No. 58
24 November 1859
I have the honor to acknowledge your Grace's Despatch No 10 of the 3rd September, transmitting a copy of a letter from the Hudson's Bay Company, and of the reply you had caused to be addressed to Mr Berens, inManuscript imagein which your Grace intimates that it is with much satisfaction that you have heard of the refusal on the part of the Company's Manager in Vancouver's Island, to accede to my application for Advances on account of Government subsequent to the 30th May.
2. In reference thereto, I beg to inform your Grace that in consequence of the refusal of the Hudson's Bay Company to liquidate the current expenses of the Colony, and in the absence of any instructions from Her Majesty's Government uponManuscript imageupon the subject, I have been forced to apply the monies arising from the sale of Public Land to that purpose, though those funds should properly be paid into the hands of the Hudson's Bay Company until the Charter of Grant is determined as it is evident that until then, no Title to Land would be legal even if sold by the Crown.
3. No official announcement has been yet made to me of the revocation of the Grant. I have at present therefore no power either to grant a legal Title or to make sales of Public LandManuscript imageLand, and I am in consequence placed in a position of extreme embarrassment.
4. I have contrived hitherto to pay all the civil expenses of the Colony out of monies raised from its own Revenues, but should these fail before the House of Assembly provides a Revenue, and before I am legally empowered to dispose of the Public Land, there will be no alternative left to me but to draw upon Her Majesty's Government.
5. The annual expenses of the Colony are moderate, and your GraceManuscript imageGrace will observe from an abstract herewith enclosed of the revenue and expenditure for the fiscal year ending the 31st day of October 1858, that the Income of the Colony exceeded the expenditure by the sum of over Three Thousand Two Hundred Pounds (£3200), and that too, at a period when much unusual expense was incurred in consequence of the discovery of Gold in Fraser River, and the number of people who were attracted to this place by that discovery.
6. The Public Accounts for the twelve months ending on the 31st dayManuscript imageday of October last not being completed, it is not in my power to forward a statement of the expenditure for that period by the present mail, but I will not fail to furnish your Grace with that information as soon as it can be received from the Agents of the Hudson's Bay Company. The Income derived from the sale of Public Land and from other sources of revenue will I am of opinion come short of the sum collected for the preceding twelve months and will probably be unequal to the expenditure, but the deficit will IManuscript imageI think not greatly exceed the excess of Income over Expenditure appearing in favour of the Colony for the year 1858.
7. By analysing the expenditure for the year 1858 it will be observed that a proportion exceeding two fifths of the whole outlay for that period was incurred for the construction of buildings and other indispensable public works of a permanent character and of the nature of investments, and not of simple expenditures the value being represented and remaining for the benefit of the Colony. The actual expenditureManuscript imageexpenditure for carrying on the Government of the Colony is thus reduced to the sum of Five Thousand Six Hundred Pounds (£5600).
8. Before closing this despatch I have to request that I may be informed whether the Charter granting Vancouver's Island to the Hudson's Bay Company be revoked, and whether I may legally make sales of and grant Titles for the public lands on the part of the Crown.
Trusting that these explanations may prove satisfactory.
I have etc.
Minutes by CO staff
Manuscript image
Mr Merivale
The topics in this desph involve Considerations which are at present engaging yr attention.
ABd 30/Jany
Mr Fortescue
1. I really think it essential, to prevent a partial bankruptcy, that the Governor should have authority to sell public land pending our long negociations with the H.B.Co. It seems to me there is no doubt this title continues in Manuscript imagethem till repurchase. I think therefore they should be moved to go on selling land as heretofore, & to allow the produce (pending present discussions) to be carried to the general revenue account of the colony. A short communication with Mr Berens would probably settle whatever there is of misconceptions about this, better than official correspondence.
2. As for the rest, the Governor must I think be cautioned against the expedient of "drawing on this country" of which he speaks. It seems to me that he is only driven to it by his unfortunate resolution to spend on improvements at the last moment, when he must have been aware that the finances of the Company were about to fail him. His calling the buildings he has raised a "permanent value" is a common fallacy with Governors who spend money in this way. We can hardly set up the Houses of Parliament as a "permanent value" against the sum they have cost.
I read on last Saturday, the Company's recent letter on the same subject.
HM Jan 30
Duke of Newcastle
If the arrangements proposed in the H.B.Co's letter (773), wh I saw with this, be carried out, without delay, the difficulty will be met.
CF 30
Manuscript image
I hope that No 773 means that, without money passing in settlement of the H.B.C. claims, upon agreement for so doing the Company will not interfere to prevent sales by the Crown. If so, as soon as the L. & E. Comrs have reported on the letter I will see Mr Berens and endeavour to bring the matter to a point.
N 1-2
Keep for the report.
HM F 7
Documents enclosed with the main document (not transcribed)
Manuscript image
"Abstract of the Income and Expenditure of the Colony of Vancouver's Island for the Year Ending October 31st 1858," dated 21 November 1859, signed by Joseph Porter, Accountant.
Douglas, James to Pelham-Clinton, Henry Pelham Fiennes 24 November 1859, CO 305:11, no. 871, 261. 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. https://bcgenesis.uvic.ca/V59058.html.

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