No. 19
10 April 1863
I have the honour to acknowledge the receipt of Your Grace's Despatch No 147 of the 28th October 1862, with copies of a correspondence with the Lords Commissoners of the Treasury, on the subject of the Assay DepartmentofManuscript image of British Columbia.
2. I observe, with reference to the application of the Officers of the Assay Department, for an increase of Salary, that Your Grace has left the matter to be dealt with according to my discretion, and I have Your Grace's instructions to furnish a return of the amount of work performed at the Assay office and its current costs, and receipts, up to the latest period, with other information connected with that Department of the public service.
IManuscript image
3. I have now the honour of transmitting a return made up in conformity with Your Grace's instructions.
4. It exhibits the whole quantity of Gold assayed at the Government Office from its first establishment in the year 1860 to the 17th March 1863, and also the receipts and costs of the Department including buildings, for the same time, from which it appears that the expenditure of the Department exceeds the receipts from every source, to the extent of TenthousandManuscript image thousand and forty pounds, nine shillings and eleven pence (£10,040.9.11).
5. These results which are so different from what was anticipated may be attributed to two causes: First—The condition of the Country.
Second—The cost of the Establishment.
6. In respect to the first, although the Country in its normal state abounds in natural resources, these are as yet undeveloped. Mining is at present its only industrialpursuitManuscript image pursuit, and Gold its only available product. This it has to give in exchange for food, clothing and all the other necessaries of life consumed within the Colony. For these indispensable wants it is absolutely dependent on other countries, and is thus being continually drained of its sole export and convertible capital, the Gold.
7. The Colony of Vancouver Island has no mines of Gold, and it is not in a much betterpositionManuscript image position with respect to other native products than the sister Colony. The trade of the former is confined to furs, coal, and timber of various kinds, which are exported in small quantities, while the balance of trade, being against the Colony, is made up of remittances of cash and gold dust.
This operates as a further drain upon the supply of Gold, which being generally exported as received from the Mines greatly diminishes the work, and affects,toManuscript image to a ruinous extent, the interests of the Assay establishments in both Colonies.
8. The following trade statistics, in which the two Colonies are treated as one and the same country, having a common interest and administration system will serve to illustrate the foregoing remarks.
9. The declared official value of Imports, at Victoria for the year ending with 31st December 1862, was in round numbers Three million six hundred and tenthousandManuscript image thousand dollars ($3,610,000).
10. In the payment of these imports I assume that one 1/6 of that sum—equal to Six hundred and two thousand dollars ($602,000) has been met by cash payments, and by exports of furs, coal, and timber, including an allowance for bad debts; there would then remain a balance of Three million eight thousand dollars ($3,008,000) against the Colony to be paid in Gold dust.
11. The yield of Gold in the whole Colony of BritishColumbiaManuscript image Columbia for 1862 is roundly estimated at Five million dollars ($5,000,000). Assuming as above that Three million eight thousand dollars ($3,008,000) was remitted in payment of imports, and that Three hundred and eighty eight thousand dollars ($388,000) left the Colony in private hands not in payment of imports, forming in all a total export for the year of Three million three hundred and ninety six thousand dollars ($3,396,000), there would remain an excess of gold dust produced over the quantityexportedManuscript image exported equal to One million six hundred and four thousand dollars ($1,604,000). This, as will appear hereafter, very nearly represents the declared value of the Gold dust assayed in 1862 within the two Colonies.
12. I may here remark that besides the Government establishment at New Westminster, two private Assay offices are in full operation at Victoria. Their respective returns for the year 1862 are as follows—
GoldManuscript imageGold assayed at the Government
Office New Westminster ounces value in dollars
40,430 634,137
Molitor & Coy Victoria 41,900 651,275
Cording & Coy Victoria 19,300 500,000
Total 101,638 $1,585,412
It is found that over two thirds of the aggregate yield of Gold is annually sent abroad, and that less than one third of the whole is actually assayed in the two Colonies. These returns show that the public have not given a decided preference to the Government establishment, and moreover that the entire receipts on the AssaybusinessManuscript image business of the two Colonies, if thrown into one sum, would not cover the annual expenditure of the Government Establishment alone.
