Colonial Despatches

We have to acknowledge your letter of 5th instant, enclosing a further communication from the Hudsons Bay Company, on the subject of their claim to be indemnified to the extent of £12.469.5.7 for expenses incurred in searching for Coal at Fort Rupert in Vancouvers Island.

2. In our Report of 26th Novr last we pointed out that a claim on account of another Coal mine atat Nanaimo which had been originally put forward by the Company had been subsequently withdrawn, and we expressed an opinion that the Coal Mine at Fort Rupert must stand on the same footing, and that if the Company were to receive the Profits where the working had been successful, they must also accept the loss where it had been unsuccessful. To this the Company answer that the Coal Mine at Nanaimo was on Land purchased by the Hudsons Bay Company while the works at Fort Rupert were on Government land, that the Royalty on the working ofof Coal was calculated upon as a source of Revenue—and that if the Fort Rupert workings had been successful it would have had a material influence on the prosperity of the Colony. The Directors consider that under these circumstances the Company have a claim to be reimbursed by the Government the expense incurred in the exploration of this land.

3. To this it is obvious to answer, that if the working of Coal Mines fell legitimately within the duties of the Company by reason of their Territorial possessionpossession and ownership of Vancouvers Island and if the Company are prepared to say that had the Mine been successful the whole profits derived from the sale, lease, or working of it (less the 10 per Cent allowed them under the grant of 19th January 1849) would have been carried to the credit of the Colonial Revenue, then the Company are entitled to claim from H.M. Government a reimbursement of the expenses of searching for this Coal. But if the mine supposing it to have been successful would have been purchased by the Company, as theythey purchased that at Nanaimo, or if the Company would have derived any direct pecuniary advantage from it, then the expenses incurred must be looked upon as part of a commercial speculation which has failed, and must be borne by those who undertook it. The terms in which the letter of the Company is expressed and their allusion to the "Royalty" on the Coal would lead us rather to the latter conclusion. At the same time we feel the difficulty of coming to any confident conclusion on a point which must be decided principallyprincipally with reference to the intentions of third parties which intentions are to be inferred from circumstances many of which are unknown to us.

4. On the whole we see no other course than to call on the Hudsons Bay Company to state whether it was their intention, if the search at Fort Rupert had been successful, to sell or Lease the Mine to themselves, or in any way to hold or work it with a view to their own advantage. Considering the high character of the Directors of thatthat Company we think Her Majesty's Government may safely rely on any assurance which may be given by them on this point.