A.—No. 20.

CORRESPONDENCE RELATIVE TO A LETTER BY J. E. FITZGERALD, ESQ., ON THE SELF-RELIANT POLICY OF NEW ZEALAND.

No. 1. The Hon. the Peemiee to the Conteollee-Genebal. Sic, — Government Offices, Wellington, 6th June, 1870. The Government has received from the Commissioners in England a letter complaining of the publication of a pamphlet by you relating to the Defence question and other matters. I enclose a copy of the Commissioners' letter. It will be the duty of the Government to lay this letter on the table of the Houses of Assembly, together with the other correspondence of the Commissioners ; and they are desirous of affording you the opportunity of offering to the Government any explanation you may wish relative to the complaint made by the Commissioners. I have, i&c., William Fox, J. E. PitzGerald, Esq., Controller-General. Premier.

Enclosure in No. 1. The Commissioners to the Hon. the Colonial Seceetaet. Sir,— London, 15th March, 1870. We think the attention of the Government should he drawn to a letter just published here by Mr. FitzGerald, under date 26th December, 1869, and entitled " The Self-Reliant Policy in New Zealand." Some days before the debate in the House of Lords on Lord Carnarvon's motion, a rumour had got abroad that the Colonial Office was in possession of a letter from a well-known colonist, giving advice very contrary to the course we were urging Lord Granville to take; and we were told that Lord GranA'ille had expressed grave doubts as to the truth of our representations on the ground of their contradiction by letters he had seen from New Zealand. We were unable for some time to learn whose letter it Avas that had caused this rumour; but a day or two ago our inquiries were answered by the publication of Mr. FitzGerald's letter. It seems an unusual course for one of the highest civil servants in the Colony to inform the English public that the tone taken by the Imperial Government " had been provoked by the language of Ministers in the Colony." Throughout the discussions which we have had as Commissioners, we have not only absolutely refrained from casting blame on any of our predecessors in office, but have uniformly defended their administration whenever Aye could do so without sacrifice of our own opinions, for we felt that the character of the Government of New Zealand, as a continuing body, must be upheld by ourselves in the most loyal and generous spirit. As regards the imputations against Sir George Grey, Mr. Sewell, Mr. Atkinson, and other friends of the Colony who have helped in the endeavour to retain the 18th Regiment in New Zealand, it is not necessary we should notice them. But it appears to us a pity, that when Mr. PitzGerald thought it right to attack them as a means of vindicating his own consistency, he should have omitted a matter of great importance in Avhich he himself played a principal part. Mr. PitzGerald, referring to the time (1865) when he was himself in office, says that " a commencement was made towards the establishment of a permanent force ;" and he immediately adds, " It was the next (Stafford's) Government which neglected to bring this force to perfection." He omitted to state, that when Mr. Stafford met the Assembly with the proposal for a large appropriation for the maintenance of an efficient Defence Force, he (Mr. PitzGerald) moved the following Resolution: —"That whilst this House recognized the duty of providing for the security of life and property and the maintenance of the public peace in all parts of the Colony, it does not perceive the necessity for creating a permanent military force of the magnitude contemplated by the Government, at a cost which cannot fail to inflict burdens unnecessarily heavy upon the inhabitants of the Colony." This Resolution may he at least supposed to have represented Mr. FitzGerald's own opinions at the time, and we have taken care that the Resolution of 1866 shall be known here as widely, if possible, as the accusation of 1869. But Mr. FitzGerald's letter has not only interposed a political difficulty in our way ; another is added about finance. In addition, to the more prominent duty of our mission, we are engaged in a large operation —the re-opening of the Consolidation. The question is put to us, wdiether the New Zealand Government mean to bring out a new loan ? And we definitely answer that there is no such intention, and that we earnestly hope still to avoid throwing a new loan on the English market, pointing to the sale of the Treasury Bills as an instance of our credit being high elsewhere than in London. At the very moment when we are making these statements and working out a financial operation of great delicacy connected with the Consolidation of Public Debts, the Controller of Eevenue announces on the London market that " New Zealand cannot long go on without a fresh loan." There is really no knowing how much mischief this statement will do us, nor how much hesitation it will cause among holders in coming iv with their Debentures Avhen our arrangements for re-opening the Consolidation are completed.

Ko.B.