CORRESPONDENCE, &c. COPY OF A DESPATCH FROM GOVERNOR SIR G. GREY TO THE DUKE OE NEWCASTLE. Government House, Wellington, June 16, 1853. My Lord Duke, It having become necessary for me to recommend for your Grace's approval the manner in which I propose that those funds should be disposed of, which, under the recent New Zealand Constitution Act, are reserved for Native purposes, I have the honor to transmit for your consideration a correspondence upon this subject which has passed between myself and the heads of the three religious bodies which have missions established in New Zealand, within which bodies are also included all the Native and half-caste population in these islands, as also the great mass of the European population. 2. Your Grace will find that I propose that the great portion of the funds reserved for Native purposes should be devoted towards the consolidation and extension of that system of education which, after an experience of several years, has worked with such very successful results in all those portions of the islands in which it has been tried. ■ 3. Erom the letters enclosed from the Bishop of New Zealand, from the Roman Catholic Bishop at Auckland, and from the Superintendent of "Wesleyan Missions in the Pacific, it will be found that they, together with the Central Committee of the Church Missionary Society, all unhesitatingly and gra:efully accept <he plan proposed, at the same time recognizing its entire adaptation to the circumstances of this country. Your Grace may therefore, I think, rest satisfied that all those persons who have the greatest amount of knowledge regarding the state of New Zealand, and the greatest experience of the disposition and character of its inhabitants, unanimously admit the wisdom and practicability of the plan which I submit for Her Majesty's approval. 4. A portion of the total sum of £6,300, which I reoommend should be annually devoted to the purposes of education for the Native race, will for the present be paid, independently of the Native funds, from the general revenue, under the authority of the Education Ordinance; but I think that the total amount of £6,300 should be directed by your Grace to be made up from the funds available to Native purposes, if it was not provided from some other source; so that at least the sum of £6,300 should be annually spent in the proportions and mannef I have recommended, for the education of the Native and half-caste races. And it will be stipulated yearly by the Government here, with the several religious bodies, that they shall educate a number of Natives and half-castes proportionate to the amounts I have named, so that the funds intended for Native purposes may always be applied for the use of the Native race, although this stipulation will by no means prevent children of European parents, or from islands in the Pacific Ocean, being educated in the same schools, as the cost of their maintenance will be paid from different funds. I have, &c., (Signed) G. GREY. His Grace the Duke of Newcastle, &c., &c. Downing Street, January 25, 1854. Sir, I have received your despatch No. 64, of the 16th of June last, submitting the outline of a plan or the education of the Native race, and of the half-castes of New Zealand, and I hare.to convey to