Berens to Newcastle
Hudson's Bay House
London
16 December 1859
I have the honor to acknowledge the receipt of Mr Merivale's letter of the 7th instant in which he informs me that Governor Douglas has reported, with respect to the advance of $27,000 made by Mr Dallas the Representative of this Company in Vancouver's Island, to defray the expense of Public Buildings at Victoria that it was "met by the surrender to Mr Dallas of the site of the Old Public Offices on condition of his placing at the disposal of Governor Douglas the sum of money obtained by the Sale." Mr MerivaleManuscript imageMerivale requests of me to inform your Grace whether any intimation has been received by this Company of the sale of this land, and of the arrangement made with Mr Dallas.
The letter which I had the honor of addressing to your Grace on the 4th ulto, and with which I transmitted a Copy of Mr Dallas' letter to the Secretary of this Company of the 14th September, contains the latest information we have received upon the subject, and, by reference to it, your Grace will observe that at that period no reference is made to the Sale ofManuscript imageof the Land in question and I consequently presume that it had not then been sold.
But it was about to be sold, as the company knows. See page 6.
With respect to the arrangement made between Governor Douglas and Mr Dallas in regard to the advance made by the latter of $27,000 I am at a loss to understand how under any circumstances it could have been provided for in the manner which Governor Douglas appears to have represented, because, as we read his communication, while on the one hand it is suggested that the advance in question was met by the surrender to MrManuscript imageMr Dallas of the site of the old public offices, it is added on the other that this surrender is made on the condition of Mr Dallas placing at the disposal of Governor Douglas the sum of money obtained by the Sale. Unless it is meant that the Government are to be responsible to the Company for the amount of such sale, this Company would appear literally to receive nothing in respect of the advance that has been made.
The local Govt of course are responsible and it was to be presumed that Governor Douglas applied the sum placed at his disposal in paying off the loan of $27,000.
But in point of fact, this Company entirely denies the right or power of Governor Douglas to deal with the land in question at all, as it formed partManuscript imagepart of the property possessed by this Company in the Island before the Grant made to them by the Crown and therefore entirely irrespective of it;
Under what title?
but we have been informed by Mr Dallas that Governor Douglas had attempted to treat this property as belonging to the Government, and upon that pretention had advertised it for Sale. This course of proceeding was immediately protested against by Mr Dallas on the part of the Company and, as we gather from Mr Dallas' communications, it was distinctly understood that inasmuch as the preparations for the Sale had proceededManuscript imageproceeded so far, and in order not to cast a slur upon the proceedings of the Governor, who admitted it to be Fur Trade Land,
Fur trade land.
the sale should be proceeded with under Mr Dallas' directions, and on account of the Hudson's Bay Company. It was also arranged between Governor Douglas and Mr Dallas that as the Public buildings were urgently required, Mr Dallas should advance—not the amount of the sale of the land—but the specific sum of $27,000, to enable Governor Douglas to proceed with the proposed Buildings,
This disagrees with Govr Douglas' Statement in 10759 par. 7 tho' the 2 sums are about equivalent.
it being distinctly understood that this advanceManuscript imageadvance was a loan which was to be reimbursed to the Hudson's Bay Company along with the other payments made by the Company under the provisions of Her Majesty's Grant.
I take leave to add that Mr Dallas' views are entirely borne out by the facts. The land upon which the old Buildings stand was the undoubted property of the Hudson's Bay Company before the Grant to them of the Island. The Buildings upon it were also erected at the expense of the Hudson's Bay Company. Indeed Governor Douglas has admitted that both the land and theManuscript imagethe Buildings belong to the Company as your Grace will see by reference to his address to the House of Assembly of the 7th May, and that fact was confirmed by Mr Pemberton, the Colonial Surveyor, in the course of a debate on the subject which took place on the 17th May last.
The land upon which Governor Douglas is now erecting the New Public Offices has also been represented by that Gentleman to be Government property, but I have reason to know that it is part of the land held by the Fur Trade long priorManuscript imageprior to the Grant from the Crown. The Company therefore will have no claim upon the Government for the value of this land.
From this statement I trust I have made it evident to your Grace, that the advance of $27,000 was actually a loan by this Company on Government account, and that Governor Douglas is in no way justified in representing the advance as being "met by the surrender to Mr Dallas of the site of the old buildings."
In order to place before your Grace information on the subject I haveManuscript imagehave the honor of transmitting herewith an Extract from the Address of Governor Douglas to the Assembly on the 7th of May last, and a Copy of Mr Pemberton's speech in the Assembly on the 17th of the same month.
I have etc.
