Article III of the Boundary Treaty of 1846 is as follows: "In the future appropriation of the territory south of the forty-ninth parallel of north latitude, as provided in the first article of this treaty, the possessory rights of the Hudson's Bay Company, and of all British subjects who may be already in the occupation of land or other property lawfully acquired within the said territory, shall be respected." Good faith, and to carry out the letter and the spirit of this Article III, should have caused Congress to respect these possessory rights of British subjects, so as to make them effective, and especially as they had acquired these rights under the Conventions for joint-occupancy of the Oregon Country. Means should have been provided in the Donation Land Law by which such British subjects "already in the occupation of land" in Oregon could have acquired the title thereto.

In the debate in the House of Representatives, May 28, 1850, on the bill which became the Oregon Donation Land Law, Thurston said:[44] "This company [Hudson's Bay Company] has been warring against our government for these forty years. Dr. McLoughlin has been their chief fugleman, first to cheat our government out of the whole country, and next to prevent its settlement. He has driven men from claims and from the country, to stifle the efforts at settlement. In 1845, he sent an express to Fort Hall, 800 miles, to warn the American emigrants that if they attempted to come to Willamette they would all be cut off; they went, and none were cut off. How, sir, would you reward Benedict Arnold, were he living? He fought the battles of the country, yet by one act of treason forfeited the respect of that country. A bill for his relief would fail, I am sure; yet this bill proposes to reward those who are now, have been, and ever will be, more hostile to our country—more dangerous, because more hidden, more jesuitical. I can refer you to the Supreme Judge of our territory, for proof that this Dr. McLoughlin refuses to file his intention to become an American citizen." Judge Bryant was then in Washington, lobbying for the passage of the eleventh section of the Donation Land Law, particularly the part giving Abernethy's Island to the assigns of the Milling Company. I have already shown the falsity of these statements of Thurston in his letter and in this speech, by setting forth the truth in this monograph. The mention by Thurston, in his speech, of Benedict Arnold in comparison with Dr. McLoughlin, was contemptible. It was an insinuation which Thurston should have been ashamed to make.

On September 12, 1850, Dr. McLoughlin published in the Oregon Spectator his answer to some of the statements, or rather misstatements, in Thurston's speech in Congress, May 28, 1850, and in his letter to the House of Representatives. Dr. McLoughlin there said: "What Mr. Thurston means by 'warring against our government for these forty years,' I know not. I am certain, however, that the H. B. Co. had a right to carry on trade under the treaty of joint-occupation of the country—even were we to look no farther for another foundation of the right. I am sure, moreover, that the business of the Company was so managed as to bear the strictest scrutiny, and to be in all respects subservient to the best interests of the country, and the duties of religion and humanity.... But I am described as a 'fugleman' of the Hudson's Bay Company; first to cheat our Government out of the whole country, and next to prevent its settlement. I am an old man, and my head is very white with the frost of many winters, but I have never before been accused as a cheat. I was born a British subject—I have had for twenty years the superintendence of the Hudson's Bay Company's trade, in Oregon, and on the North West Coast; and may be said to have been the representative of British interests in this country; but I have never descended to court popularity, by pandering to prejudice, and doing wrong to any one. I have on the other hand, afforded every assistance to all who required it, and which religion and humanity dictated; and this community can say if I did so or not.... But, moreover, it is well known that the fact of my having aided in the settlement of this country has been a subject of serious complaints, and grave charges made against me, by subjects of Her Britannic Majesty, during the pending of the boundary question—who seem to have been imbued with the same kind disposition toward their fellow men as Mr. Thurston.

"Mr. Thurston says, 'In 1845 he [Dr. McLoughlin] sent an express to Fort Hall, eight hundred miles, to warn the immigration that if they attempted to come to the Willamette, they would be all cut off.' This is a calumny as gratuitous as it is unprovoked; but it is with mingled emotions of astonishment and indignation that I have accidentally become acquainted with the contents of another document, entitled a 'Letter of the Delegate from Oregon to the members of the House of Representatives, in behalf of his constituents, touching the Oregon Land Bill.' On the back of the only copy sent, is written in the handwriting of Mr. Thurston—'Keep this still till next mail, when I shall send them generally. The debate on the California Bill closes next Tuesday, when I hope to get it and passed—my land bill; keep dark till next mail."

"June 9, 1850. Thurston.'"

