No. 1, Legislative
5 January 1861
My Lord Duke
1. I have the honor to forward herewith the Copy of an Act entitled the "Victoria Harbour Act 1860," which yourGraceManuscript image Grace will observe has passed the House of Assembly and the Legislative Council and now awaits my assent.
For reasons however which I shall proceed to state, I propose to postpone its execution, until I have ascertained from Your Grace whether or not I am authorized to deal with certain provisions containedinManuscript image in the Act.
2. Its object is to raise the sum of £10,000 by loan partly for the improvement of Victoria Harbour, and partly for the formation of a road connecting it with Esquimalt; and for payment of the debt so created: the Act assigns the proceeds of certain fees levied on Ships entering and leaving the Port of VictoriaManuscript imageVictoria.
3. Concurring in opinion with the other branches of the Legislature as to the great importance of the contemplated works, I have nevertheless declined to confirm the Act in consequence of the following passage which occurs in the 21st section of my instructions from the Queen, vizt:
And you are nottoManuscript image to give your assent to or pass any Act whereby Bills of Credit may be Struck or issued in lieu of money or for payment of money either to you our Governor, or to any person whatsoever, unless a clause be inserted in such act, declaring that the same shall not take effect until the said act shall have been approved and confirmed by us our Heirs and Successors.
TheManuscript image
The intention of that passage I conceive not only prohibits notes from being declared a legal tender for money but is also meant to restrain Colonial Governments from contracting debts without having first obtained Her Majesty's sanction to that effect.
3. I would also beg to draw your Grace's attention to the dues levied on ships as setforthManuscript image forth in Schedule D under the Title of "Landing Permits" and that your Grace will be pleased to inform me whether the levying of such dues in this Colony does in any respect conflict with the laws relating to Trade and Navigation.
I believe there can otherwise be no objection as the rates are not burdensome to trade and the proceeds are to be devoted to objects ofgreatManuscript image great commercial importance.
Trusting soon to receive your Grace's instructions with respect to these points.
I have the honor to be
My Lord Duke
Your Grace's most obedt
Humble Servant
James Douglas

To His Grace The Duke of Newcastle
&c &c &c
Minutes by CO staff
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Sir F. Rogers
From what I have heard of the respective merits of the two harbors I should be inclined to believe that it wd be more advantageous to spend this money on Esquimalt in preference to Victoria Harbor. But the Legislature has settled the point in favor of the Capital.
ABd 7/March
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Mr Fortescue
Refer to Bd of Trade as to the charges upon shipping.
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I think that the clause of the Instructions to wh the Govr refers was only intended to prevent the Legre from authorizing virtually the issue of paper money and not to prevent them from contracting a Loan witht sanction from Home. Perhaps the dph shd be communicated to the Try with an intimation that unless their Lps shd think differently it was the intention of the D of N. to communicate the above opinion to the Governor.
At the same time I [propose if?] contracting a loan at rather more than 12 per cent interest (taking the discount of 5 per cent into account) is somewhat startling.
FR 8/3
I am aware of no legal objection to the Ordce.
CF 9
N 10
Documents enclosed with the main document (not transcribed)
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Copy of "The Victoria Harbour Act of 1860" not on microfilm.
Other documents included in the file
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Elliot to J. Booth, Board of Trade, 23 March 1861, forwarding copy of the despatch and enclosure and asking whether they had any objection to the proposed fees being levied.
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Elliot to G.A. Hamilton, Treasury, 23 March 1861, forwarding copy of the despatch and enclosure and asking whether they would object to informing the governor that the clause he quoted was not intended to prevent a colony from raising a loan without Imperial sanction.
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Draft reply, Newcastle to Douglas, No. 57, 11 May 1861, advising that the colonial government is allowed to incur debts, but not to issue paper money or letters of credit.