Murdoch to Merivale (Permanent Under-Secretary)
Emigration Office
27 January 1859
I have to acknowledge Mr Elliot's letter of 22nd ultimo, enclosing a Despatch from Governor Douglas in answer to a Memorial addressed to Her Majesty, and a representation addressed to the Earl of Derby, by Mr Nias, on the subject of the sale of Town Lots in Victoria Van Couvers Island.
2. Mr Nias stated that a large number of Town Lots in Victoria had been sold by Governor Douglas—that they had been bought to a great extent by Land Jobbers, 50 or 60 by oneManuscript imageone person—that Lots worth from £50 to £1000 had been sold for £5 and £10 and that as no conditions of improvement are attached to the sale they will be held by the owners as a speculation in an unimproved state—that capitalists who do not improve their properties are a great injury to the bona fide settler—and that those who have purchased the land at Victoria are to a great extent Foreigners. Mr Nias, therefore, urged that steps should be taken to compel purchasers of Town Lots to make substantial improvements on them within a reasonable time.
3. To these statements Governor Douglas replies in effect that the onlyManuscript imageonly Town and suburban Land in Van Couvers Island—that namely in the neighbourhood of Victoria belongs to the Hudson's Bay Company—that the Company have been in the habit of selling suburban Lots of 5 acres for £25 and Town Lots measuring 120 x 60 feet for £10.8.4 but latterly for £20.16.8—that Country Lands have always been sold at £1 an Acre in Lots not less than 20 Acres—that there are many thousand Acres of Country Land now open for purchase at £1 an Acre, and any number of Town Lots at £20.16.8 which find no purchasers—that consequently the allegation that jobbers have bought such Lands for an inconsiderableManuscript imageinconsiderable sum and are holding them as a speculation is not true—that instead of having fallen into the hands of a few jobbers the 1142 Town Lots were purchased by 434 individuals—that their whole extent amounts to only 193 1/3 Acres equal on an average to about 2112 square yards to each purchaser—that the subdivision of the Land is generally very minute as is shown by the fact that 203 Lots were sold to 209 purchasers and that for 8 of the Lots there were 17 purchasers—but that it would not be desirable to prevent individuals from purchasing more thanManuscript imagethan one Lot a piece, as some occupations would require a larger area than 120 x 60 feet. He adds that of Country Lands 30,214 Acres have been sold in 110 Lots to 126 purchasers giving an average of about 239 Acres to each.
4. It may, I think, be assumed from Governor Douglas's statement that the information which had reached Mr Nias as to what had occurred in Van Couvers Island was incorrect—and that no Land speculations have yet taken place there calculated to interfere with the prosperity or settlement of the Island. The nature of the Hudsons BayManuscript imageBay Company's claim to the Town and suburban Land in the neighbourhood of Victoria is explained in the letter from the Company of 21st instant of which a Copy is enclosed. Under the circumstances stated in that letter I apprehend that even if there were more ground than there appears to be for Mr Nias' statements the Home Government would not be entitled to interfere with the disposal of the Land held by the Company, not as Trustees for the Crown but as a Commercial Company, from a date prior to the grant of 1848.
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But having pointed out the errors in Mr Nias' statements Governor Douglas considering very properly that the question raised by that Gentleman is of paramount importance proceeds to explain his own views respecting it. He states that he has always been favorable to the theory of improvement duties, and was disposed to introduce them when the rush of Emigration to Vancouvers Island first commenced. But on reflection he considered that it would be inconsistent after striving so long to promote immigration to impose a check on it as soon as it began—that it was not probableManuscript imageprobable that a high price of Land could be long maintained by speculators where there was so much unoccupied—that capitalists buying Land might be expected in their own interests to do their best for the interests of the Colony—that it would be difficult to define, and in the case of labouring men inexpedient to enforce, substantial improvements—and that a temporary dearness of labor and material might render such improvements impracticable. As a remedy against speculative purchasers whenever they become inconvenient he, thereforeManuscript imagetherefore, suggests a Tax on unimproved Land.
6. I venture to think that Governor Douglas' reasoning scarcely meets the case. Whether Her Majesty's Government are entitled to interfere authoritatively with the disposal of this Land by the Hudson's Bay Company is, as I have pointed out, open to question. But it may be assumed, for the sake of argument at least, that the Company would be disposed to defer to such recommendations as the experience of H.M. Government might induce them to offer, for the management of this Land in the manner most advantageous toManuscript imageto the interests of the Colony. The risk then pointed out by Mr Nias and which will certainly require to be encountered, is not that ordinary Country Lands should be bought and held over by speculators, but that Town Lots and Lots having special advantages from situation or otherwise, should be so held. Lots such as these cannot under any circumstances be of great extent, and a speculation in them would not be affected by the quantity of Rural Land open for purchase in the Island. Neither would it be safe to trust to the personal interest of theManuscript imagethe Speculator. That interest would lead him to keep up the Land until by the improvement of the neighbourhood its value had been raised to its extreme point—but long before that it would probably have become an obstruction and nuisance to the community. In his objection to the difficulty of defining improvement duties, and to the facility with which they may consequently be evaded it is impossible not to concur. But he does not seem to have perceived that the same objection would apply to the remedy which he proposes, namely, a tax on unimproved Land. For if, as he justlyManuscript imagejustly states, it would be difficult to define "substantial improvements" on a Town Lot, it would be infinitely more difficult to define what amount of improvement should exempt Land from the Tax and what proof of such improvement should be furnished. It may safely be predicted that any improvement duties prescribed in Vancouvers Island would follow the same course as settlement duties in other Colonies and become deceptive or migratory.
7. Protection against the anticipated evil must be found, asManuscript imageas it appears to me, first in selling Town and suburban Lots by auction only, as I suggested in my report of 5th instant, and second by imposing a Tax not on unimproved only, but on all Land within the limit of the Township. I am not aware whether there is at present in Victoria sufficient population to allow of the incorporation of the Town, but whenever that can be done the municipal Authorities would be the proper persons to be entrusted with the power of Local Taxation, and if precautions were taken to restrict the franchise to resident Householders, and it were provided thatManuscript imagethat the Revenues raised from the Town should be expended exclusively on local improvements, there would be little reason to apprehend that speculators would find it profitable to buy up Land to hold it for any length of time in an unimproved state. But until a local municipality can be established the imposition of any Tax of this kind must remain with the central authority.
8. I have here adverted to a Tax on Town Lands only, but the same reasoning will apply to a Tax on suburban and Country LandsManuscript imageLands should it be found that they are bought and held in an unimproved state with a view to speculation. The imposition, however, of a general Tax on Land in a sparse population is a matter of questionable policy, as the collection of it is likely to be very difficult and to cost more than the Tax will produce.
I have etc.
T.W.C. Murdoch
Minutes by CO staff
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ABd 31 Jany
I think that in writing to Governor Douglas, we should take great care so [as] to avoid any comments or arguments as mt imply the least fault-finding with a Man who has met so many difficulties with so much sagacity and vigor. But I quite concur in the conclusions in the two last paragraphs of this Report, and I would recommend that they be concisely embodied in a reply to Governor Douglas.
TFE 1 February
Mr Elliot
Perhaps you will take this in hand?
C Feby 2
I will attend to the draft, if the papers be returned to me.
Documents enclosed with the main document (not transcribed)
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Thomas Fraser, Secretary, Hudson's Bay Company, to S. Walcott, Land Board, 21 January 1859, explaining the nature of the company's land holdings in and about Victoria.