H.H. Berens
Govr
Minutes by CO staff
Manuscript image
Mr Merivale
It is evident I think after comparing this letter with the Governors despatch of the 12th September (10759) and examining the wording of the 4th and 5th pages of that despatch, that the sum realized by the sale of the site of the old Buildings was placed at the disposal of Governor Douglas as a loan by the Hudsons Bay Company's agent, and not as was inferred from the words of the despatch as the price of land which belonged to the Colonial Government but to which they were unable to Manuscript imagegrant a title. Mr Dallas (the Coys agent) states that this loan was made on a distinct understanding that it was to be included with the other improvements made by the Hudsons Bay Company to be paid for by HM's Govt. Govr Douglas denies that it was any part of his plan to throw the cost of the new Buildings on HM's Govt. On this point therefore there is a distinct contradiction in the two statements, and Governor Douglas' despatch is certainly calculated to mislead.
Refer to the Governor with reference to the Duke of Newcastle's despatch No 24 of 1st Decr?
HT Irving 17th Decr
I agree with Mr Irving as to what is to be done.
But the more important part of this letter to us is that to which I have called attention in pencil, in which the company claims certain parts of Vancouver's Island (we do not know how much) as their own, in right of property, antecedent to and independent of Lord Grey's grant of the whole island—"Fur Trade Land" as they call it.
This claim rests of course on the same grounds as that which they press to similar property in British Columbia. Manuscript imageAnd, as I have said before, I apprehend it to be clearly without foundation.
It is worth while on this head to refer to the beginning of the correspondence of August 1848. It will be seen that the Company began by asking "to be confirmed" in the ownership of land in V.I. which they occupied thereby admitting (though cautiously) that they had no title except on confirmation from the Crown. The correspondence ended in a grant of the whole island, in which no distinction whatever is made respecting land previously owned by them, & the whole island was made repurchasable by the Crown. I apprehend therefrom that their case falls absolutely to the ground.
The British Columbia question is to be referred to the Judl Committee, & so I suppose must this: but I cannot but record my opinion that it is a mere afterthought of the Company, who are anxious to press every claim, however preposterous, in order to back up those claims on which they have a good or plausible case.
HM D 23
I am sorry to say there appears to be too good ground for this serious charge. It is not to be believed that this claim had been ever thought of when the others were put in. It appears to me that we should not appear even to admit it so far as to submit it without challenge to the Judl Commee. I think we should state that it is incomprehensible and ask for an explanation.
Refer as proposed to Govr whose proceedings are no less unintelligible.
N 25
Memorandum
Documents enclosed with the main document (not transcribed)
Manuscript image
"Extract of the Message of Governor Douglas to the House of Assembly, dated Victoria, V.I. 7th May 1859," as per despatch.
Manuscript image
"Extract from the Proceedings of the House of Assembly, Tuesday, May 17th 1859," as per despatch.
Other documents included in the file
Manuscript image
Draft reply, Newcastle to Douglas, No. 1, 2 January 1860.
Manuscript image
Draft, Merivale to Berens, 7 January 1860, agreeing that more information was needed regarding the disposition of the $27,000 advanced by Dallas, but questioning a number of other points raised in his letter (12 pages).
Minutes by CO staff
Manuscript image
This, as regards myself, is a liberal statement of the facts. It will be seen from 6854 annexed, that last year the Governor returned a list of "lands sold" in which the HB Co. figure as purchasers, from themselves apparently. I thought this at the time irregular, but there seemed no reason against it, if the price was properly paid & applied. But whether these are the same lands which they now claim as by anterior title, remains to be seen.
Minutes by CO staff
Manuscript image
Mr Merivale
In obedience to the directions of the Duke of Newcastle we had an interview, on the 2nd instant, with the Chairman, Deputy Chairman and one of the Directors of the Hudsons Bay Co, on the subject of the questions now in dispute between them and H.M. Government. Those questions relate:
First—to the amount to be paid to the Company on the resumption of Vancouvers Island by the Crown—and Second—to the Company's claim to Land in British Columbia.
In Manuscript image
In respect to the first the point in dispute had at one time been reduced to the question as to who should bear the expense of searching for Coal at Fort Rupert, amounting to £12469.4.7. The claim originally sent in by the Company amounted to £225,699.9.11. In conformity with an opinion of the Law Officers of the Crown they subsequently amended their claim by leaving out all but three items, vizt
£ S D
1. Balance for public works and Establishments.....8,505.6.11
2. Cost of sending out Settlers ..................25,550.-.—
3. Expense of Searching for Coal at Fort Rupert[…]12,469.4.7
£46,524.11.6
Manuscript image
To the two first items (assuming the details to be properly supported by vouchers) no objection was taken, but the last being objected to, on the ground that it appeared to stand on precisely the same ground as the Nanaimo Mine (which was not assumed by the Company) and that it did not fall within the expenditure which the Crown was found to take over, a reference was proposed on the point to Sir J. Coleridge. The Company refused this partial reference but proposed that the whole question of their claims should be referred to Sir J. Coleridge Manuscript imageor the Judicial Committee of the Privy Council. They withdrew at the same time their assent to the principles laid down by the Law Officers opinion of July 1858, and reverted to the original claim sent in by them in February 1858 subject to a deduction of £27,959, in respect of property belonging to them before the grant of the Island.