"... In the letter referred to, speaking of Oregon City, he says, 'The Methodist Mission first took the claim with the view of establishing here their Mills and Mission—they were forced to leave it under the fear of having the savages of Oregon let loose upon them.' This charge is likewise without a fraction of truth, as a few facts will demonstrate.... Mr. Thurston is not ashamed to more than intimate a disposition to 'let loose upon them savages of Oregon.' Mr. Thurston says, 'He has held it by violence and dint of threats up to this time.'—That I have held my claim or any part of it [Dr. McLoughlin's land claim] by violence or threats, no man will assert, and far less will one be found to swear so, who will be believed on his oath, in a court of justice. I have probably no other enemy than Mr. Thurston, so lost to the suggestions of conscience as to make a statement so much at variance with my whole character. He says that I have realized, up to the 4th of March, 1849, $200,000 from the sale of lots; this is also wholly untrue. I have given away lots to the Methodists, Catholics, Presbyterians, Congregationalists, and Baptists. I have given 8 lots to a Roman Catholic Nunnery, 8 lots to the Clackamas Female Protestant Seminary, incorporated by the Oregon Legislature. The Trustees are all Protestants, although it is well known I am a Roman Catholic. In short, in one way and another I have donated to the county, to schools, to churches, and private individuals, more than three hundred town lots, and I never realized in cash $20,000 from all the original sales I have made. He continues, 'He is still an Englishman, still connected with the Hudson's Bay Company, and refuses to file his intentions to become an American citizen.' If I was an Englishman, I know no reason why I should not acknowledge it; but I am a Canadian by birth, and an Irishman by descent. I am neither ashamed of my birth-place or lineage.... I declared my intention to become an American citizen on the 30th May, 1849, as any one may see who will examine the records of the court, in this place. Mr. Thurston knew this fact—he asked me for my vote and influence. Why did he ask me for my vote if I had not one to give? I voted and voted against him, as he well knew, and as he seems well to remember. But he proceeds to refer to Judge Bryant for the truth of his statement, in which he affirms that I assigned to Judge Bryant, as a reason why I still refuse to declare my intention to become an American citizen, that I cannot do it without prejudicing my standing in England. I am astonished how the Supreme Judge could have made such a statement! as he had a letter from me pointing out my intention of becoming an American citizen. The cause, which led to my writing this letter, is that the island, called Abernethy's Island by Mr. Thurston, and which he proposes to donate to Mr. Abernethy, his heirs and assigns, is the same island which Mr. Hathaway and others jumped in 1841, and formed themselves into a joint stock company, and erected a saw and grist mill on it, as already stated. From a desire to preserve peace in the country, I deferred bringing the case to trial, till the government extended its jurisdiction over the country; but when it had done so, a few days after the arrival of Judge Bryant and before the courts were organized, Judge Bryant bought the island of George Abernethy, Esq., who had bought the stock of the other associates, and as the Island was in Judge Bryant's district, and as there was only two judges in the Territory, I thought I could not at the time bring the case to a satisfactory decision. I therefore deferred bringing the case forward to a time when the bench would be full.... But Mr. Thurston makes another statement in which there is not more truth. He says, 'Last summer he,' meaning myself, 'informed the writer of this that whatever was made out of the claim was to go to the common fund of the Hudson's Bay Company, of which he and other stock-holders would share in proportion to their stock; in other words, that he was holding this claim in trust for the Hudson's Bay Company.'... I assert I never made such a statement to Mr. Thurston, and I assert that I hold my claim for myself alone, and that the Hudson's Bay Company, nor no other person or persons, hold or have any interest in it with me.... Can the people of Oregon City and its vicinity believe Mr. Thurston did not know, some months before he left this [territory], that Mr. Abernethy had sold his rights, whatever they were, to Judge Bryant, and therefore proposing to Congress to donate this Island to Mr. Abernethy, his heirs and assigns, was, in fact, proposing to donate it to Judge Bryant, his heirs and assigns."[45]

Thurston attempted to reply to this letter of Dr. McLoughlin, published in the Oregon Spectator, in a speech made in Congress December 26, 1850.[46] With all its false statements this speech utterly failed to justify the actions of Thurston against Dr. McLoughlin.

Lieutenant Neil M. Howison, of the United States Navy, came to Oregon in 1846, in charge of the United States schooner "Shark." He made a report on Oregon to the Commander of the Pacific squadron. The report is dated at San Francisco, February 1, 1847. It was printed by order of the House of Representatives, at Washington, in 1848, more than two years prior to Thurston's speech. It is Miscellaneous Document No. 29 of the first session of the 30th Congress. In this report, after speaking in praise of Dr. McLoughlin, Howison said of him: "He resides now altogether at Oregon City ... and has, by his advice and assistance, done more than any other man towards the rapid development of the resources of this country." Lieutenant Howison also said, in this report, that Dr. McLoughlin "has settled himself on the south side of the river [Columbia] with full expectation of becoming a citizen of the United States, and I hope the government at home will duly appreciate him."

In the report of Dr. Elijah White, dated Willamette Valley, Oregon, November 15, 1843, to J. M. Porter, Secretary of War, Dr. White said: "And here allow me to say, the seasonable service, in which hundreds of dollars were gratuitously expended in assisting such numbers of our poor emigrant citizens down the Columbia to the Willamette, entitles Gov. McLoughlin, saying nothing of his previous fatherly and fostering care of this colony, to the honorable consideration of the members of this government. And I hope, as he is desirous to settle with his family in this country, and has made a claim at the falls of the Willamette, his claim will be honored in such a manner as to make him conscious that we, as a nation, are not insensible to his numerous acts of benevolence and hospitality towards our countrymen. Sir, in the midst of slander, envy, jealousy, and, in too many instances, of the blackest ingratitude, his unceasing, never tiring hospitality affects me, and makes him appear in a widely different light than too many would have him and his worthy associates appear before the world."[47]