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Yoc have beeti already informed that s correBpondence has been for some time in progresB between Her Majesty's Government and the Hudson's Bay Company on th« subject of the resumption by the former of Vancouver Island, and the amount which, on such resumption would be payable to the Company under the stipulations of tie grant of 13th January, 1849. By the terms of that grant the Crown was entitled, at the expiration of the Hudson's Bay Company's license of excluaive trade, to repurchase Yanco Ivor's Island on repayment to the company of the sums ot money expended by them upon the Island, and of the value of their establishment, property and effects thereon. The license of exclusive trade expired on 13tb May, 1859, and in anticipation of its termination Her Majesty's Government gave notice to the company, in the close of 1859, of the intention of the Crown to resume the Island, and requested them to send in » statement of the amount of which they would be entitled to claim repayment. The claim which they sent in in the first instance embraced the whole of their expenditure and amounted to £225,699, but on being informed that Her Majesty's "Government declined to take over any of the establishments or property connected with their commercial tranB< actions, they furnished an amended account, comprising only three items, viz. : 1. The balance due on account of Public Works and Establishment! amounting on 3 lit December. 18&1. .......£ 8,606 611 2. The cost ot sending out settlers ........ 26,660 6 3. The expense of searching for coal at Fort Rupert .... 12,469 4 7 £46,624 11 6 The company however have since intimated that they do not wish this to be taken as a final restrictiea on their part ot their claims to those enumerated in this list. To the two first items (assuming the details to be supported by vouchers) Her Majesty's Government did not object, but the third appeared to them to stand on a different footing. It is unnecessary to trouble yon with a detail of the oorrespondence that ensued, it is sufiBoient to state that Her Majesty's Government being convinced after full consideration that a farther and indefinite dal&y in the settlement of the matter would be detrimental to public interests, and that an examination of the matter on the 106842 2 ■pot would probably involve oonsiderablo expense, thought it most advisable on the whole to effect a oompromise on the point with the Hudson's Bay Company. They therefore proposed ^hat the expense of the Fort Bupert Coal Mine should be divided equally between the Crown and the company, and the company havinir arceded to t) al proposition a vote of £25,000 will be proposed to Parliament during the present ie8si()ii ill ])art repayment of tlio amount due to the company. The vute has been limited to the above sum because tbe account of expenditure for Pui lie Works, etc., has, as I have stated, been furnished only to Slst December, 1859, and antil that account is completed tbe exact amount to which the company will be entitled cannot be ascertained. ,> -.j, " . "•■'-*' The company have apprized me of their readiness to receive the amount proposed to be voted, and to convey to you the necessary authority to make grants of land, not however, including any of the lands belonging to, or which have been registered as belonging to the cnnipuny, whether in their own posacssion or in that of third parties. As the title of thu coniDHny to these lands is now under investigation this reservation is reasonable nnd muHt bo acquiesced iq. In regard to other lands in Vbncouvor's Island you will, on nuciving the above authority from.the company, take the necessary steps tor throwing them open for setttoraent. The measures for making the payment of £25.000 are so far advanced that I have every reason to hope that you will receive the intended authority by the present mail or by the next one at the latest. I nhall have no objection to the adoption of the price of 48. 2d. per acre, which has been recommended by the Legislature with your concurrence. Upon other questions conneotod with the manner of disposing of the Crown Lands I shall address you by the next opportunity. I have, etc.. (Signed) NEWCASTLE. OoyxBNiB DouoiiAi, C.B, &0., &0.; &0. No. «. BXBCUTIVl. ViCTORXA, V. I., 10th January, 1861. My Lord Duke, With reference to your Grace's despatch of the 28tb June, 1860, No. 26, upon the subject of the resumption of Vancouver's Island by Her Majesty's Government, and of tbe temporary arrangement made for the disposal of land not heretofore dealt with by tbe company, I have the honor to acquaint your Grace that I received by the same mall with your despatch the undertaking to which you allude from the Governor ot the company to confirm all sales of such land that I might make. 2. There is, however, one serious drawback to this arrangement, for by it all the deeds must be forwarded to the company, in England, to be perfected by the attach- ment of the corporate seal of the company, the use of which it is stated cannot b'3 dele- gated. I am not aware whether your Grace contemplated this process, but it is one that will be productive of much embarrassment. Under the old system, when land was paid for by inotalments, the practice was found inconvenisnii, but under existing cir- enmstances, when land m«y be sold by auction and paid for at once, the delay and uncertainty attending the issue of the title may, I fear, have the effect of depreciating its value. 3, As an instance of the delay consequent upon (Eending the deeds to England, I would mention that in February, 1859, certain title deeds were forwarded for execution, and that up to tbe present time they have not been returned ; constant enquiries have been made at the land office for them, and their non-arrival, combined with a rumor which has circulated that the company do not intend to confirm the appropriation made of Und for the public park and cbnrob reserves, has created a feeling of distrust em- barrouing to this Goreroment, 8 4. I have specially addroased the company upon tbo Hubject of the non-arrival of these deeds, and in replying to the communication before alluded to irom the Governor uf the company, I have again adverted to the ciroumstanco, as will be seen from the copy of the letter I enclose herewith. 5. My recent despatch. No. 51, of the 7th December last, will throw much light upon the claim now under the consideration of the Judicial Committee of the Privy Council, made by the company to 3,084 acres aiound Fort Victoria, and I trust I may be pardoned for urging upon your Grace that no settlement of the claim should be admitted which would in any way infringe upon the reserves tnade and virtually gua- ranteed to the public by being marked upon the o£Scial plan and used as appropriated. 6. To convey a olearor idea of the position of the lands in question I forward herewith a rough sketch map of town of Victoria and environs, upon which the portions reserved for governmental and public purposes are distinctly marked and noted in oolor. I have, ic, (Signed) JAMES DOUGLAS. His Gbaoe the Duke ov Newcastle. &c., &o., &o. No. M. Sir, Downing Street, 15tb April, 1861. I have the honor to acknowledge the receipt of your despatch No. 6, of the 10th of January last, in reference to the arrangements connected with the resumption of \ Vancouver Island by Her Majesty's Government. There is no doubt that inconvenience and delay must be occatiioned by the system to which you refer of sending to England all deeds cf grants of land in Vancouver Island, in order that the seal of the Hudson's Bay Company may be affixed to them ; but this appears to be unavoidable so long as it is necessary to the validity of the grants that tbey should bear that seal. Tho arrangement, however, is temporary only, and will, 1 trust, shortly be discontinued, au soon as the pecuniary accounts between Her Majesty's Government and the Company are adjusted, and the island is ruconveyed to the Crown, the usual more couAcnient system will no doubt be brought into operation. With regard to the recommendation contained in your despatch on the settlement of the company's claim to land around Fort Victoria, I have to inform you that until the title of the Hudson's Bay Company to lands by reason of occupation prior to 1849 is decided no steps can be taken for the settlement of the question respecting this par- ticular land; bat that when a decision has been obtained on the general question, the local government will be consulted belore deciding on the final