Murdoch to Elliot (Assistant Under-Secretary)

I have to acknowledge the receipt of to Sir Frederic Rogers' letter of
6th ultimo, enclosing a Despatch from Governor Douglas with various
other documents, on the subject of the conflicting claims of the
Crown and the Fur Trade Branch of the Hudsons Bay Co to certain land
in the Town of Victoria in Vancouvers Island, which has been recently
sold by order of the Governor.

This question has arisen out of an arrangement which has been
differently represented by Governor Douglas and the Agent for the
Hudsons Bay Co. The former stated that being anxious to obtain
funds for erecting new Government buildings he resolved on selling
the Land on which the old Government Buildings stood, but that being
unable, during the existence of the grant to the Hudsons Bay Co of
Janry 1849, to give titles to that land, he arranged with the
Company's Agent to surrender the land to him on receiving from him
the proceeds of the sale amounting to $27,000. The Agent of the
Company on the other hand represented the $27,000 as an advance made
to the Governor on an express stipulation that it should be included
in the expenditure to be repaid to the Company on the revocation of
their grant. The Governor, however, denied this representation and
asserted that the advance was to be covered by the sale of the Land,
the proceeds of which had been paid to the Cashier of the Company.

3. So far no question arose as to the ownership of the Land which
was asserted by the Governor and not denied by the Company's Agent to
be a public Reserve, and the proceeds of the Sale therefore public
money. But in a letter from the Governor of the Hudsons Bay Co of
the 16th Decr 1859 a new claim was started. Mr Berens there
alleged that the land in question was part of the property possessed
by the Company before the Grant of 1849—that its sale on Government
account had been protested against by the Company's Agent, but was
allowed to proceed in order to avoid discrediting the Governor—that
the buildings erected upon it had been erected at the expense of the
Hudsons Bay Co and that the right of the Company to those Buildings
had been asserted by the Governor in his address to the House of
Assembly of 7 May 1859 & by the Surveyor General, Mr Pemberton, in a
speech in the Assembly on the 17th of the same month.

4. Out of this letter two questions arise. First whether the
Company are entitled to the Land in Vancouvers Island which they
claim by reason of occupation previous to the grant of 1849, and
Secondly if so whether the Land now in question forms a portion of
that to which they are so entitled.

5. Upon the first point it is not of course asserted that the
Company can show any legal Title—but they rest their equitable
claim on the length of their possession on the stipulations of the
Oregon Treaty of 1846 in respect to Lands similarly held by them
within the Territory of the United States and on the deliberate
acquiescence of Lord Grey in their claims when brought under his
notice in 1846 and again in 1851-2. Whether these facts would be
sufficient to make out claims which are likely to have so important a
bearing on the future progress of the Colony it is unnecessary here
to consider. The Duke of Newcastle has announced to the Company his
intention to refer this claim to the Judicial Committee of the Privy Council, in the same way as their similar claim in
British Columbia, and they were accordingly requested on
7th Febry 1860, to send in a supplementary
statement on the subject. I do not gather from the papers before me whether this has yet been done. If not it would
probably be desirable to remind the Company of it.

*

6. In respect to the second question vizt whether if the Company are
entitled to Land by reason of occupation before 1849 the Land now in
dispute forms a part of it, the evidence presented by these papers
appears to be as follows.

7. In January 1851 the Hudsons Bay Co directed Governor Blanshard
to commence the erection of Government Buildings—adding

You and your Council will hold the same with the Lands that may be
appropriated with them as Trustees for the Colony.

Before this Despatch however reached the Colony, Governor Blanchard
[Blanshard] had already commenced the erection of a Government
House—with reference to which Mr Douglas, who was then Agent to the
Company, wrote under date 29th Janry 1851, as follows.

I have not charged that sum (the amount expended by Governor
Blanshard) to the Colony as the site on which it (the Government House)
stands belongs to the Fur Trade—and I was proposing that the House
and premises should remain a Fur trade possession and that the Colony
should be charged an Annual rent of 10 per cent on the original
outlay.

It further appears that on the 7th May 1859 (at the time that is
when he was negociating with the Companys Agent for the advance of
$27,000) Governor Douglas in a Speech to the Assembly of Vancouvers Island stated that

The Building now occupied as a Government office as well as that for
the Land office are the property of the Hudsons Bay Co.

