Colonial Despatches

I have the honor to acknowledge receipt of Mr Under Secretary Elliot's letter of the 29th Ulto. accompanying a copy of the Report which has been submitted to Her Majesty's Government by Mr Andoe in reference to the accounts of the Company in connection with the resumption of the Island of Vancouver by the Crown.

I will now proceed to notice the objections made by that Gentleman to the Accounts furnished by this Company.

The first item objected to is the sum of £15,123.19.3 for expences incurredbetween between the first of March 1851 and the 31st of May 1859 as furnished in a statement made up by Mr Dallas when in the Island of Vancouver. With reference to this amount the principal objection appears to be that this Company have already delivered an account of advances covering the greater part of the same period amounting to £8,505.6.11. In reference to this last account which was forwarded to the Secretary for the Colonies by Captain Shepherd late Governor of this Company on the 16th December 1856 Your Grace will find the account was made up at the request of the Colonial Office in consequence of a despatch from Governor Douglas in which he stated that it was not in his power to furnish a statement of the sums expended on account of couvers Island. In answer to thisapplication application the account referred to was made up from such materials as existed in the Company's Office here and the result was furnished to the Government as requested by them; but it was impossible that the Officials here could undertake that the Accounts so furnished embraced all the expenditure properly chargeable to the Colony.

All that they professed to do was at the request of Her Majesty's Government to furnish the best account in their power. When Mr Dallas went out to Vancouver's Island in the year 1851 he found that no proper distinction had been made in the books kept there between the outlay specially made on behalf of the Colony and that made on behalf of the Company's Fur Trade; and this led him to investigate the different accounts and he selectedsuch such items as appeared to him to be properly chargeable to the Colony which constitute the sum of £15,123.19.3 the correctness of which is now disputed.

I may observe that in regard to the sum of £4,000 for the services of the Steamer "Otter" Mr Dallas was not aware that Captain Shepherd in his letter of the 16th of December 1856 before referred to had intimated that the Company would not under the circumstances make any charge for her cost and maintenance, altho' there cannot be any reasonable doubt as to the Government being properly chargeable with a considerable sum on account of the services rendered to the Colony itself by the employment of that Steamer; and in furnishing the account in question Captn Shepherd's letter was not referred to and the attentiontherefore therefore of the present Board was not called to what had passed with him. As however he had adopted the liberal course of making no charge in respect of the "Otter" the Company now will not seek to do so.

With regard however to the other items in Mr Dallas' Statement amounting therefore to £11,123.19.3 I have to submit that they are all in respect of matters properly chargeable to the Colony. At the period in question the Government had their own establishment for the purposes of the Colony the whole cost of which was defrayed by the Company without reference to the services rendered to the Colony. Whether the particular amounts put down by Mr Dallas represent the proper proportion of the outlay incurred by this Company in reference to the items in question may be a proper subject ofinvestigation investigation; but I respectfully submit that the new Government cannot expect the Company to maintain at their own cost the Governor appointed by the Crown and the other Officers attached to his department and still less to pay for the entire administration of Justice, the Government Surveyor &c &c, and I shall be quite willing that this Company shall now be allowed for the period over which these disbursements extend at the rate at which the Government are now paying for the same services since this Company has ceased to make these disbursements. There will be no difficulty I feel confident in satisfying the Colonial Authorities that these charges are much less than the Government would themselves have incurred had they provided the Establishments, and it is obvious that this Company cannot be deprived of their right to be allowed them merely because that at the request of theGovernment Government they upon a former occasion furnished such accounts as the materials in their hands enabled them to render.

The next item objected to by Mr Andoe is a sum of £2,405.13.10 being the commission of 10 per cent upon land sales actually made by this Company and the proceeds of which have been received by the Governor of the Colony. The fact of his having received them is admitted by Governor Douglas and it cannot rest with this Company to account to the Government for the mode in which he may have applied them. The right to this Commission is distinctly reserved to this Company by the Grant from the Crown and I really cannot understand upon what ground the right to make the charge is now impeached.

The Third item objected tois is the sum of £3,712.13.10 for Interest.