arrangements to be made with the company in regard to the disposal of tho ground in the vicinity of Victoria. t have, &c., (Signed) NEWCASTLE. Governor DouqiiAs, C.B., Ac, &c., &o. Sir, Hudson's Bat House, London, June 20i'.b, 1860. In accordance with arrangements which have been made with Her Majesty's Government you are hereby authorized on the part of this company to dispose of such of the land in the Island of Vancouver as has not already leen disposed oi by tbk company, or as is not claimed by them as having been their property prior to the grant of the Island from the Crown. \^ You are aware tbit the land so otaitced by them oonaists of 3)084 acres, with Fort Yiotoria and other buildincs erected thereon, and that i>he whole is registered in the oame of this oompany. You will distinctly understand, therefore, that the present authority does not extend to any part of the property registered in the name of this oompany, or to any part which has already been conveyed to other parties. As It is necessary that the conveyances to purchasers should be under the seal of this oompany, and as this company have not the power to delegate the use of their seal to any person whatever, it will be necessary that the conveyances of the property you may dispose of under the present authority should be sent over here, as in all former oasea, for the seal of this company to be affixed to them ; but you will consider the present communication as an engagement on the part of this company to give effect to anything you may do within the scope of tbo authority now delegated to you. It is of course understood that in anything you may do you are to act altogether under the instructions of Her Majesty's Government, from whom you will no doubt have already received the necessary advices. I have the honor to be. Your Excellency's very obedt. Servant. (Signed) H. H. BBRBNS, His Excellency James Douglas, C.B., &c., &o., &o. Governor. K*.l. Sir: DoWNiNO Street, 2d January, 1860. With reference to your despatch. No. 47, of 12th of September last, and my answer of the 1st ultimo relative to the erection of public buildings in Vancouver Island. I now transmit yon copy of a letter from Mr, Berens commenting on your despatch on behalf of the Hudson's Bay Company and of the answer wiiioh I have caused to be addressed to that gentleman. Yc «'" observe that it is necessary that your report on the whole subject should be fall t olanatory, n» the matter is one involving serious considerations. Yc also observe strictly the caution expressed in that letter, and let it be fblly anaeT.i(;ood that Her Majesty's Government are not prepared to recognize any private ownership of soil in Vancouver Island by the company by any title anterior to the grant. It must rest with the company to take such steps in vindication of such supposed title as they may think proper. You will further furnish me with as little delay as possible a report in which the land claimed by the oompany in Vancouver Island by anterior title is distinguished from such land as they may have acquired in their private capacity, and in accordance with the land sales regulation since the date of the grant. On this subject I have to refer yon to your despatch of 15tb Julyr 1858, containing a return of " Land sold to any individual or company/' in which the Hudson Bay Company appear as purchasers of NTeral specified lots. I have, etc. (Signed) NEWCASTLE. Governor Pouolas, &c., &o. Hudson Bat House, London, December 16, 1859. JHy Itord Duke : I have the honor to acknowledge the receipt of Mr. Meri vales letter of the 7th inst. in which be informs me that Governor Douglas has reported with respect to the advance of 927,000 made by Mr. Dallas, the representative of this company in Vanoottver Island, to defray the expense of public buildings at Victoria, that it was met by the surrender to Mr. Dallas of the site of the old public offices on condition of his Klaoinff at the^disposnl of Governor Douglas the aum of money obtained by the sale. Fr. Merivale requests of me to inform your Grace whether any information has been received by this company of the sale of this land and of the arrangement made with Mr. Dallas. The letter which I had the honor of addressing to your Grace on tho 4th nit. and with which I transmitted a copy of Mr. Dallas' letter to the secretary of this company of the 14th September, contains the latest information we have received upon the subject, and by reference to it your Grace will observe that at that period no reference is made to the sale of the land in quention, and I consequently presume that it had not then been sold. With respect to the arrangement made between Governor Douglas and Mr. Dallas in regard to the advance made by the lat:er of 827,000, 1 am at a loss to understand how under any circumstances it could have been provided for in the manner which Governor Douglas appears to have represented, because, as we read his communication while on the one hand it is suggested that the advance in question was met by the surrender to Mr. Dallas of tho site of the old public offices, it is added on tho other that this surrender is made on the condition of Mr. Dallas placing at the disposal of Governor Douglas the sum of money obtained by the sale. Unless it is meant that the Govern- ment arc to be responsible to the company for the amount of such sale, this company would appear literally to receive nothing in respect of the advance that has been made. But in point of fact the company entirely denies the right or power of Governor Douglas to deal with the land in question at all, as it formed part of the property possessed by this company in tho Island before the grant made to them by the Crown and therefore entirely irrespective of it, but we have been informed by Mr. Dallas that Governor Douglas had attempted to treat this property as belonging to the Govern- ment, and upon that pretension had advertised it ror sale. This course of proceeding was immediately protested against by Mr. Dallas on the part of the company, and, as we gather from Mr. Dallas' communications, it was distinctly understood that inas- much as the preparations for the sale had proceeded so far, and in order not to cast a slur upon the proceedings ot the Governor who admitted it to be fur trade land, tho sale should be proceeded with under Mr. Dallas direstion and on account of the Hudson Bay Company. It was also arranged between Governor Douglas and Mr. Dallas that as the public buildings were urgently required, Mr. Dallas should advance, iio't tho amount of tho sale uf tho land, but the specific sum ot 827,000, to enable Governor Douglas to proced with the proposed buildings, it being distinctly understood that this advance was a loan which was to be reimbursed to the Hudson Bay Company along with the other payments made by the company under the provisions of Her Majesty's grant. I take leuvo to add that Mr. Dallas' views are entirely borne out by tha iacts. The land upon which the old buildings stand was the undoubted property of the Hudson's Bay Company before the grant to them of the Island. The buildings upon it were also erected at the expense of the Hudson's Bay Company. Indeud Governor Douglas has admitted that both the land and tho buildings belong to the company, as your Grace will see by reference to his address to the House of Assembly on the 7th May, and that fact was confirmed by Mr. Pemberton, the Colonial Surveyor, in the course of a debate on the subject which took place on the 17th May last. The land upon which Governor Douglas is now erecting the new public offices has also been represented by that gentleman to be Government property, but I have reason to know that it is part of the land held by the fur trade long prior to the grant from the Crown. The company will therefore have a claim upon the Government for the value of this land. From this statement I trust 1 have made it evident to your Grace that the advance of 827,000 was actually a loan by this company on Government account and that Governor Douglas is in no way justided in representing the advance as being met by tho surrender to Mr. Dallas of tho site of the old buildings. I 6 In order to plnoe before your Grace iDformatioD on the Bubjeot I have tbe honor 1^ of tranamitting herewith an extract from the Aasombly on the 7lh May last, and a copy of Mr. on the 17th ot the aamo otonth. Ilia Grace the Dukb or Niwoabtle. &c., &o., &c. addreaa of Guvornor Pemberton'a speech in Douglaa to the the Aaacmbly I have, etc., (Signed) U. U. BBBENS, Governor. Sir, Downing