No. 10
16th April 1856
I hasten to communicate for the information of Her Majesty's Government, a discovery of much importance, made known to me, by Mr Angus McDonald, Clerk in charge of Fort Colvile one of the Hudson's Bay Company's Trading Posts on the Upper Columbia River District.
That Gentleman reports in a letter dated on the 1st of March last that Gold has been found in considerable quantities within the British Territory on the Upper Columbia, andManuscript imageand that he is moreover of opinion that valuable deposits of Gold will be found in many other parts of that country, he also states that the daily earnings of persons then employed in digging Gold were ranging from 2 to 8 for each man.
Such is the substance of his report on that subject, and I have requested him to continue his communications in respect to any further discoveries made.
I do not know if Her Majesty's Government will consider it expedient to raise a revenue in that quarter, by taxing all persons engaged in gold digging, but I may remark that it will be impossible to levy such a tax, without the aid of a military force, and the expense in that case would probably exceed the income derived from the Mines.
See Sir J. Paking[ton's] desph on a former report as to the discovery of Gold in Queen Charlotte I.
I will not fail to keep you well informed in respect to the extentManuscript imageextent and value of the gold discoveries made, and circumstances will probably be the best indication of the course, which it may be expedient to take: that is in respect to imposing a tax or leaving the field free and open to any persons who may choose to dig for gold.
Several interesting experiments in gold washing have been lately made in this Colony, with a degree of success, that will no doubt lead to further attempts for the discovery of the precious metal. The quantity of Gold found is sufficient to prove the existence of the metal, and the parties engaged in the enterprise entertain sanguine hopes of discovering rich and productive beds.
I have the honor to be Sir
Your most obedient humble Servant
James Douglas

The Right Honble Henry Labouchere Esqre
Her Majesty's principal Secretary of State
For the Colonial Department.
Minutes by CO staff
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Mr Elliot
Copy to the H.B.Co—for their information.
I annex a P. Paper containing Sir John Pakington's instructions to Governor Douglas when gold was reported to have been discovered in Queen Charlotte's Island. It seems to me that they are applicable to the present case.
Without imputing an arrière pens ee to Governor Douglas in respect to the necessity of establishing a military force to collect any tax it may be thought right to impose on licenses for gold hunting I should myself conceive that a good strong body of Constables, but of course sufficiently well paid to prevent their deserting to the diggings, would be the best & the most legitimate Authority for him to possess. Soldiers at 3d a day would certainly desert. What with the distance, & peculiarity of this settlement almost everything must be left in such a case as this to the Governor's discretion, aided by general instructions, which he already possesses, from the Home Govt. See also his desph 11 Apl/53—6981. But the time has not yet arrived for talking about a revenue from Gold in the H.B.Co Territories.
ABd 1 July
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Mr Ball
Sir J. Pakington's directions were adapted to the case of alleged gold discoveries on an island, which can be to a certain extent guarded by a naval force, & interlopers frightened away. I should think them quite inapplicable to that of similar discoveries on the continent of Nth Am. & within easy reach of the frontier of Oregon: and that it was idle to attempt to derive a direct revenue from licenses; while, if the discovery proved real, there would soon be revenue enough for practical purposes from other sources. But it would be necessary to maintain in some way the supremacy of the BritishManuscript image Government, & establish some degree of law & order among the diggers. I do not see how this can be done without the presence of a small armed force. But, as the occasion has not as yet arrived, I think it may be sufficient to give Govr Douglas general instructions on this head, & direct him to take them into consideration & devise the best means of accomplishing the object. The H.B.C. have nothing to do with the matter farther than this, that the territory in question is within the limits of their (all but expired) license to trade withManuscript image the Indians.
HM Jy 2
Mr Labouchere
I concur with Mr Merivale in thinking it idle to attempt to raise a revenue by Licenses to dig for gold. If further accounts should confirm the present reports & show an influx of population I suppose that some military force shd be provided. In the mean time I do not well understand what legal provision exists for the Government of the territory—or what power there is to levy import duties which probably wd be the best means of providing a revenue.
JB 3 July
Licenses are out of the Question—all that can be done at present
is to leave it to his discretion to keep order in the district if the population should increase—that for the present we do not look for revenue nor desire to incur expence—but wish that he should keep us regularly informed of anything of interest that may occur.
HL 4 J
Returned to Dept 23 July.
Other documents included in the file
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Draft reply, Labouchere to Douglas, No. 14, 4 August 1856.