No. 11

Adverting to previous correspondence upon the subject of the Hudson's
Bay Company's claim to land at Victoria, and to the Indenture dated
3rd February 1862 containing the arrangement entered into between
Her Majesty's Government and the Company for a settlement of the
question,
I have the honor now to forward to your Grace copy of a Map
which I have received from the Agent at this place of the Hudson's
Bay Company, accompanied by a Letter explaining and exhibiting the
portions of land to the South of James' Bay that will revert to the
Crown under that Indenture.

2. I also forward a report from the Attorney General upon the Map in
question, and a tracing from the Official Map of 1858, upon which the
greater portion of the Lots in the Town of Victoria were sold.

3. From the first named Documents it will be seen that a portion of
land equal in all to about 60 Acres, to the south of James Bay, will
revert to the Crown. This is indeed the whole that the Crown takes
by the arrangement; for if the terms of the Indenture be strictly
fulfilled it would deprive the Crown, as I shall presently explain,
of land of which it is now actually in possession, and has been in
possession for years. The extent of ground thus to be surrendered is
certainly more than I anticipated, but I fear it will not equal the
expectations entertained by Your Grace at the time the Agreement was
executed, and when you addressed to me your Despatch No 95 of the 30th April, expressing your Grace's confident expectation that in
the "large extent" of lands thereby recovered to the Crown, I shall
be able to select a fitting site for a Barracks. So far as this
point is concerned a reference to the Map will shew that with the
exception of a few not by any means valuable Town Lots—being for the
most part situated in a swamp still uncleared and undrained, and far
remote from the business and valuable portion of the City, which lies
on the North side of James Bay—the land to be surrendered consists
of Ten Sections, varying in size from 9 to 2 1/4 Acres, situated
close to the seashore in a position altogether unsuitable for a
Barracks; inasmuch as a Vessel could in a dark night run across the
Straits of Fuca, from the opposite Port of "Angelos" on the American
side, distant only 15 Miles, and with a few Shells sweep the whole
position.

4. A comparison of the present Map with the official Map of
1858, will shew that various alterations have been made in the plan
then laid down. I am not aware however that it is incumbent upon Her
Majesty's Government to take any steps in respect to this matter. If
the Hudson's Bay Co have violated their Contract with purchasers of
Land in 1858, those purchasers can institute proceedings to obtain
redress. The two most serious alterations to which I am bound
however to call Your Grace's attention are

1st The laying out and sale of Lots along the water frontage between
the Government Buildings Reserve, and Laurel point, such water
frontage being laid out as a road upon the Map of 1858.

2nd The laying out and sale of a portion of the Government Buildings
reserve.

By the first action the Colony is deprived of a water frontage that
would have been eventually at the disposal of the Legislature, and
that, if not sold, would probably have brought in an annual Revenue
of over Five thousand pounds Sterling (£5000); or if sold would I
believe at the present moment realize some Ten thousand pounds
(£10,000); and so soon as the Dredging Machine is at work and a few
improvements are effected these Lots I am satisfied would bring a sum
little short of Thirty thousand pounds (£30,000); for several
instances have recently occurred where water Lots in less available,
although more improved positions, in Victoria Harbour have been sold
at prices ranging from Three to Four Thousand pounds Sterling (£3000
to £4000) each Lot. The Lots before referred to were disposed of by
the Hudsons Bay Company privately at, I am told, the nominal price of
Twenty pounds a Lot, and I believe almost entirely to their own
Servants; indeed I am given to understand upon good authority that
the greater portion of them are in the hands of one individual a
servant of the Hudson's Bay Company. I fear however that nothing
short of an entire setting aside of the
Indenture of Agreement would
give Her Majesty's Government power to interfere in this matter,
inasmuch as the 1st Article confirms all sales of water frontages
and fore-shore rights, so far as Her Majesty, Her Heirs, and
Successors may be concerned.