Street, 7th January, 1860. I am directed by Hia Grace the Duke of Newer oile to atote in reply to your letter of the 16th ultimo, on the aubjenl of Mr. Dallaa' advance oi 927,000 to the Go* T.ernment of Vancouver's laland, that His Grace agrees in what he collecta to be your opinion, that further information ia required to enable Ilor Majeaty'a Government to arrive at a correct conclusion. Governor Douglaa will accordingly be directed to furniah an exact and circumatantial account. But there are paaaages in your letter which raise an important question. His Grace learna from that letter (and as he believes for the first time) that the company claim land on Vancouver's Island as their own freehold by some original title, as (in your own language) " property possessed by the company in the Island before the grant made to them by the Crown, and theroforf entirely irrespective of it. You refer to a message of Governor Douglas and a speech of Mr. Pemberton in the Vancouver Island Assembly, as showing that this fact is publicly known and acceded to. But those documents speak merely of land as the "property of the company." Until now it had beon inferred in this department that such land had been legally acquired by the company in their private capacity since the original grant. The present claim is therefore new to Hie drace. The Duke must repeat in the first place what has already been aaid in relation to similar claims in British Columbia, that Her Majesty's Government can recognise no claim to land in the foreign possessions of the Crown, except such as is derived either immediately or mediately from the Crown. But there is another feature ihat distinguishes the present cane from that of British Columbia. In the printed correspondence between the company and this department prior to the grant, (printed lat February, 1849,) it appears that tho company in the first instance informed Her Majesty's Government that they had " formed an establishment on the soutbern point of Vancouver laland," and were anxious to know whether they would be confirmed in the possession of such lands as they might find it expedient to add to thoae which they already poaaeased. Without detailing here the particulara of the correapeodence which followed, it is sufficient to say Lord Grey aaaented to the proposal that " lands in Vancouver laland should be granted to the company," thereby obviously implyiug that without such grant none of the land was the company's. The negotiations between thia department and the company proceeded throughout in the assumption that such a grant was neceaaary. And when the grant of the wholfl Island was ultimately made, it contained no. distinction or reservation whatever with regard to the lands now alleged by the company to have been theirs bjy anterior title. All the lands of the Island were "granted" alike and all were made subject to the like power of repurchase by the Crown. Under these circumstances I am to state that His Grace is compelled to decline acknowledging any such claim on the part of the company. And it is neoessaty in order to prevent future miaapprehension that be ahould ao inform the Governor with % view 10 hia guidance. I am, &c., (Signed) H. MBIEIVALH. H. Berenb, E8«j. t, ..IT Victoria, VANcouvia Ialand, 28th March, 1860. My Lord Duke, I have honor to acknowledge the receipt of yoar dispatch No. 1, of the 2nd January, transmitting copy of a letter from Mr. Berens, together with your reply thereto, having reference to the Buhject of the advance of 27,0U0 dollars, niude by the Hudson Bay Company, lor the erection of public buildings in Vancouver's Island. 2. My recent despatch No. 11, of the 16tb ult., will I trust have placed your Grace in poBseRiion of every detail in connection with the transaction, and I will therefore confine myself in this dftspatch solely to the question of the claim now put forth by tho company to the ownorsiup of the land. 8. I must confess that it is not without some surprise that I have perused the letter of Mr. Borons, and 1 am convincod that the course puriiued by that gentleman must originate through want oi. proper und full information in the premises. 4. During the period I have been Governor of Vancouver Island I have alwayi found the iludson Bay Company most liberal in their views and sparing of no reason- able oxponao for promoting the good of the Colony, and in the present instance the right of the Colony to the iand bo.j h so clear and indisputable that I cannot but presume that as soon as the compai)> become aware of the facts in connection therewith they will at once relinquish V claim which I feel assured has only been advanced through misconception. 5. On the 1st January, 1851, tho Hiidson Bay Company acquainted Govornor Blanchard that the sum of £4000 would be ph'jed at his disposal for the erection of Bome of the buildings most urgently required, and informed him that those buildines, "and the lands that may be appropriated with them," wore to be held by him and hit council astrusteea " for tho colony," and further that the site of these buildings should be near Fort Victoria for convenience aud protection. 6. For the better information of your Grace I enclose a coi^y of the entire aespatoh in which the above instructions are embodied. 7. Shortly after the receipt of theso instructions Governor Blanshard left tho colony, but a resideuce for the Governor was put up before his departure, and this very building with the land appropriated to it was that sold in May last, and is now claimed by Mr. Berens on behalf of the Hudson Bay Company. 8. I became Governor Blancbard's immediate successor, and carried out so far as I was able the other arrangements contemplated by the Huason Bay Company. The land appropriated to the Government House was always regarded by me as a go- vernment reserve, and the Colon ial Surveyor hid strict orders from me not to dispose of any pard thereof. And although no formal conveyance had been effected, yet I did not view that circumstance at the time as a matter of any moment, the intentions oi the Hudson Bay Company being so unmistakable. 0. In point of tact had the Hudson Bay Company themselves not adopted the fore- going arrangement, an arrangement which apparently removed all probability of cavil or dinpute, it becomes a question whether the land could not have been reserved from the first under the Charter of Grant which prohibita the disposal by sale cf any land " which may be required for public purposes ;" but as in the interpretation of this pas> sage it is not improbable that some controversy might have arisen, I consider that the Hudson Bay Company acted very wisely and properly at the outset in laying if down as a rule that the lands appropriated, with the public buildings, were to bo held in trust for the Colony. IC Tho gvound upon which the claim is now adranced is, I perceive, considered by Her Majesty's Government as utterly untenable, but were it not so I think that the in- formation I now supply sets the quoBtion entirely at rest bo far as the public reserves Are concerned. 11. I will not fail in famishing your Grace, bo soon as I can obtain it, with the )t<'l HI information yon require as to the land claimed by tbe Hudson Bay Company under a title anterior capacity < to tbo grant, and as to the land acquired by them in their privaie (Signed) His Grace the Duke of Newcastle, &c., &o., &o. I have, &c., JAMBS DOUGLAS. Hudson's Bat House, London, Ist January, 1851. To His Excellency Eiohard Blansbard, &c., &o. Governor of Vancouver Island. Sir : it having been determined that the fur trade concern of the Hudson's Bay Company and tbe Paget Sound Agricultural Company shall respectively become purchasers of considerable tracts of land near to Fort Yictoria, although tbe precise localities and quantities cannot be fixed until the surveys come home. And bailiffs and men having been sent out to commence tbe establisement of farms and cultivation under the supervi- sion of Mr. Douglas the Governor, and committee feel that they may to a moderate extent anticipate tbo funds Trhioh will thus come into their hands in trust for the colonization and improvement of tbe Island. They have therefore determined to authorize Mr. Douglas to make you advances to the extent of four thousand pounds, as it may from time to time be required, in erecting some of the buildings most urgently required. These buildings will have to be made under the direction of yourself as governor and of your council. Tou and your council will hold the same and the lands that may be appro- priated