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Its second was to establish a mutually helpful and profitable trade in supplies between the squatters and the thousands of improvident gold-seekers, who rushed to the front without a thought of provisions. Its third effect, closely connected with the second, was to excite in the minds of the squatters a lively anticipation of future profit to be realised by holding on to that popular commodity, land. And the fourth was to arouse in the minds of the newer arrivals, the gold-seekers and those connected with them, a strong desire to break up for sale the undeveloped lands of the colony.

Hereupon arose much difficulty. Naturally enough, the squatters began to look with unbounded respect upon that charter of their hopes, the Order in Council of 9th March 1847, and its amendments. Into these documents they naturally read all that their feelings dictated, and, in the expressive language of old equity principle, they "treated that as done which ought to have been done." Briefly put, their claim was, that having applied for leases, and their demand having been thwarted only by the dilatoriness of the government, they must be deemed to be leaseholders in actual possession under the Orders in Council, with pre-emptive rights to purchase the fee-simple of any parts of their runs at non-competitive rates.1 And they strenuously opposed the throwing open to public sale of any portion of the lands they occupied.

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Considerable agitation was the result of this conflict of views, and after much petitioning and resolving 2 the matter came before the Legislative Council. On the 28th July 1852 Mr. Fawkner moved a resolution advocating the inclusion of the whole of the "Intermediate" districts proclaimed under the 9 & 10 Vic. c. 104, together with such parts of the Unsettled" districts as included known goldfields, within the "Settled " area. As the effect of this prayer, if acceded to, ` would have been greatly to reduce the area of pastoral leases, and practically to annihilate the most valuable pre-emptive claims of the squatters, the motion was strongly opposed by the pastoral interests in the Council, with the result that an inconsistent amendment was carried by a majority of 18 to 7 votes.4 The amendment suggested that leases should be

1 V. and P., 1853-4, ii. p. 248.

2 Documents, ibid. pp. 276-285. 3 For meaning of these terms cf. ante, p. 113. V. and P., 1852-3, 28th July.

CHAP. XX ACTION OF THE LIEUTENANT-GOVERNOR

183

immediately issued to the occupants of Crown lands, to date from the 7th February 1848,1 in order that the lands might be "opened for sale under the Orders in Council of the 9th March 1847 in quantities to meet the demand of the increasing population of the colony." 2

Three weeks later, however, the Legislative Council seems to have agreed upon a compromise between the contending parties, for when, on the 17th August 1852, it was moved by Mr. Fawkner that the Lieutenant-Governor should be requested to withhold grants of land to all persons claiming under the pre-emptive rights alleged to have been conferred by the Orders in Council, the motion was amended by a clause exempting the grants of land for homesteads, and then agreed to, apparently without a division.3

The policy of the Government at this juncture is concisely stated by the Lieutenant-Governor himself, in his report of the matter to the Home government. He declined to interfere with the preparations for the issue of leases which were still proceeding, and he allowed the applicants for leases to purchase, under the pre-emptive claim, limited portions of their runs for homestead purposes. But he made a very liberal use of the powers of reservation contained in the Orders in Council by withdrawing from the pastoral areas large reserves, not merely for public purposes usually so understood, but also for township and village sites; and these reserves, although situate beyond the settled districts, he threw open to public sale in allotments for the benefit of settlers. At the same time he promised to bring the whole matter at once before the Home government.*

This promise the Lieutenant-Governor amply redeemed by his long and careful despatch of the 7th September 1852,5 from which we learn so much of the history of the question. The Lieutenant-Governor had to justify himself to his chief for two breaches of routine which were said by some persons to be breaches of law. He had made use of the powers of reserva

1 The date originally fixed for the first application for new runs under the Order in Council. (Cf. G. G. (N. S. W.), 1848, 5th January.)

2 V. and P., 28th July 1852.

3 Ibid. 17th August 1852.

4 See reply of Lieutenant-Governor to address of Legislative Council, in V. and P., 1852-3, i. p. 131.

5 Copy in V. and P., 1853-4, ii. pp. 241-304.

tion for public purposes contained in the third section of the Land Act of 1842,1 and the Order in Council of 9th March 1847, to withhold from the squatters large tracts of land which they claimed to be entitled to purchase under preemptive right; and secondly, he had put up these reserves for sale to the general public, under the power contained in the order in council to "grant" reserves for public purposes, although it had hitherto been the practice only to sell lands within the settled districts.

But the breaches of law were only apparent. The Land Act of 1842 was a restraining, not an enabling statute. It put an end to the power of the Crown to dispose of lands otherwise than by public auction, except in certain instances which, in spite of the general words of section 3, clearly do not cover the case of Mr. La Trobe's village reserves. But the Act was directed not against open sale but against free grant or private contract, and the Lieutenant-Governor had not adopted either of these methods. The Act, by implication, left the Crown perfectly free to sell any lands by public auction, at the statutory upset price. It was true that Government had not been in the habit of selling lands beyond the settled districts, but that was a matter of practice only.

