of factories upon the principle I have mentioned would necessarily entail, funds might be obtained from a variety of sources, such as a small fee on the registration of the purchase of land from the natives, on the entry and clearance of British shipping, and a small percentage on goods and produce imported and exported. The great security which would result from this system would, it is conceived, readily dispose the British subjects resident in New Zealand, to conform to such an impost." After acknowledging the primary need for Imperial legislation to give effect to his suggested policy, he continues: "The benefit which may be supposed to arise from the establishment of factories in New Zealand is not confined to the mere legal protection they are supposed to afford; but we may hope they will be the means of introducing amongst the natives a system of civil Government which may hereafter be adopted and enlarged upon. Nor is it to be overlooked that in times of intestine war they will afford a safe retreat to our fellow-countrymen, who will then become powerful by concentration." In the estimation of Sir Richard Bourke, Captain Hobson's scheme contained "suggestions of great value," and in transmitting it to the Colonial Office he not only gave it his full endorsement, but justified it because it was in his opinion "neither possible nor desirable to put a stop to the growing intercourse between the English colonies in these seas and New Zealand." He also raised his voice against the neutral policy which was being pursued, for while admitting the failure of the British Residency, he protested that "it would be difficult for His Majesty's or this Government to act for any length of time upon the stern principle of non-interference if the lives and property of British subjects appeared to be in jeopardy. Any plan, therefore, by which the intercourse may be sufficiently regulated, and usurpation, real or apparent, avoided, is well worthy of serious consideration." Simultaneously with Captain Hobson's scheme, was sent a letter from Mr. Busby, written while the _Rattlesnake_ was in New Zealand waters. In this communication the Resident also endeavoured, for the guidance of Ministers, to reduce to a system a scheme of government based upon his several years' experience of the people and the country. Governor Bourke evidently looked upon it with a less favourable eye than he did upon the report of the naval officer, and commended it merely as advancing "suggestions that were not without value." This letter must, however, be regarded by all historians as the more valuable of the two, for in it will be found the germ of the treaty which was afterwards adopted by both _Pakeha_ and Maori as the basis upon which New Zealand was taken into the British Empire; upon which her past progress has been built, and her future prosperity must depend.