Colonial Despatches

We have to acknowledge your letter of 6th instant, enclosing the further statement sent in by the Hudsons Bay Company of their claim against the Crown on the resumption of Van Couvers Island.

2. In March last the Company sent in Accounts showing a claim against the Crown for the whole of themoney money expended by them in Van Couvers Island and for the value of their property and establishments amounting altogether to £225,699.9.11. On a reference to the Law Officers they gave it as their opinion that the Crown was only bound to compensate the Company for the sums laid out by them on the Island as owners, and for the value of their Establishments, property and effects thereon connected with such ownership—whichwere were substantially the establishments and property got together in consequence of their Territorial possession of the Soil and to facilitate the settlement and Government of the Island. In the principle thus laid down the Company expressed their acquiescence and the account enclosed in your letter of 6th instant professes to be framed upon it.

3. That Account comprizes only three items—vizt

1. Balance due on 31st Janry last on account of expend==iture =iture on public Works and Establishments £8.505.6.11.

2. Cost of sending out and maintaining Settlers £25,550.

3. Loss on searching for Coal at Fort Rupert &c £12.469.5.7.

4. To the first two items we see no objection in principle. The items will of course hereafter be verified by the Treasury and such vouchers as circumstances may admit be obtained. But the charges appear to fall fairly within the description of charges incurredby by reason of the Company's territorial possession & ownership of the Island.

5. But in regard to the third item, vizt the loss on searching for Coal at Fort Rupert, we entertain great doubt. The Coal Mine at Fort Rupert appears to us to stand upon precisely the same footing as the Farms and Mills, and the Coal Mine at Nanaimo, inserted in the first account, and withdrawn from the present. That the expenditure has resulted in a Loss does not make anydif difference. The Crown is bound to take over the whole of the Company's property or none. There is no reason why the property which has resulted in a loss should be considered as attaching to the ownership of the Company more than that which has resulted in a profit. The same principle must we conceive attach to both and if the Company is to retain possession of its valuable property it must also sustain the burthen of that which is of no value.

6. We would suggest that before any further step is taken the Company should be requested to state on what ground they draw a distinction between their property in the Coal Mine at Fort Rupert and their other property on the Island.