E.—No. 2A.

Ministry in time to meet tlio difficulties which were likely to arise, and that in his opinion the proper — indued the necessary—course was immediately to call the (General Assembly together. He, therefore, at once acquiesces in the advice which they have tendered to him on that subject. But the Governor nevertheless considers it necessary that he should issue the proclamation which he submitted to Ministers on the Oth of September last, altered somewhat in form, from circumstances which liavo taken place since that date. The Governor considers that, from the conversation which Mr. Wood reports as having passed between himself and Mr. Cardwell upon the Oth June last, the subsisting arrangement is that the Now Zealand Settlements' Act is to be disallowed, if it is not carried out in conformity with Mr. Cardwell's instructions. Ministers arc now pressing the Governor to bring that Act into operatioa, bu he unders ands from Mr. Cardwell's instructions that he ought not to give his concurrence, in bringing it in o opera ion until he has failed in obtaining cessions of land in the manner proposed by the proclamation he wished to issue. He would take care to take these cessions in a manner wiiic.i should unequivocally exhibit the natives who made them in the position of defeated rebels, and, as he has already pointed out, he would conclude no arrangements for such* a cession until the advice tendered by his Ministers with regard to such cession hal been fully considered. He does not ask Minis ers to acquiesce in such a proclamation, or to be responsible for it ; all he asks is that it should be ins -rted in the Government Gazette in the usual manner, at the time he thinks this should bo done. The Governor cannot at once concur in the wisdom of the advice tendered to him by his Responsible Advisers, that all war expenditure to be paid for from Colonial resources should be stopped at a time like the presen1-, but as this is a very important subject he will address a special Memorandum to his Eesponsible Advis rs in relation to it in order that his views on the subject may be before them. Government House, Auckland, 10th October, 1564. G. Gitr.v.

No. 6. MEMORANDUM by Ministers. M'uisters beg respectfully to direct His Excellency's attention to their recommendation made on the Oth inst., on the subject of a reduction in the war expenditure now going on. Us Excellency in h;s reply staled his intention of addressing a special Memorandum to Ministers in relation to it, wuich Minis:ers have not yet received. As Ministers wish to send instructions by the " Ahuriri," to-day, for the reduction of the expenditure, Ministers will feel obliged if His Excellency will give them an answer to their proposal. October 12lh, 1864. Fkedk. Wiiitakkr.

No. 7. MEMORANDUM by the Governor. The Governor is unwilling to cause any delay in the carrying out of such reductions in the war expenditure in the south of New Zealand as Ministers may think it necessary to make immediately. In answer therefore to the Ministerial Memorandum of this day's date on this subject, he begs that Minis era will send such instructions by the " Ahuriri," to-day, as they think proper regarding tho proposed reduc:ions. Ho further requests that they will furnish him with a statement shewing what items of expenditure are included under the term "all war expenditure necessarily to be paid from Colonial sources, exeep- such, as is necessary to fulfil existing engagements." Government House, October 12th, 1864. &. Gekt.

No. 8. MEMORANDUM by Moris-ram In reply to His Excellency's Memorandum of this date, requesting Ministers to furnish him with a statement showing what items of expenditure are included under the term " All war expenditure, necessarily lo be paid from Colonial sources, except such as is necessary to fulfil existing engagements," Ministers beg lo inform His Excellency that the reductions they had in view were as follows:— To reduce the Defence Force in the Province of Wellington to twenty-five ; in the Provinco of Hawk ''s Buy to twenty-five ; and in Auckland to twenty-five. To s rike oft' pay and allowances of the whole of the Taranaki Militia, except the Military Settlers. To strike off pay and allowances of those officers of the Auckland Militia whose services are no longer urge,iily needed, such as Lt.-Col. Peacocke, Lt.-Col. Nation, and others, leaving in Auckland on ac< ive s rvice and full pay the four Regiments of Waikato Militia only. To lay up and s"ll the steamers " Prince Alfred'1 and "Sandfly." Ministers are quite aware of the importance in the present state of affairs of maintaining some of the Forces above mentioned, but they also know they cannot provide funds for their maintenance from Colonial sources, and Ministers have no alternative but to make these reductions, unless His Excellency can defray these charges from Imperial Funds as advances to the Colony. To give His Excellency an opportunity for consideration and a reply to their Memorandum, M [listers defer sending instructions for these proposed reductions until the 17th instant. Colonial Defence Olficc, Auckland, October 12th, 1801. T. Russell.

No. 9. MEMORANDUM by the Governor. Tie Governor vvo;ild he much ob igei to Ministers if they would allow him to be furnished with a R- urn, shewing the p *j nt strength of the Defence Force in the Provinces of Auckland, Wellington, and H-.wke's Bay, and the strength of the Militia at Taranaki, omitting the Military Settlers. Government House, Auckland, October 13th, 1864. G. Gbet.

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FURTHER PAPERS ON NATIVE POLICY,