Dear Sir,—In reply to your letter of the 18th ultimo, I have the honor to inform you that the Government of this colony would be favourably inclined to consider any proposal regarding Federation of New Zealand with Fiji. It is a matter of great moment to you, and it also concerns the Australian Commonwealth. I notice that the Secretary of State said that in any proposal of the kind the Commonwealth would be consulted. Hasty action of any kind should be avoided, and the first step to be taken should be to obtain self-government. After that, a decision should be come to with regard to Federation. In the Speech from the Throne, delivered to the New Zealand Parliament, which, in all probability, you have seen ere this, the following appears:—

"My advisers consider it to be of the first importance to the Empire and this colony that British interests in the islands of the Pacific should be definitely conserved, and in respect to several of the islands, that, with the concurrence of the inhabitants, annexation should, where possible, take place. With a view of removing difficulties and providing satisfactory administration, the extension of the boundaries of this colony may be found necessary, and if so, the people of page 56 New Zealand may be required to assume the increased responsibility."