Berens to Lytton
Hudson's Bay House
17 December 1858
I have the honour herewith to transmit an Extract of a letter addressed by Governor Douglas to myself and my colleagues on the Direction of this Company, on the occasion of his acceptance of the Office of Governor of British Columbia, under the Crown. 1 In his letter to us Governor Douglas intimates that the office has been conferred upon him on the express condition that he shall relinquish all direct or indirect connexion with, or interest in the Hudson's Bay Company; and in order to meet the wishes of the Government in that respect, he tenders his resignation as an Officer of the Company, and offers "an absolute sale to the Company of his actual and prospective interests in the Fur Trade."
Upon this offer on the partofManuscript image of Mr Douglas to sell his retired interest to the Company I feel it necessary to make an observation. It has always been my wish, and that of my colleagues, to facilitate as far as lay in our power a measure which we consider so advantageous to the public service as the appointment of Mr Douglas to the government of the new Colony; and we trust that the difficulty which has occurred to us as to the disposal of Mr Douglas's retired interests, will not be considered, on our part, as a change in that respect. By the constitution of the Company, Mr Douglas, as a Chief Factor, is entitled on his retirement to a small share (1/85th) 2 of the profits of the Company for the six years ensuing; but he is, at the same time excluded from all part in the administration of the affairs of the Company, and he is not entitled even to ask for accounts. He is consequently merely the recipient ofManuscript image a certain portion of the profits of the Company, without any control on his part, and he is expressly excluded from all voice in the management.
Now the difficulty which occurs to us is this. In the first place it is utterly impossible for us, in the present circumstances of the Company, to estimate the value of this retired interest to which Mr Douglas is entitled; and in the second place, even if an approximation of value could be arrived at, the Directors feel that in the interests of their Shareholders they would not be justified in adopting the unusual course of purchasing that interest.
This being the case it seems to us that Her Majesty's Government might safely abstain from insisting on the literal fulfilment of this condition. Mr Douglas's position, as regards the Company, is merely that of an Annuitant for six years, without any active part in its concerns; and we feel satisfied from our ownManuscript image knowledge of his high character, that he will not allow this slight connection (if connection it can be called) to influence him in the performance of his duties to the Government in the high office to which he is appointed. We make this suggestion more particularly in the interests of Mr Douglas himself, who if Her Majestys Government should insist, may find it necessary to abandon his retired interests altogether.
Mr Douglas, in the latter part of his letter, puts in a claim, under the separate Commission which he holds as Governor of Queen Charlotte's Island, "to an additional sum of £300 per annum." We cannot help feeling that this is a question, not for the Directors of this Company, but for the consideration of Her Majesty's Government. The Hudson's Bay Company were never proprietors of the Island; and if the additionalManuscript image salary demanded should be granted, it can be so only with the consent of the Government, and on the understanding that the money will be refunded by the Government to the Company upon the Settlement of the Colony accounts.
I have etc.
H.H. Berens
Minutes by CO staff
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Mr Merivale
1st With respect to the suggestion of the Company that Govr Douglas should be permitted to receive an annuity for six years in lieu of a sum of Money for his share in the profits, it may be observed that as the amount of this annual payment would depend upon the profits ofManuscript image the Company, the Govr, to a certain extent, would continue to be an interested party in their success—and if so to allow him to receive the annuity would be opposed to the spirit of the agreement he has entered into with the Crown.
2nd The Company says that "Mr Douglas puts in a claim under the separate Commission he holds as Lt. Govr of Queen's Charlotte Island to an additional sum of £300 per ann." But it will be seen from the Extract which is enclosed that the Govr forwards his claim to additional remuneration on the expense to which he has been put while administering the Govt of Van Couvers Island—& "puts in his claim on that account & for the separate Commission which he holds as Lt. Govr of Q. Charlotte's Island." This Commission was granted in 1852 on the discovery of gold on the Island, but we never heard that anyManuscript image active duties were required from him.
VJ 20 Decr
Lord Carnarvon
1. I certainly am inclined to think the indulgence asked for as to the annuity in lieu of profits might be allowed to Governor Douglas, provided only the circumstances were so completely placed on record, by letter to the Directors producible to Parliament, as to obviate all suspicion of an underhand transaction.
