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make several recommendations for improving IJnl existing system, one of which was that tlie judicial powers conferred by the Ordei'B in Council should be so extended by Ad of Parliament as lo render offences eomniitted by natives against British subjects equally cognizable with those committed by British subjects against natives. But it, would evidently have been useless to assurno jurisdiction over the unlive people and continue t > except foreigners. Nor did tlie High Commissioner shrink IVoin admitting tins. "To obtain," lio said, " the power of dealing satisfactorily with tlie misdeeds of otli or whites than Englishmen, or of punishing attacks upon them, an international agreement, having the sanction of a treaty, with France, Germany, and the United States, would be necessary. Such an arrangement would probably involve the substitution for (lie High Commissioner of a mixed Commission similar lo Hie old mixed Commission Slave Trade Courts." And Sir Arthur Gordon then went on, with perfect truth, to touch the real kernel of the whole matter. "It should be borne in mind," be said, " that the punishment of outrages, though at present forced into prominence, is not the only nor the most important matter which has to be dealt with hi these seas" ; and lie reminded the Secretary of State -that the jurisdiction of the High Commissioner and his Court was one " primarily created to bring law, both civil and criminal, within the reach of British subjects far from all other legal tribunals, to check aggressive lawlessness, and to regulate the growth and development of British settlements in the Western Pacific." This was wise language. " But when such recommendations were made, it was difficult to escape the logical conclusion from them. Once let it be admitted that the Imperial Government can pass an Act such as was advised by the High Commissioner, and is there anything but the thinnest veil left between that and the assertion of the very right of "sovereignty or dominion" which it was the purpose of the Act of 1875 to forbid ? It would not be fair if we did not refer to other remedies which were suggested by the High Commissioner. Early in 1881, after reciting the causes for the increased frequency of murder of Europeans by natives in the Western Pacific, Sir Arthur Gordon referred to two ways by which they could bo prevented in future. " One is," he said, " that which I knowon good authority was soriotisly contemplated by Her Majesty's Government some years ago, —the establishment of a strong chartered Company possessing an exclusive right to trade. Another course would be to limit the protection given for trading operations, to those carried on at certain specified localities." But Sir Arthur Gordon even then allowed that the time for any schema of a chartered Company had passed ; and last year ho proposed another plan to improve the working of the existing High Commission, the leading features of which, in addition to extending his jurisdiction by a new Act of Parliament, were the appointment of three Deputy-Commissioners, the conferring of Deputy-Commissioner's powers on naval officers in command of H.M. cruisers, and the permanent employment of a vessel, not a man-of-war, in the service of the Commission. f!ii (^""Whatever might have been the recommendations some years ago, in favor of granting an exclusive right of trading in Die Western Pacific to a chartered Company, ye entirely agree with Sir Arthur Gordon that the time for any such scheme has long gone by. An elaborate plan was devised in 1876 by Sir Julius Vogel, then Premier of New Zealand, and the present. Premier of that Colony, Mr. Whitaker, for the establishment of a great trading Company for the Western Pacific ; but it fell to the ground, as any scheme of the kind now proposed must inevitably do. There are no circumstances in the Pacific similar to those which were held to justify the granting of a lloyal Charter, in November, 1881, to the North Borneo Company; on the contrary, there are circumstances essentially adverse to any plan of the kind. But even if there were not, we may point to two things which alone ought now to dismiss it from consideration. In the first place, it would always have been futile to imagine that any grant of exclusive rights of trade to a Company would be effectual even in the case of British traders ; not only would they have traded in spite of it, but at, no time after the promulgation of the Order in Council could any such exclusive grant have been made without grave injustice to them; while as regards foreigners, such a right would not, have affected the French, German, and American traders; and if it was not to be respected by everybody it must", .necessarily fail as a remedy. There are already French Companies established in New Caledonia, whose operations extend over many of the islands, and there will certainly be several others. By what process could these Companies be prevented from trading? The slightest attempt to do so would show how the question ever comes back to the same point; to the exercise, namely, of rights of " sovereignty and dominion." But in the second place, we feel sure your Lordship will allow that, in any scheme for giving a chartered Company exclusive rights of trade, the interests and the wishes of Australasia could not, be left out of consideration. Now, the exclusive rights of trade could not exist for a moment in the islands without sonic right to govern; and the Governments of Australasia could not be expected to acquiesce in any right of government being transferred from the Imperial authority to any other authority than their own. Moreover, even if anything could bo said for the palliatives which have been suggested as being applicable to the smaller groups of islands, it is certain that they would be utterly useless in the case of New Guinea. Sir Arthur Gordon has himself, pointed out the only means by which the question of New Guinea can ever be settled. His opinion on this subject has long been familiar to your Lordship, but it is only now that it has become known. "I am irresistibly compelled," he said, "to adopt a conclusion, which I should have wished to avoid, and which I was at first inclined to think might be avoided, namely, that the annexation by Great Britain of at least certain portions of New Guinea will speedily become inevitable, even if the necessity for such a step has not already arisen . . Could I see any other way of dealing satisfactorily with such a state of things I would recommend a re;ort to it; but I must with regret admit that after the most careful consideration, lam unable to perceive any mode of meeting these difficulties except by annexation ; for it appears to me necessary that territorial jurisdiction should be assumed by Great Britain, to enable us to deal with offences committed by foreigners associated with Britishsettlers, or with those committed by natives, and unless such jurisdiction over them be assumed, I question the practicability of exercising it with the smallest degree of efficiency over British subjects themselves ; and I must confess, therefore, that I see no middle course between annexation and the abandonment of all control over the acts of British subjects in New Guinea, involving a practical acquiescence in the establishment there of a reign of lawless violence and anarchy. This latter is a course which wo cannot creditably adopt, and which, indeed, were we disposed to take it, we should after a time be forced to abandon. A greater or less degree of annexation, consequently, appears to he inevitable. Should there bo any other method, unknown to me but known to Her Majesty's Government, by which such cases could be met I need not say I should prefer its adoption." It is true that this opinion was given by the High Commissioner at a time when there was much excitement over the reported existence of rich gold-fields in New Guinea, and when an expectation existed of a great influx of miners taking place there, which was never fulfilled. But though gold-mining on a largo scale has not yet come to aggravate the evils described by the High Commissioner, other events have happened whose impelling force has not been less towards the same solution than would have been the presence of a large body of miners. To these we shall refer later on. Trade. We have endeavoured to trace the events which have gradually but surely been pressing with ever increasing force for a new policy on the Western Pacific question, We now turn from these to a matter just as pressing, namely, the constantly growing trade of all that region. At the end of 1881 Commodore Wilson collected from the various Customs officers some valuable returns of the commerce between the Australian Colonies and the Western Pacific Islands ; from these wo have taken out the following evidence of what the trade amounted to in the ten years from 1871 to 1880 : —

Sir A. Gordon, June Hi, 1882. (Mt'i/I'»rti)ili< hi.

Sir A. Gordon, April 23, 1881.

Sir A. Gordon, June Ifi, 1352.

Sir A. Gordon, Nov. 22, 1878.

Customs Returns : Oommod Wilson, Fell. 2fi 1882,

The.

Value. Colony. tag1 Imports. Exports. Total. Sew Sout.li Wales Tiotpria Jueensland Vcw Zealand f. 1,305 187 320 908 395,393 07,725 47,390 349,681 £ 2,147,858 162 095 2,899 705,223 £ 2.726,227 110,647 83.800 548,187 £ 4,874,085 272,742 86,699 1,253,410 2,720 860,187 3,018,075 3,468,861 6,480,936