 
                  
                  
                     M Elliot
                     1. The 
Duke of Newcastle, and 
Lord Clarendon will probably determine
                     whether the present be an opportune moment for inviting the American
                     
Gov to join in the settlement of a fresh Boundary question. But
                     down to this time no disputes or misunderstandings have arisen between
                     the two Countries on the subject of the Sovereignty of the 
Islands in
                        the "Canal de Arro." The Governor however states (3851) that he has
                     asserted the British ownership. The Queen's Advocate is of opinion that
                     he has acted properly. It may therefore be sufficient to approve. But
                     
some instruction is required.
                     
 
                  
                  
                     2. Instruct the Governor on the fishing and trading questions
                     according to the report of the Queens Advocate.
                     
                   
                  
                  
                     3. As there is neither Legislative Council nor L. Assembly in
                     
VanCouver's Island I imagine the Governor can only issue a Proclamation
                     or some Regulation, founded perhaps on the fishery regulations of B.N.
                     America, to prevent Foreigners fishing in improper places, and
                     trafficking with the Indians.
                     
 
                  
                  
                     M Peel
                     The questions raised in this and the previous letter from the Foreign
                     Office of the 
14 June appear to me of sufficient National importance to
                     deserve some care in the treatment. It may not be superfluous therefore
                     to present you with a short account of the former papers to which I have
                     looked back for the purpose.
                     
 
                  
                  
                     Two questions you will observe are raised; 1 Should any
                     Communication be addressed to the American Government with a view to
                     settling the Boundary in the straits which separate 
VanCouvers Island
                     from the Main-land? 2 What instructions should be given to the
                     Governor about American Citizens who fish within three miles of
                     
VanCouvers Island?
                     
                     Now I find that with respect to this Boundary, the whole of the
                     existing correspondence commences with a letter from the 
Foreign Office
                     dated the 11 
of
                     of 
June 1847 which enclosed a Memo from 
Colonel Escourt
                     upon the several Modes which might be adopted for defining the yet
                     unsurveyed portions of the Boundary Line between the possessions of
                     Great Britain in N. America and the United States. By this Memo it
                     appeared that from the Atlantic to the Head of 
Cape Huron the frontier
                     was determined by the labours of 
Colonel Escourt and his colleague; and
                     from the head of 
Lake Huron to the Head of 
Lake Superior, and from
                     thence again to the 
Lake of the Woods, the frontier might for the
                     present be considered to be quite sufficiently ascertained by the verbal
                     description agreed on in 
Lord Ashburton's treaty of Washington; that
                     from thence to the Pacific the Boundary consists of the 49 parallel
                     of Latitude which can be ascertained astronomically whenever wanted, but
                     which cannot at present 
require
require to be defined across that vast breadth
                     of desert country. From the Atlantic therefore to the Pacific the
                     Frontier might for the present be deemed to be sufficiently settled.
                     But the case was very different when once the line struck the shores of
                     the Pacific, for there it entered into the immediate vicinity of
                     American Settlers on the one hand and of British Settlers on 
Vancouvers
                        Island on the other, and not being very well defined an early settlement
                     of the question was desirable in order to obviate disputes.
                     
                     Accordingly on the 
10 of February 1848 the 
Foreign Office
                     enclosed a Despatch (of much ability it appears to me) in which the
                     British Minister at Washington proposed a joint commission of survey to
                     the American Government. After a considerable 
delay
delay they agreed in 1849
                     to lay the Papers before Congress; but nothing more has ever been heard
                     from them on the subject.
                     
                     These are the circumstances under which 
Lord Clarendon asks in the
                     present letter of the 
14 of June whether it is necessary to add
                     this to the numerous other questions now pending with the same
                     Government, and not likely soon to be arranged.
                     
                     Now I must observe that the subject at the present time has been
                     moved exclusively by a brief Despatch from the Governor (3851 annexed)
                     in which he—in very short and general terms; says that a question had
                     arisen about the sovereignty of the 
Islands in the Canal de Arro to
                     which some American Citizens laid claim as belonging to the United
                     States. He promises another Despatch but none has come.
                     
                     The same reasons which 

were adduced in 1847 and 1848 for wishing to
                     define this Boundary remain now of equal or even greater force, and if I
                     were asked which party is most likely to lose by delay I should say that
                     it was Great Britain, because American Citizens being in greater numbers
                     than British Subjects in those parts may be expected more rapidly to
                     overrun any doubtful territory, and thereby to render it more
                     practically difficult hereafter to establish a British Claim.
                     