with them as trustees for the Colony. The governor and committee would recommend that a moderate sized but respectable bouse and premises should be erected as the ofQcial residence for yourself as Governor, calculated for the commencement of the Colony rather than for what you may anticipate it may come to in time, as the funds that can be relied upon are limited and small at present. Also that a moderate sized bouse should be erected for Mr. Staines who at present will act as chaplain and schoolmaster. And a room or bouse capable of serving in a temporary way tbe purposes of a church on Sundays and of a schoolroom during tbe week. The site of these buildings should be near the Fon Yictoria for convenience and protection, and the materials should be stone, as preferable to wood, to diminish the risk of fire; there should be a similar erection of a house for the chaplain and school- master, and a building for a temporary cb'irch and schoolroom at tbe principal establish- ment of the Fuget Sound Company. As a principle, a plan and estimate of all public buildings should first be submitted to the Governor and committee for their consideration and sanction, but in the present oaso this may be dispensed with, provided the plans and estimates are approved of and aanctioned by Mr. Douglas. It is to bo understood that the trust fund is only to be applied towards the building and that any annual expense for maintenance of the^buildings, or for salaries, must be raised from the inhabitants by the Governor and his Council by means of a tax upon imports or otherwise as they may deem most expedient. The Governor and committee will be glad to bear from you from time to time, on all thtt may occur, and on all subjects that may concern the advancement of the Colony. I am, etc., A. BARCLAY, Secretary. 9 VAXCOCVKJl ISLAXD. No. 32. Sir, Downing Street, 24tb August, 1860 Your dospatches, dated respectively the 16th February and the 28th March, having bouii referred to the Hudson Bay Company, a letter iiaa been received from them ot which I enclose you a copy. I request that you will furnish mo with your report upon the contents of this letter at your earliest convenience. As the Hudson Bay Company admit that part at least of the bu'Idings upon the land near Fort Victoria are the properly of ths Government, I should wish to be in- lornied whether so much of the produce of the sale as represented the price of those buildingr has been carried to the credit of the Colonial Government. I take this opportunity ot mentioning to 3^ou that the questicn of the company's title to certain land in Vancouver's Island, na their private property anterior to the grunt to them of tho Island, will bo settled by a reference to tho Judicial Committee of the Privy Council. I have, &c,, (Signed) C. FORTESCUE, Governor Douutas, C.B. In the absence of tho Secretary ot State. &o.,!ic.,&c. My Lord Duke, Hudson's Bay House, June 26tb, 1860. I have the honor to acknowledge the receipt of Mr. Under Secretary Fortescao's letter ot the 7th instant, accompanying copies of two despatches from Governor Douglas of the 16th February and 28th March last, having reference to the claim of this company to the land and government buildings erected upon it near Fort Victoria, in the Island of Vancouver. I have now caused reference to be raado to the correspondence wLich passed in the year 1851, at the time when tho despatch referred to in Governor Douglas' communi. cation of the 28th March, was sent to Governor Blanchard. A copy of that despatch was under the same date referred to Mr. Douglas who was then the representative of this company. Your Grace will observe that that despatch contemplated the purchase by this company and the Puget Sound Company of con- siderable tracts of land near Fort Victoria, and it was at that time contemplated that the buildings intended for tho Government should be erected either on a portion of the land so to bo purchased or upon land not then disposed of and therefore belonging to Colony, but it aitci wards turned out that u>idor the directions of Mr. Douglas certain buildings for the Government had already been commenced upon land previously in tho posBossioD of this company, that land being in fact a part of the district claimed by this company, and their righi to which is now to be the subject ot discussion before tho Privy Council. I think it desirablu that your Grace should be put in possession ot everything which has occurred in regard to this subject. In the letter to Mr. Douglas of the Isl January, 1851, which accompanied tho copy of the despatch to Governor Blanchard of that date, instructions to the following effect were given to him : " In the caso of the iur trade the extant and boundaries of tho lADd oecnpied by that concern previous to the data of the boundary treaty must be accurately marked out and agreed with Governor Blanchard and tho Council. For this portion of land no price will have to be paid. But for any future quantity that may ultimately be taken by that concern the same price of 20s. per acre, as paid by other settlers, will have to be paid over to tho Hudson's Bay Company." Before, however, this commuuifiation reached Mr. Douglas ho had under date 2dlh la •Tantiary, 185>1, addressod a letter to the secretary of this compttrty, in which the folloiviiijf paragraph occurs ; " The bouse and premises erected at this place for the residence of Goverbor Biancbard bare eosb 1548 dollarb 55 cents in labor and material, and the Governor i» now making an addition to the house which will come to several hundred dollars more. I have not char^od that sum to the Colony as the site on which it stands belongs to ther iur trade, and I wa« prop'osing that the house and promises should remain a fur tradd possession, and tbnt tbe Colony should bo charged an annual rent of 10 per cent, on the original outlay. I beg to bo informed ot the committee's pleasure on the subject." From this letter your Grace will observe that Mr. Douglas contemplated not only that the Govornmunt buildings should be erected ou !^nd then olain)«d oy this company as their own, but that the Government should pay a rent for the occupation of the land and buildings at the rale of 10 per cent, upon the outlay. This proposition >v'as not approved of, and Mr. Douglas was so apprized in a letter irom the secretary under dater the 23rd May, IS&l, and rn a letter of the same date to Mr. Douglas from the then Governor, Sir J. H. PeHey, Mr, Douglas was informed that the fur trade might reiain the buildrng he bad referred to as having been constructed for the residence of the Government, on paying th-e expense of ei-ecting it and that another house might be' built for the Governor on a different site, but adding, that in all cases of reserves of land it must be understood that if any part was required for public purposeo^it must be re*" Bumed upon repaying the price and any improvements that might have been made upon it,- It appears, liowever, that the Government retained possession of the buildings which had already been ei'ectod on land claimed by the fur trade establishment of thi» company, and the cost of these buildings has, I find, been included in the account of expenditure rendered to the Government by this company and those buildings are' therefore witbont doubt the property of the Goternment ; aUhoueh I find.that the cost of otber public bnildings on the same land, such as the Citetoin Houae and Post Office, have not yet been so charged, hot assuming that the title of the company to thu land in their possession prior to the Treaty of Oregon should bo estoblished, then 1 apprehend there can be no question but that the land upon which those buildings were erected! would be their property, and that the jH-oceeds arisiicm, for I thinlc it clear, whether the claim be admitted or not, that under all the ciroumstanoeB of the case, it is wholly inadmissable that the oompany should bo permitted to monopolise not only the whole town «ite, and thus deprive the colony of the advantages resulting from im sale, but also every available foot of water trontage, and thus reduce tho Government to the level of a private individual, and oblige it to go into the market and buy at an enormous cost what is required for an evident and important public purpose. 