D.—No. 5.

to their wishes, I was in December, 1861, stationed in the midst of them as Magistrate. An attempt was promptly made by their neighbours, the Maniapotos, to expel me by violence. It was entirely due to the opposition of the Waikatos, backed by W. Tamihana, that the attempt was abandoned, and that I was enabled to remain peaceably in the district until March, 1863. During this period I was frequently indebted to the friendship and support of the Waikatos for protection against the hostility of Rewi and Maniapoto. I believe the leading chiefs of Rangiaowhia would have joined Sir George Grey's plans had they thought it safe to do so, but they dared not risk a quarrel with Maniapoto, against whose hostility the English Government could have afforded them no protection. Short of actually joining the Government, they did many acts in its support; they furnished timber in spite of Rewi for the Government buildings at Te Awamutu, and they supported Tamihaua in his various efforts to get the Waitara affair settled, and in writing to recommend the quiet surrender of Tataraiinaka. On the occasion of Eewrs attack upon Te Awamutu in March, 1863, the Waikatos openly arrayed themselves against him, and threatened to resist force with force. It was through the interference of these men, and the firmness they displayed, that the Europeans employed at Te Awamutu owed their preservation from violence. The Waikatos afterwards, in conjunction with Tamihana, compelled Eewi to restore the Government property which ho had seized, and from April, 1863, to February, 186 i, they protected the Government buildings at Te Awamutu from destruction. The message sent down to Taranaki to instigate an attack on the troops, which occasioned the massacre of Lieutenant Tragett and his men, was the act of Eewi alone. The Waikatos had no share in it. When war broke out at Taranaki, they united with Tamihana and Ngatihana in preventing Eewi from carrying out his design of attacking Te la and Auckland. There is no evidence of their having joined in any hostile schemes until the dread of an invasion drove Waikato and Ngatihana once more into an alliance with Maniapoto. I believe that in resisting the progress of General Cameron, the two former tribes imagined themselves to be carrying on a defensive war. A considerable portion of the inhabitants of the Eangiaowhia district were industrious, inoffensive men, whose desires were directed more to the acquisition of wealth by agriculture and commerce than to the pleasures of political exeitetnent. The tribe generally was less wild than Maniapoto, and less patriotic than Ngatihana, and would not, but for the mischievous nature of the former and the national aspirations of the latter, have given much trouble to the English Government. While the character of these people is in itself much less admirable than that of the Ngatihana, it must bo confessed that they are likely to make better and quieter subjects of a foreign power. I believe that most of them would be only too glad to submit to any Government that would treat them justly and protect them against molestation from others in the enjoyment of their property. It is only their position and circumstances that has made them rebels and warriors, and I believe nothing but the desperation which the entire confiscation of their territory would produce, can keep them permanently in arms against the British troops. 84-, Eaton Place, London, May 21st, 1864. J. E. Goest. No. 24. Sic,— Downing Street, 26th May, 1864. I informed you in my despatch No. 43, of 26th April last, that I should request the Law Officers of the Crown to furnish me with their opinion respecting the competency of the New Zealand Legislature to pass the two Acts, No. 7, " The Suppression of Rebellion Act, 1863," and No. 8, " The New Zealand Settlements' Act, 1863." This I have done, and I am advised that there is in their judgment no reason to doubt the legality of the former of the two Acts, and that the only reason for questioning the legality of the latter arises from its repugnancy to the third section of the Imperial Loan Guarantee Act, 20 and 21 Victoria, c. 51. I intend to submit to Parliament, in connection with the contemplated Loan, a provision calculated to remove this doubt. I enclose to you the copy of a letter which by my desire, has been addressed to Mr. Reader Wood, and which will explain to you the views of Her Majesty's Government in respect to the proposed Guaranteed Loan. I am only induced to make this offer to Mr. Reader Wood in the full conviction that the recent military successes, improved by a just and temperate policy on your part, will lead to a speedy and permanent pacification of the Northern Island. I have stated to Mr. Reader Wood that his acceptance of this proposal will be regarded by Her Majesty's Government as conveying on his part and that of his colleagues an assurance of their desire cordially to co-operate with you in a just and temperate policy towards the native race on the part of Her Majesty's Government. I need not repeat the instructions which were fully conveyed to you in my despatch No. 43, of 26th April last. _ I entirely anticipate that your Ministers will be animated by a just sense of the exertions and sacrifices which have already been made by the Mother Country for the Colony, and that on Colonial grounds they will be as anxious as you can bo yourself to terminate the present hostilities. But it is my duty to say to you plainly that, if unfortunately their opinion should be different from your own as to the term's of peace, Her Majesty's Government expect you to act upon your own judgment, and to state to your Ministers explicitly that an army of 10,000 English troops has been placed at your disposal for objects of great Imperial concern, and not for the attainment of any merely local object, that your responsibility to the Crown is paramount, and that you will not continue the expenditure of blood and treasure longer than is absolutely necessary for the establishment of a just and enduring peace. I have, &c, Governor Sir George Grey, X.C.8., &c, &c. Edwabd Cabdwell.

9

TO HIS EXCELLENCY SIR GEOIIGE GREY, K.C.B.