No. 33
Downing Street
15 June 1860
I transmit to you herewith copy of a correspondence between the Hudsons Bay Company and this office on the subject of the operation of the Customs Laws for British Columbia.
It is not to be denied that where there is an extensive line of coast or frontier with an inadequate Customs EstablishmentManuscript imageEstablishment smuggling may prevail, and that commerce, carried on in a legitimate manner, will be proportionally prejudiced. It is however impossible to increase that Establishment whilst the trade of a Country is undeveloped. Consequently the only alternative left for the Executive Government is to fix upon certain ports where duties can be most conveniently collected. This you would appear to have done by, in the first instance, naming Victoria andManuscript imageand afterwards New Westminster as the ports where vessels might be cleared for British Columbia, and it's dependencies.
But the Hudsons Bay Company represent in the accompanying letter that the Proclamations which you have issued imposing duties, and naming the places where they should be collected, operate injuriously against the fair-trader because they are incapable of enforcement against the smuggler, and because they compel the Company to pay duty on goods not intendedManuscript imageintended for consumption in British Columbia. With respect to the first complaint I can only express my hope that you will use all the means in your power for preventing any illicit trade, which is carried on, though I am sensible that the difficulty in doing so is great where the Sea-board and frontier are so extensive, and the assistance of Customs officers so small. If that difficulty is unsuperable it will furnish a strong argument for raising the Colonial Revenue by other means than customs dutiesManuscript imageduties which will only fall on them who choose to pay them. With regard to requiring the Hudsons Bay Company to pay duty on goods not intended for consumption in British Columbia, the Company seem to me to have a primâ facie ground of complaint. On this point however I cannot form any judgment till I receive your statement of the actual facts of the case. Meanwhile I have pointed out to the Company that the Proclamation of the 2nd of June 1859 makes it optional on vessels going toManuscript imageto places north of Fraser's River to pay duty at Fort Victoria or at New Westminster, which must be intended as a convenience rather than a restriction.
But there is a further and a very important point of view which is suggested by these Proclamations. A Law enacted by the Authorities of British Columbia cannot compel persons to acknowledge the authority of Customs House officers in Vancouver Island, nor subject them to penalties for setting it atManuscript imageat defiance. The authority which you possess of making laws for British Columbia does not extend beyond the limits of that Colony and the sea within 3 miles of the coast. Therefore all laws which you may pass professing to extend beyond that radius will (with certain exceptions of a somewhat doubtful character) be simply inoperative.
You must therefore take great care that no duties are collected for British Columbia beyond the limits above described, exceptManuscript imageexcept with the concurrence or at the request of those who pay them. By any other course you will run the risk of being called upon to refund the duties which you may have collected without warrant of the law.
I have the honor to be
Your Obedient Servant
Documents enclosed with the main document (not transcribed)
Manuscript image
Elliot to Ellice, 13 June 1860, reminding him that the payment of customs duties in Victoria, on goods destined for British Columbia, is a convenience and not a requirement.
Manuscript image
Ellice to Newcastle, 14 May 1860, complaining that because the heavy duties imposed on goods imported into British Columbia are next to impossible to collect, the HBC operates at a disadvantage when competing with smugglers. In addition, Ellice complains that Douglas's attempt to combat smuggling by charging duty on goods when they leave the port of Victoria is illegal. He includes an excerpt of a letter from Simpson complaining that the HBC ship Labouchere was charged duty on goods leaving Victoria and bound, not for British Columbia, but for the Territory rented by [the HBC] from the Russian American Fur Company.