The Order in Council is more difficult to dispose of. The eighth section of Chapter II certainly empowers the Government to reserve from the sales to occupants under pre-emptive claims any land required for the purposes enumerated in the third section of the Land Act. And the following section of the order authorises him to make grants or sales of lands comprised within leases actually granted to occupants, for a very comprehensive list of public purposes, including mining of all descriptions, "or for any other purpose of public defence, safety, utility, convenience, or enjoyment, or for otherwise facilitating the improvement or settlement of the colony." But it is doubtful if a construction of these words in a court of justice would have warranted a withdrawal of lands actually comprised in a lease for the purpose of starting a new township. As a matter of fact, the law officers of New South Wales were divided in opinion when the question was put to them,2 while those of Victoria itself were clear that the practice could not 1 5 & 6 Vic. c. 36.

2 V. and P., 1853-4, ii. p. 261.

CHAP. XX THE LIEUTENANT-GOVERNOR'S DESPATCH 185 be legally justified.1 However, this was not the whole case. The squatters seemed to have overlooked the fact that the whole tenor of the Order in Council was, as regarded the Colonial government, permissive and not mandatory. The Governor was empowered to grant leases for periods not exceeding certain fixed limits. The squatters treated this permission as a direction to grant leases in all cases for the full periods allowed by the Order. Moreover, they assumed all through that such leases had actually been granted, although as a matter of fact they had not.

Having stated the facts, the Lieutenant-Governor proceeds to make three suggestions for the future settlement of the question. He considers it of the first importance that, with due care to secure homestead allotments to the squatters, the Government shall be entitled to throw open for sale any of the land in the unsettled districts. Secondly, he suggests that the issue of such leases as it may be deemed desirable to grant shall be immediately proceeded with, even at the risk of some uncertainty in the description of boundaries. And thirdly, that for the valuation system applied to the runs, there shall be substituted a fixed capitation rent on the sworn returns of stock.

On the 14th March 1854 the reply of the Secretary of State was laid before the Legislative Council.2 It is no wonder that the Duke of Newcastle (who had succeeded Sir John Pakington) shrank in rather an obvious way from the formidable difficulties of his task, hinting very plainly that if the Colonial Office had desired to shirk its duties, there was a certain loophole of escape in the fact that the approaching changes in the constitution would turn the whole question over to the hands of the Colonial government.

But the Secretary of State will struggle with the difficulties, and his view is, briefly, that if the squatters are disposed to insist upon the extremest view of their rights under the Order in Council, regardless of the public interest, they shall have justice, more than they desire. The length of the lease-terms, within the limits fixed by the Order, being left entirely to the Government, the latter will exercise its unfettered discretion as to those terms. It is true that, during the continuance of

1 V. and P., 1853-4, ii. p. 255.

2 Ibid. sub date.

the leases, no lands in the unsettled districts can be sold to outsiders, but neither is the Government bound (only empowered) to sell to the occupants. Further, the Government shall construe very liberally, in the public interest, the powers of reservation and sale contained in the order. And, if necessary, a special Order in Council will be forwarded, enabling the Lieutenant-Governor to extend the limits of the settled and intermediate districts, and thus to do away pro tanto with the claim for leases.

But if the squatters will be reasonable, and accept leases with proper restrictions in the public interest, and moderate provisions for the exercise of their pre-emptive claims, the Lieutenant-Governor is empowered to grant such leases, even up to the maximum terms sanctioned by the Order in Council, without waiting for the conclusion of the survey. And if there are any who would prefer to surrender their extreme claims for compensation, the Home government will be ready to sanction any measures recommending an appropriation for that purpose of the public funds of the colony, or of lands in other neighbourhoods.1

A not very important Order in Council, partly carrying out the views of the Secretary of State, was made on the 18th April 1854,2 and laid before the Legislative Council of Victoria on the 21st February 1855.3 But the remaining great event in the history of the question during this period was the appointment, on the 2d November 1854, of a Royal Commission to inquire into the whole subject of the occupation of Crown lands in the colony, including both the existing rules on the subject and the claims made against the Government in respect of alleged disappointments.* The Commission consisted of eleven persons, most of them well-known names, and their report was presented on the 8th June 1855.5 Unhappily, the members disagreed considerably in their conclusions.

The main report, which was signed by every member of the Commission save one, though seven entered protests on different points, found as a fact that during the agitation which

1 Copy of despatch in V. and P., 1853-4, ii. p. 693.

2 Ibid. 1854-5, iii. p. 243.

4 Copy commission in Ibid. iii. p. 293.

3 Ibid. sub date.

5 Ibid. sub date.

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