Colonial Despatches

With reference to your communication of the 22d Instant, on the subject of granting a lease to Messrs Gray, Easterby & Rooney to enable them to work for Gold, Silver and other metallic minerals at Queen Charlotte's Islands, on the west coast of the British Possessions in North America, accompanied by a letter from Mr Richard Taylor to the Duke of Newcastle proposing the terms for this lease, and also by a statement of Mr A. Easterby, with a sketch map of the part of Queen Charlotte's Island where gold has been found.

I have to state for the information of the Duke of Newcastle that, while it appears very desirable that the ground mentioned should be properly explored, some care as to the terms of the proposed lease would appear needed.

The Royalty proposed of 5 per cent, or at the rate of One Twentieth of the gross produce, is undoubtedly low, yet, as it seems important to encourage the needful researches, perhaps a higher Royalty may be dispensed with for the present. The proposed term of 60 years appears far too long, and I would suggest for the consideration of His Grace if from 14 to 21 years would not be an ample range of time. Various circumstances, difficult to foresee, may render rights of this kind over so large a portion of ground as within 5 miles radius from Una Point, Michell's Harbour, not desirable, particularly when we regard the position of the Island, and the kind of harbour (as shown on the sketch map sent) on the Pacific side of the British North American possessions. No doubt the right to work this area for metallic minerals may not be accompanied by the absolute lease of the land for all purposes for 60 years, a small portion being only thus leased, yet the right of working for metallic minerals might seriously affect the advantages of some future settlement in that part of Queen Charlottes Island; and it is to be recollected that coal, reported to be in some quantity (the specimens sent to the Museum of Practical Geology were of fair quality, though taken from the surface) occurs in Vancouver's Island, on the South.

With regard to the method of obtaining the small Royalty proposed, there will probably be difficulties, for although the ore might at first be sent to the Colonial Gold Company, and all being honorably transacted, the Royalty collected, this method of treating them may not be persevered in. The alternative of paying according to the number of men employed monthly would scarcely meet the case unless the returns from a given number of men could be considered as constants. Probably the method of collecting the Royalty may be made [a] matter of further discussion and adjustment. In all cases it would appear desirable that, if the works were discontinued for some given time, say any twelve consecutive months, the lease should terminate.