14. In respect to the second cause of disappointment in the expectations of the Government Assay Office viz: the cost of the Establishment; I would observe that the Establishment is upon a scale not proportioned to the circumstances of the Colony. In my Despatch of the 11th April 1859, No 135, I mentioned thatinManuscript image in my opinion an Assay Office, suitable to the requirements of both Colonies, could be established at an outlay not exceeding Six hundred pounds (£600). Subsequent events have confirmed me in this opinion, and have shewn me that it was just. The Master of the Royal Mint when organizing the establishment appears to have taken for his guide a letter from Captain Gosset, the Treasurer, forwarded in my Despatch of the 25th May 1859 No 158. In transmitting that letter whichIManuscript image I did at the solicitation of Captain Gosset, I merely drew attention to one point contained therein, viz: the serious inconvenience which was experienced from the want of British coin in the country. I did not consider it necessary to dissect the arguments of Captain Gosset first, because the fallacy of many of them seemed to me immediately apparent, and secondly because I forwarded the documents not as part of an official project, but simplyasManuscript image as an emanation from an individual desirous of placing his individual views before the Secretary of State.
15. From what is before stated it is patent that the Assay Department maintained by the Government at New Westminster, is not and cannot in the present circumstances of the Colony become self supporting without a great reduction in the cost of management.
16. I was in hopes ofbeingManuscript image being able to provide remunerative employment for the Assay Department and of its becoming useful to the Colony by the plan of coinage proposed in by my Despatch No 67 of the 14th November 1861, but the Assay Officers have recently stated so many objections to that plan, though originally proposed by themselves, and have suggested so large an increase in the establishment preliminary to commencing operations that without some better guaranteeofManuscript image of success, and of their zeal and ability to conduct the establishment than I have yet to record, I cannot recommend the outlay.
17. By reducing the Staff of Officers, and the whole cost of the Assay Department, to a parity with private Assay Offices, wherein an equal amount of work is done by a single Assayer, and one occasional Assistant, we might succeed in equalizing the amount of receipts and expenditure; otherwise I regret to state thatIManuscript image I see no prospect of rendering the establishment remunerative or of maintaining it without a heavy charge to the Colony, which is certainly not met by compensating advantages.
18. It is true that many indirect benefits do result to the Colony from the existence of an Establishment in which the Miner believes he can place implicit confidence, and I should be loth to see the Government Assay at New Westminster brokenupManuscript image up entirely; but I feel that I cannot with consistency recommend its continuance on the present expensive scale. I would therefore suggest, if Your Grace sees fit to retain the Assay establishment at New Westminster, that the Staff should only consist of one Chief Assayer, and one Assistant or operative Melter, which Staff I consider should be sufficient to meet all the present requirements of the Colony. When business increases beyond the compassofManuscript image of such a force additions can be made.
19. With reference to the question raised in the last paragraph of the enclosure to your Despatch as to the expediency of the removing the Assay Department from New Westminster to Victoria, I would observe that most of the foregoing remarks apply with equal force to Vancouver Island. A Government Assay Office however, would undoubtedly do a larger amount of business at Victoria that at New Westminster, for thereasonManuscript image reason that Victoria being more built up and settled offers greater inducement to Miners as a resort than New Westminster and the great body pass through the latter place on their way to Victoria, and to San Francisco which in its turn through its agreeable winter and varied amusements carries off large numbers that would no doubt remain in Victoria or New Westminster, did they possess equal attractions, but there still remains the fact beforeshewnManuscript image shewn that the whole receipts from the Gold assayed under existing circumstances in both Colonies would not suffice to cover the expense of the present Government Establishment at New Westminster alone.
