Colonial Despatches
The colonial despatches of Vancouver Island and British Columbia 1846-1871
Public Offices document
Pelly, John Henry
to Grey, George 10 September 1851, CO 305:3, no. 7742, 384.
Abstract
Public Offices document.
Minutes (11), Enclosures (untranscribed) (2), Marginalia (3).
Pelly writes to Grey to answer questions raised earlier, by one of Blanshard's despatches, on HBC finances, particularly with respect to public buildings, salaries, and taxes on imports
on Vancouver Island. Pelly then provides a series of arguments for HBC expenses, which are, in part, informed by the outcome of the Oregon Treaty.
In the minutes, Jadis points out that Blanshard is no longer Governor, and, as such, need not be notified of Pelly's letter; he raises questions, however, on the HBC generating revenue from duties. Elliot then asks that Jadis prepare a statement that details the salient concerns raised by Pelly's letter.
Of the enclosed documents, the first is a letter from Barclay to, presumably, Blanshard, which advises that £4000 was to be spent on public buildings. The second enclosure
is an extract of a letter from Barclay to Douglas, which advises that the outlay for public buildings should be only £2000. The voluminous,
multi-page minutes on the second enclosure discusses, in detail, the costs and creation
of public buildings, the HBC's monopolizing financial and administrative practices, levels of government control
and profit, and more.
I have received two letters from Mr Merivale enclosing
Despatches from the Governor of Vancouver's Island, dated the 28th
April and 12th May 1851, and stating your Lordship's wish that I
would afford you an explanation of such parts thereof as relate to an
intended expenditure on public buildings, and to the payment of Salaries
from the proceeds of taxes on Imports.
At the time the communication alluded to by Mr Blanshard was made to that gentleman it was thought that the Fur Trade branch of the Company
would require a considerable quantity of land in addition to
that which they possessed before the conclusion of the Boundary Treaty
in 1846. The Puget Sound Agricultural Company had also intimated their
intention to become purchasers of a tract of land near the Fur Trade
Reserve. The quantity in
in both cases was uncertain, no accurate survey
having been made, but in order that the Governor might not be in want of
Funds for such public works as might be considered most necessary, Mr
Douglas was directed to advance from time to time (as it might be
required) the sum of £4000. When however it was found that the land
occupied by the Fur Trade at Victoria previously to the year 1846 was considered by Mr Douglas to be sufficient for their purposes, the
amount to be advanced to the Governor was reduced to £2000, as your
Lordship will perceive by the enclosed extracts from a Dispatch to Mr
Douglas dated July 16th 1851, in which also a mistake which had been
made respecting the house for the Revd Mr Staines was rectified.
in both cases was uncertain, no accurate survey
having been made, but in order that the Governor might not be in want of
Funds for such public works as might be considered most necessary, Mr
Douglas was directed to advance from time to time (as it might be
required) the sum of £4000. When however it was found that the land
occupied by the Fur Trade at Victoria previously to the year 1846 was considered by Mr Douglas to be sufficient for their purposes, the
amount to be advanced to the Governor was reduced to £2000, as your
Lordship will perceive by the enclosed extracts from a Dispatch to Mr
Douglas dated July 16th 1851, in which also a mistake which had been
made respecting the house for the Revd Mr Staines was rectified.As Mr Blanshard has not transmitted to Your Lordship a copy of the letter in which the Governor and
Committee of the Hudson's Bay
Company stated to him their views with regard to the expenditure on
on public buildings and other Colonial objects, I beg leave to hand you a copy of
that communication, from which you will see how far he is borne out in the observations
contained in his Dispatch, and what were the Company's real objects in directing £4000
to be expended in public works. It was in fact left almost entirely to the Governor
and his Council to select both the sites and the works to be erected on them.
on public buildings and other Colonial objects, I beg leave to hand you a copy of
that communication, from which you will see how far he is borne out in the observations
contained in his Dispatch, and what were the Company's real objects in directing £4000
to be expended in public works. It was in fact left almost entirely to the Governor
and his Council to select both the sites and the works to be erected on them.On the subject of Captn Grant's efficiency as a Surveyor I can only say that he was recommended to me as peculiarly
qualified for the work he had to perform. But when it was found that he neglected
his duties another Surveyor of proved ability was sent out, and is at present I have
reason to believe employed in Surveying the Victoria District.
