No. 42

1. I have the honor to acknowledge the receipt of your
Despatch No 4, of the 16th
July.

2. In the midst of the varied cares and anxieties that press upon
me in the present conjuncture, it is no small consolation to learn from
your Despatch that Her Majesty's Government feel assured of my zeal in
the public service, and offer their firm support, in the performance of
the arduous duties consequent on my present position, and I beg
leave to say that I feel the value of that support, and deeply
grateful for the confidence reposed in me.

3. I observe with satisfaction that Her Majesty's Government
were engaged in conducting through Parliament, a measure for
Governmentbill for the establishment of
the establishment of regular government in the gold
country,

and were devising means for affording me the
 support of a military force.

4. I have perused your remarks defining the extent of the Powers
Governorpowers of
conferred on the Governor of Vancouver's Island by the Royal Commission
and observe that you approve of the appointment of a revenue officer, to
prevent the landing of prohibited articles in Fraser's River, and
instruct me to maintain the principle that the navigation of Fraser's
River itself, above the mouth, is open to British vessels only, and that
American or other foreign vessels if admitted to navigate that river
should be required to take out a license; your instructions on those
points being in strict accordance with our present regulations.

5. I observe also from your Despatch, that the rights of trade made
HudsonsBayCompany exclusiverightslimitedtoIndians
over to the Hudson's Bay Company are limited to the trade with the Indian
Tribes.

We have always hitherto given a more extended application
to those rights, believing from the circumstance of the country,
being inhabited by Indians alone, and from its not being open
for settlement to white men, that the intention of Parliament
in granting the License, was to make over the whole trade of the
country to the Hudson's Bay Company.

6. That construction of the rights of the Hudson's Bay Company was
strengthened by the following passage in His Grace [the Duke] of
Newcastle, Duke ofcited
Newcastle's Despatch No 12, of the 22nd of October
1853,

on which the proclamation issued on the 8th of May last was based.

With regard to the third subject, the traffic of the Americans with the
Indians, you are of course aware that the Hudson's Bay Company are
legally entitled to this trade, to the exclusion of all other persons,
whether British or Foreign, you are therefore clearly at liberty to take
such steps as may have the effect of punishing persons who infringe their
rights. But I am of opinion that it would be prudent previously to issue
a proclamation warning all persons against the consequences of such an
infringement of the Hudson's Bay Company's rights, and also apprizing
foreigners that they are precluded from fishing within three miles of the
shore.

7. We shall however in future act upon your instructions,
abrogating and amending without delay all existing regulations
repugnant thereto. The proclamation of the 8th of May was
Proclamationestablishing customsdutiesdisallowed
in fact virtually abrogated by later
regulations,

Sufferance
permitting in the first place, the entrance of boats and vessels under
sufferance, and afterwards allowing the importation of all kinds of goods
into Fraser's River, on the payment of an ad valorem duty on the
goods of 10 per cent, as mentioned in the 11th paragraph of
my Despatch No 39 of the 9th of
September.

8. The object of that Proclamation which from the pressure of
business my despatches have but imperfectly explained to Her Majesty's
Government, was not solely to protect the interests of the Hudson's Bay
Company, for in the circumstances of the country, that was a simple
impossibility, but I sought to establish thereby a legal control, over
the multitude of foreigners who were entering the country, and who
notwithstanding our precautions to the contrary, have been with
difficulty restrained from taking possession of and occupying as
squatters all the valuable land on Fraser's River. I felt that a step of
that kind could not be legally carried into effect in my position as
Governor of Vancouver's Island, but while holding that position and
representing, at the same time, the Hudson's Bay
Company

I fancied that important public measure would violate no law, and
therefore from its evident necessity meet with your approval and support.

9. The arrangement with the Pacific Mail Steam Ship
Pacific Mail Steamship Company
Company

of which you disapprove, was never carried into effect; but the other
foreign vessels employed on Fraser's River were likewise bound by the
same conditions offered to that Company. Those regulations have by
subsequent changes fallen into disuse, in so much as they are connected
with the privileges or tend to promote the interests of the Hudson's Bay
Company.

10. We shall forthwith discontinue the regulation requiring
the pre-payment of mining licenses and head money on persons going
to Fraser's River, in consequence of your instructions to that
effect, and in all other respects we shall conform strictly to
the instructions contained in your Despatch.