Ellice to Newcastle
Hudson's Bay House
14 May 1860
By accounts received from Vancouver's Island I learn that one of the measures recently adopted by Governor Douglas in his double capacity of Governor of Vancouver's Island and of British Columbia operated in a manner so unfavourably and as I think unjustly to the interests of the Hudson's Bay Company that I feel it my duty to bring the matter under Your Grace's notice.
Your Grace is no doubt aware that Governor Douglas has of late
In Decbr 1858.
imposed heavy duties on all goods imported into British Columbia. These duties he finds itManuscript imageit next to impossible to collect within the Colony of British Columbia, in consequence of the great extent of the Coast and the paucity of Custom houses, and, in order to meet the difficulty, he has fallen on the expedient of exacting the duties payable on goods entering British Columbia, before they leave the port of Victoria.
I venture humbly to represent to Your Grace, that in thus collecting the British Columbia import duties within the separate Colony of Vancouver's Island Governor Douglas acts illegally, and the Tax, instead of being an Import duty as respects British Columbia, becomes a duty on exports from Manuscript imageVancouver's Island.
As respect the interests of this Company, I have already stated that the measure operates unfavourably and in my opinion unjustly. The Hudson's Bay Company, as Your Grace is probably aware, has the principal Depot for its Trade at Victoria, where it is very easy for the Governor to exact the duties to any extent. But the American Trader and the Smuggler have no difficulty in evading the duties, for as they do not enter the port of Victoria, but go to the Coast of British Columbia direct—where there are no Custom-house Officers
Mr Hamley is Collector of Customs for B. Columbia. He resides at New Westminster: & arrived in the Colony in April/59. I know of no establishment of officers under him.
—they escape the duties altogether. And the consequence is that the Hudson's Bay CompanyManuscript imageCompany alone is made to pay the duties.
Herewith I have the honor of transmitting an Extract of a Letter addressed by Sir George Simpson to the Secretary of this Company, from which Your Grace will observe that in a recent trading voyage of the Hudson's Bay Company's Steamer "Labouchere" to the North West Coast of North America, the duties levied upon her Cargo, at Victoria, under the denomination of British Columbia Import duty amounted to no less a sum than £300. Moreover, the duties were exacted on the whole of her Cargo, although a portion only was intended for British Columbia—the remainder being intended for Trade with the Natives residing in the Territory rentedManuscript imagerented by this Company from the Russian American Fur Company.
I have no hesitation in saying that if this system of levying taxes be continued; if this Company's goods are to be taxed exclusively, while other Traders are enabled to Traffic all along the Coast without paying any duty at all; and if, moreover, the Company are to be called upon to pay British Columbia import duties for goods sent to, and to be consumed in, the Russian Territory; the result will be that we shall be ultimately forced to withdraw from a trade in which such unfair advantages are given to the Foreign Trader and Smuggler—or to establish the Depôts for our Trade within the Russian TerritoryManuscript imageTerritory where we shall not be subjected to measures of this character.
I would therefore most respectfully submit to Your Grace that measures should be adopted to stop such proceedings. I venture to think that your Grace will at once see the illegality of raising at Victoria the duties on the importation of goods into British Columbia. They might with fully as great justice be raised at Liverpool or London. The Colonies are entirely separate, and under separate Governments, the only connection between them being that the same functionary happens to be Governor of both. It will consequently be evident to Your Grace, that in levying duties at Victoria the Governor collects an export duty from Vancouver's Island, (for whichManuscript imagewhich he has no Warrant) and not an import duty into British Columbia.
I beg to assure Your Grace that, in venturing to bring this subject under your notice, it is not the wish of the Directors of this Company to evade duties legally imposed, and legally levied. All that we wish is that the British Columbia duties should be levied within that Colony, so that they may be imposed equally upon all parties trading with that Coast. If that were done, the duties would not be imposed on the Hudson's Bay Company alone, while small traders and smugglers were allowed to escape.
I have etc.
Edward Ellice
Depy Govr
Minutes by CO staff
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[The following minute to Blackwood has been crossed out:]
Mr Blackwood
The Despatch referred to is with the Printers: but I expect it back hourly.
SidyJoseph 16 May
Mr Elliot
The Proclamation which is impugned is doubtless No 3—dated 2 June/59. You will find it with 10782/59—which is annexed. The proviso of the 4 Sect. is what the H.B.Co complain of.
The first Customs Proclamn you will find at P. 41 in the 2d series of the B.C. Parly papers.
I think we can scarcely move in this case without a report from the Govr.
ABd 24/5/60
Sir F. Rogers
This you will see is a question on a customs law. For Frasers River there is now a local port in British Columbia. For places North of Fraser's River, Vessels are still to call and to pay their duties at Victoria in Vancouver Island. I believe that in all Customs arrangements, the principle of Vessels being obliged to call at some convenient Port of Entry instead of at every place on the coast they may desire to visit is recognized from the necessity of the case. But certainly to require payment in one colony of duties of Import for another Colony appears a strong measure. And independently of this the grievance assigned of having to pay on the whole cargo, when only part is intended for the Colony is primâ facie a just ground of complaint.
P.S. But then since I wrote this, Mr Irving has pointed out that the calling at Fort Victoria for places North of Fraser River is only optional: this makes a great difference; it renders it an accommodation afforded to shipping, instead of a burthen.
Whether lawful to tax one Colony for another is a different question.