An Assistant Surveyor has also been engaged, and is now on his way to the Colony.
With regard to the exorbitant price stated by Mr Blanshard to be demanded by the Company for land, I am 
not aware, nor do I believe that a farthing more than the original price fixed upon,
namely one pound per acre, has ever been demanded by the Company's Agent for any land
either without or within the Reserve.
not aware, nor do I believe that a farthing more than the original price fixed upon,
namely one pound per acre, has ever been demanded by the Company's Agent for any land
either without or within the Reserve.With respect to the payment of the Salaries of the Civil Officers
of the Colony out of the proceeds of taxation, I beg to say that I
always understood that your Lordship meant the Colony to be established
on a self supporting principle, and I know no better mode of procuring
the means of defraying such expences than by levying a moderate
duty — Say 5 per Cent — on Imports. ⎯ Such a duty, I may observe, would, at
present at least, be paid in a great measure by the Hudson's Bay
Company; and if calculated on the value of last year's importation would
amount to £1400.
The R Honble Earl Grey
&c &c &c
&c &c &c
Minutes by CO staff
Mr Elliot
As Mr Blanshard is no longer Governor it would appear to answer no useful purpose to communicate this letter to him? But the last paragraph refers to a question which calls perhaps for some decision whether the Company have or have not the power to raise a Revenue by means of the imposition of duties?
As Mr Blanshard is no longer Governor it would appear to answer no useful purpose to communicate this letter to him? But the last paragraph refers to a question which calls perhaps for some decision whether the Company have or have not the power to raise a Revenue by means of the imposition of duties?
11 Sepr/51
Documents enclosed with the main document (not transcribed)
Minutes by CO staff
Mr Elliot/
In these Despatches Governor Blanshard raises objections to the proceedings of the Company on two points—1st the locality of the Public Buildings, on which they had ordered a Sum of £4000 to be expended, and 2dly the payment of Salaries by means of Taxes on "Imports or otherwise" instead of from the proceeds of Land Sales.
In these Despatches Governor Blanshard raises objections to the proceedings of the Company on two points—1st the locality of the Public Buildings, on which they had ordered a Sum of £4000 to be expended, and 2dly the payment of Salaries by means of Taxes on "Imports or otherwise" instead of from the proceeds of Land Sales.
On the first point the Governor
argues that to erect Public
Buildings at the Company's Trading Posts, surrounded by their own
Reserves, before a
Site for a Town is even fixed upon, would be to
defeat in a great degree the object of the Grant, namely the
Colonization & Settlement of the Island⎯
argues that to erect Public
Buildings at the Company's Trading Posts, surrounded by their own
Reserves, before a
This is objectionable especially as regards the possible future
surrender of the charter.
Sir John Pelly explains that the Sum so to be expended has been
reduced to £2000⎯ that the Buildings are to consist of a Moderate sized
Govt House, a Building for a Church, with Houses for a Chaplain & Schoolmaster. These
Buildings are to be maintained & the Salaries paid by "Taxes on Imports or otherwise."
Govt House, a Building for a Church, with Houses for a Chaplain & Schoolmaster. These
Buildings are to be maintained & the Salaries paid by "Taxes on Imports or otherwise."Besides the promotion of the Colonization & Settlement of the Island, the Imperial Govt have a further interest in these Buildings,
in so far that they have covenanted to reimburse the Company the value
of them, should the Crown resume possession of the Island. It would therefore appear to be only proper that the
Secretary of State should have the opportunity of exercising some control (both as
to the locality
and quality) over the construction of any Buildings of any extent which
the Company may contemplate ⎯
Secretary of State should have the opportunity of exercising some control (both as
to the locality
and quality) over the construction of any Buildings of any extent which
the Company may contemplate ⎯On the 2d point, the payment of Salaries, the Governor contends that by directing all Salaries
to be paid by means of Taxes the Company repudiate the Clause in their Grant which
binds them to provide at their own expense all
all necessary Civil & Military Establishments.
