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PUBLIC RECORD OFFICE

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Sir

Scratchley to have encouraged in Australia the formation of a trading company on a basis somewhat similar to the British North Borneo Company (vide Appendix Nos. 5 and 6). With regard, however, to the tenure of land by this proposed company, Peter Scratchley consulted the experience of Sir F. Whitaker, whose opinion it will be pertinent to quote: I may say that, if the Australian Company is to be empowered "to acquire and cultivate land, this would, I think, be very objectionable; in fact, would at once introduce into New Guinea all the objectionable features that have "been incident to the colonisation of New Zealand and Fiji, in an exaggerated form If, on the other hand, the Australian New Guinea Company intends only to establish trading stations on sites to be held under license from the Crown, then I think it "would be of great use in promoting the interests and civilization of the inhabitants, "and therefore should receive encouragement and assistance."

Referring to the statement made by the Auditor-General of Queensland, 1st February (vide Appendix No. 16), it will be seen that the amount received for the year 1884-5 was 15,171, the actual amount expended from 1st January 1885 to 30th January 1886, being 15,0481. Adding 500l. to this for outstanding accounts, the total expen- diture would amount to 15,5481. (vide Appendix No. 16). It will be remembered that the amount 15,1711. was the amount due from the Colonial Governments from 1st June 1884 to 1st June 1885. As the contributions for the year 1st June 1885 to 1st June 1886, have not yet been paid in, there is consequently a very considerable balance to the New Guinea account, and not a deficit as publicly stated.

Moreover, by referring to Sir Peter Scratchley's memorandum of 1st April 1885 (vide Appendix No. 15), forwarded to the Governments of the Australasian Colonies, it will be seen that he divided expenditure into three heads-(a) Capital, or first cost, to be raised as a loan; (b) Estimated expenditure for the first year; (c) Annual expenditure for years subsequent. Had he lived to have carried out this classification, which was approved of by the Colonial Governments, many of the items-such as building of house, &c.-which, under the Auditor-General's Report, appears as annual expenditure, would have been charged to a loan or first cost account. In no way can the expenditure of the year from January, 1885, to January, 1886, be taken as the basis for future expenditure. The work done by Sir Peter Scratchley was preparatory and tentative. He states-"I consider that my duty is to examine and report upon "the country for the information of the Imperial Government."

If any systematic administration of the country be attempted, the machinery of government will have to be increased, thereby involving increased expenditure both in-(a) Capital, or first cost; (b) In salaries of Government officers. The principal items under (a), or first cost, will be the building of the houses for the Sub-Commis- sioners along the coasts, providing accommodation for native police, providing whale- boats, &c. The increased expenditure under Schedule B (vide Appendix No. 15) will be the salaries of the Sub-Commissioners and native police, the establishment of a regular mail service, &c. It can, however be reasonably anticipated that the increased expenditure for administration will index a proportionate increased development of natural sources of revenue.

It has been confidently anticipated by those who have seen the fertility of the Protected Territory, and its capacity for producing articles of tropical growth, that it will ere long become self-supporting. Although in its present condition this, perhaps, would hardly be possible, yet the following methods of raising a revenue to defray local expenditure might be found practical and economical :-

(1.) License fees on all bêche-de-mer and pearl fishing boats. These would be

registered, and have to report themselves at Port Moresby at least once a year. (2.) License fees for the erection of smoke huts and copra stations.

With

(3.) Export duties on cedar and malava, at a fixed rate for so many 100 superficial

feet of timber; ad valorem duties on sandal woods and black woods. reference to this last duty, I may mention that one timber trader alone, if he had paid on his privileges according to Queensland timber dues, would owe the Government about 2,000l. The Customs officers at Cooktown and Townsville might, with the consent of the Queensland Government, be empowered to act for the New Guinea Protectorate.

(4.) Funds arising from trading licences, judicial fees, harbour dues, and leases of

certain unoccupied lands.

(5.) Import duties.

(6.) Native contributions to the expenses of government. These would have to be paid in kind, and could hardly be calculated as a source of revenue for some years to come.

The question with regard to New Guinea which at present is most prominent is whether it can be made a successful outlet for capital, or, in other words, a commercial success. Before, however, considering this point, it will be necessary to recall the fact that New Guinea was primarily annexed for a strategical purpose. Its value to Australia in this respect has not been diminished by the fact that portion of the country has been ceded to Germany. Not only is the British territory nearest the Australian shores; but it contains the best climate, the finest harbours and ports, the most fertile lands, the largest rivers. The object, therefore, for which the country was primarily annexed has been obtained, and its strategical and negative value in this respect is not unfrequently lost sight of by those who only look for positive financial results.

The next point which demands attention is the responsibility which rests with the annexing powers with regard to the protection of the natives. Probably, in no country, and at no period of history, was there a more favourable opportunity for successfully adjusting the mutual interests of European and blacks than in British New Guinea. On both moral as well as politic grounds, it is essential that the natives should be protected, not only negatively from aggressive violence and usurpation on the part of the whites, but positively also from moral contamination and corruption. Regulations with regard to the introduction of spirituous liquors must not exist merely on paper-they must be strictly and rigidly enforced; and, as far as is practicable, the system of appointing teachers to official positions must be avoided. The following statement with reference to this question appears among Sir l'eter Scratchley's notes:--The only hope of making New Guinea pay is the employment "of the natives, who can, by patience and care, be trained. If they disappear," other natives will have to be imported. Putting, therefore, the protection of the natives the lowest ground, it will be seen that it will be cheaper to preserve and educate "them. New Guinea must be governed for the natives and by the natives."

**

on

markets.

The future of the country depends largely upon the attitude of the natives. If they are rendered either hostile or corrupt, then it will continue to be the hunting ground of needy adventurers or desperate speculators: if, on the other hand, they learn confidence in their rulers, then settlement in many parts is possible, and the country may become the regular source of supply of tropical products to the Australian

On this point, therefore, the duty of the Government and the interest of the speculator coincide, and if, in the scheme for the administration of the country, the positive protection of the natives be comprehended, the introduction of European capital will materially benefit them, will create in them a useful and willing instrument, and thus be the first means towards rendering financial success ultimately possible.

Briefly to summarize the foregoing points-

(1.) New Guinea was primarily annexed for a strategical purpose—that purpose

been obtained.

has

(2.) Having been annexed, it is the duty of the annexing power to protect the

natives.

(3.) It is doubtful whether the country can ever he self-supporting, partly on account of the climate, and partly owing to the attitude and condition of the natives.

(4.) Nothing can be done towards systematically administering the country and developing its resources until it is made an integral part of the Anglo-Australian political system, and the position of the officer administering its Government, both with regard to the country itself and also to the authorities to whom he is responsible, shall have been more definitely determined.

Melbourne, March 30th, 1886.

LI 2

G. SEYMOUR Fort.