And on the 17th of the same month Mr Pemberton the Surveyor General
stated in the Assembly

in explanation of the erroneous information which he officially had
given the House in reference to the Old Government Buildings and
their site, that the Governor and himself had believed them to belong
to the Government, but upon the return of the Agent of the Fur Trade
Co they had been convinced after taking legal advice upon the
matter, that the Fur traders were the rightful owners of the
aforesaid property, and consequently the Government were not, except
by purchase.

**

8. This would at first sight appear conclusive as to the views of
the Governor & Surveyor General up to the commencement of the present
correspondence. But on the other hand Governor Douglas in a despatch
dated 12th Septr 1859 (4 months after his & Mr Pemberton's
statements to the Assembly) described the Land as having been
"reserved by the Hudsons Bay Co for Government purposes" and in a
despatch dated 28th March 1860 asserted that the Land appropriated
to the Government House was always regarded by him (he having
succeeded Mr Blanchard as Governor in May 1851) as a Government
Reserve, and that the Colonial Surveyor had strict orders from him
not to dispose of any of it. In a subsequent despatch of 7th Decr
last he alleged, with reference to his proposal before referred to to
lease the Buildings on this Land to the Government, that as the
Company did not approve of that suggestion

***

the cost of the buildings was in consequence borne by the Colony, and
the land appropriated to them was retained and set apart as a
Government reserve up to the period of its sale.

****

And he calls attention to a letter of instructions addressed to him
by the Governor of the Company on his appointment as Governor in
which it is stated, inter alia, that it must be understood that if
any part of the Company's Reserves is required for public purposes it
may be resumed upon repaying the price and any improvements that may
have been made upon it. The Land in question was, he observes,
required for public purposes and was taken possession of by the
Government in 1851, but as no price had been paid for it nor any
expenditure incurred on it by the Company there was nothing to be
repaid on that resumption. He adds that it was not till Septr 1853
that the Compy made a minute that the Land should be registered as
belonging to the Company, and not till Janry 1859 that the
registration was effected. He likewise transmits an opinion from his
Attorney General to the effect that the Company have no claim to the
Land.

9. It will be seen from this recapitulation that there is much
difficulty in reconciling Governor Douglas' present statement with
the views which he originally entertained in respect to this Land and
which, if the Surveyor General is correct, he retained up to the
month of May 1859. There appears no reason to doubt that the Land in
dispute was previous to the Grant of 1849 in the possession of the
Fur Trade branch of the Hudsons Bay Co and was still in their
possession when the Buildings since occupied by the Government were
commenced in 1851. Whether the Company had then acquired such a
right to it as the Crown is bound to respect is the question to be
decided by the Judicial Committee of the Privy Council—but if that
decision should be in their favor the subsequent transactions could
not invalidate the Company's title. Governor Douglas, as has been
stated relies on an instruction from Sir J. Pelly in 1851, authorizing
him to resume for public purposes any Land reserved for the Fur
Trade or Puget Sound Co. But it cannot be maintained that such a
resumption could be effected on the mere authority of a general
instruction from the Governor of the Co not relating to this
particular land, without any formal Act or record, and without even
notice to the previous owners of the intention to resume, by the mere
fact of the erection of Government Buildings on the land. The single
ground as far as I can see, for assuming the Land to be a Government
Reserve, is Governor Douglas' assertion that he always so regarded
it—but even that assertion is inconsistent with the statement of his
views made by Mr Pemberton in the House of Assembly on the 17th May 1859, which was brought under his notice by the Duke of Newcastle's
despatch of 2nd Janry 1860, but to which he has never adverted in any of his despatches.

10. The conclusion then to which I come is, that this land stands
upon the same footing as the other land claimed by the Hudsons Bay Co
on the ground of occupation before the grant of 1849. The point is
one of importance, because on the decision as to the ownership of the
land depends the question as to the source from which the $27000
expended on the new Government Buildings is to be drawn. If the Land
belongs to the Crown the money will have been provided from Colonial
sources—but if to the Company the money will have been advanced
only by them and would have to be repaid, in the first instance at
least, from the Imperial Treasury. This, therefore, affords an
additional reason for bringing the matter before the Judicial Committee of the Privy Council with as little delay as possible, and
I would accordingly submit that in communicating to the Company (as I
presume it will be thought right to do) Governor Douglas' last
despatch, an opportunity should be taken of recalling to their
recollection Mr Merivale's letter of the 7th Febry 1860 and of
urging them to send in without delay the necessary statement of their
claims to Land in Vancouvers Island for reference to the Judicial
Committee.
*****