all necessary Civil & Military Establishments.Sir John Pelly dismisses this part of the subject with the remark,
that he had "always understood that Lord Grey meant that the Colony
should be established on a Self Supporting principle, and that he knows
of no better mode of procuring the means of defraying the Salaries than
by levying a moderate duty on Imports ⎯"
The Clause referred to by Mr 
Blanshard certainly makes it a condition of the Grant that the entire Civil & Military expenditure
required for the protection & Government of any Settlement or
Settlements to be formed on the Island should be defrayed by the Company; and a further Clause provides that all monies
received for the
purchase of Lands & all payments in respect of Coal & Minerals should be
applied to the Colonization & Improvement of the Island. Mr Merivale in
his Minute
on 6824. expresses a doubt whether the Words "Colonization & Improvement of the Island" would include the expense of Civil Govt,
but whatever may be the legal construction which may be put upon the
terms of the Grant, there is I apprehend no authority at present
existing under which Taxes can be levied, seeing that its there is no
Legislature of any description in the Settlement, and no materials for
framing one ⎯
Blanshard certainly makes it a condition of the Grant that the entire Civil & Military expenditure
required for the protection & Government of any Settlement or
Settlements to be formed on the Island should be defrayed by the Company; and a further Clause provides that all monies
received for the
purchase of Lands & all payments in respect of Coal & Minerals should be
applied to the Colonization & Improvement of the Island. Mr Merivale in
his Minute
on 6824. expresses a doubt whether the Words "Colonization & Improvement of the Island" would include the expense of Civil Govt,
but whatever may be the legal construction which may be put upon the
terms of the Grant, there is I apprehend no authority at present
existing under which Taxes can be levied, seeing that its there is no
Legislature of any description in the Settlement, and no materials for
framing one ⎯
18 Sepr/51
V.J
Mr Hawes
I am so little familiar with the arrangements at
Vancouver's Island,
that I feel a difficulty in expressing any positive opinion. It appears
to me that unless it has been determined immediately to survey and lay
out a Town, there could be no very grave objection to placing these
buildings at the Company's post which, I suppose, is the only place at
all inhabited? ⎯ As to the question of Taxes, I should think that Sir J.
Pelly is right, and that the intention was only to have a
self-supporting Colony. Surely it could not be meant that the Company
was to pay the Govt at Vancouvers out of their profits on the Fur
Trade in Canada? ⎯ As to the want of a power of legislative action, I do
not know how the facts stand or what were the views of Govt ⎯
I am so little familiar with the arrangements at
Vancouver's Island,
that I feel a difficulty in expressing any positive opinion. It appears
to me that unless it has been determined immediately to survey and lay
out a Town, there could be no very grave objection to placing these
buildings at the Company's post which, I suppose, is the only place at
all inhabited? ⎯ As to the question of Taxes, I should think that Sir J.
Pelly is right, and that the intention was only to have a
self-supporting Colony. Surely it could not be meant that the Company
was to pay the Govt at Vancouvers out of their profits on the Fur
Trade in Canada? ⎯ As to the want of a power of legislative action, I do
not know how the facts stand or what were the views of Govt ⎯T.FE.
20 Sept
1. As to the buildings being placed in the midst of the Companys
reserves I think it objectionable, unless very clear provision be made
for a free access to them in the event of the surrender of the charter.
2. I think, before any such outlay is made very full information
should be given & a distinct sanction obtained together with the consent
of the Treasury, considering that they may have to be purchased by the
Crown under the Charter.
3. I should reject the revenue being raised by taxes on imports.
If the fund from Land sales, or rent, or minerals are insufficient to
pay the Civil Expenditure, it may perhaps be the only present resource.
But it should be limited in point of time & amount. But before this is
conceded I think some further information is wanted. What prospect is
there of any Land fund, or any revenue from Coals or Minerals? What is
the proposed cost of the Civil Govt?
