Separate

I have to communicate for the information of Her Majesty's
Government that great numbers of persons, principally able-bodied
men, unaccompanied by women or children, continue to arrive in
this Colony, on their way to the Gold Fields of British Columbia.
It appears from the Custom House Returns, that upwards of
Four thousand men have passed New Westminster since the first day
of March last; besides these, about one thousand more are reported
to have made their way overland by the Southern Frontier, making
altogether from that date, an addition of about five thousand
men to the population of the Colony.

From present appearances there is every reason to believe
that the influx of people will go on increasing, and that the
population of British Columbia will, this season, receive large
accessions, not only by the ordinary Emigration from California,
but also from the "Salmon River" Mines, which, it is reported, do
not fully realize the extravagant hopes of the restless and wandering Miners who have resorted to that Gold Field.

2. There has been no reaction this season in British Columbia;
though considering the inaccessibility of the Country, the great
distance of the Gold Fields from the sea, the heavy expense of
transport, and the fact that the country itself as yet remains
untilled, and, relatively to the demand, may be said to have neither
corn nor cattle of its own growth, a mischievous reaction may at
any time occur from the mere want of food. Even with the advantages
of good roads and every other possible facility, the capital and
commercial enterprise of the Colony could hardly be expected to
cope with our present circumstances and to provide sufficient
quantities of food for the subsistance of eight or ten thousand
people residing at a distance of five hundred miles from the Coast, and without such facilities it is very evident that the attempt
could not possibly succeed, and would simply be productive of
loss and disaster.

I am therefore making every possible effort to push on with
the roads now in progress, and perhaps never was there a more
favorable opportunity for carrying on such works with economy
and despatch, as labour is abundant, and the public have unlimited
confidence in the resources of the Country.

3. These roads will benefit and improve the Country to an
almost incredible extent, not only by effecting an enormous saving
in the cost and facilities of transport, and by giving an impulse
to business and to the ordinary sources of revenue, but also by
increasing its productive powers of taxation, without injury or
oppression to the Country; it being, for instance, my intention
immediately on the completion of the first fifty miles of the roads
starting from Lytton and Lillooet, to impose an additional tax of
three farthings per pound weight—i.e. seven pounds sterling per
ton—on all goods carried inland from the several termini.

It is estimated that such a tax will produce an annual revenue
of about Sixteen Thousand Pounds, and with the existing one farthing
tax, which last year yielded nearly Six Thousand three hundred
pounds, will produce altogether about Twenty two thousand three
hundred pounds. The Country will at the same time be a pecuniary
gainer probably to the extent of twenty times that sum, simply
through the saving in the cost of transport.

4. I am now anxiously awaiting Your Grace's further instructions
concerning the loan for British Columbia, being by the instructions
contained in your Despatch No 107 of the 6th of March last,
precluded from taking any additional proceedings for borrowing
money under the Loan Proclamation.

This delay is unfortunate and Your Grace may conceive my
intense anxiety under the existing circumstances of the Colony,
and the difficulties which surround me.

5. The increasing Revenue of the Colony has hitherto enabled
me to meet all its existing liabilities, but the anticipated calls
upon the Treasury on account of the Roads commenced before the
arrival of Your Grace's said Despatch, have compelled me to resort
to the expedient of issuing promissory notes payable on demand at
the Treasury of British Columbia, the amount of which will be
strictly limited to the sum required, in addition to the ordinary
Revenue to complete those works.

The Road Contractors have agreed to receive all such notes
at par, and to keep them as long as possible afloat, by accepting
them as cash in their business transactions at a premium of one
per cent. The principal commercial houses in the Colony being
concerned in the contracts for these Roads, and the Government
Notes being issued to them as a loan to enable them to carry on
the work; and they being moreover chargeable with interest on
the notes when redeemed, under the arrangements explained in my
Despatch, marked "Separate" of the 15th April last, they have
a very strong inducement for keeping them in circulation, and
preventing their immediate return to the Treasury.

This plan will enable me to struggle through with our financial
difficulties until I am favoured with Your Grace's final instructions
respecting the loan.

6. I beg in conclusion to remark that Her Majesty's Government
have no real cause for alarm about the resources of the Colony or
the ultimate repayment of the loan, as I did not recommend the
measure until I had received the most satisfactory evidence of the
latent wealth of the Colony; and I should not have been so pressing
and urgent in my appeals for assistance had it been for a less
essential object than opening the internal communications of the
Country by which that wealth can alone be made available, and the
Colony rendered self supporting and independent of foreign aid,
so thoroughly indeed am I satisfied with the prospects of the
Colony, that I should have no hesitation, were that course open
to me, of embarking every farthing of my own private fortune on
the security it offers.