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MICABLE relations with the natives being thus established, Sir Peter proceeded at once, with the assistance of Mr. Musgrave, to select a site for Government House. They decided on a position originally chosen by the "Argus" Expedition for the official buildings, and one on the adjoining rise for the Governor's private residence, the great advantages of these sites being the vicinity of a good spring of water, and a splendid view all over Port Moresby and Fairfax Harbour. An expedition to Bootless Inlet occupied the day after my return, the Governor and his party being accompanied by Captain Pullen of H.M.S. "Lark," who made some observations. The report was not favourable to any settlement being established on this inlet, as it possesses no river nor agricultural land, and is a mere cul de sac. Before leaving Port Moresby we were fortunate enough to witness a native regatta, in which the trading vessels (Lakatois) already mentioned were competitors. The scene was animated beyond description, the crowd on shore being as excited during the contest as those on the