4. In reference to Mr Barclays
Letter — I think there is as much reason for submitting the plans & Estimates involving
the outlay of 2000 £ (now proposed) as there was for the outlay of the 4000£, to the
Govr & Comee. — And further that these plans & Estimates should before any expense is incurred
be submitted to the Secy of State & the Treasury.
Letter — I think there is as much reason for submitting the plans & Estimates involving
the outlay of 2000 £ (now proposed) as there was for the outlay of the 4000£, to the
Govr & Comee. — And further that these plans & Estimates should before any expense is incurred
be submitted to the Secy of State & the Treasury.5. I do not now clearly understand how the 2000£ is to be
appropriated. It is not to be laid out on land not purchased — I
suppose therefore the proposed outlay is wholly in the Company's
Land — which I think objectionable.
6. Every step in this transaction requires great care & some impartial authority is
much wanted. The Company has an interest of its own — opposed to the Public Interest.
The Govr is on bad terms with the Company & it is very difficult under present circs to come to any satisfactory conclusion.
7. Sir J. Pelly passes rather lightly over that part of the Letter
of Sep 30th which insists upon some control over & inspection of the Public Buildings to be erected, on the part of H.M. Govt. It is now important to make this clear.
There is nothing pressing in this & the subject may stand over
till both Mr Merivale & myself are in London. ⎯
G.
29/
7748 Vancouver's Island
Mr Peel
As farther complaints have just reached us of the administration of Vancouver's Island (see 10,075) I forward these papers again, which had been reserved for Ld Grey's consideration. I have but little to add to what has been already said.
Mr Peel
As farther complaints have just reached us of the administration of Vancouver's Island (see 10,075) I forward these papers again, which had been reserved for Ld Grey's consideration. I have but little to add to what has been already said.
1. I think with Mr Hawes that public works of any magnitude on the island ought to be erected under the superintendcy of the Govr in Council, & the consent of the Treasury also obtained to them, for the reason state stated in the last letter on the subject to Sir J. Pelly (annexed) If (as may be hoped notwithstanding present appearances) the Company can
repay themselves this expenditure out of the sale of land, then the Treasury has no further interest in the matter, but if it should become necessary at the end
of the past trading license to resume the Island while the
Company's expenditure is not repaid, Govt will have to make it good, & therefore must have this control.
Company's expenditure is not repaid, Govt will have to make it good, & therefore must have this control.3(Probably are really reserved for the Puget's Sound Company—which is said to be the
H.B.C. under another name)
3. The locality of the buildings is matter of natural observation: nevertheless if the HBC are to be the managers of the island, it seems more convenient that they should be in the middle of
their "reserves" than anywhere else. It is common in these cases to object to the
separate consequences of a plan when the real objection is to the principles of the
plan itself, which must
be judged by their general merits.
be judged by their general merits.4. The question of the import duty is not free from difficulty. I do not think the
meaning of the grant was to bind the Co. to be at the expense of colonizing the island without any regular means of
remuneration & simply as a trading speculation. And it is not clear on
the words of the Commission & Instructions whether such a power is not
given to the Govr & Council provisorily, until the Assembly can be constituted. But the general idea
of the establishment certainly was,
that it was to be a free colony. Doubts would be entertained (especially after the
discussion of last session) whether after the general grant of a Constitution the
Crown itself could authorize the
imposition of taxes by a Governor. And I think that inasmuch as there
is a fund — the land sales & minerals — devoted to the "Colonization &
improvement" of the island, this is the
source from which preliminary expenses, such as that of governing the colony until
a legislature with power of taxation can be established, were really meant to come:
if the necessary expenses exceed this, the Company have bound themselves to furnish
them in the first instance.
source from which preliminary expenses, such as that of governing the colony until
a legislature with power of taxation can be established, were really meant to come:
if the necessary expenses exceed this, the Company have bound themselves to furnish
them in the first instance.At all events I should certainly not advise acceding to this scheme
of Sir J. Pelly's without the advice of the A. & Sol. Genl. (The
H.B.C. might levy port dues, &, for the use of their wharfs & landing
places: but, in their own right, clearly nothing more.)
5. I will just mention that (with reference to something said in
10,075) the Co. have no monopoly of the sale of articles of supply to
ships & or to their own settlers in the island legally, though
practically it is probable enough they possess one.
