No. 7

I have the honor to acknowledge the receipt of your Despatch No. 60
of the 8th of October last, on the subject of the claim of the Imperial
Treasury to the sum of £10,704.16.7 on account of the Buildings erected
by the Royal Engineers.

The reasons advanced by you for relieving the Colony from this
claim appeared to me deserving of consideration, and I accordingly
referred your Despatch to the Lords Commissoners of the Treasury.

Their Lordships however have informed me that they are unable
to submit to parliament a further Vote on account of the excess of
expenditure in British Columbia for the years 1859 and 1860, a step
which a compliance with your recommendation in behalf of the Colony
would render necessary.

I have therefore instructed the Crown Agents to repay the amount
out of the proceeds of the Loan raised under the Ordinance of the 10th
of March 1864.