No. 51

I have the honor to acknowledge receipt of Despatch No 32, of the
24th August forwarding for my report copy of a letter received from
the Governor of the Hudson's Bay Company in reply to my Despatches
dated respectively 16 February and 28 March 1860 upon the subject of
the claim put forth by the Hudsons Bay Co to the proceeds of the
sale of a portion of Government land.

2. I scarcely expected after the clear proof I exhibited in my
Despatch of the 28th March, not only of the right of the Colonial
Government to the land, but also of the original intention of the
Hudsons Bay Company with respect to such land, that the Company would
have further pressed a claim which at first I was inclined to believe
had only been preferred by the Directors through a misconception of
the actual facts of the case; but from the perusal of Mr Berens
letter I perceive that the Company although relinquishing one part of
their claim—viz the Buildings—do not seem disposed to resign the
other—the land.

3. The letter of Mr Berens is a fair narration of some of the
circumstances concurrent with the erection of the Buildings and the
appropriation of the land, and the facts stated are substantially
correct, but I do not see that he throws any fresh light upon the
claim the Fur Trade branch of the Company have made, or that he in
any way strengthens their position. On the contrary I think his
letter contains clear evidence that the Fur Trade have neither a
legal nor an equitable title to the land in question. Had the
Company adopted my proposition in the first instance, made as their
Agent, of
leasing to the Colony the Buildings required by the
Government, the matter might wear a different complexion; although
even then I am not sure that such an arrangement could have been
confirmed under the Charter of grant of the
whole Island to the company, which expressly restricted the sale
of lands to such as were
not required for public purposes—such public purposes I take
it to mean lands required for purposes in connection with the
Government of the Colony; but the company did
not approve of my suggeston and the cost of the buildings was in
consequence borne by the Colony, and the Land appropriated to them
was retained and
set apart as a Government reserve up to the period of its sale
under the authority of the Despatch to Governor Blanshard from the
Secretary of the Company dated 1st January 1851, which provides that
the Buildings required for Government purposes are to
"be near the Fort Victoria for convenience and protection"
and also that the
2
"lands which may be appropriated with the Buildings are to be
held by the Governor and Council as Trustees for the Colony."
These two points which I brought forward in my Despatch of the 28
March, to my mind conclusively settle the question, and the more so
as I notice that they are not touched upon by Mr Berens. To have
adopted the expedient alluded to by Mr Berens
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of the Fur Trade retaining the Buildings, and other Buildings being
erected upon a different site not claimed by the Fur Trade, would
have been simply absurd; for that would have necessitated the removal
of the Government Buildings from the Settlement altogether, and would
have placed them in the then almost untrodden wilderness. But in the
quotation used by Mr BerensM from the letter of Sir J.H. Pelly, it
would appear that in
all cases
of Reserves of land if
any part was required for public purposes, it might be resumed
upon
repaying the price and any improvements that might have been
made upon it. For better information I enclose a copy of the whole
of that letter, which I should not have done from motives of delicacy
the word
"private" being marked upon it, but as Mr Berens has alluded to
it as an official document, which in point of fact it is—and as some
most material points can be gathered from it, I do not longer
hesitate to produce it. That letter, in my opinion, clearly
establishes the point that if
any portion of land
reserved for the Fur Trade, or Puget Sound Company,
were required for
public purposes, it might be resumed upon two conditions,
first, repayment of its
original cost, and secondly, compensation being made for any
improvements upon it; but in the case under discussion, no repayment
of the original price of the land was required, the Fur Trade having
paid nothing for it
then, (nor have they, I believe, up to this day, made any
payment for the 3084 Acres claimed by them), and no compensation was
necessary, no expenditure having been made in improvements.

4. A consideration of these circumstances I think fairly proves that
the Fur Trade can have no claim
whatever to the proceeds of the land when sold in 1859. It is
shewn that the land
was required for public purposes and was
taken possesion of by the Government
in 1851. It was
retained by the Government and
treated as a Government Reserve down to 1859, and the most that
the Fur Trade could ever be entitled to claim would be a
refund of the money paid by them for it prior to 1851, but
they have not even this claim inasmuch as they never paid for it at
all.

5. Your Grace will perceive that I have written upon the assumption
that the land around Fort Victoria
does belong to the Fur Trade branch of the Hudsons Bay Company,
and I have refrained from questioning the validity of their claim to
it at all. That question I notice is to be considered by the
Judicial Committee of the Privy Council; and whether the claim be
allowed or not I conceive makes no difference in the position of this
Government. The entire case is I think stated in the 4h Paragraph of
this Despatch, and the points there enumerated seem to me to decide
the matter.

6. There is however one further point which is somewhat material.
Mr Berens mentions in the last paragraph but one of his letter that
the Fur Trade claim of 3084 Acres was entered in the land Register as
belonging to the Company. I have referred to the Register, and I
find therein a Memorandum signed by the Secretary of the Hudsons Bay
Company and dated 7 January 1859, containing a copy of a minute of resolution made on the 
26 September 1853 (nearly 3 years after the portion of land now claimed by the Fur Trade was
in possession of the Government) that the 3084 Acres should be
entered as belonging
to the Company. A Form of Title Deed was also filled in and
sent home, but it would seem never to have been executed.

7. Considering that some legal points were involved in the question,
I placed the whole of the papers before the Attorney General, and I
forward herewith his opinion for Your Graces information.

8. With reference to the information required in your Despatch as to
whether the produce of the sale of the Buildings has been carried to
the credit of the Colonial Government, I beg to state that as far as
I am aware that amount has not been so credited, although the cost of
all the Buildings erected upon the disputed land was charged to
the Colony.

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