Colonial Despatches

1. I have the honor to acknowledge the receipt of your Despatch No 60, 1st November 1864 informing me that you had received from the Hudson's Bay Company the copy of an Information filed by the Attorney General of Vancouver Island against that Company praying that the sales of certain public lands alleged bythem them to have been made prior to the Agreement with Her Majesty's Government of February 1862 may be set aside and requesting an explanation from me on the subject.

2. In reply thereto I beg to enclose a copy of correspondence on this subject which explains itself and will supply the information you require.

3. You will observe that this suit, the terms of which were from time to time amended, was instituted by my Predecessorso so far back as May 1861.

4. I did not possess the requisite knowledge of this much debated subject, nor did I feel justified in interfering with the action of the Attorney General instructed by my Predecessor till Mr Cary resigned office on the 22nd August 1864 when I called upon the Acting Attorney General, Mr Wood, in a letter dated 9th September 1864 for a statement of the object of the suit so long pending, and received his reply (herewith) datedOctober October 6th 1864 which conveys all the information I can at present offer.

5. You will further observe that this letter of the Acting Attorney General was transmitted by me to Mr J.D. Pemberton, late Surveyor General, in whose name the suit was instituted, for his remarks, which will be found herewith in a confidential letter dated 17th October 1864.

6. The Minute of the Acting Attorney General on Mr Pemberton'sletter letter dated 14th November 1864 I laid before my Executive Council when a decision in accordance with his recommendation was come to and the suit abandoned.

7. The subsequent letters named in the margin (herewith) will, with the Council Minute thereon, bring the proceedings up to the present date.

8. It is very difficult to deal with a part only of this large and complicated question, and the difficulty is greatly increased by the absence of my Predecessor, and Mr Young, Colonial Secretary,who who appear to have conducted much of this and other business verbally.

9. The action of the local Legislature has rendered it compulsory upon me to lay the question as a whole before you, and which I purpose to do as early as possible. In the mean time I do not think the Hudson's Bay Company can sustain injury or inconvenience from the last step I have been advised to take. I have no intention of pressing the suit proposed in the letter of the MessrsPearkes Pearkes and Green (and approved by the Attorney General) dated 3rd December till I receive your instructions.

10. The subject of my Despatch of this date, No 1, is a branch of this matter.

11. You may be sure that I will not lend my sanction to any hasty or partisan proceeding against the Hudson's Bay Company.

12. I feel confident that the Hudson's Bay Company would disclaim any proceeding by whomsoever taken which could in any way compromisetheir their deservedly high character, but at the same time I lean to the opinion that the proverbial bitterness of a family quarrel which unhappily existed between the Gentlemen who represented the Hudson's Bay Company and the Crown prior to my arrival here unconsciously led both into errors of judgment which has resulted in great complications and mischief to the Colony, and which nothing but a Court of Law, a Special Commission, or Arbitration cannow now correct. Of these I would for the interests of all parties recommend arbitration. Two honorable and unbiassed men with power to take evidence on oath and call for papers could settle the questions at little cost of time or money. It is one of those subjects on which a correspondence may be kept up for years without any result.

13. I have no desire to shrink from any responsibility Her Majesty's Government may please to put upon me, but I think as Governorof of this Colony where impartiality is all-important, it would for numerous reasons be inexpedient to make me judge in a matter which has elicited such bitter partisan feeling among the whole community.

14. I should be less likely to afford satisfaction inasmuch as the Gentlemen employed by and representing the Hudson's Bay Company in this Colony have shown a very persistent and unmistakeable hostility tomy my administration from a period anterior to my arrival.

15. You will observe that the suit in question was commenced against the Hudson's Bay Company in May 1861, and that it was abandoned some months before I received your Despatch now under reply.

16. For what reasons the Hudson's Bay Company abstained from bringing it under the notice of the Secretary of State during my Predecessor's term of Office which expired in March 1864 is a matter I cannot explain.