<P> This effectively destroyed the geographical logic of the HBC's Columbia Department, since the lower Columbia River was the core and lifeline of the system . The U.S. soon organized its portion as the Oregon Territory . The administrative headquarters of fur operations, and of the Columbia Department, then shifted north to Fort Victoria, which had been founded by James Douglas . </P> <P> In 1849, the Crown Colony of Vancouver Island was created; and in 1851, James Douglas was appointed Governor . Douglas, known as the father of British Columbia, established colonial institutions in Victoria . He started the process of expanding the economic base of the new colony by signing 14 treaties between 1850--1854 to purchase land for settlement and industrial development (coal deposits were known by the HWBC in the vicinities of Nanaimo and Fort Rupert). Subsequent native population crashes later in the 19th century along with economic upheaval and native wars allowed his political successors to be much less consistent with British principles, treaties, and laws . </P> <P> Meanwhile, on the mainland, New Caledonia continued to focus on the fur trade with few non-native inhabitants (mostly HBC employees and their families) under the administrative oversight of Douglas, who was also the HBC's regional chief executive . The Hudson's Bay Company like the previous French colony and North West Company of Montreal still officially discouraged settlement because it interfered with the lucrative fur trade . The fur trade was a mutually beneficial relationship between the local HBC trading fort and adjacent native tribes . American expansion and control of territory was predicated primarily by settlement of the land not commercial relationships with the existing local population . The British made virtually no effort to assert sovereignty over the aboriginal peoples of the area . In accordance with the Royal Proclamation of 1763, large - scale settlement by non-aboriginal people was prohibited until the lands were surrendered by treaty . </P> <P> In 1858, gold was found along the banks of the Thompson River just east of what is now Lytton, British Columbia, triggering the Fraser Canyon Gold Rush . When word got out to San Francisco about gold in British territory, Victoria was transformed overnight into a tent city as prospectors, speculators, land agents, and outfitters flooded in from around the world, mostly via San Francisco . The Hudson's Bay Company's Fort Langley burgeoned economically as the staging point for many of the prospectors heading by boat to the Canyon . </P>

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