20. The Legislature of Vancouver Island have upon several occasions discussed the matter of the establishment of the Assay Office, and even of a Mint at Victoria, and I believe all parties in VancouverIslandManuscript image Island are alive to the benefits that would thereby accrue, and I doubt not that the Legislature would readily vote the funds necessary for the support of a Establishment on a commensurate scale, should Your Grace after what I have herein stated, decide to abolish the Establishment at New Westminster, to re-organize it on a more economical footing at Victoria. I do not however believe that a Government Establishment atVictoriaManuscript image Victoria, even on a reduced scale, would be self-supporting for the first year or two, but the indirect advantages resulting therefrom would probably more than compensate the balance of expenditure over receipts.
I have the honor to be
My Lord Duke
Your Grace's most obedient
Humble Servant
James Douglas
Minutes by CO staff
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Mr Elliot
From the tenor of this despatch the inference, I think, is that Governor Douglas has not complied with the application of the Officers of the Assay Dt for an increase of salary. I do not indeed see how more pay cd be assigned to them when no issue of the gold pieces—on acct of which their claim for increased remuneration was based—has yet taken place.
Schemes cannot always be successful. And in a young Colony there must be many disappointments before great successes can be obtained; not that I think, however, that in B.C. failures have preponderated. As regards the present case though the result of theManuscript image establishment of an Assay Dt has not been equal to the anticipations we were lead to entertain I cannot but think the measure has been servicable to the interests of the Colony, & that in time it will prove a more complete success. It is clear that, at present, the establishment ought to be reduced, and made commensurate with the wants of the community. But I hope the Duke of Newcastle will not think it necessary to encourage the suggestion thrown out by Govr Douglas of transferring the Assay Dt to VanC. Island.
I presume that this desph will be referred to the T-y, who have Capn Gossett's letter of the 10 Nov. last, under their consideration.
ABd 3 June/63
I apprehend that the practical course will be simply to forward this to the Treasury, as above proposed, for their consideration.
The representation which I have always heard on behalf of Vancouver Island is to the following effect, that the miners when they return from the diggings weary of their wild life and eager to exchange it for the pleasures and comforts of a civilized Town, will not remain at New Westminster which holds out no attractions, but hurry on to Victoria. If there were an Assay Office there, they wouldManuscript image probably use it, but they will not remain at an uninviting and inferior place on the river exclusively for the purpose of getting their gold assayed.
I repeat the representation for what it may be worth, but I must confess that it seems to me to have a great deal of inherent probability. My belief is that nature has formed Victoria to be the Commercial Capital of the whole of the British Territory in that part of the World, and that although a few persons interested in land around the Town formed in B. Columbia might fight stoutly for trying to nurse it into a Capital, no efforts or policy can ever convert it into a great Port. A glance at the Chart, and an account of the approaches must be enough to convince anyone acquainted with seafaring that vessels fitted for carrying on an ocean traffic would never frequent such a place as New Westminster if they have the alternative of such a one as Victoria.
TFE 3 June
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Duke of Newcastle
Even if the removal of the Assay Office to Victoria wd be the right thing to do, it is certain that the B. Columbians would regard it as a design of Govr Douglas' to favour Vancouver I—so that it would be a mistake to do it at present. But there can be little doubt of the necessity of reducing the establishment so necessary in the first instance?
The quantity of Gold assayed in 1862, however small, was nearly double the quantity assayed in 1861.
CF 4
I agree on both points with Mr Fs minute.
N 7
Documents enclosed with the main document (not transcribed)
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"Return of the Amount of Work Performed in the Assay Office Month by Month since it Came into full operation, The Actual Current Cost of the office, and the Receipts up to the latest period," signed by W.A.G. Young, Auditor, 17 March 1863.
Other documents included in the file
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Elliot to Frederick Peel, Treasury, 22 June 1863, forwarding copy of the despatch for consideration.
Douglas, James to Pelham-Clinton, Henry Pelham Fiennes 10 April 1863, CO 60:15, no. 5386, 206. The Colonial Despatches of Vancouver Island and British Columbia 1846-1871, Edition 2.2, ed. James Hendrickson and the Colonial Despatches project. Victoria, B.C.: University of Victoria.

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