James Mackay, who was of Scots descent, was born in London, England, on 16 November 1831 to James Mackay and his wife, Ann. He arrived at Nelson, New Zealand, on 26 January 1845 on the Slains Castle in the company of his father, a well-to-do farmer, and his cousin Alexander Mackay. On 10 June 1862 he married Eliza Sophia Braithwaite at Nelson. A son, James Edward, was born in 1865 and died in 1866. A daughter, Emma Beatrice, was born in 1867.
Until coming of age in 1852, Mackay helped to farm his father's land at Wakapuaka. He then took up a licence for a sheep and cattle run near Farewell Spit, and later purchased 1,500 acres. He also took part in expeditions into the rugged mountain country of north-west Nelson and the West Coast, then little known to Europeans.
Payable gold was discovered at Aorere in December 1856, and by 1858 there were some 1,300 Europeans and 600 Māori working on the Collingwood goldfields. Fluent in Māori, Mackay often mediated in the many disputes that arose. Through the intervention of his father with Donald McLean, the native secretary, and Alfred Domett, MHR for Nelson, Mackay was in 1858 appointed assistant native secretary in the Nelson goldfields district, and in 1859 resident magistrate, justice of the peace, and warden at Collingwood. A long association with McLean's Māori land policies began. It ended only with McLean's retirement in 1876.
On 3 November 1858 Mackay was instructed by McLean to purchase Ngāi Tahu title to the Kaikōura block of 2,500,000 acres and the Arahura block of 7,500,000 acres. They comprised most of the future province of Marlborough and the whole West Coast from Kahurangi south to Milford. Mackay was instructed to pay £150 for each block. With his cousin Alexander Mackay he proceeded to Kaikōura, where the position of Ngāi Tahu had been compromised after Governor George Grey paid Ngāti Toa for the block in 1847 at Wellington. European settlers had since moved in. James used these circumstances to beat Ngāi Tahu down from their asking price of £5,000 to £300. Ngāi Tahu requested a reserve of 100,000 acres between the Kahutara and Conway rivers, but Mackay provided only 5,566 acres 'of the most useless and worthless description', telling the Māori that if they wanted any more they would have to buy it back from the government. Mackay duly reported these matters to McLean, presenting him with the deed of sale completed on 29 March 1859. Subsequently he enjoyed McLean's favour.
Mackay then proceeded from Christchurch to Māwheranui (the Grey River) via the Hurunui Saddle. He saved John Rochfort, a Nelson surveyor, from drowning in the Taramakau River, but failed to purchase the Arahura block. On 16 January 1860 he left Nelson for the Arahura once more, on the greatest of his expeditions – to prove the inland route via the Maruia River to Māwheranui. En route, near Rotoiti, he briefly joined Julius Haast. He reported: 'we followed up the spur of a hill…named by Mr Haast Mt McLean; and after a birchological pull up, we reached the summit.' He later sent Haast friendly messages regarding bush routes, signing himself 'Birchologist'. After severe privations Mackay and his Māori companions reached Māwheranui. On 21 May 1860 Mackay finally completed the Arahura purchase for £300. The Māori vendors were allowed about 10,000 acres in reserves and were promised (but did not get) sole rights to the riverbed of the Arahura, because of the greenstone which lay in it. Against Mackay's wishes they obtained the Mawhera reserve, where Greymouth now stands.
In July 1863 Mackay was summoned to Auckland to assist in Grey's Waikato policy. Mackay's personal qualities were invaluable at this time. According to Arthur Dobson, as a bushman he was 'the peer of them all'. James Cowan, who knew him in later life, said Mackay was 'the perfect type of frontiersman – of powerful physique, indomitable courage and tenacity of purpose. …Mackay was a man of abundant tact when occasion called, but he had a Highland temper, and he was handy with his fists. …Whenever there was trouble in the Maori districts, in the nervous years following on the wars, the Government sent Mackay to deal with it.'
From February 1864 Mackay was employed by Grey to receive the surrender of tribes in the Hauraki and lower Waikato areas. Instead of letting him return to the South Island, Grey on 5 December 1864 appointed him civil commissioner for Hauraki, where he was expected to cement peace with the tribes. Early in 1865 he was appointed a judge of the Compensation Court and a judge under the Native Lands Act.
While at Ōhinemuri in 1864 receiving the surrender of Ngāti Tama-Te-Ra, Mackay learned of the presence of gold in the area. He was later instrumental in having Māori land opened up for goldmining: reluctant chiefs were plied with loans and eventually signed away the mining rights over their lands to clear their debts. As the Thames goldfields became more populous, Mackay ruled both European and Māori with an iron hand. He became known as 'The Thames Autocrat'.
During the 1860s Mackay entered into a relationship with Puahaere, the daughter of the Māori King, Tāwhiao, and his third wife, Aotea. There were two children of this relationship: a girl, Parearohi, and a boy, Ngawini.
On 16 December 1869 Mackay was elected to the Auckland Provincial Council, on which he served from January 1870 to October 1873. In April 1873, while on a political mission for McLean in the King Country, he narrowly escaped death, being saved by Rewi Maniapoto. For his services, Mackay received thanks from the government, a gift of £500, a piece of plate, and an appointment as commissioner for Māori affairs. Mackay received further praise when on 17 February 1875 at Hauraki, Te Hira, a leader of Ngāti Maru, at last surrendered the mining rights to the Ōhinemuri. Consent had been assured by Mackay's unscrupulous use of the debt system.
After McLean's death on 5 January 1877 Mackay fell out with Grey, by challenging his election as MHR for Thames, and his fortunes soon declined. On 20 November 1879 he was appointed resident magistrate for Greymouth, Hokitika and Nelson south-west goldfields, and warden of the Westland and Nelson south-west goldfields, but by October 1880 he had gone bankrupt over a North Island land deal and had resigned.
After retiring to Auckland, Mackay became interested in Māori land administration, and in 1887 published a pamphlet, Our dealings with Maori lands, castigating the Native Land Court as an imposition on Māori and European alike. In 1896 he moved to Paeroa and became a miners' agent and a land agent. He marked his return to the district with a Māori oration at Thames on 25 May 1896 before his old Ngāti Maru adversaries. It was his apologia.
Voted a government annuity of £75 in 1903, Mackay spent his declining years in poverty and died at the age of 80 at Paeroa on 10 October 1912. In 1942 a plaque to his memory was unveiled in Paeroa.
In his time James Mackay was a popular hero, one of those individuals on whom the expansion of empire depended. The Treaty of Waitangi was a closed book to him. However, his cousin, Alexander Mackay, who became commissioner for native reserves on 7 October 1864, was appalled at the impoverishment of Ngāi Tahu in Canterbury and Otago and attributed this to the meagre reserves allowed by McLean and Grey. For the rest of his life he sought justice for Ngāi Tahu. His royal commission reports of 1887 and 1891 on South Island Māori land claims provided a damning indictment of the policies which James Mackay had so willingly supported.