No. 58

I have the honor to acknowledge your Grace's Despatch No 10 of
the 3rd September, transmitting a copy of a letter from the
Hudson's Bay Company, and of the reply you had caused to be
addressed to Mr Berens, in which your Grace intimates that it
is with much satisfaction that you have heard of the refusal on
the part of the Company's Manager in Vancouver's Island, to
accede to my application for Advances on account of Government
subsequent to the 30th May.

2. In reference thereto, I beg to inform your Grace that in
consequence of the refusal of the Hudson's Bay Company to
liquidate the current expenses of the Colony, and in the absence
of any instructions from Her Majesty's Government upon the
subject, I have been forced to apply the monies arising from the
sale of Public Land to that purpose, though those funds should
properly be paid into the hands of the Hudson's Bay Company
until the Charter of Grant is determined as it is evident that
until then, no Title to Land would be legal even if sold by the
Crown.

3. No official announcement has been yet made to me of the
revocation of the Grant. I have at present therefore no power
either to grant a legal Title or to make sales of Public Land,
and I am in consequence placed in a position of extreme
embarrassment.

4. I have contrived hitherto to pay all the civil expenses of
the Colony out of monies raised from its own Revenues, but
should these fail before the House of Assembly provides a
Revenue, and before I am legally empowered to dispose of the
Public Land, there will be no alternative left to me but to draw
upon Her Majesty's Government.

5. The annual expenses of the Colony are moderate, and your
Grace will observe from an abstract herewith enclosed of the
revenue and expenditure for the fiscal year ending the 31st day
of October 1858, that the Income of the Colony exceeded the
expenditure by the sum of over Three Thousand Two Hundred Pounds
(£3200), and that too, at a period when much unusual expense was
incurred in consequence of the discovery of Gold in Fraser
River, and the number of people who were attracted to this
place by that discovery.

6. The Public Accounts for the twelve months ending on the
31st day of October last not being completed, it is not in my
power to forward a statement of the expenditure for that period
by the present mail, but I will not fail to furnish your Grace
with that information as soon as it can be received from the
Agents of the Hudson's Bay Company. The Income derived from the
sale of Public Land and from other sources of revenue will I am
of opinion come short of the sum collected for the preceding
twelve months and will probably be unequal to the expenditure,
but the deficit will I think not greatly exceed the excess of
Income over Expenditure appearing in favour of the Colony for
the year 1858.

7. By analysing the expenditure for the year 1858 it will be
observed that a proportion exceeding two fifths of the whole
outlay for that period was incurred for the construction of
buildings and other indispensable public works of a permanent
character and of the nature of investments, and not of simple
expenditures the value being represented and remaining for the
benefit of the Colony. The actual expenditure for carrying on
the Government of the Colony is thus reduced to the sum of Five
Thousand Six Hundred Pounds (£5600).

8. Before closing this despatch I have to request that I may be
informed whether the Charter granting Vancouver's Island to the
Hudson's Bay Company be revoked, and whether I may legally make
sales of and grant Titles for the public lands on the part of
the Crown.

Trusting that these explanations may prove satisfactory.