Settlement from 1840 to 1852
The land claims included one for 20 million acres lodged by the New Zealand Company. This organisation, a product of the colonising theories of Edward Gibbon Wakefield, was responsible for the founding of settlements at Wellington in 1840 and Nelson in 1841. Wakefield's influence had earlier led to the formation of an association to colonise New Zealand, but an attempt to gain legislative backing from the British Government in 1838 failed. The Association was then dissolved and some of its promoters formed the New Zealand Company which sought a charter from the British Government. The charter was not then forthcoming and the company, deciding to act on its own initiative, sent a preliminary expedition led by Colonel William Wakefield to purchase land as the site for the first settlement. Colonel Wakefield's party reached Wellington Harbour in September 1839 and negotiated successfully with a number of Maori chiefs for land on both sides of Cook Strait. Shortly afterwards the first body of immigrants left England and arrived at Wellington Harbour on 22 January 1840, a week before Hobson reached the Bay of Islands. Land in the Wellington settlement had been offered for sale in London on 1 June 1839 and sold rapidly.
A remarkable feature of this sale was that it took place before the company had bought the land. The result was that the settlers arrived to find the land unsurveyed and the Maoris disputing title to much of it. Investigations into the company's claim to have purchased 20 million acres in all continued for several years, and the purchase of only a small proportion of the area claimed was finally recognised. Meanwhile, the disputed land purchases led to fighting and threats of fighting at each of the company's settlements – Wellington and its satellite settlement at Wanganui, New Plymouth, and Nelson where the so-called Wairau massacre took place.
Early in 1841 the company received its royal charter allowing it to buy and sell land, and authorising a Crown grant of 4 acres for every £1 it spent on colonising.
In 1841 a subsidiary body, the Plymouth Company, founded a settlement at New Plymouth, and church settlements were established on Wakefield principles, with the assistance of the New Zealand Company, at Otago in 1848 by the Otago Association, an association of lay members of the Free Church of Scotland, and at Canterbury in 1850 by the Canterbury Association promoted by the members of the Church of England. Of the major settlements by 1850 only Auckland, which grew rapidly following its proclamation as the seat of Government, was not a planned Wakefield settlement.
Wakefield believed that progress in a new settlement largely depended on the controlled interplay of labour, land, and capital. This could be effected through the sale of land at a “sufficient price” instead of being granted free. The price should be high enough to force labourers to work for landowners for a number of years but not so high as to prevent the thrifty labourers from becoming landowners themselves. The sale of land was to provide revenue for Government and funds to finance the immigration of other labourers. Wakefield claimed that the disposal of land would result in a demand for labour to develop the land and at the same time would provide the funds to import the labour. It proved impossible to fix upon the “sufficient price”, and the high proportion of absentee owners in the early company settlements meant little demand for labour. But the value in Wakefield's theories lay in acceptance of the policy that land should be sold and the revenues used for public works and immigration, and that a policy of selective immigration should be followed.
The early phases of Government land administration were determined by royal instructions issued on 16 November 1840 and given effect to by the Governor, who remained in direct control of the administration of Crown land until 1849, when the first Commissioners of Crown Lands were appointed to assist. The royal instructions authorised the survey of the colony, the creation of reserves for public purposes, and the sale of land either to persons paying the purchase money to the Treasury in New Zealand or to the Government Agent of the colony in London. Relatively few sales took place before 1853 but the principle of selling land rather than making free grants was followed, and both Crown and New Zealand Company land was sold at a minimum price of £1 an acre. Pastoral licences were on an annual basis at the outset but were authorised for 14-year terms in 1851 at an annual fee of £1 for each 1,000 sheep depastured.
Investigations into purchases of land from the Maoris to determine their validity added to the uncertainty of the land title position and held up the progress of European farming. At the same time, limited funds available to Hobson meant that the Crown was unable to buy much land to resell to new settlers. With old and new settlers and the Maoris all dissatisfied with the situation, Hobson's successor, Governor Robert FitzRoy, on 26 March 1844 waived the Crown's right to pre-emption and authorised individuals to buy land from the Maoris, subject to the payment to the Crown of 10s. an acre, reduced in October 1844 to a penny an acre.
FitzRoy was recalled and replaced by Captain (later Sir) George Grey, who in 1845 restored the Crown's right of pre-emption to bring some control over the confused land situation in the North Island. The pattern of land purchase Grey introduced worked well, with the Government's Land Purchase Commissioners negotiating purchases at tribal meetings with large numbers of Maoris signing the deeds of sale – this was necessary because of the complicated nature of Maori land ownership. Under Grey the Crown bought large areas of land in the North Island and almost all of the South Island, and only in Taranaki and Auckland was insufficient land bought to meet the settlers' demands.