All these troubles and tribulations naturally told on Dr. McLoughlin. He was a man of fortitude, who brooded, almost silently, over his sorrows, with an occasional outburst when his sufferings were too intense. He had made expensive improvements on his land claim, including a flour-mill and a saw-mill, and other buildings. No provisions were ever made by Congress to pay for these improvements. Even his dwelling house at Oregon City, which for several years had been the home of himself and his family, was taken from him, with his other improvements, by section eleven of the Oregon Donation Land Law. It is true he remained in possession of these improvements, including his home, but by sufferance only. Because the Territory of Oregon did not sell the land he was not actually ousted. There was no way to acquire land in Oregon City, taken from Dr. McLoughlin by said section eleven, except by a law passed by the Oregon Legislature. And the legislature did nothing.

He could not move nor sell his improvements. They belonged to the land on which they were erected. Even if he could have sold them they would have brought but little as they would have to be moved. His mills were erected to be run by water power and they were conveniently situated on the bank of the river near the falls, for the economical handling of wheat and logs and the shipping of products of these mills. They could not, at that time, be successful financially if they were moved and operated by steam. He hoped that Congress or the Legislature would restore his land claim to him. But he hoped and waited in vain. The lion was entangled in a net. He struggled but he could not escape. And so Dr. McLoughlin became straitened financially. Had Dr. McLoughlin been allowed to have his land, he could then have built up a large town at Oregon City. As it was, investors went to places where titles to land could be obtained and there built up enterprises. With the moneys from the sale of land Dr. McLoughlin could have paid the Hudson's Bay Company all the moneys due by settlers, who had failed or refused to pay. The payment of this heavy indebtedness Dr. McLoughlin had assumed. It was a matter of honor with him. He owed nothing else to the Hudson's Bay Company. The settlers who would not pay their indebtedness caused Dr. McLoughlin to feel keenly their ingratitude. If they had paid him, he would have paid the Company in full.

The McLoughlin Document was undoubtedly written at this period. It is a brief of his defense. He probably wrote it so that his descendants would understand. At the end of this Document, Dr. McLoughlin said: "By British demagogues I have been represented as a traitor. For what? Because I acted as a Christian; saved American citizens, men, women and children from the Indian tomahawk and enabled them to make farms to support their families. American demagogues have been base enough to assert that I had caused American citizens to be massacred by hundreds by the savages. I, who saved all I could. I have been represented by the Delegate from Oregon, the late S. R. Thurston, as doing all I could to prevent the settling [of Oregon], while it was well known to every American settler who is acquainted with the history of the Territory if this is not a downright falsehood, and most certainly will say, that he most firmly believes that I did all I could to promote its settlement, and that I could not have done more for the settlers if they had been my brothers and sisters, and, after being the first person to take a claim in the country and assisting the immigrants as I have, my claim is reserved, after having expended all the means I had to improve it, while every other settler in the country gets his. But as I felt convinced that any disturbance between us here might lead to a war between Great Britain and the States, I felt it my bounden duty as a Christian, to act as I did, and which I think averted the evil, and which was so displeasing to some English demagogues that they represented me to the British government as a person so partial to American interests as selling the Hudson's Bay Company goods, in my charge, cheaper to American than I did to British subjects. . . . Yet, after acting as I have, spending my means and doing my utmost to settle the country, my claim is reserved, while every other settler in the country gets his; and how much this has injured me, is daily injuring me, it is needless to say, and certainly it is a treatment I do not deserve and which I did not expect. To be brief, I founded this settlement and prevented a war between the United States and Great Britain, and for doing this peaceably and quietly, I was treated by the British in such a manner that from self respect I resigned my situation in the Hudson's Bay Company's service, by which I sacrificed $12,000 per annum, and the 'Oregon Land Bill' shows the treatment I received from the Americans."