Peel to Rogers (Permanent Under-Secretary)
Treasury Chambers
13th February 1865
I am desired by the Lords Commissioners of Her Majesty's Treasury to acquaint you, for the information of Mr Secretary Cardwell, that Their Lordships have had under Their consideration Mr Elliot's letter of the 27th Ultimo on the subject of the claim against British Columbia for the sum of £10,704—the cost of certain services therein, and I am to request that you will observe to Mr Cardwell that the statement in Mr Elliot's letter, that the cost of those services has been defrayed, is not correct—an advance only,
I should like to know then to whom the money is due. To the Try. chest.
in acceptance oftheManuscript image the Governor's Bills having been made from the Treasury Chest, and that the sum outstanding must either be paid by the Colony or by means of a Grant to be made by Parliament;
My Lords have already stated to the Colonial Office that They are unable to submit a further Vote to Parliament on account of the Excess of the Expenditure in British Columbia in the two years 1859 & 1860 beyond what was authorized by Parliament, and They would refer Mr Cardwell to Their letter of 11th September 1863, in which They stated that They had considered the Colonial Government to be liable for the whole excess—a sum of £22,026; and to the letters from the Colonial Office of 22 March & 22 April 1862expressingManuscript image expressing the Duke of Newcastle's opinion that "the portion of the overdrafts, amounting to £10,704, which was for the items of Public Works, was evidently inadmissible, ought evidently never to have been charged except to the Colony," and "should be charged against the Colony as a debt which the Governor will be instructed immediately to repay," but that the remainder of the excess being strictly for maintenance of the Garrison might—notwithstanding it was an excess of the Governor's—be permitted to be defrayed by Parliament;
The latter portion of the arrangement thus proposed by Mr Cardwell's Predecessor in Office, and assented to by this Board, having since been carried out on the distinct understanding that the whole arrangement would becarried outManuscript image carried out, My Lords are of opinion that the Colony should fulfil the other portion, and They do not find in the new Governor's despatches any ground whatever for transferring the charge in question from Colonial to Imperial Funds;
My Lords were informed by Mr Elliot's letter of 26 May last that instructions had been given to the Crown Agents to pay the sum of £10704.16.7 from the proceeds of the Loan of £100,000 to be raised under the Ordinance No 7 of 1864, and They must express Their hope that the payment will be made at an early date.
I am - Sir
Your obedient Servant
F. Peel
Minutes by CO staff
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ABd 14/F
See Minute annexed.
TFE Feby
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Mr Fortescue
I have no design to ask you and Mr Cardwell to take the trouble of considering whether we should enter into a controversy with the Treasury on this subject. We have not done so yet, although the contrary might be imagined from the terms of their letter. I would beg leave however very briefly indeed to recall the leading facts of the case.
Sir James Douglas drew Bills very heavily in excess of the amount granted by Parliament for British Columbia. Some of those Bills, amounting to about £11,300, were for the pay and allowances of the Royal Engineers, others, amounting to £10,700, were for works and buildings and surveys on which they had been employed.TheManuscript image The Duke of Newcastle recommended the Treasury to obtain a Vote from Parliament for the former, but to require repayment of the latter. The Treasury assented; and it is perfectly true therefore that this course was agreed upon by both Departments in the year 1862.
But in the year 1864, a new Governor having gone out to the Colony, submitted new facts. He said that the buildings for which he understood the repayment to be chiefly claimable, were of little value, and he quoted precedents of transferring better Barrack's to richer Colonies gratuitously. We thought it only fair to consider how far the new facts gave reason for anewManuscript image new decision, and we sent them on with our impressions to the Treasury, but pointedly treating it as a matter for their own judgement: "Mr Cardwell would be very glad if their Lordships should feel at liberty to waive &c &c." They refuse, and stand on the original intention. As this is the case, our course is simple: we must instruct the Agents to pay the money out of the first proceeds of the Loan (or if instructed already, we must remind them), we must apprize the Governor of the failure of his appeal, and must tell the Treasury what we have done.
There is no practical subject for controversy. ButonManuscript image on one point I must beg to let you and Mr Cardwell have an explanation. The Treasury say that one statement in our letter is incorrect; I will give it in our own words—These fabrics "have long been built and their cost defrayed, and the only question is whether the Colony should be forced to repay the amount." This is what the Treasury call incorrect. Now what are the facts? Governor Douglas drew Bills in order to defray the alleged cost of the several public Works, and obtained cash for those Bills in British Columbia from the Treasury Chest, and his Government has ever since been called upon for repayment to the Treasury. No one eversuggestsManuscript image suggests that he did not make the original payments with the cash he obtained for the purpose. What the Treasury must really mean is that they themselves have not been paid, but this of course we knew and admitted, since the very question put to them was whether or not they would forego repayment. Whilst therefore I do not a bit want to re-argue the merit of that suggestion, I assert that our statement was perfectly accurate, and that the Treasury contradiction of it is not owing to a better knowledge of the facts, but to a confusion of ideas.
TFE 17 Feby
Mr Cardwell
Mr Elliot's meaning was, of course,Manuscript image clear enough. But it is also true, as the Try. letter says, that the advance, if not repaid by the Colony, must be repaid by a Vote of Parlmt. The provoking part of the Treasury letter is the way in wh. it treats Govr Seymour's representations as deserving of no attention at all. To me they seem very weighty on behalf of the Colony. They amount to this; that a Colony wh. is now costing the Imp. Govt nothing for its military defence, & has lately suppressed an Indian insurrection at its own expense, is to be required to repay the cost of temporary barracks, erected for the use of troops wh. were sent out by the Imp. Govt and since withdrawn. But you will judge whether it is worthwhile to carry the controversy with the Try. any further.
CF 17
I think not.
Mr Blackwood
Drafts therefore to be prepared in accordance with the passage I have marked at page 3 of my Minute.
Other documents included in the file
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Elliot to Crown Agents, 25 February 1865, instructing them to pay £10,704.16.7 to Treasury out of the proceeds of the 1864 loan.
Minutes by CO staff
The Agents were authorized by Sir James Douglas to pay this claim out of the first proceeds of the loan but no such authority has been yet been given by the S. of S.
Other documents included in the file
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Elliot to Peel, 25 February 1865, advising that the Crown Agents had been instructed to repay the outstanding sum.
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Draft reply, Cardwell to Seymour, No. 7, 24 February 1865.
Minutes by CO staff
This will, I think, be found a judicious draft under the circumstances.
TFE 27/2