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of the Government with suspicion ; quoting in illustration, old traditions where the powerful overcome the weak either by stratagem or brute force. Since I have been down here three letters have been received from William Thompson. The first, stating that the Governor met the Waikato people and had requested them to surrender the Flag and King, to which they would not consent. The Governor therefore was going to declare war. The second stated that the Troops were engaged in road making to Waikato; —should the troops remain on Government territory all would be well, but should they overstep the boundary then there would be trouble. The third, which was received here on 8th instant, reports that the troops had crossed the boundary, and were now at Maramarua, that Thompson was going to make another protest, and should it not be heeded, he would make a forcible obstruction to the troops, which would lead to an eruption. Calling upon all friends to hasten the preparations, this people tried to send a deputation to Waikato, and on to Auckland, but have failed, as they are all engaged in getting in the crops—but I understand that one proceeds from Tauranga. This is the kind of correspondence that has been kept up with the people of this coast, it can be seen for what purpose. There is a meeting called at Ahuriri, for 24th instant, for the purpose of crying over Te Moananui, another at Pakoriri, in this Bay, for the purpose of settling a long standing boundary dispute ; it is to be held at the latter end of next month, and another also is called at Tauranga for next Christmas; invitations are sent to all the tribes in New Zealand. All these meetings are more of the political kind, and for the purpose of combining their sentiments and views, which, in the event of hostilities breaking out, they would have a perfect programme to follow. The Whakatohea, at Opotiki, are not in such an excitable state as they were a few months ago. They are now on the verge of a civil war respecting a boundary between two of their hapus—the Ngaitama and Ngatipatu. They are very much annoyed at the restriction the Government has placed on the exportation of spirits to their Coast, but eventually I have no doubt they will see and reap the benefit of the Act. This people, the Ngatiawa, are very much annoyed by Mr. T. H. Smith not meeting them, according to engagement, for they had made great preparations in the way of provisions; and the meeting would have been fully attended, and there was a very favourable feeling amongst them. They approved of the policy of His Excellency as printed in the circular, and would have assisted it. The opportunity has now passed for the favorable consideration of the new policy for the present. They would not now meet Mr. Smith if they were paid for it, as their pride has been offended. I shall start for Auckland overland on or about the 17th instant. I have, (fee, James Fulloon. The Chief Commissioner, Land Purchase Department, Auckland.

No. 2. JAMES FULLOON TO THE ACTING NATIVE SECRETARY. Auckland, March 28th, 1862. Sir,— In my report of the 13th February last, I stated that the Ngaiterangi were going to send a deputation to Waikato, and to His Excellency, to look into the matter mentioned by William Thompson in his letter to the Natives of the Bay of Plenty, viz. : —" That the troops were at Maramarua, and requesting assistance." While the Ngaiterangi were organizing the deputation, they sent a letter to Thompson, informing him that they were coming to enquire into the matter, and then they would proceed to Auckland to see His Excellency ; and to hear his version of the subject. Thompson wrote back directly, saying that he did not require them to investigate his side of the question, but that they had better proceed to Auckland, and enquire into the tahapalceke (European side)." Upon the receipt of this communication from Thompson, they came to the conclusion that Thompson was in the wrong, as he would not have his side of the question enquired into. The Waikato cause, at Tauranga, has been greatly weakened by the line of conduct pursued by Thompson with reference to this affair, and has been the cause of their accepting-more readily the new policy of Sir George Grey. I have, &c, James Fuxloon, Clerk Land Purchase Department. The Acting Native Secretary, Auckland.

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