No. 124
27th November 1865
I have had the honor to receive your despatch No. 52 of 2nd August, informing me that the amount due from the Imperial Treasury for the excess of Advances made by the Colonial GovernmentinManuscript image in respect of the Regimental Pay of the Royal Engineers lately serving in British Columbia had been placed to the credit of the Colony in its account with the Crown Agents.
2. On the receipt of your despatch, I called upon the Auditor General to furnish me with a Return showing the state of the Accounts under the head of Military Expenditure. I enclose a Report from that Officer by which it would appearthatManuscript image that the sum of nine thousand and fifty-one pounds 18s/1d (£9,051.18.1), still stands as a debt due by the Imperial Government to this Colony.
3. In support of the Statement of the Auditor General I beg to refer you to the Duke of Newcastle's despatch No. 123 of 13th May 1862, in which the Governor is instructed, that, after the arrears of 1859/60, have been adjusted by the payment from the Local Revenue of the sum of tenthousandManuscript image thousand seven hundred and four pounds (£10,704), the amount estimated as the expenditure on account of the Camp Buildings, the Colony would in future be required to defray one moiety of the cost of maintaining the detachment of the Royal Engineers, the other moiety being contributed by the Imperial Government.
4. I trust you will authorize the Crown Agents to defer making the payment of the ten thousand seven hundredandManuscript image and four pounds (£10,704) to the Imperial Treasury, until a final settlement of the Accounts for Military expenditure has been arrived at by the Lords Commissioners of Her Majesty's Treasury.
I have the honor to be,
Your most obedient
humble Servant
Arthur N. Birch
Minutes by CO staff
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Mr Elliot
This claim for the R. Engineers takes me by surprise. The arrangement as to the expense of this force was that England shd defray the Regimental pay, whilst the Colonial pay & allowances were to be borne by the Colony. But in /62 in consequence of continued grumbling the Treasury consented to pay the moiety of the cost of maintaining the Engineers. The charge was £11,000. Is it meant by this desph that the Governor never drew for the money? It seems strange, & I see nothing else except a reference to the T-y, recalling to their notice the C.O. Letter to them of the 21 Feb./62, & their ansr of the 27 of the same month.
The correspce is collected for reference.
ABd 6 Feb/66
I agree with Mr Blackwood both as to the strangeness of the claim and also the necessity of referringManuscript image to the Treasury. It is in reality a question which can only be expected to be cleared up by the Auditors. I annex a draft.
TFE 8 Feby
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Offices of the Crown Agents for the Colonies,
Spring Gardens, London, S.W.
9 Febry 1866
My dear Sir
We paid the £10,704 to the Treasury on the 22 Novemr last. We advised British Columbia that we should do so on the 14th of the preceeding month, and in our accounts with the Colony up to the end of the year forwarded Early in January, we debited them with the amount.
Yours very truly
Penrose G. Julyan

T. Fredk Elliot Esqre
Documents enclosed with the main document (not transcribed)
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Robert Ker, Auditor General, to Colonial Secretary, 24 November 1865, forwarding statements relative to the status of the colonial accounts.
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Statement of receipts and expenditures in connection with the Royal Engineers while stationed in British Columbia.
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Statement of the sums received and advances made for Her Majesty's government and which have been hitherto charged in the general account.
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Return of the amount paid on Her Majesty's government account for pensions during the years 1859 to 1863.
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Statement explaining the difference between the balance now claimed and that shown in the account rendered in July 1864.
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Schedule of despatches from British Columbia and the secretary of state on the expenses of Royal Engineers referred to in the statement of the auditor general, prepared by F.W. Fuller, 7 February 1866.
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Elliot to G.A. Hamilton, Treasury, 15 February 1866, forwarding copy of the despatch and requesting a report on the claim now submitted by the colony.