The second clause of the treaty proved to be the storm centre of the compact. By those natives who took the trouble to reason out the purpose and effect of the negotiation it was unanimously approved; by the land-jobbers it was as unanimously condemned. Guaranteeing as it did to the tribes the full and complete possession of their lands, fisheries, and forests, it complied with the one condition that made the treaty tolerable to them; yet by reserving to the Crown the right, by pre-emption,[167] to become the medium of purchase between the natives and the settlers, it provided the contentious point upon which all who were interested in the acquisition of land concentrated their attacks. Nor was this opposition shown merely because by a broad sweep of the pen the speculator's sphere of operations had been materially limited for the future, but the hostility became the more vehement because by an equally bold assertion of a great principle of law, the treaty called under review all that they had done in the past. The acknowledgment by the British Crown of the native title to all the land in New Zealand, whether waste or cultivated, was in the opinion of many a blunder grievous enough; but that the Crown should claim the right to scrutinise all titles which had been acquired before sovereignty was declared, was an excess of zeal which they regarded as nothing short of preposterous.

This feeling of indignation was rampant amongst those who were deeply implicated in land speculations when the proclamations were issued at Sydney and the Bay of Islands, declaring null and void all titles which were not derived from the Crown; and their ideas of British enterprise were even further outraged when on May 28, 1840, Sir George Gipps introduced to his Legislative Council, "A Bill[168] to empower the Governor of New South Wales to appoint Commissioners to examine and report on claims to grants of land in New Zealand."

In addition to the gigantic pretensions put forward by the New Zealand Company there were 1200 claimants whose demands upon the soil of the country varied from a single rood to over 20,000,000 acres. Three of these exceeded 1,000,000 acres each; three others were claiming 1,500,000 acres between them; three others comprised more than 25,000 acres each, while upwards of thirty persons expected to be placed in possession of more than 20,000 acres each, the aggregation of alleged purchases amounting to 45,976,000 acres. "Some of these claimants," says one writer, "had nothing more to show for their purchases than an ornamental scrawl on a deed which was so phrased as to be unintelligible to the chiefs who signed it." To reduce these wholesale purchases to some principle regulated by justice was the purpose of the Government; to let the dead past bury its dead was the fervent wish of all those who had entrenched themselves behind Maori signatures.

By the following June 25 the provisions of the Bill had been widely circulated, on which date a spirited protest against its enactment was received from a number of gentlemen claiming to be landowners in the new colony. This document, which was presented to the Legislative Council by Mr. H. H. Macarthur, set out that the petitioners having perused certain proclamations in the New South Wales Government Gazette of January 22, as well as the Bill introduced by the Governor, they submitted that their rights and privileges as subjects of the Queen and as landowners in New Zealand would be unwarrantably and unconstitutionally invaded by the provisions of the said measure. They therefore prayed that they might be heard by the Council in protest against such unjust legislation.

So reasonable a request was readily acceded to by the members of the Legislature, and on June 30 Mr. Busby, the former British Resident, Mr. William Charles Wentworth, Mr. A'Beckett, and Mr. Darvall, barristers-at-law, were introduced to the Council, and on that and several subsequent days addressed the members in opposition to the Bill.

The burden of Mr. Busby's contention in defence of his claim to 50,000 acres, including the site of a township, was that the Bill sought to legalise confiscation, and that therefore the principles which it was designed to enact were at variance with and in excess of all that was sanctioned by the British constitution.[169] No doubt, he said, there were many claims to land in New Zealand which would not bear investigation; but contrariwise there were many respectable settlers on the banks of the rivers and shores of the harbours who would be deeply injured were the proposed Bill to become law. This injury would be all the more ruthless because no attempt had been made by the Government, now become so paternal, to prevent British subjects acquiring property in New Zealand, as had been done in the case of those settlers who had come over from Van Dieman's land to originate the settlement at Port Philip. No sooner did it become known that these speculators had purchased extensive tracts of country from the aborigines than a proclamation was issued declaring the illegality of their proceedings. No such prohibition had, however, been put upon the acquisition of property in New Zealand, where the settlers, relying upon certain acts of repudiation by the British Government, had purchased from the natives in the belief that they were negotiating with an independent people. Mr. Busby proceeded to review the various stages of New Zealand's history in order to emphasise the events by which the independence of the chiefs and people had been repeatedly acknowledged, and concluded by asking why the chiefs had been induced under the Treaty of Waitangi to surrender the pre-emptive right of purchase to the Queen if they had never had the right as an independent people to dispose of their lands as they pleased?

Mr. Busby was followed by Mr. Wentworth, one of the local Magistrates, who was claiming 100,000 acres in the North Island, and practically the whole of the South Island except some 3,000,000 acres which he magnanimously conceded had been already sold to other purchasers. The history of Mr. Wentworth's claim, which to say the least, was one of the most scandalous in the long list of extraordinary transactions with the natives, is thus told by Sir George Gipps in his despatch to the Chief Secretary for the Colonies,[170] in which he intimated that in consequence of the part Mr. Wentworth had played in this flagrant attempt to flout the Government, he desired to withdraw a recommendation he had previously made in favour of this gentleman's appointment to the Legislative Council.

"In the month of February last" (1840), wrote Sir George, "seven[171] chiefs from the Middle Island of New Zealand happening to be in Sydney, it was suggested to me by the persons who had brought them here, and under whose protection they were living, that they should be invited to sign a declaration of willingness to receive Her Majesty as their sovereign, similar in effect to the declaration which Captain Hobson was then engaged in obtaining from the chiefs of the Northern Island. The chiefs in question were accordingly brought to the Government house, and, through the medium of an interpreter, the nature of the document they were required to sign was fully explained to them in the presence of myself, the Colonial Secretary, and several persons who claimed to have purchased land in the Middle Island; and amongst other things it was expressly declared to them that only such purchases of land as should be approved by Her Majesty would ultimately be confirmed. At the conclusion of this conference a present of ten sovereigns was made to each of the chiefs, and they all promised to attend on the next day but one to sign the paper which was to be prepared for them. On the day appointed, however, none of them appeared; and in reply to a message that was sent to them, a short answer was received by one of the Englishmen, under whose protection they were, that they had been advised to sign no treaty which did not contain full security for the possession by the purchasers of all lands acquired from the natives.

"It subsequently appeared that it was by the advice of Mr. Wentworth that they adopted this course of proceeding; and Mr. Wentworth, when before the Council, acknowledged that he had not only given the advice, but also that he had subsequently and after the issue of my proclamation, in conjunction with four or five persons, purchased the whole of the Middle Island (or all the unsold portion of it) from these very natives, paying them for it £200 in ready money, with a promise of a like sum as long as they should live.[172]

"Such was the origin of Mr. Wentworth's claim to twenty millions of acres in the Middle Island," continued Sir George, "and it was the legality and validity of this transaction that he appeared before the Council to defend."