Colvile to Merivale (Permanent Under-Secretary)

I have the honor to acknowledge the receipt of your communication
of the 5th Instant, enclosing a copy of an opinion of the Law
Advisers of Her Majesty, denying the right of the Governor and Council
of Vancouver Island to legislate for that Colony, and pointing out that
the power of legislation is really vested in the Governor, Council and
General Assembly; also enclosing the draft of a Confidential Dispatch
proposed to be sent to Governor Douglas, and at the same time
submitting, for the consideration of the Governor & Committee of the
Hudson's Bay Company, the question whether under the present state of
circumstances the Company would not consider it advisable to abandon the
Grant, and surrender the Land to the Crown.

The Governor and Committee have given their best attention to the
subjects referred to, and I am desired to submit for the consideration
of the Secretary of State, whether it might not be expedient to postpone
the proposed communication to Governor Douglas until it can be
accompanied by the Order in Council providing for the administration of
Justice, and by instructions to summon an Assembly, there being now more
than Forty Freeholders possessed of twenty acres of land, and upwards,
which the Regulations have declared to be the qualification of voters
for Members of Assembly.

The first or provisional Assembly might consist of seven, or some
other moderate number, and although it would probably be impossible to
separate the present small number of Freeholders into distinct districts
for the separate election of Members, yet such an Assembly as could be
formed might obviate the legal difficulty, and be sufficient to carry on
the Government for a few years until the settlement of the Island shall
be more advanced.

With respect to a surrender of the Grant, the Governor and
Committee would be disposed to recommend to the Company to meet the
views of Her Majesty's Government, in the event of what I have now
suggested not being considered to be a more convenient mode of
overcoming the present difficulties, provided the Company shall be
reimbursed the outlay which has been incurred in promoting the
settlement of the Colony. It will be necessary, however, to understand
more fully the intentions of Her Majesty's Government, and all the
details of the measure, before a definitive answer can be given to this
question; and I would propose to wait upon the Secretary of State,
accompanied by one or two of the members of the Committee, whenever it
may be convenient for his Lordship to receive us.

I enclose a nominal list of those freeholders who have already
received titles for their purchases, and also of those persons who have
purchased town lots, and built houses thereon.