4. A few days ago the company sold at auction a portion of the ground upon which formerly stood their first establishment at Yicteria, (its position is marked upon the tracing enclosed,) 51 lots, of an average of 81ft. by 75ft., were sold for the nggro- gate sum of one hundred and twenty-five thousand dollars. Some 60 lots still remain unsold, but I understand the company propose selling as soon as the market will yield a similarly good return. The company also still hold some 300 acres around Victoria (part of their claim of 3084 acres), which they are disposing of fi'om day to day at ])rivate sale, nt tho rate of one hundred pounds an acre. 5. I mention these circumstances to show the largo pecuniary benefit reaped by the company through tbeic tenure of Vancouver Island, and owing ^o the accident of the discovery of gold in British Columbia, and that therefore the company cannot, with any show of reason, complain that if the very insignificant portion of land now sought bo withheld from them, it would bo at all an act approaching to injustice. ^is Gbace the Duke of Kewcastle/ &c., &c., &c. (Signed) I bavoy ke.f JAME8 l>aUGLAS. Coi.ONrAi iSECftlMRY's OttlCT, 15tb January, 1861. Gentlemen > Uis t/xoolfency the Governor having been given to Understand that tho Hudson Bay Company are about to sell certain water fronta^^es in Victoria Harbor, I am desired by His Excellency to reqttest that previonsly to any stcb sale you will cause a reservation to be made of a plot of «^r( und sttitable for a landing place and office for the Harbor Master as the want thereof ^- now becoming sensibly felt and as no sncb appropriation of latid for this indispensable purpose has, as yet, teen made by tho company. 2. The Qove^nfaeht are prepared to repay to the company the actaal ontlay they may have incurred in the purchase of thf? land, and to reimburse the Value of any improvements which may exist thereon.' 3. l^he Colonial Surveyor has received instructions to confer with sQch personit as you appoint as to the site required. I have, etc. The Board oi Management, (Signed) W. A. G. YOU^G. Hudson Bay Company, Victoria. Sir, TicTonlA, 28tb January, 1861. 1 hate to aoltaowlodge receipt of totir letter of the 15th instant addressed ia the board of management of the Hudson's Bay Compuoy, and to state in reply that tho board does not feJl itself authorised to make a grant of iand on the terms proposed by the Government for the use of the Harbor Master. At the same time tho board is willing, as it has already offered to build ati office for tbe Harbor Master/or a moderate root, and to grant bina tho free «ee of tbe eomptny'8 16 ^ ivliarf with tho osolusive ligbt to a Buitablo approach and landing stcpsi. 1 have, &o , W. A. G. YouNO, Esq. &o., &o., &o. Government Buildings. Sir. (Uigned) A. G. DALLAS. Attobnxy-GsN£BAl's Offick, January 30th, 1861. I bavo to report for the information of His Bxoollonoy that I am of opinion that a letter in addition to that of the 15th mst. sheuid be addressed to Mr. Dallas, acquainting bim with the fact that it is absolutely nocessary that a portion of land should be sot apart for the uso of the harbor master's office, and again requesting him to do so ; iurtber informing bim, that pending the settlement of tbe land question at present in discussion at homo, a piece of land (to be specified by the Colonial Surveyor) must be retained for that purpose, and requiring him t> desist irom the sale of Buob piece of land. I have, ^c, (Signed) G. H. CARTt, Tbe Acting Colonial Secretary, Acting Attorney>General. Vancouver Island. Sir : Colonial Skcretabt's Office, Slst January, 1861. I have had tbe honor to receive and to lay before His Excellency the Governor your letter of tho 28th instant, stating that the board of management does not ieel itself authorized to make tbe grant of land on the terms proposed by tbe Government for the use of the Harbor Master, but offering in lieu to build an office for the Harbor Master, and to receive him as a tenant for a moderate rent. 2. !rbo terms proposed in my letter of the 15th instant were to the effect that tbe Government were prepared to repay to the Hudson Bay Company tbe actual outlay they may have incurred in tbe purchase of the land now required for an essential public purpose, and to reimburse the value of any improvements which may exist thereon. 8. These terms, it is believed, were in conformity to the charter of grant of Vaticonver Island to tbe Hudson's Bay Company which limits the power of sale to such lands as are not required for public purposes and in strict accordance with the rtiles laid down by the Hudson Bay Company with a respect to lands required for public purposes. The Governor of the Hudson's Bay Company, in a despatch dated 23d May, 1851, communicating those rules to the Governor of Vancouver Isbnd in tbe following words: " But in all cases of reserves of land, snob as those made for tbe fur trade and Fuget Sound Company, it must be understood that it any part is required for public purposes it may be resumed upon paying the price and any improveoients that tnay bo made upon it. 4. The portion of land now sought to be acquired by the Government is for an indesponsable and important public purpose, for which no reserve has hitherto been made, and the insonvenience arising in consequence render It absolutely necessary that the accommodation required should be sought and provided without further delay. His Excellency therefore trusts that the board of management will reconsider the matter and make the appropriation requested. 5. Bis Ezoenency is advised that (be claim advanced by the Hudson Bay Company 17 to the title to land at and around Victoria it rejected by Her Majesty's Government and that the questiun has by matual consent been submitted to the Judicial Committee of the Privy Council for settlement. His JSzoellency has, however, no desire te enter into any correspondence on the subject, he merely directs me to allude to it so that if the board of management does not ,fee'. itself authorised to make the reserve required, it will, he trusts, at all events feel i:self equally unauthorized under such oiroumstanoes to permit the land required as aforesaid for publio purposes to bo sold to private individuals, the more especially as nearly one-half of the entire available water frontage on the businesR portion of Victoria Harbor is still in possession of the Hudson's Bay Company. 6. The Colonial Surveyor has been inttruoted to point out the site and dimensions of the plot of ground to be set apart for the uses before-mentioned, and if the boatd of management, after this representation, still declines to retain the land for the purpose and dooa not desist from its sale to private individuals, I am to acquaint you that such proceeding will be at the responsibility of the Hudson's Bay Company, as to the expenses to which the Government may be put in obtaining hereafter what is now, it is believed, most properly and consistently sought. 7. In conoluaion, I am desired by His Exoelleny to thank you for the offer to -build an office for the Harbor Master, with the free use of the company's wharf, but such an expedient would be both inconsistent with the charter of grant and wkuh the oontem< plated arrangements of the Government. I have, &o., (Signed) WILLIAM A. G. YOUNG, Act. Ool. Sec. To A. G. Dallas, Esq. H. B. Co., Victoria. Sir, YicTORiAi Vanoouver Islamd, 4th February, 1861. t have the honor to acknowledge receipt of your letter of Slst ultimo respecting my offer of temporary accommodation for the Harbor Master. It is not for me to disouRS the terms of the charter of grant of the Island to the Hudson's Bay Company, but I cannot overlook the fact that the obligations of the company in respecc to the charter ceased on the 30th May, 1859. The instructions of the governor of the company, dated 23rd May, 1851, quoted by you were based in a liberal spirit, on the assumption that the lands in and around Victoria were the property of the fur trade branch of the Hudson's Bay Company by right acquired prior to the charter of grant, a right only now disputed though at the time, and subsequently acknowledged and recognized by Her Majesty's Government. Her Majesty's Government virtually confirmed to the company the lands in and around Victoria by declining to take over tbeir establishments, property and effects thereon as bound by the charter to do. In obedience to my instructions, and bearing in mind the understanding between Her Majesty's Governmient and the Hudson's Bay Company, as set forth in a letter 'of May, 1860, from ihe Secretary of State for the Colonies, and another of the 29th June, from, the Governor of the Hudson's Bay Company, both addressed to His Ezoeilenoy Governor Douglas, I am not prepared to ineur any responsibility beyond affording any temporary