Murdoch to Elliot (Assistant Under-Secretary)

I have to acknowledge your letter of 12th instant with a despatch
from the Governor of Vancouvers Island reporting on the application
of Mr Irving to be allowed to surrender certain land which he had
purchased in that Island and to receive back his deposit.

2. In 1859 Mr Irving purchased 159 Acres in Vancouver Island at £1 an Acre and paid a deposit of £50. In Feby 1861 the price of Crown
Land was reduced from £1 to 4s/2d an Acre. Mr Irving in
consequence applied to have his purchase cancelled and to receive
back his deposit, on the ground that the value of his land had been
depreciated by this Act of the Government. In a report from this
Office of 3rd October last it was pointed out that to comply with
Mr Irvings application would be to admit a principle which would
unsettle every purchase of Crown Land in the Colony—that purchasers
must be assumed to take their land subject to the contingencies
legitimately attaching to it—that one of those contingencies is an
alteration of price—and that if that alteration had been in the
direction of increase instead of reduction Mr Irving would have
received the benefit of it.

3. The Duke of Newcastle concurred in this view of the case, but
directed the Governor to consider whether purchasers who had paid a
deposit only might not be permitted to select Land at £1 an Acre to
the extent of their deposit, and to abandon the rest of their
Contract. The Governor answers that such an arrangement had upon
consideration been found impracticable from the difference in the
value of Land in the same section or group—that some of it being
valuable and other worthless, the worthless would be left on the
hands of the Government while the better would be selected—and he
observes that if such a privilege were conceded to those who have not
completed their purchase it could not be refused to those who have.
He adds that the amount of unpaid instalments having increased he had
been compelled to forfeit the Land on which they were overdue—but
had abstained from taking that step with reference to Mr Irvings
land pending the correspondence with the Colonial Office.

4. It cannot be denied that if the change in the price of land is to
entitle those who have paid deposits only to a relaxation of their
Contract it would make it more difficult to resist the claim of those
who have paid their whole purchase money to consideration on the same
ground. There is however the essential difference that in the former
case the Government would have to deal with transactions still in
progress—but in the latter with those that are absolutely completed.
The question has, however, been concluded by the forfeiture and sale
of all lands except Mr Irvings on which instalments were overdue.
There is no ground for an exception in Mr Irvings case—and it is
clear that in every case where the instalments paid do not exceed
three fourths of the whole purchase money it would be to the
advantage of the purchaser to forfeit his instalments and buy at the
present price. In the case of Mr Irving the allotment which he
received of 159 Acres would at 4s/2d an Acre cost £33.2.6 which
added to his forfeited deposit of £50 would make in all £83.2.6
offering therefore a premium of £75.17.6 on the abandonment of his
Land and its repurchase under existing regulations. Even if he had
paid three fourths of the purchase money or £119.5 he would obtain a
benefit by abandoning the Land and repurchasing it. It is not
surprizing

that under these circumstances the majority of those who
have paid deposits only should prefer to forfeit their deposits
rather than complete their Contracts.

5. Upon the whole I would submit that it would not be possible with
due regard to public interest to interfere between the purchasers of
Crown Lands and the Local Government, and I would recommend that the
Governors proceedings should be approved and that he should be left
to deal with Mr Irvings land in the same manner as with other Land
similarly situated.