 
                        
                        
                           M Merivale
                           We have not kept the Governor of 
VanCouver's Island apprized of
                           our proceedings at home in respect to the payment to the H.B.C.
                           of the sums &c laid out by them on 
the Island, because, as I
                           conceive, we were not in a condition to tell him anything
                           definite, inasmuch as the account has not yet been adjusted.
                           But so long ago as 
Feb 1856 M Labouchere desired the
                           Governor to send home, in 

anticipation of a final settlement
                           between the Company and the Crown, an account of what was due.
                           The Governor having written back to say that he c make out no
                           such account we applied to the H.B.C. and with them only have
                           we since had any correspondence on the subject.
                           
 
                        
                        
                         
                        
                        
                           M Fortescue
                           This seems to me to require very serious & early attention.
                           
 
                        
                        
                           In the grant of the soil of 
Vanc. I. to the H.B.C. Government
                           reserved a power to repurchase 
Vanc. I. on making payment to the
                           Co.
                           
2
                           in consideration of sums expended by them and the value of
                           their establishments—at the expiration of the Co's exclusive license.
                           
                           That license expired in
                           May last.
                           
                        
                        
                           It has not been renewed, as you are aware.
                           
                        
                        
                           It seems the Gov had intimation as long ago as Feb 1856 of the
                           probable exercise of this power of repurchase.
                           
                        
                        
                           But since that time we have been settling accounts with the
                           Company, & they are not yet quite settled: & it does not seem
                           that any positive instruction has been sent to the Governor to
                           consider the Company's right to the soil as on the eve of extinction.
                           
                        
                        
                           In this state of things—probably aware, one must suppose, of
                           the real position of affairs between 
Gov & the Company—he
                           
seems, at the very end of the license, to have taken on himself to
                           commence new buildings on a considerable scale
                           
at the expense of the Company.
                           One cannot help supposing, he means us to repurchase them.
                           
                           It seems to me that he ought to be written to by the next mail
                           (15) to hold his hand until further instructions.
                           
                        
                        
                           And that the Company should be written to, sending copy of this
                           projected despatch, & adding that 
Gov are anxious for
                           immediate information as to what they may know of the Governor's
                           proceedings, adding, that Government cannot consider themselves
                           as in any way bound to make 

compensation for buildings begun at
                           the Company's expense at a time when they, the Company, were &
                           had long been aware that their possession of the soil is about
                           to terminate, & only exists pending a settlement of accounts.