raoility to the Colonial Government as already offered. I should, under ordinary circumstances, have been willing to assume any reasonable responsibiUty in order to further His Excellency's views, but my confidence C 18 ii entirely Bhaken by the manfior ifi Mrhioh I iiave boon dealt Mrith on tvfro eepafattf ocoasions when I overlooked my instruoiions in order to render him assistanco. Previous to 80th May, 1859, 1 arranged to advance a Bum of $27,000 for the erection of public offices on the aBBurance of His Exoelloncy, to which he pledfjed roe his word of honor that the amount should be passed in tho Colonial accounts and be repaid to the company. Ilis Excellency Bubsequently refused to sign these accounts, and advised the Duke of Newcastle that the expenditure in question had been met by a Bur-< render of certain lands to the company. His Grace consequently and naturally declined to admit the charge and the amount remains to this day unpaid. Subsoquently to the 80th May, 1850, when the Company's charter of grant expired^ though I was expressly instructed to provide no more funds for the Colony, at the urgent entreaty of the Governor, I advanced a sum of 98,744 on condition that the amount should be repaid out of Colonial funds. On the IGth February, 1860, 1 addressed His Excellency asking if he was prepared to pay the above amount, or in what manner he proposed to deal with it. To this letter I received no reply nor to three reminders of 6lh March, 10th and 14th April. It was not till 11th June that my applications were noticed, when I was informed that the amount mentioned had been included in the Colonial accounts for 1859. This reply was but a mockery, seeing that His Excellency had refused to acknowledge or pass the Colonial accounts made up by me, and that the Duke of Newcastle had empathically disavowed responsibility for any sums expended subsoqueutly to expiry of the company's charter, or even in anticipation of that event. The marked discourtesy and want of good faith exhibited in the above transactions do not encourage mo again to overstep the strict line of my instructions, and 1 take this opportunity of informing His Excellency that I still look to him personally for the reimbursmenl of the above sums for which I conceive he is justly responsible to the company. I have, &c., A. G. DALLAS. W. A. G. Young, Esq., Acting Colonial Secretary, Government House. Sir- Victoria, V. t, 11th February, 1861. I had the honor, on the 9th instant, to receive and lay before his Excellency the Governor your letter of the 4th instant. 2. His Excellency desires me to observe in answer thereto that your said letter con^ tains no definite reply to my communication of the 81st January, making formal requi- sition for the reservation for public uses of a poriion of the water frontage on Victoria Harbor. 3. The reservation of the land in question His Excellpncy considers to be a matter of public right, and not one of convenience or accommodation, to be yielded by th« Hudson's Bay Company. It will therefore be the duty of His Excellency, pending a reference of the question for the decision of Her Majesty's Government, unless indeed you at once afford him a positive assurMuce that ihe land will be retained|by*the company to await the issue to institute such proceedings as may be requisite to restrain the Hudson's Bay Company from further dealing with the same. 4. In consideration of the liberal policy that until recently has characterised th& proceedings of the Hudson's Bay Compan}' in connection with their tenure of Van* oonver Island, His Excellency will much regret having recourse to these ex'^ treme measurea, but the position you have now assumed on behalf of the Company unfortunately leaves him no option in the matter. I have, etc. A. G. Dallas, Esq. (Signed) W. A. G. YOUNG. x» Sir. Victoria, V. I., 15tb Feb., 1801. * I havo tho honor to acknowledge receipt of your letter of the 11th instant, and to state that I bavo no mora definite reply to {jive to your communication of the 31st ultimo than is convoyed in my letter of the 4tb instant. Of tho 200 foot water front required for tho harbor master, a portion was sold shortly after the public sale on 28rd ultimo. Lot 15, measuring about 60 foot A-ontage, is still unsold, and will remain so, being let to a tenant. The remainder, about 82iY, is in the occupation of the company, as it has been for a length of time, and is required for the uses of their business. Irrespective of the question of right, the Hudson's Bay Company would be at all times ready to surrender to Hor Majesty's Government any reasonable quantity of land required for public uso ; but when, as upon a former occasion, land is demanded for the purpose of rosalo to a profit, I am not prepared to admit tho propriety of the request. The want of good faith on the part of His Excellency in the transaction referred to in my letter of the 4th instant is my apology and substantial reason for declining to involve myself again in a similar manner, more especially as the tenth part of the water frontage demanded -would supply all the reasonable requirements of the harbor master. The reservation of the land in questibn is demanded by His Excellency as a matter of public right. On a former occasion His Excellency assumed a position which he could not maintain in demanding as a right that the company should continue to pro- vide funds for colonial expenditure after expiry of the charter of grant. In my anxiety to meet his wishes, I conceded the point contrary to my own judgment. |The opinions of the Duke of Newcastle and the result of my consequent applications for an adjustment of the account, as set forth in the 7th paragraph of my letter of 4th instant, caution me to make no more concessions to an assumed right pending a reference to the Governor and Board of Directors in London. I cannot remain silent under the implied and groundless charge of illiberality against the Hudson's Bay Company conveyed in tho 4th paragraph of your letter, being ignorant and unconscious of any act which can bo construed as such. On the means and resources of the company the colonies of Vancouver Island and British Columbia were founded, and for a time supported. The result has been disastrous to tho com- pany in an almost total disorganitiation and annihilation of its ordinary business, in unpaid accounts and diputed rights. To the injustice and illiberality of His Excellency I attribute a large portion of this result. It is in no illiberal spirit that I now decline to meet His Excellency's wishes, but from an entire want of confidence, engendered by ^be circumstances referred to in the 6th and 7th paragraphs of my letter of the 4th February. I have, etc., A. G.DALLAS. W. A. G. YouNQ, Esq., Act. Colonial Secretary. Sir, Colonial Seobatary'b Office, 18tb February, 1861. I have the honor to acknowledge the receipt of your letter of the 15th instant, which I have duly laid before His Excellency the Governor. 2. His Excellency gathers from that communication that von decline to make the reservation of certain land required for publio purposes until tlie question of the risbt of the Hudson's Bay Company to deal with such land can be determined by higher aathority. '•i\ritnifimiii'Tii'fliiii(iii- 20 . 4. His XxotUeooj »lao gatkeri that subiequently to my flrMt lotter commuiiicatitiff to you the roquiraments of the publio, you sold by private con tract a portion of bucU land, the same haviog been previously advertised for sale by publio auction. 4. flis Excellency cannot concede that the question of whether or not the land is to be devoted to publio purposes rests with yon for decision. His £xoelloncy has offered to refrain irom prosHing the point until it can be determined in the proper quarter, provided you will agreo not to alienate the land in the meantime. You not* only refuse this, but vou tnke advantage of an opportunity which offers for selling pri- vately a portion of the land in question. Reluctantly, therefore, is His Hxcpllency oompellea for the protection of the public to have resource to those measures iotimatod in mv letter of the 11th instiint. 