Colonial Despatches

I have to acknowledge your letter of 8th instant with one from the Treasury enclosing a further report from Mr Andoe on the amount to be paid to the Hudson's Bay Co for the reconveyance of VanCouvers Island to the Crown.

2. The position of the case is as follows. The Company sent in a claim amounting to £53.569.14.2. Mr Andoe to whom it was referred suggested the disallowance of items to the extent of £26,157.3.10 reducing the claim to £27,412.10.4. Mr Andoe's report was communicated to the Company. When the papers were subsequently referred to this Board I submitted that two items disallowed by Mr Andoe vizt Commission on unpaid Land instalments £2405.13.10 and interest on expenditure stated by the Company at £3279.6.5 might fairly be allowed but I submitted whether a greater reduction ought not to be made on the claim of the Company for the maintenance of Settlers under the circumstances explained in my report of 18th March last—Mr Andoe in his letter of 24th ultimo adopts that view and thereby after allowing the Commission and interest reduces the claim of the Company to £28,995.14.11. The Lords of the Treasury concurring with Mr Andoe announce that they would not feel justified in submitting to Parliament any vote beyond that taken last session in respect of the claims of the Company.

3. The Company on the other hand maintain the justice of the claims they originally put forward but agree to accept as a compromize the sum of £35,000. The question between them and the Crown is therefore a sum of £5,000.

4. The case is somewhat complicated by the fact that Mr Andoe's first report admitting the claim of the Company to the extent of £27,412.10.4 is known to them and that they are aware that their claim for Commission on unpaid Land instalments and for interest cannot be resisted. If these were added to the above sum of £27,412.10.4 they would make a total of £33,097.10.7. It was on these grounds that I suggested in my report of 18th March last that a payment of £32,000 would not be excessive, and that it would be good policy and economy even to pay £35,000 rather than have recourse to legal proceedings to compel the Company to reconvey the Island. That opinion I repeated in my report of 12th ultimo and I continue to adhere to it. If the Company are determined not to accept a balance of £30,000 in full of their claim, and compel the Crown to resort to legal proceedings it can scarcely be doubted that the expense will be great—the result doubtful—and the delay most injurious. I do not think they would be compensated by a saving of £5000 even if the decision should eventually be in favor of the Crown.