A.—4

8

futility of causing the future administration of New Guinea to be made dependent on sums of money to be annually voted by half a dozen Parliaments. _ ' 9 It seems certainly to be most necessary that the conditions on which the Constitution oithe new province is to be founded should be specified in the organic instrument under which Her Majesty may be advised to confer jurisdiction, and in this respect I have nothing to add to Mr Griffith's remarks. These principles, however, having been agreed on, and stamped on the Constitution, I cannot think that there would be much advantage in a detailed control m administration exercised by the Government of Queensland, unless, indeed, it should be proposed to effect a territorial incorporation. This, I apprehend, is not contemplated, and Mr. Griffith has said that, m his opinion, it would not be desirable. . , 10 It is essential, as Sir Peter Scratchley has remarked m one of his later memoranda, that British New Guinea should become part of the Anglo-Australian political system, lor this reason the principles of its Constitution should be in accord with those laid down by the associated colonies or States of Australasia. Its future legislation, subject as it must be to Her Majesty s assent, mignt also be submitted for the sanction of the Federal Council when fully constituted. But 1 cannot bring myself to think that the estimates of expenditure should be subject to the annual adjustment of the Queensland Executive, or indeed of any combination of Australasian Executives, buch subjection might, and probably would, paralyse the action of the New Guinea Executive At the same time it must be admitted that the Queensland Executive might be of the^ greatest use as the exponent of the Federal Council. It might also materially assist in the administration of justice, and in the auditing of accounts, so as to secure an expenditure in accordance with the scheduled estimates. For the first few years this would be necessary, and lam confident that the Government of Queensland may be depended on to give the aid which in these respects the infant btates ot INew Guinea will so much require. I wish, however, earnestly to draw the attention of your Excellency's Government to the fact that financial stability and continuity are of the utmost importance A scheduled estimate should be agreed on. The money thus advanced should be applicable, in that form for a period of not less than five years, and the whole amount thus advanced should be secured on the future revenues of British New Guinea. Sir Peter Scratchley, I observe, expressed an opinion that it seemed to be doubtful if the country could be made self-supporting I owe every respect to General Scratchley's conclusions. I am bound to say, however, that I entertain a different opinion. I assume that European settlement will go on hand in hand with the gradual attraction ot the native races to industrial pursuits. Land will be acquired by the Government from the natives and will be sold. I have seen at Thursday Island how a revenue grows up, under conditions not very different from those which prevail in New Guinea. I have some confidence therefore, in concluding that, under judicious management, a revenue may be obtained for all the essential purposes of government: But I readily admit that, for the first few years, there must be some expenditure in advance, and I have already stated what I think the minimum of that expenditure >Ull Allow me, in conclusion, to draw your Excellency's attention once more to the meeting of the Prime Ministers of New South Wales, Victoria, and Queensland, which, it is expected, will shortly take place in Sydney. It is, of course, exceedingly desirable that there should be concerted action on the part of the Australian Governments on this question. They are in honour bound to maintain Her Majesty's Government in the future government of New Guinea, and I regret extremely to observe that the Province of South Australia has, for the present, notified a discontinuance ot payments on account. From communications, however, which I have had with Lord Camngton s Government in New South Wales, and with Sir Henry Loch's Government in Victoria, I feel confident that no defection need be feared from them, and I anticipate their hearty co-operation with your Excellency's Government. , 12 I assume, for the moment, that the three colonies I have named would be willing, each ol them on behalf of the whole Australian group, to guarantee an advance of £20,000, being at the rate of £5 000 a year each for five years. This would amount to a capital sum of £75,000. On such a sum of money being guaranteed I cannot doubt that Her Majesty's Government would accept its share of the responsibility, and would probably be willing to guarantee a similar amount by way ot advance, to be secured in like manner on the accruing revenue. This would provide the Government of New Guinea with the means, and not more than the sufficient means, for an emcient start in life I assume that a steam-vessel must be obtained, and that a small sailing-vessel with several whaleboats will be required for the use of the New Guinea Government. Houses aso will have to be built for the agents—native and European—which it will be necessary to domicile on the coast. It may be desirable also to erect some jetties. Having regard, therefore, to such outlay as this on capital account, as well as to the annual expenditure, I do not regard an amount ot iISO,OUU, expended over five years, as by any means excessive for the purposes of establishing a rudimentary form of government, having effect over the wide area which has been added to Her Majesty s 13? I will presume to add that it becomes a duty incumbent on Her Majesty's subjects in Australia to devise the means for giving effect to a project of government which is of most momentous importance to hundreds of thousands of human beings of whom as yet we know so little. 14 I confidently anticipate, therefore, that the hearty interest which has hitherto been shown by your Excellency's Government in this matter will be shortly followed up by some definite propositions to be submitted to Her Majesty's Government; and I shall deem it a favour if your Excellency will inform me of the nature of the propositions when an understanding has been arrived at. I have, &c, John Douglas, Her Majesty's Special Commissioner for British New Guinea. His Excellency Sir Arthur Palmer, K.C.M.G., &c.