The British Government decided to allow a lottery to divide the lots amongst those who showed interest in the colony or who had petitioned the Crown for land due to some favor owed them. As a result, the Board of Trade and Plantations held a lottery by ballot on 23 July 1767. Lot 25 was drawn by Archibald Kennedy and James Campbell . Lot 26 was drawn by Lt. Robert (John) Stewart and Major Peter Gordon . These lots were granted on the following conditions: 1. Quit-rents were payable to the Crown. Lot 25 and 26 were both assessed at six shillings per 100 acres. The quit-rents were intended to pay the expenses of operating a colonial government; 2. Proprietors were responsible for settling the land within ten years at the rate of one person for every 200 acres (approx. 100 people for each lot) and to settle one third of it within four years; 3. Only protestants were to be introduced as settlers. They could not come from any other of His Majesty's Dominions unless they were from the American colonies and had been there at least two years; 4. One hundred acres on each lot was to be reserved for churches and fifty acres for schools. By 1780 many of the proprietors who had been granted these lots had done nothing to fulfill the conditions of their grant. This made it difficult for the colonial government under Governor Walter Patterson to operate. There was no source of income from quit-rents to pay the salaries of government officials. As a result Governor Patterson petitioned the British for support in forcing the payments of all arrears in quit- rents. The British Treasury Board ordered the quit-rents be paid and this resulted in a public auction on 17 November 1781 where eight whole lots and six half-lots were sold for non-payment of quit-rent. Walter Patterson purchased the southern half of Lot 25 at this auction. One half of Lot 26 was also sold at the auction but this was later restored to its original proprietors. Up to 1781 there had been no settlement on either Lots 25 or 26. The British lottery and subsequent plans for settlement by the successful proprietors had not worked out. This plan of settlement would be a stumbling-block for all Prince Edward Island for many years. Prospective settlers were interested in purchasing or obtaining their own land rather than in paying rent to an absentee landlord. The move taken by Walter Patterson to purchase the southern half of Lot 25 was important for the future settlement of the area. Patterson's desire was to have more settlers in his colony and he was willing to risk personal financial loss to bring this about. THE UNITED EMPIRE LOYALISTS When the American colonies defeated the British and won their independence from the Crown, a number of people loyal to the British Crown left the colonies for British . The majority of these made it to Shelburne, Nova Scotia , where they drifted to New Brunswick , Nova Scotia and the Island of St. John. Governor Patterson in an effort to attract Loyalists to his colony sent the following proclamation throughout the British on 14 October 1783. Whereas a number of proprietors of this Island have very generously given up a considerable portion of their estates to be distributed among such of the Refugees, Provincial Troops or other American Emigrants, as are desirous to become its inhabitants, the lands to be granted by the Governor and Council in the same proportion and on the same terms as are offered in Nova Scotia , and to be given out of the different townships by Lot; in the fairest and most equitable manner, according to the quantity assigned by each proprietor, and whereas, His Majesty has been graciously pleased to extend his Royal Bounties and Gratuities, to all persons of the above description in every respect, and in the manner as to those who settle in Nova Scotia . I do therefore, by and with the advice of His Majesty's Council, issue this proclamation hereby giving notice to all such refugees, as wish to become settlers in this colony, that in a few days after their arrival at Charlottetown, they shall be put in possession of such lands, as they shall be entitled to, free of every expense, that they may depend upon the lands being good, neither mountainous, rocky nor swampy, continuous to navigable harbours, many parts convenient for fishery, and in every respect preferable to any lands unoccupied throughout His Majesty's American Dominion, and as to further encouragement, they will deal with a Government very warmly inclined to give them every assistance and protection in their power, and with loyal fellow subjects, from whom they will receive a most cordial and hearty welcome. Prior to this proclamation some proprietors, including Patterson, had indicated a willingness to grant a quarter of their property to the American Refugees. This was agreeable to the British Government and, in July 1783, Lord North sent instructions to have deeds of conveyance drawn up without expense to the proprietors and to exonerate the quit-rents on lands that were to be granted. Not all proprietors followed these instructions but Patterson did grant clear land titles with generous provisions. 10