The Committee having expressed their opinion definitely on the subject of the alterations in pasturage regulations which were proposed by me, it is unnecessary for me to argue the question farther. The Committee knowing, as they must do, the feelings and wishes of intending purchasers in England, have, I dare say, exercised a sound discretion in what they have done. I trust that the provisional arrangement entered into by me, of which I have already sent home the outline, and now send full particulars in the letter of which a copy is enclosed, will be found by them so far satisfactory that it does not interfere with the full liberty of choice offered by the terms of purchase to purchasers. That arrangement, contrary in a great measure to my expectation, have given satisfaction to both purchasers and licensees, and, I think consequently the Committee need not now in any way interfere further than if they see no objection to ratify it. I had thought that it would be desirable to have the Act of Parliament altered, but unless the Committee think that the agreement which I have entered into contradicts the Act, I now think it better to leave the latter untouched in this particular. You will observe that I have introduced into it a clause requiring the deposit of a sum of money in cases where the run is not immediately stocked; this provision is intended to prevent the taking up of runs by mere speculators who may have no intention of stocking them at all. There is one point connected with this subject which I think it is desirable to notice. An impression seems to prevail in England that there is a danger of establishing a squatting interest too strong for the law. I do not think there is the slightest ground for such page 215an apprehension. In no part of the world is the law more easily and certainly carried into effect than in those districts of New Zealand which are not occupied by Natives. It is remarkable, as I have already observed, that few,—hardly any indeed,—of the colonists from England have taken to sheep farming. The expense and risk of bringing down sheep seems to have alarmed them, and though a few are now taking advantage of the relaxation above alluded to in the pasturage regulations, the importation would still be quite insignificant, if it were not that the capabilities of the country are attracting capitalists from Australia. And yet without such importation there is nothing but gradual impoverishment and ultimate ruin to be looked forward to by those land purchasers who have not incomes derivable from other sources than their farms- I cannot too often repeat that in a new country farming will only pay the working-man, unless through the operation of some stimulus acting on the market over and above the ordinary demand of an agricultural population. In the older Settlements of New Zealand this stimulus has been supplied to some extent by a large expenditure of money by the British Government, but this, of course, we cannot calculate upon here. Land owners have therefore absolutely nothing to trust to except the wealth which may be created by an export trade, and the only export trade apparently possible for this district consists in the produce of cattle and sheep. To the land owning colonists, therefore, it is felt to be a matter of life and death (if I may use the phrase), that capital be invested in pastoral husbandry, not only extensively but speedily, before their means be exhausted and they be obliged to sell their holdings. They know that they must not trust to continuous immigration from England to keep up the value of their land, because if it become known, as it must become known, that the cultivation of land will not pay, land sales and immigration will stop, or at least proceed so slowly as not to meet their necessities. Experience shows too, that the immigrants from England do not invest capital in stock, that page 216is, in the only pursuit which is remunerative; their arrival therefore, though for the moment it gives an artificial stimulus to the business of the Settlement, has by no means a proportionate tendency to promote its permanent material prosperity. Indeed the greater the amount of capital sunk in an unre-munerative investment, the more certain and disastrous will be the reaction, sooner or later. On the other hand, the colonists are aware that in Victoria and South Australia the creation and maintenance of a profitable export trade has had the effect of keeping up, and even enhancing, the value of land. In neither case, indeed, was the process rapid enough to save from ruin a very large proportion of the first settlers, and the inference drawn from this circumstance is that the foundation of an export trade ought, if possible, to be laid contemporaneously with the first settlement of agricultural colonists. On the whole, then, there is a very general feeling here that the material prosperity of the Settlement, and the fortunes of the great majority among the landowners, are dependent upon a rapid importation of capital in the shape of stock from Australia, and that any policy which should tend to retard or restrict such importation would be most fatal to their interests. For my own part, I should rejoice beyond measure to see the same end attained by the immigration of pastoral capitalists from England; but there appears to be no prospect of this on an extensive scale, and I advocate, therefore, as the next best thing, the immigration of pastoral capitalists from the neighbouring colonies.