I have the honour to report to you my arrival at this place, after a favourable passage. The Lady Nugent came to an anchor yesterday morning, and the bags for the Woodstock, by which I intend to send this letter, are advertised to close on Thursday. The Cornelia will sail direct for London in about a fortnight, and I will write again by her, as well as send a duplicate of this letter. Information which I received at Otago as to the actual state of affairs at Lyttelton, determined me to require that the Lady Nugent should call at Port Cooper, and after having ascertained by personal observation how matters stood there, to proceed to this place and communicate with Mr. Fox. We anchored in Port Cooper on the 14th instant, and I immediately landed. The appearance of the harbour surpassed my expectations, as well as those of all on board. It is perhaps hardly necessary to add to the testimonies on this subject which have been already sent home; but as I understand that some difference of opinion has been expressed upon it, I will observe that in the opinion of our captain, an excellent practical seaman, the harbour is perfectly safe in all weathers.

On landing, I was astonished to find how much had been effected by Mr. Thomas towards making preparation for settlers. He has built an excellent jetty, extending to twelve feet water, four emigration houses, with a cook-house, capable of holding from 250 to 300 persons, two boat-sheds, an office for the chief surveyor, and a house for the chief agent. All these buildings were either completed, or on the point of being so. Adjoining and around them the site of the port town is laid off; over part of it are scattered a considerable number (about twenty) of houses, built by individuals who page 44hare received from Mr. Thomas (in the form enclosed) permission to "squat." Two of these are inns, or public-houses, and altogether they would afford, in the event of a large body of settlers arriving, very useful temporary accommodation. Prom the jetty the main road, which is to connect the port with the plains, leads up the hill. Its length, as partly finished, is four and a half miles; this brings it to the level plain, from whence the whole district is accessible. The entire distance to the intended chief town will be ten and a half miles. The road crosses the hill at the lowest point, where it has an elevation of rather more than 600 feet; and Mr. Thomas informs me that at the steepest part the rise is at the rate of one foot in twenty. That part of the road which runs along the side of the hill, facing the harbour, is very difficult and expensive of construction, as it is necessary to remove a large quantity of solid rock by blasting. The other side of the hill presents no engineering difficulties. After inspecting the works at the port and in the immediate neighbourhood, I rode with Mr. Thomas over the hill to Mr. Dean's farm on the plain. The track which we were obliged to follow is exceedingly steep—so much so as to be only just practicable for horses, and no heavy baggage could be transported by it. I cannot better describe my impression of the country beyond the hill than by saying that it precisely corresponded to the idea which I had formed of it from the map which was sent home last year. It may be said that to the eye there are but two features—a range of mountains, apparently thirty or forty miles distant, and a vast grassy plain (the colour of which, as seen from a distance, is not green, but rather that of hay), stretching from the sea towards them as far as the eye can reach, without any inequality, and almost without any variety of surface; for streams though numerous, are not large, and they are sunk between very steep banks, and the patches of wood are unfortunately both rare and small. The grass on the plain is intermixed with fern and flax. To an eye unaccustomed to page 45new countries it does not appear luxuriant; but I am informed, on the most undoubted authority, that the district in question is equal, if not superior, in this respect to any part of New Zealand, and that the improvement of the grass, after being grazed over for some time, will be almost incalculable. In Mr. Dean's garden I saw excellent crops of fruit and vegetables, and he gives a very good account of his own crops. I had not time to visit the intended site of the chief town; but I understand that Mr. Thomas has sent home a map and description of it. It will possess the important advantage of excellent boat navigation. I understand that boats of five or six tons burden come up the river as far as Mr. Dean's, which lies at a considerable distance higher up, and that there are from four to five feet of water at the site of the town. As you are aware that my stay in the harbour was limited to twenty-four hours, I had not time for more than a cursory inspection of Mr. Thomas's works, and a rapid investigation of his accounts. With the former, so far as I could judge of them, I was exceedingly pleased; and I am happy to express the strongest approbation of that gentleman's zeal, energy, and anxious desire to promote the objects of his mission. He has had great difficulties to contend with, and much personal odium to incur in the discharge of his duty; and I have only one opinion from those in this country who are qualified to judge: the opinion, namely, that the interests of the Association could not possibly have been confided to more efficient hands. I am anxious to assure you of this, because in expressing, as I am compelled to do, my regret that in one point he has committed what I consider a serious error of judgment, I wish it to be distinctly understood that I believe his conduct in this, as in all other respects, whether well judged or not, to have been actuated solely by sincere anxiety to promote the views of his employers. I allude to the fact that he has overdrawn to a considerable amount the credit with which he was furnished, and he has also incurred liabilities to a still further extent. In page 46order to meet these, he has applied to Mr. Fox for an extension of his credit, and that gentleman has granted his application. I consider it extremely unfortunate that Mr. Thomas should have been compelled to make this application, because I feel that the Association had no claim whatever upon the Company for a larger sum than that originally agreed upon; a sum which, in case of the Association discontinuing its operations, it will have, of course, no means of making good. But except on this (as I may call it) moral ground, there can be no doubt that it was for the interest of the Association and its intending settlers that the works should be carried on, after the exhaustion of the original credit; and I should be very glad indeed now to have the means of prosecuting them without relaxation until decisive intelligence shall arrive. Such, however, is not the case; and the only course open to me, on learning the condition of Mr. Thomas's financial affairs, was to direct the suspension of all further outlay on his part, even at the hazard of loss and damage to the works. I enclose a copy of the letter (Enclosure No. 2), which I wrote immediately on my arrival here, and sent by a cutter which sailed this morning for Lyttelton. With the reasons which have induced Mr. Fox, as the Company's representative, to make advances to Mr. Thomas, beyond the £20,000, I have, officially, nothing to do; but I cannot forbear from stating my personal conviction, that by so doing he has acted wisely under very difficult circumstances, and consulted the interests, not of the Association only, but of the Company. When the application was made to him, it would have been impossible for Mr. Thomas to have closed his accounts, and kept within the limits of his authorized expenditure; and it is needless to point out the extreme inconvenience and evil of all kinds which would have resulted from leaving him in a position of virtual bankruptcy.