0. Both in your present lotter and in that of the 81st ultimo there are vnrioua cir- onmstanoes introduced wholly foreign to the subject now treated of. His Excellency considers it quite unnecessary for him now to refer to those circumstances, either to efpOae the misrepresentation of facts in connection therewith, or to controvert the opinions in which you have so freely, and as His Excellency hopes, thougiitlessly indulged. To A. G. Dallas, Esq., &o., &o., Ac. I have, io., (Si/;ned) WILLIAM A. G. YOUNG. VANOOUTBR ISLAND, No. n. ait: DowNiNO Street, 15tb June, 1861. I have to acknowledge the receipt of your despatch No. 9, of the 7th February last, on the subject of the intended sale by the Hudson's Bay Company of the water fVontage of the City of Victoria. I enclose for your information a copy of a letter which I caused to be addressed to the governor of the company, together with a copy of Mr. Berens' reply, from which|yon will learn that directions have been sent to the company's agent at Victoria to suspend the sale of the land in question. I have, &c., (Signed) NEWCASTLE. GoviRNXB Douglas, C.B. &c., &o., &o. ' Sir: DowNiNa Street, 23rd May, 1861. I am directed by the Duk*^ of Newcastle to enclose herewith for your consider- ation the copy of a despatch from Governor Douglas transmitting a correspondence which had passed between himself and the agent of the Hudson Bay Company in Vancouver Island on the subject of the sale by the company of the water frontage in the City of Victoria. You will observe that the Governor, anticipating that the whole of this property might be disposed of by the agent oi the company to private individuals, applied to him to reserve a plot suitable for a public landing place and Harbor Master's office, pay any outlay which the company mig^t have incurred in^ the purchase or improvement of the land. This offer was in exact conformity with the principle laid offering to repay any outlay which the company mig^ improvement of the land. This offer was in exact c . down in Sir. J. Felly's instruciions to Governor Douglas of the 23rd May, 1851, thatjf any 21 pnrt of tho roiervoa made by thfloompanyii required for public pnrposea, " it in»y be resumed on repaying the price and any improTemente that may have been made upon it." NevertheleNS the agent declined to nooedo to the Governor'a application, offering, instead what would be clearly inauffioient. to build an office lor the Harbor Master for a moderate rent, and to grant him the free use of the company's wharf. In the grant of 18th January, 1840, lands required for public purposes arc exempted from those which the Hudson's Bay Company is thereby empowered to sell. The lands in question could not, therefore, be properly sold under that grant. They appear, however, to be sold not an part of the public lands of the Colony placed at the disposal of the company by the grant of 1849, but ts part of the private property of the company, to which they assert a claim by reason of occupation previous to that grant, llor Majesty's Government, as you are aware, deny the validity of that claim, and tho question is now under reference to the Judicial Committee of the Privy Council. Pending the decision of the Judicial Committee Her Majesty's Government would have been anxious to avoid any measure which might be supposed to indicate a hostile spirit towtirda the company, but they cannot allow their feeling on that point to inter- fere with their duty towards the public. As it appears, therefore, from Governor Douglas' despatch that the public interests would be seriously inconvenienced if the remainder of the water fVontago of Victoria were disposed of to private individuals, and as the agent of the company nas refused to attend to the Governoi>'s remonstrance on this subject, I am directed by the Duke of Newcastle to inform you that unless you can assure His Grace that instructions will be sent to the agent ot the company by the earliest and most rapid opportunity to bub. pend the sale of the land in question, the Governor will be instructed to issue a notice in the colony that Her Majesty's Government deny the right of the company to sell those lands, and that, if the decision of the Judicial Committee should be adverse to the Company's right the sales will not be reoogniced by tho Crown. I am to request your answer to this letter at your earliest convenience. H. H. Berens, Esq. (Signed) 1 have,'&c. P. KOGBRS. My Lord Duke, Hudson's Bat House, . May 24tb, 1861. I have the honor to acknowledge the receipt of Sir F. Borers' letter of the 23rd instant, enclosing a despatch from Governor Douglas transmitting a*! correspondence which has passed between himself and the Ag<>rt of the Hudson's Bay Company in Vancouver island, ob the subject of the sale by the company of a certain portion] ot water ft'ontage in Victoria required for a public landing place and harbor master's office. In reply I beg to state that there is no wish on the part of this company to do anything that would militate against the public interests. I therefore haiten to inform your Graoo that, io compliance with the suggestion thrown oat in Sir Frederic Bogera' J 22 Jotter, I have directed that apecifio instructions shall be sent by this day's post to the Agent of this company at Victoria to suspend the sales of the land in question, as referred to in the correspondence between Governor Douglas and Mr. Dallas. His Grace thk Dukb of &c., &o., &c. EWCASTLE, (Signed) I have, &c., H. H. BERENS, Governor. TANOOUVRR ISLAND. No. W. } Sir, Downing Steekt, 26th July, 1861. I have the honor to transmit to you herewith a copy of a lottor nddressed to me by the Governor ot the Hudson's Bay CompaTi y, and to'request that you will f\irni8h me with a report on the subject of the transactions of which the company complain, connected with certain land sold by their Agents to Mr. Lowenberg. Govi;enob DouolaS; C.B., &c., &c., &o. (Signed) I have, &c.. NEWCASTLE. '■ Hudson's Bat House, July 15tb, 1861. My Lord Duke, It is with ereat reluctance that I have to trouble your Grace upon the subject of an outrage committed by the representatives of the Government in Vancouver Island, in respect to some land which had been sold by the agents of this company to a Mr. Lowenberg who had paid for the same, and who was in possession of it at the time that Mr.'Dallas the agent of the company left Vancouver's Island for this country. The land in question formed a portion of the 3084 acres which are claimed by this company as having been possessed by them before the grant of ti e island to the com- pany, and adjoining a portion of the same property which had been appropriated for the erection of buildings for the accommodation of the Grovernment. From the Go- vernment land it was separated by a ditch or fence. The piece of gtound referred to formed part of a farm which had long been under cultivation by the servants of the company, by whom it had been cropped for a series of years ; and a proposal having been made to form a street which passed through the farm, and severed this piece from the remainder of the farm. Mr. Dallas thought it right to dispose of the land, consisting of about 2 acres 8 roods, and 17 poles, and accordingly did so, under the authority held by him for the purpose from this company. It now appears that since Mr. Dallas' departure from the island, a Mr. Teideman who is in the employ oi the Land OflSce at Victoria, endeavored to prevent Mr Lowen- berg Scorn proceeding with some fencing which he was putting up, stating that h« 23 claimed the land as government property, and on Mr. Lowenberg resisting this intor-> ferenoe with his property, a warrant was obtained from the police magistrate for his arrest, under whioh be was taken to prison, and only discharged upon giving bath Under these circumstances he soelcs redress from this oemjpany ior the injury which ho has sustained, as well as compensation for the land for which he has been dis- This proceeding is so extraordinaryjand so entirely at variance with the under- standing come to between your Grace and this company, to the effect that the repre< sentatives ot the Government should not seek to interfere with the land claimed by this company, and for years past registered in the Land Office as belonging to thorn, that I feel assured your Graco will at once give the necessary directions for Mr. Lowenberg being i-oinstated in the possession of his property, and for proper measures being to taken to compensate him ^r the indignities to which he has been subjected. His Grace the Duke of NBwCA*;iti!, &C., &Ci, &o« I have, &c., (Signed) H. H. BBRENS, Governor^ KXDCUTIVB. YiCTORiA, 24th October, 186L My Lord Buke : I have the honor to acknowledge the receipt of your Grace's despatch, No. G5, of the 26th Juiy last, forwarding for my report copy of a letter from the Governor of the Hudson's Bay Company complaining of certain transactions arising out of the sale by the agents of the company of a certain piece of land at Victoria to a Mr. Lowenberg. 