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100 persons in British New Guinea who have firearms. The South Sea Island teachers have firearms, but I rather think that the number I have named would be found to be in excess of the reality.

I have thus summarised the information lately obtained on the coast of New Guinea, and have given expression to some of the conclusions I have arrived at. On the whole the condition of the Natives may be regarded as encouraging. They have, in

many places on the coast, abandoned their savage habits and their cruel cannibal feasts. There is still a good deal of inter-tribal disquietude, but they are learning to value the blessings of peaceful industry. In some places, and especially among the islands at the east end, they are very much embittered against Europeans, and are decidedly hostile. At South Cape, Killerton, and Milne Bay, they are not unfriendly, but they are distrustful. From Aroma to Port Chalmers, along the whole line of that coast, they are friendly, and may be trusted. From Port Chalmers to the mouth of the Fly River the coast is still almost a "terra incognita." From the Fly, along the coast as far as Saibai, everything is perfectly quiet. Timber getters frequent the rivers, and pearl shellers visit the shores and islands in that locality. I have heard of no serious casualties there, and do not anticipate them, though there are occasionally brushes between the coast and inland tribes.

Summarising the existing state of affairs, I arrive at the conclusions that—

1. Authority should be organised at Port Moresby, and British sovereignty proclaimed.

2. That the Commissioner or future Administrator should have an armed vessel ot his disposal, for use in the Louisiade Group.

3. That only a small Revenue can be expected in the first few years.

4. That no substantial progress will be made unless Europeans are encouraged to settle in the territory.

5. That the number should be limited, but that their lives and property should be protected.

I append a statement of probable expenditure up to the 31st December 1886 showing balance then available.

I add to this an estimate in detail of probable receipts and expenditure up to the 1st of June 1887, being the close of the financial year on account of which payments are made by the Australasian Colonies.

Thursday Island, Torres Straits,

September 1, 1886.

(Signed)

JOHN DOUGLAS.

RECEIPTS cont.

Dz.

1886.

£ . d.

1886.

('k

+ 3. ď

ť

4.

d.

EXPENDITURE-cont.

JULY.

"Governor Cairns," an account

of salaries and wages

Salaries, June

· 150 0 41

Stores, &c.,

*Goldie

3

Stores,

Xc.,

Liljellad

10

(1

0

-

Incidental expenses

604 M

( 3

O

201 13

4

"

July

58

N

350

t'niforme

1X

0

Gaol contract,

advance 01

Berount

·

Surveys, advance on account - "Daisy," purchase of cutter Salaries, &c., Port Moresby May-June (paid from A. Musgrave's cash credit)

200

125 300

U

0 0

(}

-

431 17 11

2183 18

AUGUST. "Governor Cairns," on ac- count of salaries and wages

233 6 N

150

U

·

August 291 13 4

525

0 1

G 0 0

4 3

Salaries, July

11

Travelling expenses

Cablegram

Stationery

Dr. Clarkson. Fee as medical

officer for 10 weeks Probable amount of payments made by Assistant Deputy Commissioner At Port Moresby for July and August

4 10 6

50 0 0

500 0 0

1246 14 9

PROBABLE EXPENSES TO END OF YEAR 18T SEPTEMBER TO 31ST DECEMBER 1886 (Four Mostus).

Port Moresby Establishment - 1000 00 Salaries, Special Com-

missioner

Salaries,

- £625 Assistant

Deputy

Commis-

sioner

Salaries, Accountant

175 100

900 0 0

520 0 0

754 0

0

360

0

"Governor Cairns "

Gaol. Balance of Contræet

Surveys.

Do.

* Governor Cairns," Charter of, from 1st May to 31st December -

II. . Forbes. Salary

200

0 0

"Coral Sen," C'harter of

120 U U

200 0 0

Vessel for Western Division,

500 0 0

600 0 0

purchase of-

Buildings

Harbour improvements, buoys,

beacons, mooring, &c. Mail contract, from 1st May

to 31st December 1886

- 300 U 0

400

0

5854 O

0

Enclosure 2 in 20.

BRITISH NEW GUINEA.

STATEMENT showing actual and probable RECEIPTS and EXPENDITURE of the PROTECTORATE from the 1st June to 31st December 1886.

DR

RECEIPTS.

£ 8. d. £ a. d.

EXPENDITURE.

JUNE,

·

- 7455 4 9

1886.

££. d.

£

CR.

.. d.

*90 6 2

Insurance Incidental expenses, postages,

&c. -

190 12

6

21 0 0

2668 18

9

2699 4 11

H. O. Forbes, salary Joly-

August

Travelling expenses (Special Commissioner and Staff) Stores, trade, etc.

100 0 0

53 18 0

•

98 19 8

459 10 2

1886.

June Balanco from 31st May

.. 26 Tasmanin, further contribu-

tion

July 23 New Zealand, contribution to

1st June 1886

Dec. 81 Probable balance

£10,154

9 8

9744 3

I

410

6

7

€10,154 9 8

B. A. HELY, Accountant.

Thursday Island, September 1, 1886.

This amount represents about six months supply of provisions, trade, &c. for the Government Establishment at Port Moresby. The account remained so long outstanding, in consequence of the unsettled state of affairs subsequent to Sir Peter Scratchley's death.

Nn 2

PUBLIC RECORD OFFICE

C.O.

Reference -

885/

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