E.—No. 3 SECTION 11,

New Zealand, nor do I think that your reference to them had any proper place in the despatch to which I am now replying. I have also to call your attention to the following passage in your memorandum of the 29th November, 18G1 : —" Also with a view to the protection of the out-settlements it will be requisite to occupy the great lines of communication by Military posts, on a plan which I will hereafter discuss." I think it was not unnatural to suppose that these posts were to be occupied by Imperial troops, in which case it would have been perfectly correct to assert, as was done in my despatch of 26th May, that a large Military force was to be maintained, " partly in order to afford to the outset tiers that protection and sense of security which is essential to enable them profitably to occupy their farms." I entirely approve of your having employed the troops in making roads, nor am I aware of having expressed any doubt that in prevailing on the colonists to give them " working pay" you accomplished all that could have been reasonably expected of you. You will learn from another despatch that before receiving your present communication, I had obtained the consent of the War Office to the temporary employment of Officers as Civil Commissioners in the Native districts. Thus much for the particular points to which you have drawn attention. I owe it to you, however, to proceed further and to explain what I think you have not rightly understood —the tone of dissatisfaction which has certainly pervaded some of my despatches to you. In the first place, therefore, I will state, or rather I will re2)eat, that I fully and gladly recognize the vigour, ability, and public spirit, with which you are conducting the affairs of New Zealand. My opinion of your present policy, derived as it is from your own statements, and during a period of anxious transition, must be necessarily somewhat provisional. But as far as I can now judge, it fully justifies, and in some respects even more than justifies, the expectations with which I requested you to reassume the Government of the Colony. No one, I am sure could have done more to effect the great objects with which you were appointed—the restoi-ation of tranquillity in New Zealand, the advancement of the European Colony, the improvement of the Maories, and the establishment of healthy relations between the two races. It is true that your despatches indicate opinions respecting the relative obligations of the Imperial and Colonial Governments in which I do not always concur. But in this I see nothing to complain of. It is natural that on such a point an Officer entrusted with the welfare of an important Colony during an extraordinary crisis should be less alive to the claims of the British Treasury than those of Her Majesty's servants who are under a more direct obligation to guard Imperial interests. Even when I have been unable fully to adopt your proposals, I have never intended to censure you for making them. And if the tone of my despatches has inadvertently been such as to give you pain, this has proceeded from a wholly different cause. For when I turn from the consideration of your personal policy to the pi-oceedings of the Colonial Government and Legislature, and still more to the statements in which those proceedings are from time to time embodied, I find myself confronted by views and expectations which so long as they are entertained, must furnish a continual source of dissatisfaction and controversy What the views are to which I allude, and how far, and for what reasons Her Majesty's Government are compelled to dissent from them, you will find fully stated in my despatch No. 22, of even date herewith, and I have no desire to refer further to them here. I will only add an exjiression of my hope that you will not add to your own embarrassments and mine by placing a construction upon my despatches which they were by no means intended to bear. I can assure you that when most anxious to assert the rights of this country, I have never forgotten the great practical difficulties by which you are surrounded; and I have never consciously written a line which was calculated to impair your personal power and usefulness in the Colony, or to detract from the credit which, in my opinion, your successful administration of the Government is now earning for you. I have, &c, Newcastle. Governor Sir George Grey, K.C.B., &c, &c, ifec.

NEW ZEALAND. No. 30.

No. 10 copy or DESPATCH from his grace the duke of Newcastle k.g. to governor sib GEORGE GREY, K.C.B. Downing-street, 22nd March, 1863. Sib,— I have received your Despatch No. 130, of the 18th of December. It appears that your Ministry are desirous of making a Road in the neighbourhood of New Plymouth, through lands belonging to the Natives, but without the consent of the Native owners. And the Attorney-General has advised them (as I understand) that the Local Legislature is powerless to authorise such a proceeding ; but that the Land may be appropriated for the pi-oposed purpose by authority of the Crown.

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THE DUKE OF NEWCASTLE, K.G.