I do not understand whether it is intended to be suggested that the Company are to be allowed no interest upon the large advances made by them from time to time on account of the Colony. I can hardly suppose that it is intended to raise such an objection. If any question arises as to the mode in which the interest is calculated that may be a fair subject for discussion and this Company will be prepared to enter upon the investigation in any manner that may be found convenient.

The last material item objected to by Mr Andoe is the charge made for the passage of Settlers from this country to the Colony; and as to this he has misapprehended what are the actual facts. In the statements originally furnishedto to the Government it was assumed that of 700 Settlers expected to be sent out to the Colony one half would be taken up by the Puget's Sound Company and the passage money for each was charged £23 per head and it was estimated that the wages and maintenance would amount to £50 per head. The Colony in consequence was charged with passage money for 350 Settlers which at £23 per head comes to £8050 and at £50 per head for wages and maintenance to £17,500 making together £25,000. In the result however it turned out that instead of the Puget's Company taking over 350 Settlers they took over only 80. The total number sent out was 631 1/2—two children being estimated as one adult leaving 551 1/2 chargeable to the Colony. Their passage money per head at £23 each amounted to £12,717.5.0; but it was ascertained that instead of the wages and maintenance amountingto to £50 each the total sum expended on these accounts was £12,925.9.7 giving a total therefore chargeable to the Colony of £25,642.14.7; but as in the account already rendered the amount had been given as £25,550 this Company were then content to adopt the amount and charge the wages and maintenance therefore at £12,832.15.0 to make up £25,550 instead of charging as they were and are now entitled to do the total sum of £25,642.14.0.

I must here observe that a correct list of all the Settlers sent out is now in this Office and was submitted to the Gentleman who attended from the Emigration Office to examine the Accounts; and I take the opportunity of sending herewith a concise statement also submitted to him shewing the results which I have above detailed.

Your Grace will observe therefore that Mr Andoe is mistaken in supposing that the number of Settlers as originally assumed was only 350 and consequently that instead of the account last rendered being in point of charge in excess of the former one the passage money is precisely at the same rate but a large dimunition is made in the charge for wages and maintenance the difference arising entirely from the fact of the estimated number of 350 having proved erroneous from the circumstance of the Puget's Company not taking over as expected a like number of 350.

The only other item alluded to by Mr Andoe is a sum of £247.11.11 which he seeks to have disallowed as being the moiety of a sum charged for interest on the outlay for searching for Coal at Fort Rupert.

I cannot suppose that there is any intention to alter the express arrangement come to by the Colonial Office that the Company should forego one half of the sum claimed by them in respect of that outlay. By this arrangement the Company have already lost one half of a claim to which I believe they were originally entitled.

I may likewise observe in reference to a remark made in Mr Andoe's Report, that the delay in settling these accounts arose first from the introduction into them by the Company of inadmissible items; that the Company by no means admit that the items introduced by them and afterwards by their consent withdrawn were such as they might not reasonably have insisted upon. At the time this discussion first arose they were desirous of meetingthe the Government in a friendly and liberal spirit and on that account they did not press all of what they were then and still are advised is the strict legal effect of the terms of the Grant; I would take leave in conclusion to express a hope that this Company will be met by Her Majesty's Government in the same liberal spirit. No money compensation which they can now receive will at all indemnify the company for the more serious losses which they have incurred from having accepted the Grant of the Island from the Crown under the belief and expectation that neither their exclusive licence of trade nor the Grant itself would have been put an end to at so early a period.

Independently of other losses and of the great injury to their general trade caused by the absorption of the Sum and attention of their best Officers whose serviceswere were necessarily diverted to the Colonial business in the first years of the new Government, I must beg to inform Your Grace that in one transaction alone a dead loss of £17,000 was incurred which fell entirely upon the Company. This loss was incurred upon a purchase of provisions, which Mr Douglas considered himself bound as Her Majesty's only Representative in that part of the World to make for the support of the Miners flocking into British Columbia on the first discovery of the Gold Fields. These purchases were made under the pressure of the moment entirely out of the funds of the Company and for the loss they incurred the Company have received no compensation.

I shall merely add that Mr Dallas will be leaving England at theend end of next week but if your Grace should be of opinion that further explanation on any of the points above referred to are necessary he will be glad to hold himself in readiness at any time to meet any Gentleman you may please to appoint for that purpose.