Colonial Despatches

I have to acknowledge your letter of 8th inst, with the copy of a letter addressed to Mr Secretary Cardwell by the Governor of the Hudsons Bay Company, complaining of an information filed against the Company in the Local Courts—and also a report on the case from the Governor, to whom the letter of Sir E. Head was transmitted by Mr Cardwell.

2. It appears from the report of the Attorney General enclosed in Mr Kennedy's despatch that the information in question was originally filed against the Company by the Attorney General in 1861, at the instance of the Surveyor General, to set aside all sales made by the Company subsequent to 1858, which were in contravention of the plan of the Town of Victoria as laid down and sanctioned by the Company in that year. This suit became untenable, so far as the Crown was concerned, by the Indenture made at this office in February 1862, whereby all Sales made by the Company before January 1862 are declared to be valid as against the Crown. It might, however, have been continued by the Surveyor General in his private capacity, as the purchaser of certain lots in Victoria, but as he declined to accept the responsibility of that course the proceedings have been discontinued. This took place some time before the receipt in the Colony of Mr Cardwells despatch enclosing the letter from Sir E. Head.

3. So far therefore as Sir E. Head's letter of 24 Octr last is concerned, the correspondence might be allowed to drop here. But in announcing his intention not to proceed with the suit in his private capacity, the Surveyor General pointed out several particulars in regard to the dealings of the Company with the Land in Victoria, in respect to which he considered that fuller information is required. His letter having been referred to the Attorney General and the Executive Council, they suggested that the Company should be called on for a formal account of the Sales made by the Company previous to January 1862, with such proof as they could give of the accuracy of the account. The Agent of the Company declined to furnish any such account, and the Executive Council in consequence recommend, that legal steps should, if necessary, be taken to compel the disclosure of the information sought. The Governor announces his intention of bringing the whole question before Mr Cardwell on an early occasion, and proposes in the meantime not to press the suit against the Company to compel them to disclose their Sales until he receives further instructions.

4. It would be premature, pending the receipt of the promised report, to express any decided opinion on the points in dispute between the Local Government and the Agents of the Company. But the refusal of the Company's Agent to furnish the information without which the Deed for the reconveyance of the Island to the Crown cannot be prepared—information which is exclusively in the possession of the Company—appears unreasonable and obstructive. The Governor of the Company has repeatedly applied to the Secretary of State to get their reconveyance completed—and we have had several interviews at this Office with him and with the Solicitor to the Company on the subject, and have even prepared at their request and communicated to them unofficially a Draft of the instrument necessary to reconvey the Island. But so long as the Agents of the Company in the Colony refuse to produce the information required for the purpose of setting out the Lots to be retained by the Company, no effectual progress can be made in the matter. The Governor remarks that nothing but a Court of Law—a special Commission—or Arbitration can now disentangle the complications in the matter arising from the bitter spirit in which it was formerly dealt with by the Governor and the Company's Agent. For the interests of all parties he would recommend, he says, arbitration—but he does not say whether impartial Arbitrators could be found on the spot, and the disapproval with which the Indenture of February 1862 has been viewed in the Colony is sufficient evidence of the risk of dealing with such a matter in this Country. Probably Mr Kennedy will develope more fully in his promised report his scheme for the settlement of the questions in dispute. In the meantime I would submit that the Governors report should be communicated to Sir E. Head and the Directors of the Company, and that their attention should be especially drawn to the letter of Messrs Pearkes and Green of the 3rd of December and the answer of Mr Drake of 17th of December.