No. 17.

Mr. Elliot to Mr. Hammond.—(Received February 8.)

Sir: I am directed by the Duke of Newcastle to acknowledge your letter of the 5th instant, accompanied by one from Messrs. Sinclair, Hamilton & Co., in which they say, with reference to Penguin island, that they are informed on good authority that a man-of-war was sent towards the end of 1861 to take possession, and that the British flag was hoisted in due form, and a lease of the island, or a portion of it, granted to Messrs. Granger and Co., of Cape Town.

I am desired to acquaint you, in answer, that in the month of June, 1861, in pursuance of previous orders duly given for the purpose by the Queen’s government, her Majesty’s ship Furious proceeded to the island of Ichaboe and took possession of it, and hoisted the British flag, and that a lease of a considerable portion of that island was granted to the Messrs. Granger & Co. There would appear every probability, therefore, that this must be the proceeding of which a report has reached Messrs. Sinclair & Co. It is exceedingly unlikely that another man-of-war should have gone in the same year to another island, and have taken possession of it as a colony, without any knowledge of the fact at this department, and a lease has been granted there also to the same firm of Messrs. Granger, of Cape Town. The proclamation of the governor of the Cape of Good Hope, professing to annex Penguin island, was not issued until August, 1861, which was some months after the Furious took possession of Ichaboe. But in order to omit no means of seeking all possible information bearing on the present case, the Duke of Newcastle has written to inquire whether or not the statement which has been made by the Messrs. Sinclair & Co., about the occupation of Penguin island, is supported by any report in the records of the admiralty.

I am, &c.,

T. FRED’K ELLIOT.