Berens to Newcastle
Hudson's Bay House
4 November 1859
I have the honor to acknowledge the receipt of Mr Merivale's letter of the 31st ultimo transmitting a copy of a correspondence which has passed between your Grace and Governor Douglas on the employment of British Columbia Officials in the service of the Government of Vancouver's Island.
The portion of that correspondence which seems most particularly to interest this Company is the announcement made at the end of Your Grace's letter to Governor Douglas, that Vancouver's Island like other British Communities however smallManuscript imagesmall "must expect no assistance from without towards the ordinary and regular expenses of her Government"—and I shall take care that the attention of the Company's representative in Vancouver's Island, to whom the whole correspondence will be forwarded by the next post, shall be called to that intimation.
I avail myself of this opportunity of referring your Grace once more to a letter which Mr Fortescue addressed to me on the 12th July last by Your Grace's directions, and in which after referring to certain advances made by this Company's representative in the Island at Governor Douglas's earnest request for the erection of some public buildings which were pressingly requiredManuscript imagerequired, you informed me that Her Majesty's Government would not consider themselves bound by the conditions of the Grant of Vancouver's Island to take upon themselves the repayment of any cost thus incurred, after the actual expiration of the Grant, or in the immediate prospect of its expiration.
That letter I had the honour of answering on the 19th of the same month, and I at the same time directed that a copy of the correspondence should be forwarded to Vancouver's Island for the guidance of Mr Dallas, the Company's representative there. The last Mail has brought Mr Dallas's acknowledgement of the correspondence, together with a letter addressed to the Secretary of this Company givingManuscript imagegiving a detailed account of the circumstances under which he consented to make those advances.
I now have the honor of transmitting that letter for Your Grace's information, (together with a Copy of a correspondence on the subject which has taken place between Mr Dallas and Governor Douglas), and I venture to hope that the explanations which he gives will satisfy Your Grace that under the circumstances he could not have acted otherwise.
I have etc.
H.H. Berens
Minutes by CO staff
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Mr Elliot
See Minute annexed.
HT Irving 7 Novr
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Mr Elliot
The grant of Vancouvers Island to the Hudsons Bay Company reserved power to H.M.'s Govt to repurchase the Island, on making payt to the Company in consideration of the sums expended by them and the value of their establishments, at the expiration of a license of exclusive trade granted to the Company.
That license expired on 30 May 1859, and HM's Govt determined to exercise their power of repurchase.
During the company's tenure of the Island, the produce of the land sales were paid over by the Governor to their agent who supplied the funds necessary for the civil government.
The company were cautioned by this Department against continuing to make advances to the Governor after the expiration of the license, andManuscript imageand the present letter contains a statement of all the advances made by their Agent since that date. They are 1. $5,000, for liabilities incurred previously to the 30 May 59.
2. $2,000 as a loan, to extricate the Governor from financial difficulties in which he was thrown by being no longer able to draw on the company for his supplies.
3. $27,000 for the erection of Public Buildings.
The first two items do not seem to require notice, but I would call attention to the third, in connection with the Governor's despatch No 47/10759 now under acknowledgement.
The erection of these Buildings was first reported by Governor Douglas in his despatch No 17 of 14 May from which it appeared that he had obtained the necessary funds from Manuscript imagethe Hudsons Bay Coy's Agent, and that he intended to include the Buildings with the other improvements effected by the Company during the grant of the Island, & thus throw the cost on the Crown.
The Duke of Newcastle informed him, on 12th July 59 that this could not be allowed, and that if he relied on the cost being borne by HM's Govt, he must at once discontinue all further expenditure upon them.
The Governor replied, No 47, 12th September, that the circumstances had been misapprehended here, and that the cost of the buildings has been defrayed by the sale of a piece of land in Victoria reserved by the H.B. Compy for Govt purposes.
But the present letter from the Compy encloses one from their Manuscript imageAgent in which he states that he was reluctantly induced to advance the $27,000 for the Buildings on condition that the sum advanced should be passed by the Governor as fairly coming within the head of sums expended by the Company during the period of the grant of the Island.
