No. 57, Financial
18th July 1865
1. I have the honor to transmit for your information the documents named in the margin
Governor Kennedy to the Legislative Assembly, 13th January 1865.
Acting Colonial Secretary, 12th January 1865.
Estimates of Revenue and Expenditures, 1865.
Estimates 1865 as passed by Legislature.
Speaker of Legislative Assembly enclosing Resolutions, 24th March 1865.
Governor Kennedy to the Legislative Assembly, 30th March 1865.
Acting Colonial Secretary, 28th March 1865.
Estimates of Expenditures, 1865 (Assitional).
Governor Kennedy to the Legislative Assembly, 30th March 1865.
Estimate 1865 (Additional as passed by Legislature).
relative to the Estimates of Revenue and Expenditure for this Colony for the year 1865.
2. The letters of the Acting Colonial Secretary will afford a minute explanation of theseEstimatesManuscript image Estimates and render it unnecessary for me to do more than draw your attention to some of the more important points.
3. The estimated Revenue for 1865 was less than that of 1864 by about $146,000, while the estimated Expenditure exceeded the total amount voted for 1864 by $107,000.
4. The apparent falling off of the Revenue ($146,000) is accounted for by the exclusion of the LandRevenuesManuscript image Revenues, $33,000, and of sums amounting to $117,000 and consisting of a debt from the Government of British Columbia, paid off in 1864, and balances (reduced to $11,000) in the hands of the Crown Agents, and of the Road and Harbour Loan.
5. The increased expenditure compared with 1864 of $107,000 may be explained partly by the addition of various small amountsproposedManuscript image proposed with a view to the greater efficiency of the Public Service, but is chiefly owing to sums which are either larger than corresponding votes for 1864 or are altogether new—
Conveyance of Mails (increase) $21,451
Goldstream to Nanaimo Road, pursuant
to wish of Legislative Assembly (new) 23,000
Goldstream to Sooke Gold Mines (new) 10,000
Reimbursements ($15,148 for erection of
Lighthouses and $34,066 due to Crown Revenue) 49,214
Immigration (increase) 7,000

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6. The Legislature voted a sum of $298,618 in lieu of $390,466 proposed in the Estimates submitted to it.
7. A commentary upon the votes thus come to will be found in the letter of the Acting Colonial Secretary and in my Message to the Legislative Assembly in reference to additional Estimates of Expenditure which I deemed it my duty to submit in order to procure votes of sums rejectedbyManuscript image by the Assembly and which were essential to enable me to carry on the Public Service and to meet the just liabilities of the Colony.
8. Additional votes were agreed to by the Legislature amounting to $14,940.
9. It will be seen that the total sum voted was $313,558, and the estimated Revenue being $239,799 there remained $73,759 to be met by the provision of additional Ways and Means.
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10. I would draw your attention to the fact that the Legislative Assembly has declined to vote any Salary for the Surveyor General, and has only voted $1455 (£300) with fees, as salary for the Attorney General under the head "Provisional and Temporary."
11. The Assembly also refused to vote a sum of $15,148 95/100 submitted both in the original and additional Estimates, toenableManuscript image enable me to pay one half of the moiety of $12,493.19.9 advanced by Her Majesty's Government to defray the cost of the erection of Lighthouses as required by the Duke of Newcastle's Despatch No 45 dated 2nd January 1865. In relation to this subject a correspondence which passed between the Governor of British Columbia and myself will be found among the papers transmitted herewith.
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12. In like manner I submitted a sum of $34,066 to repay the moneys advanced by me out of Crown Revenue in accordance with the undertaking of the Assembly contained in Resolutions transmitted in my Despatch No 45, dated 13th July 1864, and treated of in your Despatch No 38 dated 16th September 1864. The Assembly however declined also to vote this sum.
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13. It is I think matter for much regret that the Assembly should have failed to recognize the propriety of voting moneys to meet these liabilities and I will avail myself of an early opportunity of again laying the subject before them.
I have the honor to be
Your most obedient Servant
A.E. Kennedy
Minutes by CO staff
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Sir F. Rogers
I should say that this Colony was drifting into financial troubles which the Governor has no power whatever of averting.
The "ways and means" provided by the Assembly for the expenditure of 1865 fell short by a sum of upwards of 70,000 dollars.
Fortunately the Governor will keep the Crown Revenue of /65 distinct from General Revenue.