2. My despatch, No. 50, of the 8th Aiigutt last, will have revealed very fully to your Gr.ice the recent proceedings of the agents oi the Hudson Bay Company in respect to lands which had been previously appropriated ab Government and public reserves, and will have shown how this Government was compelled, although most reluctantly, by their inconsiderate and really unwarantable nct'ons lo Imve resource to legal measures, not only to prevent part of ths streets, public, park and church reserve from being sold, but actually to reta'.u in its entirety the ver5< small spot of land upon which the Government offices stand. The case of Lowenberg is exclusively connected with this Government land, and it is clearly disclosed by the douiraents forwarded in that despatch, hut as it is made the subject of a special and ^ery ^rave complaint, and a» the matter is bat very imperfectly represented in the letter ct Mr. Berenb, I will rcuapituhiia the actual facts of the case, most of which are incontb.'^tably proved by the affidavits filed with the information of the Attorney General, certifieu copies of which were forwaided with my aforesaid despatch. 3. A few days before the interference complained of by Mr. Lowenborg occurred I bad issued instructions to the Surveyor General to run a fence round two of the open sides of the Government reserve. Upon the evening of the day the work was com- menced, and after the Surveyor's men had ceased work, Mr. Lowenberg, it appeara, repaired to the spot with a number of men and proceeded to the construction of another 24 fence. Mr. Tiedemtn, an employee of the Innd ot&oa, warned the men that thoy were committing a trespass upon the GoTernroent property, and were doing that which might lead to a breach of the peace. They desisted, and, I am told, that thereapon Mr. Lowenberg became very violent and asBaulted Mr. Tiedeman. Mr. Tiedeman laid an information against him and he was taken into custody. This I believe to be the whole sam and substance of the proceeding characterized as an '' outrage' upon the part of the Government by Mr. Borens, but which I, probably with greater accuracy, might designate as an attempt upon the part of the Hudson's Bay Company to repossess them- selves of the Government reserve, Mr. Lowenberg being merely their agent or instru- ment in the Uni step taken. 4. Mr. Berens does not state that the land purported to have been sold to Mr< Lowenberg by Mr. Dallas was a portion of the Government reserve, he represents it to have formed part of a farm which had long been under cultivation by the servants of the company and had been cropped by them for a series of years and that it "adjoined'' the Government reserve from which it was " separated " by a " ditch or fence." In 1858, when the] Hudson's Bay Company surveyed off into lots and sold the town site of Yiotoria, this government reserve, consisting of 10 acres more or less was laid out and marked with conspicuous posts upon the ground, some of which remain to this day; and when the plan of the town was made it was duly included therein. A portion of the reserve might or might not once upon a time have been considered to be included within the limits of the company's farm, but it the linos of the reserve did extend so far back as to encroach upon the lands of the farm, they were taken so designedly in the first instance, by the company's agents to the advantage of the company, by enabling them to utiliise and sell as town lots an increased frontage on the water. Certain it is that the cultiva- tion of this portion of the farm represented by Mr. Berens to have existed was not con- tinued after the land was laid out as a government reserve. The portion in question was not separated either by a ditch or fence from the land occupied by the Government, for neither exists, unless indeed a drain or trench about 2ft. wide, to carry off the surface accu- mulation of water during the winter can with consistency be termed a ditch. Mr. Berens says a proposal had been made to form a street which passed through the farm, and severed this piece from the remainder of the farm. The "proposed" street was actually laid out and lots upon it facing the Government reserve sold in 1859. The map upon which the lots were exhibifed and sold by the company containing the lines of tho Government reserve as originally laid down, tho rear line in 1850 forming part of one side of the " proposed" street. For convenience and a better comprehension of this point I forward a plan of the locality. ^ I cannot believe that Mr. Berens could be aware of all these matters when he Senned the letter now under consideration. It would seem to have been the policy of [r. Dallas, who sold the Land, to deprive both the Government and the Public of the Lands originally reserved to them and to restore the power of the Hudson's Bay Company to deal with tho Land. The attempt to sell the Public Springs, Public 'Park, etc., detailed in my Despatch No. 50, afford strong evidence of this. Your Grace is well aware of the manner in which my recent application was met for a site for a Public Wharf and Harbor-mastei's 0£Sce. The Governor of the Hudson's Bay Company then instantly repudiated any desire on the part of the company to interfere with the requirements of the Public, :.ad I would fain believe that be will now, upon becoming SOBSessed of the real facts of the cose, as instantly repudiate the attempt to deprive the overnment of a piece of ground required for public purposes, and so allotted ana marked oat in 1868 ; the more especially a?. Mr. Berens himself recognizes the Besei in his letter to your Graoeot the lOthDeoember, 1858, wherein he says : " Tho land upon which GU>vemor Douglas is ereetiog the new Public OfBoes has also been reprseented by that {rentleman to be government property; but I have reason to know that it is part of the and held by the Fur Trade long prior to the grant from the Crown. The company, 25 ttierolore, will have a claim apoo the Oovernment for the value of the land." In 1859, Mr. Sevens admits this land to be in the posseasioo of the local tiovernment, and simply contends that the comprny will have « a claim" for the value of the land. In 1861, Mr. Ileserve were ran and marked in 1858, that the Hudson's Bay Company were in possession ot a copy of the affioial plan of the town upon which those linos are traced, and although one ot those lines now forms part of one side of the proposed street (actually laid out in 1859), yet at the time it bad no reference to it, and no other significance than the rear line of boundary of the Government reserved land; on the contrary I think the inference may not unfairly be drawn that in laying out the street alluded to in 1859 the situation of the Government Beserve did goverr the position and direction of such street and ot the lots surveyed off and sold; otherwise it soenis remarkable that lots should be laid out and sold upon one side of a street only, and that when fresh lots were required they should be laid out and sold in the rear of those first disposed of— the legs remote meanwhile not only being not sold but not even surveyed or exhibited for sale, and at least that this piece of land which*, had it been at the disposal of the Hudson's Bay Company, could haye been very advantageousljr disposed of if put up for sale in lots at public auction, should be parted with to a private individual, a land-agent by profession, without being surveyed and divided in similar manner to the other side ot the street. 6. The olaim for payment of the value of the land which Mr. Berens asserts in 1859, would, I conceive, be perfectly legitimate if the company in the first instance paid for the land, for it would be merely an equitable refund in a case where the company had no power to sell or purchase, but as tho company had not paid for it nor any portion of the 8084 ^res det^lt with by them as private property they cannot, I apprehend, sustain any claim for repayment or reimbursment onaooountof any portion of those 3084 acres required for publiu purposes; for whether the private ownership of those lands beiadmitted or not the same principle, I conceive, must govern both them and the other lands of the Colony, viz., that all portions as are required for public purposes must remain in the Crown, and are oonsequently wholly removed ttom the control of the Company, whatever general rights and privileges may have been accorded by the Crown. I have, &c., (Signed) JAMES DOUGLAS. His Gbaox the Dukk or Newcastle, &o., &c., &o. 4 I i I i •: