Colonial Despatches

I have to acknowledge your letter of 22nd ultimo with a further despatch from Governor Douglas on the subject of the Land surrendered to the Crown by the Hudsons Bay Co in the City of Victoria Vancouvers Island.

2. In this Despatch the Governor encloses the Map of Victoria showing the Sales by the Company and the land to revert to the Crown; a copy of which was received from the Company in Mr Berens' letter of 17th March last. The result as stated in our report of 30th March is to show that the whole extent of Land reverting to the Crown is about 60 Acres, a quantity which Governor Douglas rightly assumes to be much less than we had expected when we entered into the Agreement with the Company of 3rd Febry 1862.

3. It is useless, however, now to resume the discussion whether as Govr Douglas intimates we were deliberately misled by Mr Dallas in that Agreement or whether we only misunderstood the state of the case which avowedly Mr Dallas was unable accurately to explain. If the principal object of the Agreement had been to reclaim for the Public the greatest quantity possible of valuable land it would have been a cause for serious regret, and perhaps complaint, that the statement furnished to us had been so incomplete. In that case, however, we should not have ventured to recommend the conclusion of the Agreement without a previous verification in the Colony of the grounds on which it proceeded. But the quantity of Land to be recovered, though an important, was not the principal object in view—and in forming an opinion as to the terms obtained from the Company it is necessary to bear in mind the exact state of the case. It must be remembered that the Hudson's Bay Co some years before the Grant of 1849, had established themselves at what is now Victoria, and had occupied there upwards of 3000 Acres of which the land now in question is a portion—that in 1846 they applied to Lord Grey for a grant of that land and that his Lordship was prepared to recognize their claim to it. It was in the course of the correspondence arising out of their application for this land that Lord Grey proposed to them to accept a grant of the whole Island on certain conditions of Colonization. As the correspondence on the larger question proceeded the minor question as to the land at Victoria faded out of view—and when the whole Island was subsequently granted to the Company their claim to this particular land was held to have merged in the more extensive grant. Under these circumstances it was held, and was understood by us, that although the Company might not have a strictly legal, they had an equitable, claim to the land at Victoria—and that they could not have been ousted from it without legal proceedings which would have been certainly tedious and expensive and probably of doubtful result. And in the meantime the reconveyance of the Island to the Crown must have been delayed.

4. The primary object then was to expedite the reconveyance of the Island to the Crown—to prevent future disputes respecting this particular land—and to acquire for the Crown so much of the ungranted portion of it as might be wanted for Government Offices. It is not denied that these objects have been attained and if so it is of no use now to raise questions as to the manner in which the Company disposed of other portions of the land previous to January 1862, when it was assumed by them to be their own property—an assumption which the Home Government had not disputed. It would of course have been of advantage to the public to recover for it land that was likely to sell for a high price—and the sale would probably have been conducted with greater reference to the future advantage of the public by the Crown than by the Company. But all questions respecting Sales effected bonâ fide before 1st Janry 1862 are concluded by the Agreement of Febry of that year. If as Governor Douglas says the original plan of the Town was altered by the Company to the detriment of their grantees, it is for the grantees not for the Crown to take the necessary steps to obtain indemnification.

5. The practical questions now requiring decision are explained toward the close of Mr Douglas' despatch. He states that a portion of the Government reserve was improperly sold by Mr Dallas—and that by the terms in which the Agreement was drawn up two lots adjoining that on which the Post Office stands, and covered with public buildings, are given up to the Company. On the other hand a valuable lot at the foot of Fort Street on which the Company possess Buildings is by the Agreement ceded to the Crown for a Harbour Masters Office. He proposes that the Crown should give up the lot at the foot of Fort Street, and accept instead a lot for the same purpose at the foot of Broughton Street, on condition that the Company relinquish to the Crown the portion of the Government reserve marked Z on the Map enclosed in Mr Berens' letter to the Duke of Newcastle of 17th March last together with lots 1603 1605 and 1607—the first being that on which the Post Office is situated and the two others adjoining Lots required for the public service. It only remains therefore to propose this compromise to the Hudsons Bay Co. If it is accepted Governor Douglas considers that there will be no further difficulty in effecting the reconveyance of the Island to the Crown.

6. There is much in Govr Douglas' despatch which it is desirable the Company should know—but at the same time there are many imputations conveyed in it and expressions used which could scarcely fail, if communicated to the Company, to prolong and exasperate the correspondence which has already arisen on this subject. I would venture, therefore, to suggest that if it is decided to make the Company acquainted with Mr Douglas' general statements on the question some passages of his despatch should be omitted in the communication to them.