With respect to the second alteration viz. the sale of a portion of
the Reserve upon which the Government Buildings stand, I have already
very fully explained the whole matter in my Despatch to Your Grace
No 66 of the 24h October 1861, and I would beg a reperusal of that
Despatch, which probably arrived too late to be placed in the hands
of Her Majesty's Commissioners when settling the Agreement, or if in
their hands was not probably, from ignorance of the locality,
connected by them with the portion of land which they agreed to
surrender by, in the the 5h Article, admitting the words "as far as
the old fence" dividing the "Government Buildings from a Farm" of the
Hudsons Bay Company. The concession as it appears in the Agreement
is reasonable enough, and Her Majesty's Commissioners, ignorant of
the true facts of the case, could not insist upon depriving the
Company of a portion of a farm actually fenced in, as the specious
words in the Agreement would imply. But what are those two facts.
They are given at length in my beforementioned Despatch. A
Government Reserve consisting of 10 Acres was laid out in 1858. Some
of the posts are in the ground to this day. The near portion it is
true did infringe upon a small part of what once had been considered
the boundary line of the farm alluded to, but the reason of its doing
so was to give the Hudson's Bay Company a more extended water
frontage which was of more value to them; for if the Reserve had not
been carried so far back as to infringe upon the supposed boundary
mentioned, the frontage must have been increased and the Company by
that means would become the losers of far more valuable land. Mr
Berens the Governor of the Hudsons's Bay Co admitted the Government
to be in possession of this Reserve in 1859. The Agents of the
Hudson's Bay Company at this place also admitted it in 1859, as in
that year the Lots forming Block 60 were laid off and sold, and upon
the Map upon which they were sold, the rear boundary of the
Government Reserve was exhibited as part of the line of the street.
In 1861 Mr Dallas disposes of a piece of this Government
Reserve—the portion marked L in the Company's present plan—by
private sale to a Land Agent, for I am told a sum very considerably
under its value; and in 1862 by the use of the peculiar language
before referred to in the Agreement he obtains Her Majesty's
confirmation of such illegal sale. The Government have been in
possession of the whole of this Reserve since it was first laid out.
They are still in possession of it. To give up the rear portion
marked L in the Company's Map, would be to render the ground almost
valueless for Government purposes, for the remaining space would be
too circumscribed, the exit by the rear would be cut off,
objectionable Buildings could be erected close to the Government
Buildings, and a constant fear of fire would exist. In short so
great a nuisance would the possession of the disputed piece become
that the Government would be compelled, if it had been legally sold,
to buy it back. I cannot but think that this result must have been
foreseen when the arrangements were made for its improper alienation.
I shall await Your Graces instructions in respect to this Reserve
before I give up any portion of it. The reclamation and sale of a
portion of it in 1861, was a decided breach of faith on the part of
the Hudson's Bay Company towards the Government; a breach of faith
which I am sure would not have been confirmed by the Crown had the
circumstances been understood.

5. As a part of the whole question involved in the Indenture of
Agreement, I beg to report upon the plans forwarded to me in Your
Grace's Despatch No 123 of the 19h December last. In reply to your
Graces inquiry, I must state that I do not consider these plans
accurately represent the land surrendered by the Agreement. I
will proceed to examine them seriatim

No 1 Harbour Masters Office

The Lot is herein represented as at the Foot of Broughton Street.
The Agreement provides for 50 feet at the foot of Fort Street; a
far
more valuable property.

No 2 Prison Lot, Police Barracks

This is correct, with the exception of a portion of the wide Street
in front of the Police Court being cut off. This is a matter however
in which no interference is required. The street in question has
been used for years, has been macadamized by the public, and
therefore cannot be reclaimed by the Company, even presuming the
rights of private property holders were not affected.

No 3 Post Office Lot

This would deprive the Government of the two adjacent Lots No 1605,
and 1607, a portion of property in undisputed possession of the
Government for the last 13 years, and upon which a Government
Building
is actually now standing. Article 4 of the Agreement treating
of the Post Office Lot, apparently makes a generous surrender of
property by the Hudsons Bay Company, if that property to be required
by the Government as a convenience to
avoid the removal of a Government Building. I will shew however
that so far from this being the case a practical appliance of the
Agreement is the virtual surrender to the Company of property that
they never before possessed, and never had any claim to. The words
of the Agreement are

Provided always that if the Post Office or any part thereof shall be
found to stand on a portion of two Lots as marked in the said
official plan, the whole of both Lots shall be conveyed and
surrendered to Her said Majesty, Her Heirs and Successors.

Lots 1603, 1605, and 1607, are occupied by
two Government Buildings. Mr Dallas was as well aware of this
as he was that Lot 1603 was
above the site of the Building which was generally used as a
Post Office; and I cannot understand why that Building alone should
have been mentioned, and the other wholly overlooked; except indeed
to obtain what the words of the Agreement would suggest, a surrender
to the Company of property possessed by the Government, and required
by the Government for public purposes. The Map forwarded by the
company is almost conclusive evidence of this, for thereupon the Post
Office Building is very carefully exhibited as not in any way
infringing upon Lot 1605 or 1607 but no Government Building is shewn
as standing upon them, which is in reality the case. Moreover this
tracing must have been taken from a Map in the possession of the
Company, and I suspect of Mr Dallas also, prior to the conclusion
of the Agreement, or at all events prior to the arrival here of the
copy of the Agreement, for this tracing exhibits the Post Office
building as projecting on the Street. The building was moved back
early in April 1862 and therefore the Map must have been made at the
very least anterior to that date. Lot 1603 by itself is useless for
the site of a Post Office, being only 30 feet frontage by 67 feet
back, and the three Lots are absolutely required for the public
convenience.

No 4 Public Park, School Reserve

The tracing of the public park I believe correctly represents its
present boundaries, although not accordingly with the official Map of
1858, but as the Crown waives its rights so far as sales of portions
thereof are concerned, it is not necessary for the Government to move
further in the matter. The School Reserve is correctly exhibited.

No 5 Church Reserve, Parsonage and Public Cemetery

These are correctly exhibited with the exception of a portion of the
public Cemetery being cut off viz the Lot marked 2005. The Crown
however has in this case relinquished all claim to such portion, and
therefore I presume it is not intended that any steps should be taken
for its recovery.

