No. 33 9505, CO 305/20, p. 309; received 29 September 10 August 1863 My Lord Duke,

I have had the honor of receiving Your Grace's Despatch of the 14th May last No 19, accompanied by communications from the Hudsons Bay Company, in reply to my Despatches Nos 57 and 58 of the 3rd and 5th ofDecember December 1862, relative to the delay on the part of the Company in the completion of the preliminary arrangements for the carrying out of the Indenture of Agreement of 3rd February 1862.

2. Your Grace impresses upon me the importance of not raising unnecessary controversies with the Company's Officers, but of conducting the correspondence in a liberal and conciliatory spirit.

It has ever been my desire to act with the Company's Officers in the settlement of all thesematters matters in the most frank and cordial manner, but consistently with the duty I owe Her Majesty's Government, and with the interests of the public, I could not refrain from pointing out to Your Grace what appeared to me a most remarkable and unnecessary delay on the part of the Hudson's Bay Company in revealing what extent of land would revert to the Crown under the Indenture before mentioned of the 3 February 1862. In doing so I did notdesire desire to raise any unnecessary controversy. I believed Your Grace to be in ignorance of the true facts of the case, and I deemed it but right to lay them before you. It was furthest from my wish to cast any undue reflections upon the Hudsons Bay Company, but I could only judge of events as they occurred on the spot, and, as I have already remarked in a previous Despatch, if the Hudson's Bay Company felt hurt at the appliance to them of the inferences to be drawn from proceedings involvedin in so much mystery and delay, they had but themselves to thank for it by adopting such a line of conduct. I notice that Mr Berens in his letter to Your Grace of the 17th March alleges that my communications are conceived in a spirit of hostility to the Company. I need take no further notice of this observation than to remark that this is not the first time that an attempt has been made by the Hudson's Bay Company to give such a complexion to thepublic public acts in respect of the Company which my position has required me to take. I have however carefully abstained from ever permitting the true merits of the case to be lost sight of through the introduction of personalities. I desire most sincerely, and that speedily, to see the Hudson's Bay Company confirmed in all that they have a legal and equitable right to under the concessions made by Her Majesty's Government; but I do not desire in a settlement of that right to see the publicnecessities necessities disregarded, and land yielded up to the Company that is actually possessed and occupied for public purposes; and I feel sure that Your Grace will support me in what I have done upon a perfect comprehension of the whole case.

3. I trust that my Despatch No 11 of the 20th April last, accompanied as it was by complete Maps and Plans explanatory of the land treated of, will have served to place the whole case clearly beforeYour Your Grace, and to solve any difficulty that may exist to a speedy settlement of the matter.

4. It is perhaps almost unnecessary that I should trouble Your Grace with any further remarks upon the correspondence you enclose to me, but I would desire to draw Your Graces attention for a moment to the two cases in particular in which I maintain that the claims of the Hudsons Bay Company under the Indenture should not be confirmed to the great and manifest inconvenienceof of the public. The first is the Government Reserve upon which the Government Buildings stand. Mr Berens in his letter of the 17th March alluding, I presume, to this Reserve, says it is very strange that as the Reserve in question was planned by Governor Douglas while in the Company's employ, that he should not have himself any map or plan shewing its exact boundaries. It is with respect to this that I especially complain of the action of the Hudson's Bay Company. The Government Reserve was planned by me, as stated by Mr Berens, while in the Company's employ.In In 1858 it was surveyed, boundary posts were placed upon the ground, and it was marked as so surveyed upon the official Map of the Town. In 1859 Mr Berens admitted the Government to be in possession of this Reserve. In 1859 its rear line was taken by the Company, as the line of a street, and Town Lots were surveyed off and sold facing the rear of the Reserve, the street running between them and the rear of the Reserve, and on the Map upon which these Lots were publicly sold by the Company in 1859, the rear line of the Reserve was exhibited as laid down in 1858. And yet notwithstanding all this in 1861, without any intimationto to me, Mr Dallas suddenly disposes of nearly two Acres of the rear of the Reserve so planned, so surveyed, and so marked in 1858: and I am credibly informed has gone to the unusual extent of granting a guarantee to the person to whom he sold it, a land Agent, that the Company would protect him against questions of title. The language in the Indenture, which requires a personal knowledge of the locality thoroughly to appreciate, is interpreted by the Company to deprive the Government of the aforementioned two Acres so sold, and to confirm the act of Mr Dallas. I senta a plan of the Reserve, as originally laid out, to Mr Mactavish in July 1862, but he declined to acknowledge it as being correct, although it only contained the 10 Acres precisely as marked on the Map in 1858, and admitted by the Company in 1859 to be the Reserve. In Mr Mactavish's letter of the 21st January 1863, forwarded in Your Grace's Despatch now under reply, the Reserve to be conveyed is represented to contain 10 Acres. This is not the case for the piece beforementioned being deducted, but 8 acres or thereabouts would be left to the Government, and as I have explained in my Despatch of the 20h April last would render the Reserve comparatively valueless for the Government purposes forwhich which it was allotted. Mr Dallas I am told was frequently seen (before leaving the Colony) accompanied by Surveyors in the rear of the Government Reserve, and he could not be ignorant that its rear line formed one side of the line of the street, that a great part of the opposite line was fenced in, that Houses were built on the ground immediately opposite to the rear of the Reserve, and even for some distance beyond; and it therefore appears to me inexplicable, except for one reason, that the Government Reserve shouldhave have not been described as Mr Dallas knew it was described clearly and distinctly on the Map, but that it should in the Indenture of Agreement have been made to appear to adjoin and to be contiguous to a Farm, when surveyed Lots and two if not three public thoroughfares did actually exist between the Reserve, and portions of ground still unsold that once belonged to the Farm mentioned. Mr Dallas offers no explanation on this head in his letter of the 20 January 1863, forwarded by Mr Berens.

The other case is the Post Office Lot. Mr Dallas claims the merit ofreserving reserving this Lot to the Colony. Mr Dallas knew that it was in possession of the Government, and had a Government building upon it, and I presume for that reason "stepped forward" to reserve it for the Colony. Mr Dallas also knew that the ground was claimed by the Government not only of this Lot, but of two adjoining Lots, the same having been in undisturbed and undisputed possession of the Government for more than 12 years, and as has been shewn in my Despatches of the Numbers and dates as per margin, * virtually removed from the control of the Company; and as Mr Dallas knew this, and also knew that a Government Building stood upon those two other Lots, it seems to me more than strange that Mr Dallas while so candidly coming forward in the interests of the Colony in respect of the Post Office Lot and Building should have made no mention at all of the other equally valuable Government Building, and only such a mention of the two Lotsas as, I must think, he well knew would yield them up to the Hudson's Bay Company. I sincerely trust that the reasons and explanations I have already given in my Despatch No 11 of the 20th April last, will induce Your Grace to insist upon the Colony being left in undisturbed possession of the Government Reserve as originally laid down, and of the property, cut up into three Lots, which is now occupied and held by the Colonial Government in Government Street, and in thus urging this step upon YourGrace Grace I hope that you will deem that I am not raising a controversy which is unnecessary, but that I am performing a simple act of duty to the public which it would be culpable to neglect.

I have the honor to be My Lord Duke, Your Graces most obedient and humble Servant James Douglas