The Hudson's Bay Charter gives them the 
land, exclusive trade, fishery, lands, &c in the territory East of the 
Rocky Mountains called "
Ruperts'
                        Land" together with the right to make laws & ordinances impose penalties &c.
 
                  
                  
                  
                     By 1 & 2. G. 4. c. 66. The Crown was empowered to make
                     grants or give licenses for exclusive trade with the Indians in parts of
                     N. Am. not included in 
Ruperts' Land.
 
                  
                  
                  
                     Under this Act G. 4 granted a license to the Hudson's Bay Co.

 jointly with certain members of what was then called the North West Co.
                     to trade in what is called the North West Territory (which
                     
would include Vancouver's Island as a dependency)
 
                  
                  
                  
                     In 
1838 the H.B.C. acquired the rights of the North West Co. and the
                     
Crown then granted them the H.B.C. similar license for 21 years from that time which will therefore expire in 
1859.
 
                  
                  
                  This 
gran license contains a proviso that nothing therein contained
                     should enure to prevent the establishment of colonies in this territory,
                     or constituting any

 such form of government as might seem meet to the Crown. And it reserves power to
                     the Crown to revoke such license, so
                     far as the same may embrace any territory which may hereafter be
                     comprised within such colony.
 
                  
                  
                  
                  
                  
                  With regard to the legal jurisdiction over this North Western
                     region: it is provided for by the Act

 1 & 2 G. 4. c. 66. already cited: which subjects all the North Western & other Indian
                     territory to the
                     judicature of the Courts of Upper Canada, & empowers the Crown to issue
                     commissions under the Great Seal empowering justices to hold courts of
                     record for the trial of criminal & civil cases, &c, only not so as to
                     affect any privilege belonging to the H.B.C. under their Charter.

 The
                     H.B.Co. have erected various forts & establishments, and brought into
                     cultivation some tracts in this N. Western territory: and amongst
                     others a fort & land on the south point of 
Vancouver's Island.
 
                  
                  
                  Under these circumstances they 
                     
obtained an opinion
                     
from the Law Advisers which was to the effect that they could legally take part of any land Westward of
                     the 
Rocky Mountains.
 
                  
                  
                  They then applied for a Grant of land of the whole territory
                     Westward of the 
Rocky Mountains.

 This was declined, but a Grant of the
                     land of 
Vancouver's Island has been offered to them, subject to the conditions, 1. that 
the settlement shall cost nothing to this Country in […] they shall establish there a settlement of British
                     emigrants, the grant to be void 
unless if 5 years' hence it is certified that
                     they have not done so by any person employed by the Crown to inquire; 2.
                     that such settlement shall cost nothing to this country. Also, that
                     when the license expires in 
1859 the Crown may revoke the grant, subject
                     to the obligation to repay the Co. any expenditure in colonization.
 
                  
                  
                  
                  It is not proposed to give them any jurisdiction or legislative
                     authority.
                  
                  
                  […]: But it is proposed to give a Commission to a Governor (who will
                     be nominated by the Company
                        
sanc by the Crown that is the Crown can exercise a veto?
                      ) with a Charter empowering the government of the island by means of an Assembly of
                     the inhabitants.
 
                  
                  
                  It is apprehended that the Crown has undoubtedly this power. It is
                     the manner in which the Constitution 
                     
of Newfoundland was created in
                     
1855.
 
                  
                  
                  The effect will be that the land will be vested in the 
HBCo. under

                     this grant. 2. The exclusive trade until 
1859 under their licence. 3.
                     The criminal & civil jurisdiction can be given by Commission from the
                     Crown under 1 & 2 G 4 C 66. 4. The legislative authority & right to
                     raise the revenue not derived from land will be in the inhabitants.
 
                  
                  
                  The same thing or nearly so it will be shewed has been done in
                     the Southern part of New Zealand, where the Crown land and Crown right
                     of preemption from natives are vested until 
1852 in the

 New Zealand
                     Company, while the right of Government & of raising revenue is in the
                     Legislative Council, which will be popular unless the Governor exercises
                     his lately granted suspending power.
 
                  
                  
                  
                  
                  You will observe that if 
Vancouver's Island had been made over to any other body of adventurers, it would have been necessary
                     to put in
                     execution the power reserved to the Crown of revoking the Company's
                     license for exclusive trade so far as 
that Island was concerned. But
                     this could not have been done without compensating the Company, if not
                     for the loss of the trade, at all events for the establishments which it
                     had made at the Southern end of 
the island, with a view to the protection & extension of that trade.
 
                  
                  
                  
                  
                  It is hardly necessary to add how great an advantage the Company
                     must have over independent colonists, in the first place from the
                     powerful establishments which they already possess in the North Western
                     territory, in the next place because, possessing the exclusive trade of
                     the main land adjacent of which they could not be deprived, no one could
                     turn the land of 
the Island to so much account as they.
 
                  
                  
                  
                  
                  With regard to the reasons which have prevailed to induce the
                     cession of this land to the Company notwithstanding the charges which
                     are pending against them for maladministration in the other parts of
                     their territories, you will of course ascertain these from other
                     quarters especially as the negociation was begun before I came into the
                     office. But the following suggest themselves to me.
                  
                  
                  These charges are twofold: they relate to the conduct of the
                     Company 
in their only agricultural settlement of any consequence, that
                     at 
Red River: and, secondly, to various points in

 the general treatment
                     of the Indians throughout their extensive territories by their agents.
                     With regard to 
Red River, I cannot see if the charges of misgovernment were substantiated, that they would
                     seriously affect the question,
                     whether the Company was fit to be trusted with the land (not the
                     government) of 
Vancouver's Island. If there be mismanagement at 
Red
                        River, it is only to be traced in the details of the government of a
                     colony more than 1000 miles from 
Vancouver's Island & the adjacent coast, which must depend much more on the local

 authorities than on any central supervision of the trading Company in 
London. The two subjects have really no connexion. But the report of 
Col. Crofton is quite sufficient to shew that the charges, whatever they are, are mixed up
                     with much exaggeration, although enough of truth may remain to render it
                     advisable that some enquiry should take place, & it is at all events
                     desirable that the situation & wants of such remote subjects of Her
                     Majesty should be known.
 
                  
                  
                  
                  
                  Vancouver's Island will lie in the track of many vessels & become (as we hope) soon the seat of a considerable
                        maritime business. Nothing
                     can possibly be more different than its prospects from those of the
                     remote half Indian settlements in the centre of North America.
 
                  
                  
                  2. As to the 
general charges against the Company: they are really
                     too general to merit much attention with reference to a case like this.
                     It is of course undeniable that a mere trading Company will always

 have a certain tendency towards monopoly and exclusiveness: But in
                     situations where colonization is the true & obvious policy, it will
                     probably soon learn to pursue that policy.