Murdoch to Elliot (Assistant Under-Secretary)

I have to acknowledge your letter of 2nd instant, with a letter from
the Governor of the Hudsons Bay Co, on the subject of the claim of
Mr Lowenberg to a Lot of Land forming part of the original
Government Reserve at Victoria, Vancouvers Island.

2. The Government Reserve was a portion of the 1212 Acres at Fort
Victoria claimed by the Hudsons Bay Company on the ground of
occupation previous to 1849. By an Agreement concluded in Febry 1862
all sales of this Land made by the Company up to that date were
confirmed, on condition that the unsold portion of the Land, with the
exception of 50 Acres, should be surrendered to the Crown.

3. Previously to that date Mr Dallas, the Companys Agent, had sold
to Mr Lowenberg the Lot now in question—Governor Douglas, however,
refused to admit him into possession. The Governor alleged, but the
Company denied, that the Lot still formed part of the Government
Reserve—the Company asserting that it had been cut off from the
Reserve by a ditch and proposed Street, Governor Douglas maintaining
that the ditch was only a drain, and that the Street was outside the
Boundary of this Lot. The Agreement of 1862 made no reference to
this controversy.

4. Certain modifications of that Agreement were, however, found
necessary in carrying it out—and Governor Douglas in April last
proposed a compromize by which he considered that the rights of the
Crown and the Company would be both maintained. One condition of
that compromize was the surrender to the Crown of the Lot in question
("Lot Z"). The Hudsons Bay Company assented to the compromize, so
far as they had power to do so consistently with the rights of
individuals.

5. But Mr Lowenberg now calls on the Company to put him in
possession of the Land, which he says he bought from them in March
1861—and the Company apply to the Duke of Newcastle to give
directions for that purpose. I do not see how this application can
be refused. Nothing short of proof of fraud in the sale could
invalidate Mr Lowenberg's title, supported as it is by the Agreement
of February 1862. But although Governor Douglas in his despatch of
24th October 1861 described Mr Lowenberg as being "merely the Agent
or instrument of the Company" in the sale and purchase of this
Land—such a statement without further evidence would not justify the
Government in resisting Mr Lowenberg's claim. As Governor Douglas in
the subsequent correspondence adduced no additional evidence of the
alleged collusion between the Company and Mr Lowenberg, and as the
charge was inherently improbable, it seems hardly worth while to
enquire into it further. Much, therefore, as it may be regretted
that any portion of the Government Reserve should have been sold,
I see no ground upon which the Crown could refuse to recognize the
Sale.