The Assembly repudiates the repayment to the English Board of Trade a moiety of the sum of £6246.19.10 which was advanced for the building of 2 Light Houses on condition of repayment. (B.C. was liable for a similar moiety & G. Britain has given £6246.19.10 to the service.) I observe that Dr HelmckenManuscript image (Speaker of the Assy—& Son in Law to Sir James Douglas) wd ride off from the bargain by saying that when the matter was under discussion in the House it was decided that this debt shd be liquidated out of the Crown Land Fund. But this excuse can hardly be admitted. The proposal was never submitted to the S. State, and could not have been agreed to. In the mean while what are we to say to the Bd of Trade, whom we are bound to see repaid their advance? It is impossible to charge the debt to the Crown Revenue & never was so intended. It seems to me a case of repudiation on the part of the Colony & must make us cautious in future. It shd be observed that B. Columbia has not yet paid her share. But she has not appealed against the claim. Again last year the Colony being in great straits, & no money in the Colonial Treasury the Governor consented, on an indemnity being given him (see 8114) to pay certain public Officers their Salaries out of Crown Revenue. Mr Cardwell, under the pressing circs of the case, as represented to him, sanctioned this step (see desp. 16th S/64).
The Assembly decline repayment. Second instance of repudiation.
Further they refuse to grant a Salary to the Surveyor General, & give a "temporary & provisional" salary of £300 a year to the Office of Attorney General. It is impossible to make appointments of good men from home to these Offices on such terms.
All this is a matter for serious consideration but as the Governor says in the last par: of his despatch that he will resume the subject on some early occasion I imagine that his further report must be waited for.
ABd 19 Sep/65
Govr Douglas 15 Jany/59
In Jany/59 Governor Douglas called the attention of the S. State to the urgent necessity for the early erection of Light Houses upon some of the Approaches to the Harbours & Anchorages of V.C. Isl. and B. Columbia. He mentioned that the Govt of the U. States had already established Lights in certain other places convenient for our trade as well as theirs. Govr Douglas added I am not aware of any funds that may be appropriated for these objects, nor do I know to what Dt of Govt I shd properly apply for assistance. The infant state of the 2 Colonies precludes the possibility of their being able to help themselves, & the matter being one wh. it is manifest must materially affect their future development I trust you will pardon me in bringing it before you &tc &.
To Bd Trade 31 March 59
The S. of State, considering that we ought surely to follow the example of the U. States, & knowing that the want of Lights had been complained of by the Admy endeavoured to persuade the Bd of Trade to include the expense of the required Light houses within the class of "Imperial Lights" in their application to Parlt.
T-y Lr 4 May/59
The Treasury declined putting the charge on the General (Parly) Estimate for Lighthouses abroad: but they agreed to charge the B. Columbia Estimate (we had none for V.C. Island) with the sum of £7000-the amount at that time supposed to be the cost of the work—"with the understanding that one half of that sum would be hereafter repaid from Colonial funds."
(I see the T-y subsequently changed their minds & did put this item on the "Lighthouses abroad" Estimate. 4 Aug/59.) The cost ultimately reached £12493.19.9 (B Trade 24 Dec/63).
S. State to Govr 11 May/59
The Govr was apprized on the 11 May that the Govt would send out all that was requisite for setting up the Light Houses (saving of course materials on the spot) that the Treasury had "consented to advance the £7000 on condition that one moiety of it shd be repaid by the Colonies of V.C.I. & B.C. jointly." It was also added With regard to the repayment by B.C. & V.C.I. to the Imp. T-y of the moiety of the advance of £7000 I must leave it to you to decide the proportion of that sum whh it wd be equitable that each Colony shd contribute, but I must instruct you that this debt shd be repaid within the earliest practicable period.
23 July Govr D.
On the 23 July/59 the Govr ackd the S.S. desph of the 11 May preceeding & said I feel highly gratified by the intelligence conveyed in yr desph of the intention of H.M.G. to advance the sum of £7000 for the construction of these important works, on the condition that one moiety of it shall be repaid by the Colonies of V.C.I. and B.C. jointly, & measures will be taken accordingly for that purpose.
24 Decr. 63 B. Trade
S.S. to Govr 2 Jany/64
As soon as we were informed by the Bd of Trade that the total cost of the Houses was upwards of £12000 the S. State informed the Govr of the fact, &, adverting to the conditions on which the Impl Govt consented to advance money for the work, requested the Governor to cause the sum of £6246.19.10 to be repaid in the proper proportions by the two Colonies.
S.S. 66. 15 Aug 61
Govr D. 10 Feb/62
In ansr to a desph from this Office saying that the Treasury wd pay a bill drawn by the Governor on acct of the Lighthouses he wrote thus: I feel very grateful to H.M.G for the essential aid afforded by the advance of the funds required for the erection of these L. Houses; for otherwise the work cd not have been undertaken & successfully carried through. I will take the earliest fitting oppy of bringing to the notice of the Legislature the necessity of providing for the repayment of the proportion of the advance due from the Colony, but yr G. is aware our revenue is very scanty, & our wants numerous & urgent, & I doubt not H.M.G. will afford a reasonable [time] to meet our obligations.
