3. If I may take the liberty of referring your Grace to Arrowsmiths improved map of Vancouver's Island, you will observe that the three principal Islands of the Arro Archipelago, "San Juan," "Lopez," and "Orcas," are of considerable extent, and I may add from my own knowledge that they are exceedingly valuable, not only on account of their relative position to Vancouver's Island, but also from the fact that their shores and Inlets, abound with Salmon and other fish, which form a productive export, and inexhaustible source of wealth.

They contain a great extent of arable land, are capable of supporting a large population, and form an appendage of incalculable importance to this Colony.

4. In reference to their geological structure the most southerly Islands of the Archipelago, are chiefly composed of Trap or Greenstone but sandstone and other strata, similar in character to those found in the Coal District of Nanaimo, mark the more northerly Islands as belongingto to the same geological series.

Some fine specimens of serpentine and auriferous quartz have also been found there.

5. According to the intention expressed in my said Despatch to Sir John S Packington of the 9th December last, I shall proceed to lay before your Grace the grounds which led me to assume without positive instructions on that head, that the Islands of the Archipelago de Arro, did of right belong to Her Majesty the Queen.

I was led to take that view of the question by a fair construction of the Oregon Treaty which defines the territorial limits of the contracting Powers on this coast; the common opinion of the day; and the maps published in both countries exhibiting the boundary line in the middle of "Vancouver Strait," the only direct channel which connects the Gulf of Georgia with the Straits of Juan De Fuca.

6. The first article of that Treaty, declares that the lineof of boundary shall be continued westward along the said forty ninth parallel of north latitude to the middle of the Channel, which separates the continent from Vancouver's Island and thence southerly through the middle of said channel, and Fuca Straits to the Pacific Ocean, provided however, that the navigation of the whole of the said channel and Straits, south of the forty ninth parallel of latitude remain free and open to both parties.

The letter of the Treaty clearly implies the existence of a navigable channel, extending from the point in the Gulf of Georgia, where the westerly line ceases, to the Straits of Juan De Fuca, and also declares that the said channel runs in a southerly direction.

8. On that head I wish to observe that "Vancouver's" Chart, to which I beg to refer your Grace, shews that no navigable channel, leading from the Straits of Juan De fuca, into the Gulf of Georgia, was known to exist when the Treaty was made, neither had any channel, which can be safely navigated by sailing ships, beendiscovered discovered, even to this day, except "Vancouver Straits," which up to this hour, is the route invariably taken by sailing ships, bound to and from the Gulf of Georgia.

9. The Treaty also declares that the boundary line shall run, "thence," (i.e. from the middle of the Gulf of Georgia)," southerly, through the said channel." The chart will here again shew that none of the passages, in the Arro Archipelago, run continuously in a southerly direction, and that no other outlet, from the Gulf of Georgia, answers the description given of the channel, through which the boundary line, was to be carried, except "Vancouver Strait."

10. The Treaty moreover provides, that the navigation of the whole of the said channel and straits (of De Fuca), south of the forty ninth parallel of latitude remain free and open to both parties.

I would observe in respect to that article that there could be no object for leaving the navigation, of the "whole" of the Straits of Juan De Fuca, as far east asWhitby Whitby Island and Deception passage, free and open to British Vessels, unless it was intended, that "Vancouver Strait," should be the boundary Channel, and I cannot suppose that any other consideration would have induced the American Plenipotentiary, so tenacious on all other points affecting the interests of his country, to make in that instance an important concession in favour of British commerce, a concession affecting the navigation laws of the United States; by throwing open a large extent of the American coast to British Vessels; without any real or apparent necessity, arising from the nature of the navigation, and without securing thereby, any reciprocal advantage for his own country.

11. In respect to the evidence derivable from public opinion, we who have lived almost on the spot, have ever believed thatVancouvers Vancouvers Strait, is the sure line of boundary, between the two countries, and as a proof that we are not alone in that opinion, I herewith transmit a Map of the Arro Archipelago, being a section faithfully copied from a Map of Oregon and Upper California, from the surveys of John Charles Fremont, and other authorities, drawn by Charles Preuss, under the order of the Senate of the United States Washington City 1848 on which the boundary line is carefully traced, exactly as your Grace will observe on the section, through the middle of "Vancouver Strait" into the Gulf of Georgia. The original map is now in my possession and may be consulted if necessary.

12. "Vancouver Strait" is thus shewn to be the only channel, answering to the description given of the boundary channel, in the Treaty—being a navigable channel—running southerly—and from its position requiring for the safety and convenience of the vessels frequenting it, the free navigation of the whole of theStraits Straits of Juan De Fuca, and the description is applicable to no other channel in that quarter.

The Map published at Washington City in 1848, under the orders of the Senate also shews that "Vancouver Strait," was supposed to be the boundary channel, by the highest authority in the United States.

13. The question of right appearing thus clearly in favour of the claims of Great Britain, I conceived it my positive duty to assert them, and I was also influenced in coming to that decision, by another pressing consideration that "Vancouver Strait," is the present navigable outlet from the Gulf of Georgia, and without it, that noble inland sea, bounded on every side by the Territories of Great Britain, would be in a measure, sealed to British commerce.

14. I also have the honor of transmitting herewith a section embracing the Territory herein described, of "Vancouvers chart," of the north west coast of America, shewing the routetaken taken by the vessels under his command, into the Gulf of Georgia, which will further illustrate the hints I have herein taken the liberty of submitting for your Grace's consideration.