No. 18

I have received your despatch, No 44, of the 13th of October
relative to the sale of Town lots at Victoria and Van Couver's Island
and to the precautions requisite in order to prevent the appropriation
of such lots by persons who have not the intention or the requisite
means to make substantial improvements.

The explanation which you have afforded of past transactions on
this subject is satisfactory. I see no reason to suppose that anything
has yet taken place which is calculated to interfere with the prosperity
or settlement of Van Couver's Island.

You have, however, judged very rightly in believing it to be of
paramount importance in a new Colony to guard against mere speculative
purchases of land. So far as regard Town and Suburban Lots, one
effectual security will be provided by only disposing of them, as is
directed in another despatch from me by auction and at a substantial
upset price.

The attempt to impose conditions of settlement on purchasers of
land has failed in every Colony where it has been tried, both in
Australia and in North America. The opportunities of evasion are too
numerous to be counteracted, and the Government only finds itself
engaged in a hopeless conflict with the entire body of occupants of land.
But your own consideration of the subject has led you to think of one
remedy which has been most efficient in those countries where it has
been tried viz a tax upon lands. This tax you would apparently lay on
unimproved lands only. This however, has been found open to the
objections, first, that debates may arise as to the definition of
unimproved land, and secondly, that a resident Legislature may possibly
enforce the measure too stringently against absentees by raising such a
tax to an undue amount. Both objections are obviated by a general tax
on all lands whatever, whether improved or not. It may be made so
moderate as to be scarcely felt upon lands which are really occupied,
whilst nevertheless it must fall very heavily on any extensive tracts
held by speculators with no other motive than the hope of some future
rise in the general value of land. The measure as I have thus described
it, is one applicable to all lands whatever. In the case of town and
Suburban allotments, a somewhat higher rate would be requisite in order
to get rid of mere speculative occupants, but then it may be supposed
that in such situations higher rates would at all events be required and
be appropriate, for the improvements of the town and neighbourhood.
They would be under the management of local Municipalities when such
should be created in the progress of time, and in the meanwhile they
might be created, if it should be found expedient, under the authority
of the Executive Government.

I have thrown out these general views, derived from the large
experience which has been acquired in the course of the last 30 years in
the formation of new Settlements, for your information, and in order
that you may have an opportunity of using them as far as you may find
them applicable to the wants of your Government; but I am wll aware how
much must depend on the varying circumstances of different colonies, and
it is not my wish in the remarks which I have made to dictate any
precise measure or to fetter your discretion.