No. 25
               
            
            
               11th January 1867
               
               My Lord,
                
            
            
               With reference to My despatch No. 24 of this date forwarding
               the several applications of 
Mr Needham and 
Mr Begbie for the
               Office of Chief Justice of this Colony,
I
 I beg now to state that
               concurring in the view entertained by the latter officer I
               considered the whole Government Staff of 
Vancouver Island abolished
               by the proclamation incorporating that Island with 
British Columbia.
               
               2.  It seemed somewhat hard, however, urgently as the
               Legislature had prayed for the extinction of the separate
               existence of the island as a Colony that all the Public Servants
               should at once be thrown out of Employment.  Some were more
competent
               competent to fill the particular situations they held than those
               of corresponding designations on the Mainland.
               
               3.  Under these circumstances I have considered Your Lordship's
               despatch of the 
14th September 1866, (addressed to me in 
London)
               which authorizes me to effect, subject to Your Lordship's sanction,
               such reductions in the Civil Establishments of 
British Columbia
               as our financial difficulties may require as a sufficient authority
               for me to lessen somewhat the severity of the effect of Union upon
               the Government Officers of
Vancouver Vancouver Island
 Vancouver Island.  I am selecting the
               most competent from among the two Establishments and will submit
               their names for Your Lordship's consideration.  Many Gentlemen, I
               fear must lose their offices.
               
               4.  I enclose copy of a circular which I caused to be issued to
               the Public Officers of 
Vancouver Island.
               
               5.  I am proceeding gradually, but firmly, in the difficult
               task of reducing the Public expenditure and it is
probable
 probable that
               every officer of the Government, myself included, will have to
               make heavy sacrifices in order to relieve the financial embarrassments
               of our position. It was indeed time that the Colonies were united.
               On the Mainland the Customs receipts alone have fallen upwards of
               £20,000 below the estimate, and the Island was in such a
               position as to be unable to meet its liabilities without a change
               in the system of taxation or a decided revival of prosperity.
I
  I
               shall submit to your Lordship a Return showing the financial
               position of each section of the Colony on the 
19th of November
               when the union was effected.
               
               Minutes by CO staff
               
                
                  
                  Mr Elliot
                     If the Ho: of Assembly of 
V.C.I. c
d have been induced
                     to alter its system of taxation, the Colony would not have
                     been in such a bankrupt state as it now is.  In consequence
                     of the abolition of the free port system, Customs Laws & an
                     altered financial policy must

 be established; & it may fairly
                     be hoped that before long more cheerful prospects may be
                     seen in 
Van Couver.
                     
 
                  
                  
                     Wait further reports?
                     
                  
                  
                   
                  
                  
                     A selection of Papers on the Union of these Colonies must before
                     long be made for Parlt.  This sd be one.
                     
                  
                  
                  
                   
            
            
               Documents enclosed with the main document (not transcribed)
               
                
                  
                  
                     Printed circular to Heads of Public Departments of 
Vancouver Island,
                     
13 November 1866, giving notice of possible termination of their
                     positions due to union of the colonies.