Among the Many difficulties growing out of the union of
               the two Western Colonies is that in regard to 
San Juan.  As
               I understand, That Island remains for the
present
 present under the
               joint Military occupation of Great Britain and the United
               States.  The Municipal law of either Country is excluded from it.
               The farmers and few shopkeepers pay no taxes and have no Civil Courts.
               
               2.  On the Union being effected the Customs Law of 
British
                  Columbia was at once extended over 
Vancouver Island, and then
               came the question as to how articles the growth
of
 of 
San Juan
               were to be treated on their arrival in 
Victoria.  If we
               admitted everything that came from 
San Juan, where we could
               not establish a Custom House, duty free, the whole trade of
               
Puget's Sound and probably of 
San Francisco would centre in
               the Island in dispute.  If on the other hand we taxed all
               imports from 
San Juan, it would appear as if we renounced our
               claim to the Island and
treated
 treated it as a Foreign Possession.
               
               3.  Under these Circumstances I have thought it best to
               have Forms like the enclosed printed which when signed by
               the Officer in Command at the English Camp will admit the
               Articles specified in the accompaning Invoice duty free.
               
            
            
               4.  I enclose Copy of a letter I have addressed to the
               Senior Naval Officer on this subject.  The Marines who
               garrison the Island are I
believe
 believe temporarily under his command.