I am happy to inform your Lordship that nothing has occurred to disturb the tranquility of the Settlements on this Island, since the departure of the late Governor BlanchardBlanshard by Her Majestys Ship "Daphne" on the 1st September last. The Natives generally profess the most friendly disposition, and prove their sincerity, by the character of their daily intercourse with the Settlers. ⎯

The late operations of Her Majestys Ship "Daphne" acting under instructions from Governor BlanchardBlanshard against the Neweeti Tribe, inhabiting the north end of Vancouvers Island, have been attended with the happiest effects, and so filled their mind with terror, that they made no attempt at reprisals. They since abandoned their former place of residence, and took refuge among the Tribes living on the West Coast of Vancouvers Island. ⎯

To that point as Soon as their retreat was discovered a party of friendly Indians were dispatched by Mr George Blenkinsop the Hudson's Bay Companys Officer in command of Fort Rupert, with a message from this Government proffering peace to the Tribe at large, on Condition of the delivery of the three Indians concerned in the murder.

Those terms were at once accepted by the Neweete Chiefs, but before the proposed seizure could be effected the murderers receivedreceived notice of their danger and fled from the Camp. They were however chased into the woods, and put to death by their own people after making a desperate resistance, in which one of the assailants was severlyseverely wounded. ⎯

The mangled remains of the Criminals were taken to Fort Rupert and after being identifi=edidentified by the Chiefs of the Quaheolth Tribe, were interred near the Fort, so that there is no doubt as to their having met with the fate they so Justly merited. ⎯

The war with that nation may be now considered as virtually at an end, and I beg to express, to your Lordship, how greatly I feel indebted to Mr GeoGeorge Blenkinsop, for his able and active aid, in bringing it to a satisfactory and honourable close. ⎯

I propose in a short time to visit that part of Vancouvers Island for the purpose of establishing amicable relations with that, and other Tribes of Indians whose friendship will greatly conduce, to the well being of the Colony. ⎯

I am happy to inform your Lordship that the Grain Crops throughout the Settlements were abundant this season, and were secured in fine condition; though Singular to say, in the American Settlements about Nisqually and on the Columbia River, the harvest was remarkably wet, and it is estimated that at leastleast one third of the grain of this season perish==edperished on the field, and a larger proportion was much damaged by the wet, a circumstance which tells greatly in favour of the climate of Vancouvers Island. ⎯

The grain raised in the Colony this year will not be Sufficient to meet the home demand, and we shall be under the necessity of making up the deficiency by importing bread stuffs from abroad. ⎯

On the other hand the potatoe crops will greatly exceed our annual consumption, and the potatoes are remarkably large and of good quality. ⎯

The Natives generally are turning their attention to the cultivation of the Potatoe, and to other useful arts, such as the manufacture of Shingles and Laths which are becoming popular among them.

I shall probably take the liberty of calling your Lordship's attention hereafter to the best means of improving the condition of the aborigines of this Island, who are in many respects a highly interesting people, and I consider worthy of attention.

They will become under proper Manage=mentManagement of service to the Colony and form a valuable auxiliary force, in the event of war with any foreign power. ⎯ From my long experience of Indian character and of thethe tribes on this Coast in particular, I am led to regret that the Missionary Societies of Britain, who are sending Teachers to so many other parts of the world have not turned their attention to the natives of Vancouvers Island; as by the aid of those Societies, Schools might be established for the moral training and instruction of the Aborigines, to the manifest advantage of the Colony. ⎯

On the subject of internal improvements, I may remark that a high road along the Coast from Victoria to Soke Inlet about 25 miles distant, is greatly needed to facilitate intercourse, and we have that object now in contemplation, having already surveyed the ground and found it not ill adapted for the purpose. ⎯

I have further to inform your Lordship, that the natives have discovered Gold in Englefield Bay, on the West Coast of Queen Charlottes Island. One of the Hudson's Bay Company Vessels visited the spot, in the month of July last, and succeeded in procuring about 60 oz of Gold, principally by barter from the Indians. One lump of nearly pure Gold weighing 1 lb 11 oz was seen in the possession of one native, who demanded a price beyond its value, so that it was not purchased. ⎯ The Gold is associated with white Quartz rock, similar to that of the auriferous deposites in California; it is yet found in small quantities, but I amam of opinion that it exists abundantly in that and other parts of the Island. ⎯

The report of that discovery having become known in this Country, I am informed that several American Vessels are fitting out in the Columbia, for Queen Charlottes Island, for the purpose of digging Gold—a circumstance to which I would request your Lordships attention, as it may be the desire of Government to exclude foreign vessels from that part of the Coast. ⎯

As the Council of this Island nominated by Governor BlanchardBlanshard, consisted originally of three members, myself included, and is now reduced by my late appointment, to two members, a number insufficient to form a quorum, I have selected Mr Roderick Finlayson, a Gentleman of worth and great experience, to fill the vacancy until your pleasure thereupon is made known. ⎯

I shall do myself the honor of addressing your Lordship from time to time, on the affairs of Vancouvers Island, as circum==stancescircumstances occur, deserving of your notice.