Colonial Despatches

I am directed by the Lords Commissioners of Her Majesty's Treasury to request that you will recall the attention of the Secretary of State for the Colonies to the letter from his Department of 15th February, and the reply of My Lords of the 31st May last, relating to a claim of the Government of British Columbia upon HM Government for a sum of £9051.18.1.

The greater portion, vizt £8592.5.2 of this sum was claimed in respect of the expenses of the Royal Engineers, and was founded as stated in the 3rd paragraph of the Acting Governor's despatch No 124 of 27 November 1865, upon the Secretary of States despatch of 13 May 1862 No 123.

It appears to My Lords that the Acting Governor & the Colonial Auditor have misunderstood the arrangement sanctioned by that, and the previous despatch of 27 February, not only in having claimed on behalf of the Colony a larger proportion of these expenses, than was intended to be charged to the Imperial Government, in accordance with that arrangement, but also by referring to the three years previous to 1862; as it will no doubt be in the recollection of the Earl of Carnarvon, that a Vote was taken in that year for the arrears of the previous years, and that the arrangement sanctioned by the despatch was to be considered as a new one.

On referring to the despatch of27th 27th February, a draft of which was sent for Their Lordships approval in the letter from the Colonial Office of 21st February 1862, it will be seen that the entire cost, both Imperial & Colonial, of the Royal Engineers, was estimated to amount to about £22,000 per annum, vizt

Colonial Pay	£12000
Provisions &c	5900
Regimental Pay	3800
Total	£21700

Of this sum HM Government decided that one moiety, £11000, must be defrayed from the Colonial Revenue—of the moiety to be paid from Imperial Funds £3800 was to be charged to Army Funds for the Regimental Pay, and the remaining sum of £7200 was to be provided by a Parliamentary Grant.

The despatch states that "this sum in addition to the salary of the Governor will constitute the Estimate to be submitted to Parliament for British Columbia for the year 1862/3," and the Governor was directed to limit accordingly the Bills to be drawn on this Board.

On this understanding the sum of £7200 was voted by Parliament for the following year.

In making out their Account of the sum claimed from HM Government, the Colonial authorities have not included the Regimental Pay—the Bills, which are included in the Auditors Statement, having no reference to this expenditure, which has been defrayed by a separate set of Bills and the amount charged to Army Funds.

My Lords have ascertained from theWar War Department that the Regimental Pay and allowances amounted

for the year 1862,	£4597.1.5.
for the year 1863,	£3625.0.7.

In making up the account between the two Governments these sums should be included in accordance with the arrangement made by the despatch of 27th February 1862.

My Lords also observe that the Colonial Authorities have taken no notice in their account of the payment in this Country, out of the Parliamentary Grant, of Col. Moody's Colonial Pay at the rate of £1200 a year during the year 1862, and up to 14th November 1863, when he left the Colony.

They consider that the payments on that account should have been included in thegeneral general account, and if the account between the two Governments had been made out in this manner, vizt in accordance with the arrangement that was sanctioned, it would be seen that there would not only have been no balance due to the Colony, but that the Imperial Government has paid more than the amount originally intended. (See copy of Statements herewith.)

My Lords regret that the circumstances above stated were lost sight of when Their communication of 31st May was addressed to your Department.

The claim having been admitted by that letter, They are unwilling now to revoke its admission, but as only a portion, vizt £6714.14.11 has been actually paid to the Crown Agentson on behalf of the Colony, They consider that no further issue in respect of the balance should be made.

With regard to the other items included in the total claim for £9051.18.1, vizt advances

£200	to	Col. Hawkins
£100		Capt. Lempriere
£157.12	for	Calders Pension

My Lords are of opinion that they must be considered as included in the sum of £6714.14.11 that has been paid to the Crown Agents.