                     But these are considerations of general policy which were just as
                     good last year as this. If then we are only now to consider the
                     narrower question whether any thing fresh has occurred to lead us to
                     urge the movement of a question which the Foreign Minister evidently
                     considers inconvenient at this moment, I must say that I do not think
                     that the Casual statements in the Gov despatch of the 
19 of
                        Dec are sufficient for the purpose. I should be inclined therefore
                     to answer the Foreign office 
that
that whilst on general grounds it would be
                     very desirable that the Boundary Line between Great Britain and the
                     United State in the 
Gulf of Georgia and 
Fuca's Straits should be defined
                     as soon as practicable, in order to prevent Encroachments and obviate
                     further subjects of dispute, the 
Duke of Newcastle does not consider
                     that there is anything in the recent Despatch from the 
Gov of
                     
Vancouvers Island which 
w render it necessary to accelerate any
                     fresh proposals to the American 
Gov on this subject if 
Lord
                        Clarendon should not consider the present a favorable time for the
                     purpose.
                     
                     II. This is the answer which occurs to me on the question of
                     Boundary. As to instructions to be given for preventing encroachment by
                     fishing within 3 miles of 
the Island, I confess myself rather at a loss
                     what to recommend. It seems to me that a Governor who
has
 has no force
                     worth mentioning, either Civil or Military, at his disposal, can do
                     little more than occasionally protest against such fishing on the part
                     of Foreigners, and warn them that their title to it is not admitted, in
                     order to keep up the British right. But the Queen's Advocate goes
                     further, and suggests that some advantage might be derived from
                     supplying the Governor of 
V.C. Island with the regulations on this
                     subject of some of the British N. American Colonies, a suggestion which
                     
M Blackwood recommends to adoption. If 
M Blackwood knows any
                     such regulations which would be suited to the circumstances of
                     
Vancouvers Island, he will be able to supply you with them. I admit
                     that I can hardly suppose, myself, that the regulations made by the
                     Governors of populous and wealthy Provinces with a due array of public
                     Functionaries, will be found very
applicable
 applicable to the circumstances of an
                     Island chiefly tenanted by Red Indians and wild animals.
                     
                  
                  
                     It appears from 10199/52 that the 
Islands forming the Arro
                        Archipelago are very numerous, many of them being laid down on
                     
Arrowsmith's Map as an integral portion of 
VanCouver's Island. The
                     
Gov should in my opinion be called upon to explain the steps taken
                     by the Americans to set up their claim to these Islands, and the Manner
                     in which they had received his assertion of the sovereignty of this
                     country over all the Islands East of the usual Ship Channel into the
                     
Gulf of Georgia and I should not write to the 
F.O. on this point till
                     the Gov reply was received.

 As regards the Encroachments of the
                     Americans in the way of fishing, they are clearly unlawful and if there
                     is no vessel of war to repel them, the 
Gov must for the present
                     Content himself with protesting against them.
                     
                     But there is a third point which 
M Elliot has not noticed,
                     although it was Exclusively with a View to its elucidation that our
                     letter to the 
F.O. of the 
22 July was written. Have the Americans a
                     Right to trade with the Indians. The 
Gov seemed to raise the
                     question as involving a Violation of British territor. 3851/53. The

                     Americans could not traffick without landing and without therefore
                     trespassing on British Territory. No notice of this objection of the
                     
Gov has been taken, but the traffick is Declared to be illegal on
                     Another ground viz as at variance with the Monopoly of trade with
                     Indians in the hands of the C. And the Queen's Advocate states
                     (notwithstanding the Gov assertion that "the traffick was not
                     hurtful to any Existing British Interests" 3851/53) that no persons
                     whether British or foreign should trade with the Indians. I was under
                     the impression that the Colonists in 
Vancouver's island were not
                     prevented from trading by the Co's Exclusive Rights, but if the opinion
                     of the Queen's Advocate is to prevail 

there can be no trade upon the
                     Island, Except such as is Sanctioned by the Company.
                     
 
               
               
                  
                  
                     Former experience of similar questions between the two Countries
                     would lead to a conclusion that the interests of posterity would be
                     prejudiced by leaving this dispute about boundary open. I do not
                     however think it is quite ripe for any renewed action on the part of the
                     
F.O. The Governor has protested & promised further reports. I should
                     only inform him that till he had done the latter & told us the result of
                     the former no fresh negociations

 could be opened.
                     