HM.
D. 8./51
See separate sheets within. ⎯
7742 & 10,075 Van Couver's Island
The last of these letters must be transmitted to the Hudson's Bay
Company at the same time observing with reference to the former that I
am by no means satisfied with respect to the manner in wh the island has been managed by the Company. ⎯ I hope that with a view both to the interest of
the Company itself & for that of the settlers more efficient
measures may be taken for its colonizatn & for improving the conditn of the inhabitants. ⎯ The chief points which call for observatn are the following. ⎯
1st As to public works. ⎯ I
think it is quite necessary
that the government shd have some control over what is done in this way for the reasons noticed in the former
minutes, but on the other hand having regard to the very irregular means
of communicatn with the island & the great delay which wd arise from the requiring the previous sanctn of the Treasury before buildings are undertaken I think it will be enough to say that the Govr must send a full report upon all works that he contemplates & must furnish to this
departt accounts of the expenditure incurred. ⎯
that the government shd have some control over what is done in this way for the reasons noticed in the former
minutes, but on the other hand having regard to the very irregular means
of communicatn with the island & the great delay which wd arise from the requiring the previous sanctn of the Treasury before buildings are undertaken I think it will be enough to say that the Govr must send a full report upon all works that he contemplates & must furnish to this
departt accounts of the expenditure incurred. ⎯2d With regard to the reserve of land for the Company, I agree with Mr Merivale that if the Compy reserve land for any but strictly public purposes they are bound to credit the colony
with a
price for
the land equal to what they wd charge private individuals, & to spend this money in the necessary expenses of the
settlement & expense either in sending out emigrants (who clearly shd be married men) or
in openg roads & making more land accessible. ⎯ It is obvious that no private individuals
can be expected to buy land […] if all the land most valuable from its positn is reserved by the Company for their own use witht applying the price which wd have been charged for it if sold for the benefit of the Colony. ⎯
the land equal to what they wd charge private individuals, & to spend this money in the necessary expenses of the
settlement & expense either in sending out emigrants (who clearly shd be married men) or
in openg roads & making more land accessible. ⎯ It is obvious that no private individuals
can be expected to buy land […] if all the land most valuable from its positn is reserved by the Company for their own use witht applying the price which wd have been charged for it if sold for the benefit of the Colony. ⎯3d With regard to import duties — I considered it to have been clearly understood at
the time the arrangement with the Company was made, that no such duties cd be imposed until the number of
inhabitants had increased enough to admit of the calling
together of an
Assbly, I apprehend that there clearly is no authority but that of Parlt or of a representative Assbly by which taxes can be levied
in the island, this shd be pointed out. ⎯
together of an
Assbly, I apprehend that there clearly is no authority but that of Parlt or of a representative Assbly by which taxes can be levied
in the island, this shd be pointed out. ⎯4 On the subject of the alleged monopoly of the Co their special attentn must be called to the statements which have been made,
remindg them that they are not legally entitled to such a monopoly &
expressing my hope that they have not indirectly endeavoured to
establish one by refusing to traders who might be inclined to compete
with them, […] ground in suitable situatns for buildg stores & shops,
or by denying them any other facilities for carrying on trade which it
may be in the power of the Company to with-hold. ⎯ Any such proceeding I
shd regard as a great abuse & a departure from the spirit 
if not from the words of the agreement entered into with the Govt call which wd call for its interventn. ⎯ It may be added that I have reason to believe that owg to the advantageous market for coals & also for
Agricultural produce created by California I have reason to believe that there wd be […] a considerable influx of settlers into V.C. Island if the Hudson's bay Co wd give them the encouragement which it is both their duty & their obvious policy to
afford. ⎯
if not from the words of the agreement entered into with the Govt call which wd call for its interventn. ⎯ It may be added that I have reason to believe that owg to the advantageous market for coals & also for
Agricultural produce created by California I have reason to believe that there wd be […] a considerable influx of settlers into V.C. Island if the Hudson's bay Co wd give them the encouragement which it is both their duty & their obvious policy to
afford. ⎯G.
10/12/51