The result is declared in the despatch before you.
Refusal to reimburse the Crown Revenue the sum of 34,066 dollars advanced to the public service.
You are disposed to doubt whether the claim wh. the Govr has advanced to be reimbursed 34,066 dollars has any thing to do with the pledge of the Assembly of 2 July/64.
I have nothing to produce in explanation of this point besides the Governors own Letter to the Assembly of the 30 March last (in 9074) in which he speaks of that sum as the Estimated balance of Crown Revenue wh. ought to have been in the hands of the Treasurer on the 31 Decr/64 & wh: has been disbursed, in the absence of other funds, for local purposes, including all Salaries paid for 1864. He goes on to speak of this sum as being that wh. the Assembly had undertaken to replace out of ordinary revenue by their resolution of 2 July 1864.
The inference I draw is that the resolution of 2 July promises to repay the 34,066 dollars. But I may be mistaken.
ABd 27 July
Previous papers referred to in desp.
There seem to be three questions. 1. Reduction or refusal of Salaries wh the Lege wish to throw on the Crown Reve. 2. Refusal to pay share of expenses of Lighthouse. 3. RefusalManuscript image to indemnify the Govr for paying certain salaries out of Crown Reve he not being authd to do so by the Secy of State.
1. On the first point I imagine that in the present state of affairs the Crown Revenue is simply unequal to bear the proposed burdens. But I think that part of the Surveyor Generals Salary is a fair charge on Land Revenue.
AsManuscript image to the second and third points, vide Mr Blackwood's separate minute, the completeness of wh I take for granted.
2. Lighthouses.
It wd seem that this department promised the Treasy that half the expense of the Lighthouse shd be born by B.C. & V.C.I. The dept was competent to pledge the B.C. Revenue and the Crown Revenue of V.C.I. But it was not competent to pledge the General Revenue of V.C.I. and the Legre of V.C.I. may, as far as I see, in strict right, refuse to be bound by the implied pledge of Govr Douglas (in the desp of wh copy is annexed).
See P. 5 of my mem.
If we cannot, now or at some future period, pay it out of the Crown Reve, I do not see how we can enforce our claim agstManuscript image an unwilling Lege either in fact or in argument.
3. On the 2nd of July 1864 (Res: 2) the Assembly pledged itself "to indemnify H.E. the Govr in case he shall take the responsibility of paying the s[ai]d salaries" (1/2 years salaries to C. Justice Atty Genl Col Treas Surveyor General) "out of the Crown Revenues while awaiting further instructions from HMs Govt." It is not clear that he has received any instructions.
[but qu?] No 30 of 16 Sept 1862.
Those instructions shd now I suppose be given & in that case the Assly will stand pledged to pay the salaries of the above officers for the half year endg July 1864 if not also for the 1/2 year endg January 1865.
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But I can not see that the Assly has any where pledged itself to the whole outlay from Crown Funds for General purposes—stated at $34,066.
It may be right that they shd pay it but I see no evidence that they have acknd that right.
The ultimate point to be aimed at is I suppose the transfer of all V.C.I. matters to the V.C.I. Govt & Legislature—the Legislature obtaining control over the Crown Fund and satisfying all the demands of the Impl Govt.
This we can only accomplish by making the Crown Fund available to relieve our own difficulties & so managing it as to shew that it is worth while for the Colony to take it on our terms.
The expenditure to which it shd be in this view exclusivelyManuscript image devoted, seem to me as follows: 1. Colonial Payments to wh the faith of the Home Govt is pledged—viz—as I understand the salaries of the Govr & Col. Secretary. 2. Its own maintenance & increase—in which will be included the salaries of the Surveyor Gen. & his staff so far as his duties have this object. If he receives no payment from the Genl Reve, it wd be competent to him to refuse to lay out roads &c (except for the purpose of increasing the Cn Reve) or plan further building. Under this head wd also be included (if necessary) explorations. 3. Discharge of liabilities to the Home Govt—such as the light house debt. 4. Conduct & conclusion of matters wh the Home Govt has practically treated—such as the negotiationsManuscript image with the H.B.C.—e.g. I wd not object to pay Lowenberg for his Lot Z out of Crown Funds if they sufficed for the purpose.