It appears to me that the statements of Governor Douglas & of the Company's Agent are somewhat contradictory.
If the explanation is that Governor Douglas had in the first instance intended to throw the cost on the Home Govt and that finding that this course was disapproved by the Secretary of State, resorted to the expedient of disposing of the land referred to in his despatch, some misgiving Manuscript imagemay be felt whether the interests of the Colony may not have been sacrificed by a forced sale.
I would suggest that the present letter from the Company and its enclosures should be sent to the Governor, that it shd be pointed out that they "confirm the surmise"
Instead of these words I would prefer "agree with the supposition originally formed here".
that it was intended in the first instance to throw the cost of the Buildings on the Home Government, and that he shd be asked for further information respecting the sale of land referred to in his despatch No 47, both as to the extent of land & mode of sale.
The Hudsons Bay Company might be informed that the Duke of Newcastle understands that the advance of $27000 dollars by their Agent has been met by the sale of Land in question, asking Manuscript imageat the same time whether they have received any report of the transaction?
HT Irving 7th Nov
This appears to be right, I think.
TFE 10 Nov
Duke of Newcastle
I think that the Govnr's attention ought to be called to the statement of Mr Dallas that the funds for the Government buildings had been advanced by him on condition that the sum sh. be passed by the Govnr "as fairly coming within the head of sums expended by the Co. during their grant of the island," and that he sh. be asked for an explanation. This statement is irreconcileable with Mr Douglas' account of the transaction in his desp. of 12 Sep., or appears to be so, indeed down to that very date, he was endeavouring to obtain supplies from the Agent of the Hudsons Bay Co. on the Manuscript imageground that "their charter had not yet been formally determined by Her M's Govt."
CF 11
The date of the Governor's despatch No 10759 is identical with the last letter of the somewhat angry correspondence between him & Mr Dallas, and I must say the new light thrown by the latter upon the transaction which induced my call for explanation in July is little creditable to the Governor's candour—for under any circumstances the most favorable to him he has only given a half explanation of what he has done.
There is of course no need to send to him copies of any of the enclosures in the letter from the H.B.Cy except the first, but the fact of their having been transmitted here should be notified to him and Manuscript imagehe must be called upon for explanation in the terms of Mr Irving's Minute.
The statement of Govr Douglas in 10759 should be communicated to the H.B.C. in answer to this letter of Mr Berens and they should be asked whether they have received any intimation of the sale of the land and of the arrangement said to have been made with Mr Dallas.
N 22
Documents enclosed with the main document (not transcribed)
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A.G. Dallas to Thomas Fraser, Hudson's Bay Company, 14 September 1859, explaining the circumstances and conditions upon which he had agreed to advance Douglas the funds needed for new public buildings, and enclosing copies of a subsequent correspondence with Douglas.
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Douglas to Dallas, 19 August 1859, asking why he had refused payment of an order for $708.30 on account of expenses incurred by the sheriff of Vancouver Island.
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Dallas to Douglas, 21 August 1859, explaining that there were no funds available from the proceeds of land sales with which to meet the demand.
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Douglas to Dallas, 23 August 1859, asking whether he declined "to furnish the funds necessary to carry on the Civil establishment of the Colony" and expressing his view that the Hudson's Bay Company was still under the obligations of the grant.
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Dallas to Douglas, 1 September 1859, declining to say whether funds would be made available or not until he knew whether monies owing to the company by the colony were to be paid, and requesting vouchers for certain advances already made.
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Douglas to Dallas, 6 September 1859, stating that he had instructed the colonial surveyor not to pay over the land revenues, because he had not yet received a clear answer to his question of 23 August, and asking for rectification of the surveyor's accounts relative to the sale of certain "Government reserved land."
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Dallas to Douglas, 9 September 1859, continuing discussion on the same topic.
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Douglas to Dallas, 9 September 1859, asking whether an order for $24 on account of colonial expenses had been refused with his "knowledge and consent."
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Dallas to Douglas, 12 September 1859, stating that payment had been refused with his knowledge and consent.