At our interview we found the Directors decided in their determination not to accept a reference of any isolated portion of their claim to arbitration. They alleged that their operations generally in Vancouver Island hadManuscript imagehad been a loss to them—that as far as the Company was concerned the most advantageous course would be that they should surrender the whole of their property in the Island on the terms of the grant of 1849—that they were confidently assured by their legal advisers that, with the deduction above described,
i.e. the Town of Victoria
they were entitled to do so, and that they were not bound in any way by an opinion of the Law Officers to which they had not been parties. We felt precluded by the correspondence between the Colonial Office and the Company Manuscript imagefrom lending any countenance to the proposed opening of the whole question, and even had it been otherwise we should have thought it very inexpedient that the Government should be driven to such a result. After much debate, therefore, we threw out as a possible basis of Settlement that the expense of the Fort Rupert Mine should be divided between the Government and the Company and that the Island (except the establishments of the Company) should be regranted to the Crown on Manuscript imagethe payment of the amount which might be found to be due on the first two items specified in the amended claim of the Company plus half the expense of the Fort Rupert Mine. This according to the accounts before us would amount to about £40,000, but as the first item has as yet been made up only to the end of 1857 we cannot state precisely what the amount would now be. It will more probably be less than more—but under any circumstances it is one of the charges that must necessarily fall on the Crown. The Directors without pledging Manuscript imagethemselves left us under the impression that such a proposal if made to them would not be refused.
The grounds on which we recommend this compromize are 1st that the Government cannot, in our opinion, hold the Company to their admission of the principle of the Law Officers opinion of July 1858, and compel them to agree to a reference on the single point of the Fort Rupert Mine. 2nd that if this cannot be done there is no choice between such a compromize as we propose and a reference of the whole question. 3rd that looking toManuscript imageto the looseness of the wording of the grant it is impossible, notwithstanding the Law Officers opinion to feel sure that an arbitration would not go against the Crown. 4th that if the Crown were compelled to defray the whole expense of the searches at Ruperts Mine and to take over the whole of the Company's establishments and effects, the money paid for them (stated in the Company's first account at about £190,000) would be to a great extent wasted and 5th that under any circumstances great delay must occur and the Settlement of the Island be meanwhile arrested. Manuscript imageThe possible saving of about £6,000 would we think but inadequately compensate for the risk of loss and the certainty of delay which would be thus incurred. If the Duke of Newcastle should acquiesce in the arrangement we have suggested it would be necessary that a proposition to that effect should be addressed to the Company. At present the matter stands merely as a suggestion by this Board of a possible arrangement.
Second in regard to their Land in British Columbia we found the Directors inaccessible Manuscript imageto a compromize. They stated that much of the Land (that at Fort Langley for instance) had been in their occupation since 1802-3 that this occupation, taken in connection with the Oregon Treaty, had given them they considered a legal title—that they were prepared to sell to the Crown at a fair valuation any portion of their land which might be required for public purposes, but that they were not prepared either to accept in exchange for it the same extent of Land in another part of the Colony, or Manuscript imagea Crown title to a smaller extent at the same spot. Under these circumstances there seems no course open but either to recognize the Company's title or to obtain a legal decision as to its validity. As the first course ought not we presume, to be adopted except as a matter of necessity, it only remains to consider in what manner the question as to the Company's title can be most conveniently raised. Probably it will be thought best to require them to state their case in suchManuscript imagesuch a form as will admit of its being brought under the consideration of the Judicial Committee.
FR 5 Decr 1859
Mr Fortescue
As to 1. I think Mr Murdoch's recommendation had better be followed.
And as to 2. on the whole I agree: though it is not really a legal question at all.
HM D 7
CF 9
I approve of both recommendations—of the first without any hesitation, and of the second as upon the whole the best and fairest that has occurred to myself.
Is it necessary to obtain Treasury sanction to the first before we propose it to the Company?
N 10
Manuscript image
Mr Merivale
I send you the Drafts of two letters to the H.B.Co. the one about land in B. Columbia prepared by Sir F. Rogers the other respecting the retransfer of Vancouvers Island by myself. Have you observed that in the letter of 10 July (7160) Mr Berens points out that the Co have not received any express notice of the intention to repurchase Vancouvers Island—but only an intimation that it was the intention of HM Govt to advise the exercise of the power of repurchase. I do not suppose that the Co have any disposition Manuscript imageto take advantage of such a plea, but I have thought it as well to draw your attention to it, since they have thought it worth while to start it.
TWCM 17 Decr/59
I am quite aware of the omission to give definite notice: & have once or twice called attention to it. But the difficulties of the subject have prevented any distinct steps from being taken. I add, for approval, a few words to this effect for it seems to me required?
HM D 22
Berens, Henry Hulse to Pelham-Clinton, Henry Pelham Fiennes 16 December 1859, CO 305:13, no. 12465, 192. 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/V595HB16.html.

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