No 6 Government Offices

This tracing exhibits the portion which has been cut off from the
original Reserve and sold, marked L. I have already gone into this
question and therefore need not describe the incorrectness of the
tracing at greater length.

6. To review the whole case. Assuming that Her Majesty's Government
do not desire to move in the matter of the recovery of the water
frontages, portions of the public park, and Cemetery, I yet think I
have herein given sufficient reason for the Government to require
that the Company should relinquish their attempt to obtain a portion
of the Government Reserve at James Bay, and the two Government Lots,
now occupied by a Government Building in Government Street. Mr
Berens adverts to the conditions of the Agreement requiring the
surrender to the Government of a Lot at the foot of Fort Street, and,
in his letter to Your Grace of the 3rd November 1862, observes that
Mr Dallas, through whose medium the arrangement was come to,
"never could have intended to have appropriated to the use of the
Harbour Master ground already covered with Buildings, and in actual
use." On the other hand I feel confident that had Her Majesty's
Commissioners possessed as much local knowledge as Mr Dallas, they,
on their part, never would have consented to yield up to the Hudson's
Bay Company ground already covered with Government Buildings,
and in actual use by the Government.

To equalize this state of things I would suggest the following
compromise, not that the public requirements will be satisfied
thereby, but simply, since matters have proceeded so far, to bring
the whole question to a speedy
termination.

1. The Crown to yield up the valuable Lot at the foot of Fort
Street, and to accept the less valuable, and less convenient one at
the foot of Broughton Street.

2. The Hudsons Bay Company to relinquish all claim to Lots Nos
1603, 1605, and 1607, in Government Street, and to the rear portion
of the Government Reserve at James' Bay, marked L in their Map now
transmitted, and to convey the same to the Crown.

I should think the Company will hardly object to accept of this
amicable arrangement
of the matter. Under the Agreement they already
take immense advantages. A vast property is secured to them. They
are left in undisturbed possession of large sums of money which the
sale of portions of that property has brought them; not one farthing
being deducted for the benefit of the Colony, or even to pay for the
expense of surveying and selling, which has been mainly borne by the
Colony, and by the Imperial Government. All their actual outlay in
connection with their tenure of Vancouver Island has been generously
repaid in money by Her Majesty's Government. And what does Her
Majesty's Government take by the Agreement? A few Acres of
comparatively valueless land on the sea Coast, and a few Town Lots
that would have been sold long ago had anybody considered them worth
buying. I would further mention with respect to the acceptance of 50
feet frontage at the foot of Broughton Street, that the ground
originally claimed by this Government for a Wharf and Harbour Masters
Office, as a public requirement and convenience had a frontage of 200
feet. The circumstances in connection with this were brought to Your
Grace's notice in my Despatch of the 7h February 1861 No 9. The
steps taken by Your Grace in consequence thereof, as communicated to
me in your Despatch No 61, of the 15h June 1861, led me to assume
that the Hudson's Bay Company would place the 200 feet at the
disposal of the Government: the Company, to use Mr Berens' words in
his Letter of the 24 May 1861, having no wish to do anything that
"would militate against the public interests." Her Majesty's
Commissioners have however been led to agree to the reduction of this
claim to 50 feet, which although sufficient for a public Landing
place, and for a Harbour Masters Office, is wholly insufficient for
the purposes of a Wharf, according to the original intention.

7. Adverting particularly to Your Graces Despatch of the 15h
November last No 121, I would observe that I have had one or two
interviews with the Companys Agents at this place upon the subject of
the early final settlement of the whole business; but I do not find
them disposed to take any responsibility on their own hands. The
matter must therefore be settled in London: and if the compromise
herein proposed be accepted, and Your Grace decides that the terms of
the Agreement be not further disturbed, I believe no obstacle will
then remain to the immediate re-conveyance to the Crown of the whole
Island, less the portions required or legally alienated by the
Company: and so soon as I hear from Your Grace to this effect I can
have one Map prepared for the purpose recommended by Your Grace.

8. The Attorney General in his report accompanying this Despatch
states his belief that some of the sales represented to be made prior
to the 1st January 1862, are not bonâ fide. So soon as any fresh
light is thrown upon this matter I will not fail to advise Your
Grace. At present I can only say that if the case be otherwise, and
the Company feel
hurt at such a suspicion being cast upon them, it has
been brought about by their own proceedings. Had the sales of land
been in all cases genuine and beyond question, I cannot understand
why so much delay should have occurred in declaring what was sold, or
why so much secrecy should have been observed, so that the Surveyor
General could never at any time obtain the slightest information upon
the subject. I mentioned these matters to Your Grace in my
Despatches Nos 57 and 58, of the 3rd and 5h December 1862: and as
there is no want of qualified Surveyors and Draughtsmen at Victoria,
and as the Agreement had reference to acts that were done prior to
its date, and not to acts that were to be done subsequently to its
arrival in the Colony—so far as the sales of land were concerned, I
feel bound to say that the reason assigned by Mr Berens for the
delay, "a want of assistance in making the necessary surveys and
plans of the Property" only serves to give countenance to the
suspicion instead of to remove it, for how could legal transfers and
bonâ fide sales of property be effected, if no Survey had been
made at the time of the sale.