I have hitherto deferred any reply to 
Lord Granville's Despatch
               N 46 of the 
12 May last respecting the transference of the
               Crown Fund of 
Vancouver Island to the general Revenue of 
British
                  Columbia, because it was not possible to do anything under his
               instructions
until
 until the next meeting of the Legislative Council.
               Since that Despatch was written the probability of the early
               Union of this Colony with the Dominion of Canada has very much
               increased. On the Meeting of the new Legislative Council in
               
January there seems to be little doubt that the business first
               attended to will be the completion of the terms of agreement.
               The circumstances of the Colony will be so changed by
               Confederation that the arrangement proposed by 
Lord Granville in
               respect of the Crown
Fund
 Fund will scarcely be applicable. The
               Crown Lands of 
Vancouver Island have already been transferred to
               the local Government by the operation of the Land Ordinance,
               
1870. And I submit that it will now be best to leave the fund
               in its present position until the Union has been completed, when
               it may be transferred to the local government without any stipulation.