No. 13

Among the Many difficulties growing out of the union of
the two Western Colonies is that in regard to San Juan. As
I understand, That Island remains for the present under the
joint Military occupation of Great Britain and the United
States. The Municipal law of either Country is excluded from it.
The farmers and few shopkeepers pay no taxes and have no Civil Courts.

2. On the Union being effected the Customs Law of British
Columbia was at once extended over Vancouver Island, and then
came the question as to how articles the growth of San Juan
were to be treated on their arrival in Victoria. If we
admitted everything that came from San Juan, where we could
not establish a Custom House, duty free, the whole trade of
Puget's Sound and probably of San Francisco would centre in
the Island in dispute. If on the other hand we taxed all
imports from San Juan, it would appear as if we renounced our
claim to the Island and treated it as a Foreign Possession.

3. Under these Circumstances I have thought it best to
have Forms like the enclosed printed which when signed by
the Officer in Command at the English Camp will admit the
Articles specified in the accompaning Invoice duty free.

4. I enclose Copy of a letter I have addressed to the
Senior Naval Officer on this subject. The Marines who
garrison the Island are I believe temporarily under his command.