Colonial Despatches

I am commanded by the Lords Commissioners of Her Majesty's Treasury to acquaint you for the information of the Duke of Newcastle that Their Lordships have had under Their attentive consideration the measures proposed in your letters noted in the margin for the adjustment of the financial difficulties of British Columbia.

Their Lordships fully recognize the obligation of co-operating with His Grace, as far as is consistent with Their duty to the Public in this Country for this purpose, and in endeavouring to place the affairs of that Colony on a sound and satisfactory footing.

With this view My Lords deem it advisable to re-state the position ofthe the Colony in its financial relation to the Imperial Government for the years 1859 and 1860.

In these years Parliament having voted £38,000 for the maintenance of the Royal Engineers on service in British Columbia, the Bills drawn by the Governor on account of the Engineers amounted to £60,026, leaving a debt as against the Colony, under this head, for these two years, of no less a sum than £22,026, as adverted to in your letter of 22 April. There is also the sum of £6,900 due to Her Majesty's Government for the Silver Specie sent out in 1860, and for which their was an engagement on the part of the Governor that a corresponding amount of the Parliamentary Grant should be undrawnand and there are the following sums chargeable to the Colony, vizt
£152. 3.8 for the Assay Office
34. 6. Passages of
35. 7. the Bishop
£221.16.8

With regard to the £22,026, the Duke of Newcastle in Sir F. Rogers' letter of 22nd March urges that a portion of this excess (amounting so far as can be at present ascertained to £11,322) being for the extra cost of the Supplies necessary for the use of the Royal Engineers should be defrayed from Imperial resources, while His Grace admits that the remainder, vizt £10,704 incurred in connection with the employment of the Corps on Public Works, Roads, Bridges, and Surveys is properly chargeable against the Colony as a debt.

Assuming this calculation to be correct, My Lords are prepared to accede to His Grace's proposition in this respect upon the clear understanding that this sum of £10,704 shall be repaid by the Colony in the year 1863.

With regard to the £6,900 and the £221.16.8, My Lords are under the necessity of requiring that they shall be repaid during the present year.

My Lords admit the importance of developing the resources of the Colony by Roads and other public works, and although the Colonial Revenue for the present year does not seem over estimated at £90,000, yet after deducting the fixed charges together with the repayment of £7,121.16.8 to Her Majesty's Government as already referred to, and the share which the Colony will have to bear this year of the cost of the Royal Engineers, a less sum perhaps will remain available for Public Worksand and Roads than it may be for the interest of the Colony to expend in that manner.

My Lords will therefore not object to the necessary steps being taken to raise a Loan not exceeding £50,000 with a provision for a Sinking Fund.

The Proclamation already issued by the Governor for raising a Loan being defective in several particulars, Their Lordships annex a Memorandum with reference to the Roads Loan Act of 1861, shewing the amendments necessary for enabling the Agents to raise money in this Country, also a draft clause relating to provision for a Sinking Fund, with a form of Debenture, and They request that the Duke of Newcastle will convey the necessary instructions to the Governor to pass an amended Proclamation accordingly.

With regard to the year 1861, My Lords observe that the Bills drawn by the Governor for the Colonial Pay for the Royal Engineers amount to £11,000, which is the sum provided in the Votes of Parliament for the year 1861-62. My Lords therefore observe that no overdrafts have been made by the Governor in respect of the past year.

During the current year the Governor has already drawn to the extent of £4,000 against the sum of £7,200 provided in the Estimates.

These Bills appear to have been drawn previously to the receipt of His Grace's instructions of February last, limiting the amount of the Parliamentary Grant for the Colonial Pay of the Royal Engineers to £7,200.

My Lords cannot conclude this communication without conveying to the Duke of Newcastle Their dissatisfaction at the course taken by the Governor in drawing upon the Imperial Government apparently without regard to the sums voted by Parliament, and for his omitting to pay for the Specie according to his instructions, and the promise made in his Despatch of 8 Febry 1861.

My Lords make it a condition of Their assent to the course recommended by the Duke of Newcastle that the Governor shall for the future keep strictly within the limits of the sums voted by Parliament.

His Grace has already warned him that if His Grace's instructions on this head shall be again disregarded, he must be prepared to be held personally responsible for the consequences, and itwill will be Their Lordship's duty, in future, whatever may be the inconvenience to the Colony, to refuse payment of any Bills in excess of the Grants to the credit of the Colony.