Confidential

I have to acknowledge your Despatch of the 30th of
August,

enclosing copies of the regulations issued for the management of the
Gold Fields, and a Proclamation establishing Harbour Regulations, &c.

The latter I have transmitted to the Lords of the Committee of
Privy Council for Trade, with a view of obtaining their Lordships'
opinion; but the former relate to so important a branch of the
administrative duties with which you are now charged, that I prefer very
briefly calling your attention to some points which have suggested
themselves to me, rather than postpone all communication on the subject
till the next mail.

I am sensible of the difficulty of criticising in England the
details of those regulations which, from an experience of local
circumstances and requirements, you have laid down for the guidance of
the Gold Commissioners and miners in British Columbia.

I feel also that rules which have been established in the Australian
Colonies with good effect may be qualified by conditions in North
America, which from a necessarily limited information on the subject I
am unable to take into account. I am not, therefore, prepared to give
you any definite instructions, or to insist upon any modifications which
at first sight might seem desirable.

But whilst, therefore, on these grounds, and from a reliance on
your judgment and discretion, I am desirous of giving you full freedom
of action, I feel it right to place before you the impressions made upon
me by a perusal of your regulations for the gold fields.

On the Instructions to the Assistant Gold Commissioners and to the
Police I have no objection to offer. They appear to me in both cases to
meet the objects which are to be had in view.

Taking, however, first, into consideration the rules prescribed in
the case of alluvial gold, the regulations provide that licences at
21s per month shall be taken out by each miner, such licences
conferring a claim to the following spaces, viz., 25 feet of the bank of
the river, 25 feet of each bank of a creek or ravine, or 20 square feet
of table land.

Such arrangements may be on the whole most congenial to the
dispositions of the American miners whom you may have to consider; but I
cannot forget that it was the system of enforcing from time to time the
licence fee which created in Victoria so much dissatisfaction, and
ultimately led to the Ballarat riots, and to the adoption of new rules.
The Victorian system was in the main the same as that which you have
apparently adopted. It exacted a licence fee of 1£ from each miner per
month, and, as Sir Charles Hotham says, in a Despatch of 21st November 1855 to Sir William
Molesworth,

"The great and primary cause of
complaint which I found was undoubtedly the licence fee."

Every miner was required to produce at a moment's notice the
licence which authorized him to dig. No excuse was admissible.
Theoretically, nothing could be more just than that the man who profited
by the gold should pay a proportion to the Crown for the right of
extracting it, but practically nothing could be more unsound.

Even if he were rich enough to pay it, he often could not spare
the time to go to the Government Office and obtain his licence. Thus a
general antipathy to the licence system was engendered, and men's minds
prepared for any measure which might wash away the annoyance.

It was then decided that the monthly licence fee should be
abolished, and be replaced, independently of royalties, first, by a
miner's annual certificate of 1£; secondly, by the payment of 10£ per
annum on every acre of alluvial soil; and, thirdly, by and indirect tax
in the shape of 2s6d export duty on the ounce of the gold.

Experience seems, as far as we yet know, to have justified this
change in Victoria. Discontent, with its attendant dangers, has been
removed, and by the present system, which appears to be acquiesced in by
all parties, a larger revenue is obtained than ever was the case under
the earlier arrangement. I observe, indeed, by the last Victorian
returns for 1856, that the duties on the export of gold amounted to
more than 376,000£.

It is, I doubt not, expedient to maintain a distinction between the
search for gold in alluvial soil and its extraction by means of
machinery from quartz rocks, and I conclude that the object which you
have mainly had in view in your regulations on this branch of the
subject has been to attract men of capital to the Colony. At the same
time, I would request you to consider again with care the expediency of
requiring so large a sum as 2,000£ security from any individual entering
upon this particular field of speculation.

In Victoria, the royalty is not to exceed one-twentieth of the
gross produce, instead of being as high as one tenth, and the payment
exacted from the miner (1£ per yard) is probably less felt, and more
remunerative in the long run, as it is in proportion to the work which
he achieves, than would be the introduction of capital to the extent of
2,000£, which it must be further borne in mind is nugatory if
subsequently invested in other objects of speculation, and burdensome
to the individual giving the security if it is to lie idle.

I do not question the correctness of your decision in assigning
three years as the period when such a licence must be renewed, though
there might be cases where the erection of expensive machinery would
require some latitude to be allowed in enforcing the rights of the
Crown; but the condition that 20 men shall be simultaneously employed
upon the claim is one which, under certain circumstances, might press
somewhat hardly upon the miner.

The seizure as Crown property of gold of any kind which has been
procured without due authority is a question the propriety of which
would be governed by the particular circumstances of the case, and the
means possessed by the local functionaries for enforcing the rule.

I observe with satisfaction the foundations laid in these
regulations for the creation of local tribunals, the attributions of
which will enable them either to dispense a ready and simple justice, or
to settle disputes by an arbitration on the spot and accessible to all.