This Block is estimated to contain 110,000 acres of land, and comprises Hale's run on the coast, part of Cameron's run, A Sutherland's run, and extending inland to the Wainuiora River, including Smith's run. The Chief Werita, when he offered this block for sale, asked a sum of £3,500 for it. I objected to this sum, as being too high, and proposed that the price should be determined after the extent of the Block was ascertained by survey, and the external boundaries and reserves for the natives marked off. A first instalment of £700 was paid to the natives in October 1853. 157 natives signed the Deed of Sale, as claimants to it. In December 1854 £100 was also paid, and subsequently in January 1855, at the urgent request of the natives, I paid a further sum of £450 on the understanding that the transaction should be final without reference to survey, the reserves for Te Werita having been in the meantime defined. For several years the natives offered no objections to these arrangements; and it was not until a change had taken place in their sentiments, occasioned by the King movement, that a parge portion of the claimants began to repudiate Te Werita's sale. The old Chief, who would not ally himself with the King party, was constantly assailed by them; until he was at length impelled, for the sake of peace, and safety of the settlers, to join with them in an endeavour to obtain a further payment. The natives were much encouraged in their opposition, in consequence of one of their Chiefs, Houa, (or Hoera) having been offended by a settler, Mr. Smith, who resides on a portion of the block. It appears that this Chief, who had been travelling all day, was very much exhausted. He wanted food, and requested some from the European; who, instead of giving him any, ordered him off the place. The Chief related this circumstance to the first tribe he visited, the Ngatitaha, at Hurunuiorangi, also claimants to the land in question; when it was resolved that the European should be driven off, as they had all experienced similar treatment when they visited his place. This feeling has been gaining ground to such an extent, that the natives now desire to resume about 30,000 acres of the block, including all that portion of it occupied by Smith; and offer to give up the residue 80,000 for the money received by them, unless they obtain the full amount demanded by Werita in the first instance, of £3,500 less what has been already paid to them, amounting to £1250. I informed the natives at several meetings held at Greytown, that land, once alienated, could not again be resumed by them; that the Deeds of Cession, containing their own full concurrance in the sale, had been forwarded to the Governor; and that any material deviation from the terms of these Deeds, must be referred to His Excellency, as I had no power to alter arrangements once concluded, without the Governor's sanction. The natives, after full deliberation, openly avowed that they had no fault to find with the manner in which the negotiations were conducted on the part of the Government; that the blame rested with their own Chiefs, whose acts in terminating the payment for the block, they would not ratify, excepting to such portions as they, the Chiefs, had the exclusive right to alienate. The acts of the Chiefs were, at the time when the payment was concluded, were considered fully binding upon all parties interested in the land; and they generally recognised Werita's power to conclude the sale. They assert their independence of Te Werita. The Ngatikoura, Ngatikawera, Ngatiparera, and Ngatitahu tribes, who have no Chiefs of influence among them, and who formerly recognised Werita's power, declared that they would repossess themselves of their own portion of the block, and expel Messrs. Smith and Sutherland. The natives afterwards became more moderate, but not less decided, in their tone; and agreed among themselves that each Hapu should dispose separately of their interest in the block. Considering the large extent of the block, and that its cost, even at the amount demanded by the natives, would not exceed 8d. per acre. I deemed it judicious to make them an offer of £500, together with all the 5 per cents accruing on the purchase up to that time. This offer was declined. The natives fully expected that His Excellency, Sir George Grey, would visit the Wairarapa; when the case would be brought under his notice. Should His Excellency not carry out his expressed intention of going there, I apprehend the natives may carry out their threats of expelling the Europeans. I may state that this is the only question of any real importance that has to be settled in the Wairarapa district. From the extent of the purchase, I do not think that an additional payment for it would be regarded as a precedent; more especially as the natives regard all other sales made by them as conclusive, excepting where some small differences arise about boundaries of reserves. The further action to be taken in reference to their case is herewith submitted for the consideration and decision of His Excellency's Government. I enclose a sketch showing the disputed part of this block. The changes, however, that have taken place, have greatly dimished the influence of the Chiefs; and attempts are constantly made to upset their acts, by the more turbulent and discontented members of their own, and other tribes; who are countenanced in any opposition to the Government by the numerous delegates that visit them from disaffected districts.