TFE 25 May
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It would not, I apprehend be positively illegal for the Legre of Vancouvers Island to impose an export duty on goods exported to B. Columbia on the understanding that the proceeds of that duty shd be paid over to the Govt of B. Columbia. The arguments of the H.B.C. agst the policy & fairness of such a law appear very strong but they would have to obey it.
But the law actually passed, as far as I see, they could not have been compelled to obey, if they had chosen to resist it. Certainly a law passed by the Legre of B.C. (i.e. the Governor) could not compel any one to ackne the authority of Custom H. Offrs in Vancouvers Island—or, (except by a circuitous process wh has not been adopted)—subject them to penalties for setting it at defiance.
I should hope however that those who have over paid in V.C.I. duties wh, though exacted without any [real?] authority [there?], really became due when the goods on which they were paid were landed in B.C. wd not be at liberty to reclaim the money thus paid. The H.B.C. do not make any such claim.
I should think it wd be prudent to inform the Govr of B.C. Manuscript imagethat the authy wh he possesses of making laws for B.C. does not extend beyond the limits of that Colony and the sea within 3 miles of these limits—that all laws which he may pass professing to extend beyond these limits will be simply inoperative—(except perhaps in certain doubtful cases wh it is unnecesary to refer to)—& therefore that he must make provision for collecting within the
own limits all duties payable to the Govt of B. Columbia.
This as Mr Elliot remarks is already done with regard to Frasers river. Procln No 3 of 1850 [1859], section 4. But it is not done as to ports N. of Fraser's river; and I rather doubt whether, practically, the claim gives the option which by its language it seems to do. Vessels it says "may" clear at Fort Victoria for those ports; but if they do clear, must "pay…full duties" &c.
FR 28/5
I may perhaps be allowed to point out Manuscript imagethat the Proclamation in wh this provision occurs is of a class wh is referred as a matter of course & without comment by this Office to the Bd of Trade & Treasy, on whose examination of them the C.O. relies.
Sir F. Rogers
(Perhaps you wd. be good enough to look at this again.)
The case seems to stand in this way. By Proclamation of Decber 3 1858, Customs Duties were imposed on goods imported into B. Columbia, which were to be "ascertained, raised, levied, paid & recovered at Victoria". (B.C. Parly Papers Part 2. p. 42, 43). This Proclamation was approved of by Sir E.B. Lytton by desp. of March 19, 1859 (Parl. Papers p. 82), and continued in force (in this respect) until the 15th June 1859, when it was modified by Proclamation No. 3 of 2nd June 1859, acc. to which Queensborough (New Westminster) became the Port of entry for Fraser River & "the ports of B. Columbia adjacent to Fraser River"—and it was made optional, and wd. appear to me, for vessels proceeding to any "other ports of B. Columbia", or "any port in B. Columbia Manuscript imagenorth of Fraser River" (wh. expressions must necessarily mean the same thing), to clear either at New Westminster or Victoria—the latter provision seeming to be intended rather as a convenience than a restriction. It is strange that neither we nor the H.B.Co. have discovered the illegality of these Proclamations until now—when for nearly a year that illegality has, at all events, been reduced to a much smaller compass than that of the original Proclamation of Decber/58. (It will be observed that the "Labouchere" was proceeding to ports north of Fraser River.)
I sh. be disposed to answer by stating to the Co the nature of these Proclamations, admitting that their illegal character had escaped the notice of this Office, as well as that of the Treasury & Bd. of Trade, but drawing attention particularly to the 4th clause of the Proclamation of June/59, by wh. the payment of B. Columbia duties at Victoria wd. seem to be optional, saying at the same time, that the Govr wd. be called on for a Report, & instructed as proposed by Sir F. Rogers.
CF 29
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Mr Fortescue
I can hardly account for my own oversight in reading the 4th clause of the Proclamation No 3. I had overlooked the second sentence in it.
It is consequently clear that the power of clearing at Victoria is optional and this is very material.
I should be inclined to answer the H.B.C. somewhat more shortly than you propose—stating that their letter would be communicated to the Govr with special reference to their allegation that they were compelled to pay duty on goods not imported for Consumption in B. Columbia and drawing their attention to the 4th clause of the Procln No 3 by which the payment of duties at Fort Victoria had been discontinued as to one class of shipping & made optional as to the rest.
And to write to the Governor drawing his attention to the alleged effect of the Proclamation 1st in as much as it is said to be injurious to the honest trade because it is incapable of being enforced agst the smuggler—& 2nd because it is said to compel the H.B.C. to pay Manuscript imageduty on goods not intended for consumption in B. Columbia.
And pointing out clearly to him the limits of his legislative power as Govr of B. Columbia.
FR 29/5
CF 29
Write as above. This is a curious series of over-sights by so many Departments. I suspect however the grievance is more theoretic than practical.
N 31
Other documents included in the file
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Draft reply, Newcastle to Douglas, No. 33 (British Columbia), 15 June 1860 (extensive revisions).
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Draft, Elliot to Ellice, 13 June 1860, stating his letter would be forwarded to Douglas for report, and calling his attention to the proclamation of 2 June 1859.
Minutes by CO staff
Sir F. Rogers
As these drafts relate to a construction of Laws, and to the limits of the Governor's Jurisdiction I apprehend I am right in sending them at once to you.
Documents enclosed with the main document (not transcribed)
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Extract, Sir George Simpson, Governor-in-Chief of Rupert's Land, to Thomas Fraser, 2 March 1860, reporting the amount of duty paid on the cargo of the Labouchere on her last trip to the coast.