For the present, accordingly, all our operations are at a stand-still, and must remain so until fresh remittances shall arrive from England. This is very mortifying, as not only is page 47there necessarily a considerable amount of loss accruing on such a suspension of extensive works, and a risk of considerable damage to the works themselves, but Mr. Thomas and myself are in the disagreeable position of remaining idle for want of means to do any work. I shall remain here, and endeavour to employ my time as usefully as I can in acquiring general information; and he will remain at Lyttelton, after winding up his operations, until he shall receive from me instructions to resume them. The work actually done consists of the building's which I have enumerated, of a road partially made, but which (including a bridge and sea wall, which are necessary to complete the connexion between the port and chief town) will require at least £7000 to finish; of the trigonometrical survey of about 600,000 acres, the topography of about half of which will be completed (as Mr. Thomas informs me) within the period at which he will be compelled to stop; and, finally, of the materials for emigration houses at the chief town, which will hardly, I fear, be erected within that period. I consider, however, that with the exception of the road, nothing will then be left unfinished which is absolutely necessary for the reception of settlers. They will find temporary accommodation sufficient, I think, for 700 or 800 at a time; and a very short notice would enable us to provide more; and they will find also 300,000 acres of the best land in the district fully surveyed. To complete the entire survey of the plain will be neither tedious nor expensive. Mr. Thomas calculates the cost at only five farthings per acre; and I am informed, both by him and Mr. Fox, that Captain Stokes and Mr. Evans (of the Acheron) speak in the very highest terms of his maps, which they carefully examined. I enclose an estimate prepared by Mr. Thomas (Enclosure No. 3) of the liabilities which he calculated upon incurring before the 1st July: if the credit given to him by Mr. Fox will not carry him up to that period, he will, of course, have to wind up sooner. I enclose also a conjectural estimate of the sum required for completing the road (Enclosure No. 4), page 48and I must urge on the Association the necessity of enabling me to complete it before settlers come out; as, except by footpaths, and by boats round the head of the harbour (a route impracticable in bad weather), there will be no available communication between the port and the plain till that shall be done. The Association will also remember that a considerable expense will be incurred in putting settlers into possession of their land. I presume the expense of emigration houses will be charged upon the Emigration Fund. Mr. Thomas is now engaged in preparing an account of his expenditure set forth under different heads, as surveying, road, &c.

In conclusion, I will only repeat, that if the road be made before the settlers come out, I trust that they will have nothing deserving the name of difficulty to contend with (except the expensiveness of wood); and I feel convinced that their success will depend (humanly speaking) entirely upon themselves. With respect to the supply of wood, I will add, that at present both sawn timber and fuel are cheaper at Lyttelton than Dunedin, and the latter not more expensive here than at Wellington, while there is no reason why it should not be supplied at Christchurch at a rate hardly greater than at Lyttelton, the chief source of supply to both places being the hills of Banks's Peninsula, from whence there is communication with them by boats. Settlers establishing themselves at a distance from the rivers will find it expensive, but at first, probably, such instances will not be numerous; and the Mandeville district, which is one of the best for agricultural purposes, is well supplied with wood. It is to be remembered, too, that land carriage, though always expensive, will be less so on these plains than in any other part of the islands, from the immense extent to which they are accessible without roads.

I trust the Association will, before receiving this letter, have given specific instructions to me relative to the sale of land here. I have had numerous applications already page 49from persons wishing to buy, especially land in the town of Lyttelton.