On the whole therefore I shd be inclined to say to the Govr that you regretted the refusal of the Assembly to pay for the Lighthouses and to replace the expenditures from the Crown Fund of $34,066 (giving reasons)—that Govr Kennedy wd of course under these cirs not be at liberty to make further advances for Crown Funds except for purposes specially sanctd by you—that he wd continue to pay the Salaries of the Govr & Secretary—that he wd also be at liberty to pay part of the Surveyor Genl's Salary—viz—so muchManuscript image as was a fitting remuneration for Services rendered to the Crown Revenue—that the officer cd under these circumstances not be under an obligation to perform that part of his duties wh are properly paid for from the Genl Revenue.
That you do not doubt that the Lege will repay those advances on acct of salaries wh it pledged itself to repay by the Resolution of 2 July 1864 if required by the Home Govt.
That the Crown Revenue subject to the above payments & to such others as may be necessary for its own administration maintenance & increase, need be carefully husbanded to meet liabilities like that respectg Lighthouses in whManuscript image the interest or Credit of the Crown is concerned & which the Legislature refuse to adopt.
I minute this with a little hesitation however from want of familiarity with the correspondence on these matters.
FR 29/9
With Mr Blackwood's supervision as to the accuracy of the facts, I think the Despatch suggested by Sir F.R. may be drafted.
EC 29
Other documents included in the file
Documents enclosed with the main document (not transcribed)
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Kennedy to Legislative Assembly, 13 January 1865, unnamed newspaper clipping, forwarding the annual estimates for 1865 and "an explanatory statement from the Acting Colonial Secretary."
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Acting Colonial Secretary to Kennedy, 12 January 1865, unnamed newspaper clipping, forwarding the estimates and providing a detailed explanation of their contents.
Minutes by CO staff
This is worthy of notice.
Documents enclosed with the main document (not transcribed)
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Kennedy to Douglas, 5 April 1864, forwarding a despatch from Cardwell on the subject of sums advanced for the construction of lighthouses, and asking what provision had been made for repayment and what proportion of the total sum was to be paid by the colony.
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Douglas to Kennedy, 11 April 1864, advising that it had been decided that Vancouver Island and British Columbia should "defray an equal proportion of the liability on account of construction and also of the cost of maintenance."
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J.S. Helmcken, Speaker, to Kennedy, 24 March 1865, forwarding resolutions passed in "Committee of Supply."
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Copy of various resolutions relating to salaries for public servants, conveyance of mails, and public works, no date, signed by R.W. Torrens, Clerk of the House.
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Kennedy to Legislative Assembly, 30 March 1865, unnamed newspaper clipping, forwarding letter from the Acting Colonial Secretary.
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Henry Wakeford, Acting Colonial Secretary, to Kennedy, 28 March 65, unnamed newspaper clipping, commenting at length on the annual estimates for 1865 recently passed by the House of Assembly.
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"Abstract of additional sums required to defray the expenses of the Colonial Government of Vancouver Island for the year from 1st January to 31st December 1865," with summary attached, signed by Wakeford.
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Kennedy to Legislative Assembly, 30 March 1865, unnamed newspaper clipping, acknowledging receipt of the resolutions as noted above and remarking upon their contents.
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Newspaper clippings, British Colonist, 22 February 1865, and Daily Chronicle, 24 February 1865, reporting the debate concerning the sum of $34,066, and whether it should be reimbursed to the Crown Revenue.
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Printed copy of "Colonial Estimates, (Additional), Vancouver Island, B., 1865," signed by Wakeford.
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"Abstract of the probable Revenue of the Colonial Government of Vancouver Island for the year 1865 showing also the Revenue received under the similar heads in the year 1863 being the year previous to that in which the Estimates are prepared," with summary attached, signed by Wakeford (thirty-one pages).
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Printed copy of "Colonial Estimates, Vancouver Island, A. & B., 1865.
Other documents included in the file
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Draft reply, Cardwell to Kennedy, No. 59, 12 October 1865, ending amended.
Minutes by CO staff
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I do not understand that the Assembly have repudiated this manifest
obligation; and I do not doubt that they will discharge it if it is specifically brought before them.
Other documents included in the file
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Draft reply, Cardwell to Kennedy, Separate, 12 October 1865.
Minutes by CO staff
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The probability is that the Govr will lay before the Assembly the
other despatch of this day's date respecting the Lighthouses. And I am not without a faint hope that they may think better of their late decision and pay their debts to the Govt. Under this idea it appeared to me that it would be more appropriate to put into another despatch the injunction to the Governor not to trust the Assembly with any more of the money, & to be careful with that which he had in hand. An exhibition of mistrust in the same despatch in which a request for repayment was made seemed to me not quite adapted for ensuring or expecting success.