Colonial Despatches

1. I have laid before the Lord President of the Council your letter of the 6th instant enclosing a communication from Mr Hamilton which states the views of the Lords Commissioners of Her Majesty's Treasury on the subject of the reference of the Petitions of the Hudson's Bay Company, to the Judicial Committee of the Privy Council and I am commanded by His Lordshipto to make the following observations on this subject.

2. The Lord President entirely concurs in the opinion of His Grace the Duke of Newcastle, expressed in your previous letter of the 31st July 1860, that the question to be referred to the Judicial Committee ought only to be that of title; and that the subsequent question of the amount of indemnity to be paid to the Company in the event of the decision of the Judicial Committee being in their favor, may more properly be settled afterwards between the Company and the Executive Government.

3. But it is evident that a decision of the legal question of title by the Privy Council in favor of the Company would fairly be taken to establish the claim of the Company to some indemnity; and indeed that is the prayer of their Petition to her Majesty and the sole object of the contemplated proceeding.

4. It does not appear however to the Lord President that the Lords Commissoners of the Treasury in the letter of their Secretary of the 20th February 1861 have taken this view of the case.

5. Mr Hamilton says that ifthe the proposed reference to the Judicial Committee comprehends merely the question of title to the lands in question, the Lords Commissioners of the Treasury are of opinion that they are not called upon to become parties to the Reference; but if any question relating to compensation to be awarded to the Hudson's Bay Company in respect of such lands is involved in the reference, then, before their Lordships can give their consent to the proposed proceeding, they require further information from the Secretary of State.

6. This reply appears to the LordPresident President to withhold rather than to give the required assent of the Lords Commissoners of the Treasury.

7. No advantage could arise (as far as the Lord President is aware) from a discussion of the title to the lands as an abstract question; nor would such a title (if established) be of any value to the Company, except in as much as it involves the principle of compensation, or of restitution, by replacing the Company in possession of the lands which are alleged to have been improperly taken from them. But the prayer of the Petitions is not for restitutionbut but for payment of the value of lands &c taken by the Officers of Her Majesty's Government.

8. In any case it would be highly inconvenient that such a question should be debated at the Bar of the Privy Council on one side only, and the Lord President apprehends that it must be the intention of His Grace the Duke of Newcastle or of the Lords Commissoners of the Treasury to cause the Law Officers of the Crown to be instructed to argue the case and examine the evidence on behalf of the Crown. His Lordship therefore conceives that the expression "the Lords of theTreasury Treasury are not called upon to become parties to the Reference" cannot be taken to mean that the Lords of the Treasury would not think it necessary to take any share in the proceedings.

For the reasons before alleged it appears to the Lord President that it is not expedient to impose on the parties the expense of a hearing before the Privy Council, or to impose on the Lords of the Judicial Committee the duty of adjudicating upon this legal title, unless it be upon a distinct intimation from the Lords Commissioners of the Treasury thatin in the event of the decision being in favor of the title of the Company to these lands, their Lordships will consider such title to be established, as the principle of the compensation prayed for by the Company, and will therefore recognize that principle, leaving the amount of the indemnity to be adjusted hereafter between the Company and the Executive Government.

The Lord President therefore directs me to add that as it appears to his Lordship that Mr Hamilton's letter of the 20th February last does not contain any such distinct intimation, but, on the contrary, asks for furtherinformation information before the Lords Commissoners of the Treasury can give their consent to the proceeding, involving, as it undoubtedly does, the question (though not the amount) of compensation, his Lordship is of opinion that the reference of the Petitions must be deferred until the Lords Commissoners of the Treasury have favored his Lordship with a more explicit declaration of their consent to abide by the decision of the Judicial committee as to theprinciple principle of compensation arising out of the legal title to the lands.