                     The 
Admiralty has lately sent two Vessels of War to the coasts of
                     
Vancouver's Island. We do not yet know whether they may have been
                     called upon by the 
Gov to stop the illegal fishery & if so whether
                     they have succeeded. Upon this point also I should call for
                     information.
                     
                     As regards the traffick with the Indians—I am almost certain that
                     in the discussions in 1848-9 about the Colonization of 
V.I. it was
                     stated by 
M Hawes that no monopoly of trade would be given to the
                     H.B.C. & I suspect that if the amended Charter of 1849 is examined it
                     will be found to be at variance with the Queen's Advocate's opinion.
                     
 
               
                
                  
                  
                     M Peel
                     I annex the enclosed "extracts" with reference to the last part of the
                     
D. of Newcastle's minute. There is I believe no doubt of the legal
                     monopoly of the 
HBC remaining in force in 
Vanc. I as no steps were
                     taken to put an end to it when 
the Island was granted. Legally, the
                     Crown can revoke the exclusive license as regards 
VanCouvers' Island if
                     it pleases, see the clause

at the end of that license, p. 11 of printed
                     papers of 
1842 annexed. And the quinquennial visitation to which 
Vanc. I. is subject may afford an opportunity. The Company at the same time
                     always assert, as the extracts will shew, that trade in 
V.I. is
                     absolutely free, with the exception of the fur trade only.
                     
 
                  
                  
                  
                  
                  
                     The Clause 
M Merivale refers to was in my recollection when I
                     made my remarks on 8610. It is clear that if the whole of 
VanCouver's Island
                     Island
                     Island is comprised within the Colony, the Crown has the power at any
                     time to revoke the Co's licence for Exclusive trading with the Indians
                     in so far as it affects that Island.
                     
                     I had supposed that such revocation had taken place simultaneously
                     with the Creation of the Colony. but it appears from the preceding
                     minute that this was not the case.
                     
                  
                  
                     I am not prepared to say that it 
w be prudent to revoke the
                     licence over the whole Island 

but I would propose that freedom of trade
                     with the Indians be Authorized 
within the Settled parts of the
                     Colony, so that any colonist or visitor have full liberty to barter with
                     the Indians, resorting to those parts, for furs or anything else,
                     subject to certain

 restrictions as to sale of spirituous liquors &c.
                     
                     The Co. might be informed that this would be done at the expiration
                     of the five years from the date of the Grant of Jan 1849, i.e. in January
                     next.
                     
                  
                  
                     The Co have certainly used ambiguous & 

Misleading language in their
                     communications to this office, judging from the specimens in the
                     extracts which are Annexed.
                     
                     The other directions in 8610 may be attended to at once.
                     
                  
                  
                   
               
                
                  
                  
                  
                  
                  
                     I may however observe that there is a market price there
                     (
Vancouver's Island) as every where else, and that 
Admiral Moresby's
                     remark "that the interest of a Company with exclusive right of Trade is
                     incompatible with the free and liberal reception of an emigrant
                     community" is not applicable to the 
Hudson's Bay Company, inasmuch as
                     that Company neither possesses,

 nor exercises any exclusive right of
                     trade in 
Vancouvers Island."
                     
                     
                     "Extracts of a letter from the Hudson's Bay Compy to 
Earl
                        Grey dated 
14 Jan 1852."
                     
                     
                     I have already stated to your Lordship that the Hudson's Bay
                     Company neither claim nor exercise any monopoly whatever in 
Vancouver's
                        Island. But it appears to have been represented to your Lordship that
                     the Company exercise a virtual monopoly with respect to Settlers and
                     Visitors.
                     
                     
. . . *
                     
Whether the opinion stated by the Admiral in a former Despatch and
                     here repeated "that the attempt to Colonize 
Vancouver's Island by a
                     Company with exclusive rights of trade is incompatible with the free and
                     liberal reception of an emigrant Community," be correct or not I will
                     not take upon me to say. I can only repeat that it is not applicable to
                     the case of 
Vancouver's Island, inasmuch as the 
Hudson's Bay Company
                     neither claim nor exercise such right in 
that Island.
                     
                     
Extract 
                  
                  "Extract of a letter from the 
Hudson's Bay Company to 
Earl Grey
                     dated 
27 January 1852."
                     
                     There is no restriction whatever either on the importation or Sale of
                     British goods.
                     
                     The Trade in furs, secured by Charter [marginal note. by
                     Licence] is the only exclusive trade carried on by the Company and it is
                     one of the conditions under which land has been granted to Settlers that
                     they shall not interfere in the Fur Trade with Indians.