I have had the honour of receiving 
M Peels letter dated the
               
2 Instant, in which it is stated that your Lordship would be glad
               of some further explanation as to the distinction between the lands
               which the 
Hudson's Bay Company possessed before the "Boundary Treaty"
               and others, and also as to the meaning of the expression "lands which
               the Fur Trade of the 
Hudson's Bay Company propose to take."
               
 
            
            
            
               In compliance with Your Lordship's wishes I hasten to afford you
               the required explanation.
               
            
            
            
               During the period that elapsed between the original connection of
               the 
Hudson's Bay Company with the Country west of the 
Rocky Mountains
               and the division of the Territory by the Boundary Treaty of 
June 1846,
               while 
in
in fact the sovereignty was in abeyance, the Company reclaimed
               from the Wilderness and occupied portions of land wherever their trading
               Establishments were planted. These lands they claim as theirs without
               purchase and the possessory rights thus acquired in that portion of the
               Territory which is situated to the south of the 49 parallel of
               North Latitude have been guaranteed to them by the Boundary Treaty.
               Among the lands occupied by the Company North of the 49 parallel is
               that situated at 
Fort Victoria in 
Vancouver's Island where they formed
               an Establishment in the year 1843 and this is the land alluded to in the
               4 Paragraph of my letter of the 
14 December. Its exact extent
               has not yet been ascertained by the Company's Surveyor, but whatever
               that may be the Company consider they have a right to hold that land
               without paying for it, while for any additional quantity that may be
               required to be taken by the "Fur Trade" (which is merely a subordinate
               branch of the 
Hudson's Bay Company) the same price will 
be
be paid as is
               paid by other purchasers of land.
               
 
            
            
            
               With regard to the levying of Import Duties, of the legality of
               which Your Lordship still entertains doubts I need only say that it
               rests entirely with Your Lordship to instruct the Governor of 
the Island
               as to the extent and mode in which he is to exercise the powers
               conferred upon him.