No. 84

I have the honor to acquaint you that the questions which have
been so long under discussion between Her Majesty's Government and the
Hudson's Bay Company respecting the Company's claims to Land in
Vancouver Island under a title anterior to the grant of the Island have
been brought to a close.

It had been determined as you are aware to submit those claims to
the Judicial Committee of the Privy Council, and the preliminary steps
had been taken for that purpose. But a long time must necessarily have
elapsed before the decision of the Council could have been obtained, a
protracted and expensive investigation must have been undertaken, and a
delay incurred, which could not fail to create a serious impediment to
the progress of the Colony.

Under these circumstances I readily agreed to a proposal from the
Hudson's Bay Company that an attempt should be made to settle the matter
by arbitration. Mr. Dallas and Mr. Maynard on the part of the Company
and Mr. Murdoch and Mr. Walcott on behalf of Her Majesty's Government
were accordingly appointed to confer upon the subject and after due
consultation agreed to a memorandum of arrangement, the terms of which
have subsequently been incorporated in the Agreement of which a copy is
annexed to this Despatch.

The Company having signified to me their acceptance of these
terms, I have felt no hesitation in likewise acceding to the
arrangement. The concessions thus made by the Company appear to me to
be as great as can be demanded from them; and, moreover, the speedy
settlement of these questions of title which, by keeping the public
mind in suspense, retard the progress of the Colony, must be of far
more value to the community than the issue however favorable to the
Government of a tedious and expensive litigation.

It only remains for me to instruct you to carry the present
arrangement into effect, and to authorize you, with this view, to
prepare under the directions of the Colonial Attorney General for
execution by the Company the necessary Deeds of reconveyance of the
portions of Land to be surrendered to the Crown.