No. 4

I have the honor to forward herewith to Your Grace copy of
correspondence and of an Agreement Entered into with respect to a
direct steam communication between San Francisco and the Colonies of
Vancouvers Island and British Columbia.

2. The disadvantages under which these Colonies were laboring
through the communication even from San Francisco not being
direct—or in other words, through the Steamers coming here from San
Francisco ascending the Columbia River and touching at Portland en
route, whereby freight became exposed to greatly increased risks, and
emigration was diverted—were very clearly exhibited in the Memorial
which I had the honor to forward to Your Grace in my Despatch of the
25th June last, marked "Separate."

3. The recent rich gold discoveries in the District of Carriboo in
British Columbia, and the large number of successful Miners who had
returned from that region exhibiting their rapidly acquired wealth,
and thus advertising abroad undoubted proof of the unprecedented
yield of the new gold fields, rendered it morally certain that a
large immigration would flow thither in the spring of 1862. It was
ascertained beyond a doubt that prodigious efforts were being made by
the people of Portland to stop this emigration at that point, not
only by artful representations of the facilities for reaching the
Carriboo being greater through their Territory, but also by
favourably contrasting the Diggings at the Salmon River—some new
gold fields said to have been recently discovered in American
territory about 500 miles from Portland. The truth or fallacy of
these representations would be of but little moment. So long as
every Steamer on its way to these Colonies touched at Portland, there
is but small doubt a large proportion of the Emigration would have
been checked, and the results to these Colonies would have been
greatly disastrous. The fact was patent to all, and it became a
matter of almost vital importance to counteract these evil
influences. The Legislature of Vancouver's Island consequently voted
a sum of Two thousand Five Hundred pounds (£2500) towards obtaining a
direct communication from San Francisco for a few months. This sum
was all that the small Reserve of this Colony could furnish, and even
that amount was only obtainable at the sacrifice of other works of
much importance. I propose to add another Two thousand Five Hundred
pounds (£2500) from the Revenues of British Columbia, thus making the
total sum available for the service Five Thousand pounds (£5000).

4. I trust that these proceedings may meet with the approval of Your
Grace, and that you will deem the Agreement which has been concluded
is as satisfactory as could possibly have been expected. By it a
weekly communication is provided for Six months, every alternate
Steamer either coming direct from, or returning direct to San Francisco. Indeed had it not been that the parties entering into the
contract firmly believe in the large emigration from California
hitherwards, it is not likely that the small sum we have offered
would have induced them to make such terms.