No. 92, Separate

1. I have the honor to forward herewith a Petition from certain
Merchants, Traders and others resident in Victoria Vancouver Island,
which has been entrusted to me for transmission.

2. I have numbered the paragraphs of the Petition to facilitate
reference.

3. It is to be regretted that this Petition was not presented when
the Resolutions of the local Legislature in favour of union with
British Columbia were passed and transmitted to you in my Despatches
Nos 14 and 16 dated 21st March 1865.

4. It will be within your recollection that I then informed you that
a very decided majority of the electors of the City of Victoria were
advocates for the union of the Colonies accompanied by a tariff, or
the imposition of import duties, as evinced in the return of two
Members to the Legislative Assembly who at that time offered
themselves upon those principles.

5. I now observe with some surprise that several influential persons
who supported and
voted for those Members and whose influence contributed
materially toward their return have appended their names to the
enclosed Petition praying for the "continuance of the Free Port
policy in its fullest integrity."

6. The following analysis of the signatures appended to the Memorial
is substantially correct.

British Subjects . . . . . . . 88

Americans . . . . . . . . . . 33

Germans . . . . . . . . . . . 21

French . . . . . . . . . . . . 8

Unknown . . . . . . . . . . . 7

___

157

7. You will also observe that many of the Petitioners sign as the
Agents for absentees, whether with or without their concurrence is not
shown.

8. I will now proceed to offer such remarks upon the Petition as
appear to me necessary for your information.

9. Paragraph No 2. It is an undoubted fact that "great commercial
depression" has existed and still exists in both these Colonies, and
I am sure that you would have been glad to have learned the
Petitioners' opinion of the cause or causes of it.

10. These causes in my opinion rest with the Petitioners themselves,
and are beyond the reach of any remedy which you can apply. They may
be found in a system of reckless credit, competition, and
overtrading. It is notorious that large quantities of goods were
thrown into [the] Cariboo market this year by the merchants of Victoria
which did not realize the cost of carriage. The supply far exceeded
the demand. While this proved a great boon to the working miner, it
left the
Cariboo traders without means of paying their debts to Victoria,
and the Victorian merchants without payment for the goods they
supplied. To this obvious cause of "depression" may be added the
more stringent administration of the Customs Laws at San Francisco
and neighbouring American ports where a large amount of goods were
formerly introduced from Vancouver Island without going through the
formalities of the Custom House.

11. I may further remark that this "depression" is by no means
confined to British Columbia and Vancouver Island. Many thousand
persons are departing monthly from San Francisco, owing to the same
causes which my experience leads me to believe are common to all
mining or gold producing countries, and will continue more or less
till men become honest and prudent.

12. Paragraph 4. As regards Vancouver Island I am of opinion that
the character and small number of the population render the present
form of Government inapplicable and expensive. The statistics and
taxes as shown in the annual Blue Book will enable you to judge
whether it can be truthfully termed "a most onerous burden upon all
classes." On this subject I would refer you to a recent Despatch of
mine No 81, 22nd September 1865.

13. Paragraph No 8. The Proclamation declaring Victoria and
Esquimalt Free Ports simply declares that they "shall be (free ports)
until otherwise determined by proper authority."

14. Paragraph 9. The Petitioners are obviously in error in stating
or thinking that "the vote of the House of Assembly praying Her
Majesty to grant an union of these Colonies on such terms as to Her
Majesty may seem meet is not inconsistent with the prayer of your
Petitioners for the continuance of the Free Port policy in this
Colony." A reference to my Despatches Nos 14 and 16, 1865 together
with the whole tenor of the debates clearly point to "Union with a
tariff."

15. I concur with the Petitioners in thinking that the uncertainty
existing on this subject is producing very ill effects upon the
business and prosperity of these Colonies, but this uncertainty is
and has been mainly caused by the action of their own representatives
over whom Her Majesty's Government has no control in this behalf.

16. Paragraph 10. My opinion on the subject of this paragraph will
be found in my Despatch No 16, 21st March 1865. I see no reason to
alter it.

17. I refrain from offering any opinion on the merits of the
different systems of "Free Port" or import duties as applicable to
the circumstances of this Colony as it must be contingent upon union
or no union of these Colonies on which subject I look daily for
information or instructions from you.

18. In conclusion I have only to state that I think this Petition
ought to have been addressed to the local Legislature rather than Her
Majesty's Secretary of State for the Colonies.