In an endeavour to clarify certain ambiguities in the original Act, another Act was passed in 1874. The University of New Zealand was to be exclusively an examining body, administered by a Senate of 24 members comprising the existing council and four others appointed by Government A Court of Convocation, to be set up when the number of graduates reached 30, would have the right of electing a proportion of members. Provision was made for finance but most of the reserves set aside for university purposes were resumed. The nature of the University of New Zealand, thus clearly defined as an examining body, was to be the subject of controversy for many a year to come. The charter that followed in due course, in 1876, gave recognition to degrees in arts, law, medicine, and music: it was not till 1884 that degrees in science were recognised by a supplementary charter. Interminable argument continued inside the Senate and outside: about the requirements for degrees, about syllabuses, about the methods of examination, and about standards; until at last, in 1879, the Senate decided that all examinations for degrees and honours should be conducted by examiners in Britain. A general matriculation examination was also instituted.

But many problems remained unsolved. Hence, at the instance of Robert Stout, then Attorney-General, a commission was appointed in 1879, by which time there were over 100 undergraduates, and in Otago an incipient medical school and a mining school. The commission comprised 13 members, among whom were four members of Parliament, four from the Senate, and five professors of Otago or Canterbury. It recommended the disaffiliation of the secondary schools that had been recognised in various places and the establishment at Auckland and Wellington of university colleges. All four colleges would be colleges of the University of New Zealand, governed by a Senate largely composed of representatives of the colleges, which alone should have power to confer degrees, and to make general regulations about qualifying conditions. In other respects the colleges would have sufficient independence to develop “marked individuality” and “sufficient influence over the examinations to prevent their being of such a kind as to require or foster a rigid uniformity in the course of instruction”. Professors were to be appointed by college councils, to be regarded as professors of the University, who ordinarily would act as its examiners. For this reason and also to prevent “the undue multiplication of technical and professional schools and of giving a special character to each college by attaching different schools of that class to the different colleges”, it was recommended that the sanction of the Senate be obtained before any college established a new chair or lectureship.

On most of the recommendations there was near unanimity; and the adoption of the report by the Government and the University would have put the University on a footing that was not reached for many years to come but the depression, which followed the Vogel boom, was a time of financial strigency. The Senate itself could do little, and in that little was guided by conservatism.