Before taking up his post Fergusson had paid a brief visit to England but began to have second thoughts about a career in colonial administration. The Gladstone government was unpopular and a return to office by Disraeli looked likely. Fergusson felt obliged to assume the appointment he had accepted and took office as governor of New Zealand on 14 June 1873. He found local politicians as jealous of their autonomy as those in Australia but the political situation was more stable and there were no elections and only one premier, Julius Vogel, during his eighteen months as governor. He established close relations with Vogel, for both men were ardent imperialists and Fergusson strongly supported Vogel's grandiose schemes for the extension of New Zealand's influence in the south Pacific. Such schemes exasperated the Colonial Office and were rejected out of hand not only by the Liberal secretary of state, Lord Kimberley, but also by Lord Carnarvon, who succeeded him in February 1874 when Disraeli returned to power. Ultimately New Zealand's concerns were partially satisfied by the British annexation of Fiji in October 1874. By then Fergusson had announced his resignation as governor and he left the colony on 3 December 1874 to try his luck again in British politics.
On his return to Britain Fergusson was made KCMG. In March 1875, while awaiting a suitable chance to enter parliament in a by-election, he was appointed chairman of a royal commission on the Factory and Workshop Acts. It was the only thorough inquiry into the subject in this period. It reported in February 1876 and comprehensive legislation followed in 1878. Meanwhile, Fergusson contested Frome in November 1876, but lost by ninety-three votes. He chaired another royal commission in 1877 and then in January 1878 contested Greenock, a Liberal stronghold, and lost by sixty votes. Such failures were both costly and disheartening, and when the government's popularity began to wane under the stress of agricultural and trade depression and unpopular foreign wars, Fergusson, who received the honorary degree of LLD from Glasgow University in 1879, again turned his mind to imperial administration. On 10 March 1880, on the eve of Lord Beaconsfield's fall from power, Fergusson accepted appointment as governor of Bombay, a post he assumed on 28 April 1880.
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