Colonial Despatches

I have to acknowledge the receipt of your despatch No. 46 of the 12th of September, pointing out the financial embarrassment in which you are place in consequence of the resumption of Vancouver Island by Her Majesty's Government, and the refusal of the Agent of the Hudson's Bay Company to continue further advances to meet the cost of the Civil Establishment. On this subject, I must refer you to the directions conveyed in my despatch of the 20th October last. Whatever the temporary difficulties in the way of such a course may be, it is absolutely necessary that the Island should provide for its own Civil expenditure, and expedients for delaying this consummation, if practicable, would only aggravate the evil.

The important Constitutional and financial questions which your despatch involves are at present occupying my careful attention, and I hope to be able shortly to give you full and definite instructions upon them.

In the meantime I have to express my satisfation at the prospect which you hold out of enlarging the House of Assembly. You have only anticipated the recommendation of Her Majesty's Government on this point, and I trust that you may be able to carry your design without delay into execution.

I also approve your intention to adhere to the policy of making Victoria a free port, and I concur, therefore, in your desire to raise a revenue, if possible, by direct taxation rather than by the imposition of Customs duties.