2. Mr Jadis justly points out that the Directors misunderstand Gov. Douglas's second application. He only throws in his government of Q. Charlotte's Island as a makeweight; his substantial claim is for extra expenditure in Vanc. I. I do not think he went to Q. Charl. I. or was put to any expense by his commission there, but if he was, I agree that to this extent he has a claim against Government and not the Company, & should in justice be reimbursed.
HM D 21
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Sir Edward Lytton
1. As to the 1/85 of the aggregate profits, I agree with Mr Merivale that Govr Douglas sd be allowed to accept it. I had some conversation with Mr Berens on the subject and asked him as to the actual value of this 1/85 in money. He said that it was very difficult to speak precisely on such a subject but that from £300 to 350£ wd probably be the average sum for the next six years. I think therefore all things considered we may allow Govr Douglas to enjoy this, as under no circumstances will he have any voice or share in the direction of the affairs of the Company. But I also agree that there sd be a complete & spontaneous publicity on our part given to the transaction.
2. As regards the extra £300 per an. I doubt more as to the form wh the proposal takes than as to the substantial justice of the claim. He thinks we never paid GovrManuscript image Douglas one shilling though he has discharged many & important duties of a Govr; and this has always seemed to me to be rather a shabby piece of economy on the part of this country. The H.B.C. did pay him £300 in his capacity as Govr 3 and if he can show that during the seven years wh he has filled the office he has been out of pocket by expenses of an exclusively governmental or imperial character I think he is in fairness entitled to a repayment.
But in such a case I wd rather that those charges sd be computed and sd be paid in one sum, whatever that might be, than defrayed in the indirect and to my mind unsatisfactory mode of a retrospective doubling of his official salary. If £2100 (7 years at £300) be the sum which he has defrayed on govt matters from his private resources it wd be I think aManuscript image far simpler & more intelligible course to pay it [to] him as one sum on that ground & understanding than to mix up the calculation with his salary during former years.
C Dec 22/58
I think this demand questionable in every shape. If we do not come to terms with the H.B.C. we take away its license next year, & I propose to transfer the Indian Country to B. Columbia with power to grant licenses to the Govr. Indeed I wish to submit that question now to Mr Merivale with a view to his dr[a]ft Despatch thereon. In that case we shall be at strong rivalry with the Cy and I don't think that the H. of Commons will at all like his receiving 6 years annuity out of a Company whose interests will certainly cease to be in unison with those of the Colony. Even as it was last Session, members spoke to me privately about this annuity as a great objection to Douglas, & I certainly told them that if I offered him the Govrship it must be on the condition of renouncing all Connexion with the Company & all future share in its profits.Manuscript image I almost think of the 2, Parl wd prefer adding 300£ a year to his imperial Salary. This point must be reconsidered.
The 2nd claim, of a retrospective 300£ a year for administe[rin]g poor little Charlotte's island is what the H of C. would never hear of & the demand for it wd make Douglas very unpopular. Such a claim shd have been made at the first, & unless the Govr himself sends us a Bill for his services. I am not disposed to take it into any consideration.
EBL D 24
Other documents included in the file
Manuscript image
Draft, Carnarvon to Berens, 7 January 1859, insisting that Douglas must surrender his retirement interest, and that if he had been put to actual expense regarding the Queen Charlotte Islands, he should submit a statement to that effect.
Documents enclosed with the main document (not transcribed)
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Extract, Douglas to Governor and Committee of the Hudson's Bay Company, 12 October 1858, leaving "the manner of my retirement from the service to be settled by your Honours."
  1. = Douglas resignation from HBC See also Douglas to Lytton, 4 October 1858, 12643, CO 60/1, p. 175. See GR 332 Vol. 4, p. 32, 12 October 1858, PABC. What is it??
  2. = Deed Poll, 1/85 retirement benefit The commissioned officers of the Hudson's Bay Company (chief factors and chief traders) received no salary but only a share of the profits. A chief trader received 1/85 and a chief factor 2/85 of that portion of the profits that were assigned to them. As a chief factor, therefore, Douglas's "retired interest" was equivalent of the income of a chief trader for the ensuing six years. Cite Rich?? Williams??
  3. This is apparently in error as Douglas did not receive salary as governor from the HBC. Double Check??
People in this document

Berens, Henry Hulse

Carnarvon, Earl

Douglas, James

Jadis, Vane

Lytton, Edward George Earle Bulwer

Merivale, Herman

Organizations in this document

Colonial Office

Hudson's Bay Company

Places in this document

British Columbia

Haida Gwaii

Vancouver Island