Colonial Despatches

I have the honor to acknowledge the receipt of Mr Under Secretary Fortescue's letter of the 21st ultimo on the subject of the amount to be paid to this Company in the resumption of Her Majestys Government of Vancouvers Island and by which it is proposed that the Company should accept the sum of £30,000 in addition to what they have already received in full of all claims in connection with their outlay on the Island.

Although this Company are exceedingly desirous to come to a settlementwith with Her Majestys Government of their claims for their advances they really do not feel that they ought to be called upon to make the large sacrifice that would be entailed upon them by the acceptance of the sum proposed.

Your Grace is aware that upon the Accounts last sent in by this Company they made a balance due to them of £55,569.14.2 but upon the investigation which took place at the desire of Her Majestys Government by Mr Andoe he suggested that this amount was subject to reductions amounting to £26,157.3.10 thereby reducing the sum payable to this Company to £27,412.10.4.

As Mr Andoe has furnished the particulars of the reductions he has made from the Account rendered by the Company I feel confident that upon consideration your Grace will feel that many of these deductions are not warranted and ought not to be asked.

Mr Andoe takes off in a lump various sums claimed by the Company in respect of payments made by them in the Island which in the first instance had been charged to their own establishment but which manifestly had reference to the Government of the Island as well as to their own affairs. These sums amount to £15,123.19.3 the whole of which isdisallowed disallowed by Mr Andoe, and as this Company had not in the first instance brought forward this claim not being aware of the mode in which the Accounts had been kept in the Island the Company are prepared (to avoid further discussion) to forego the whole of it.

The other items however which make up the £26,157.3.10 are of a nature to which I apprehend there can be really no objection.

The first is a sum of £2,405.13.10 being the Commission on sales of Land actually made by thisCompany Company at the rate provided in the Grant of the Island. The purchase monies on these sales were made payable with the sanction of the Colonial Office by instalments at stated periods which had not expired at the time the Government gave notice of resuming the Island but as the Commission is payable for effecting the Sales I apprehend there can be no question as to the Companys right to be allowed it.

There are two sums charged for interest amounting together to £3960.5.9 the whole of which Mr Andoe has disallowed upon what ground I cannot understandas as I conceive there can be no question as to the right of this Company to be allowed interest upon the advances they have made.

The remaining deduction is a sum of £4,667.5.0 which is termed "excess in the charge for Settlers."

In the Accounts first sent in by this Company the charge for sending out Settlers was estimated at £23 per head and the charge was made at that rate for 350 being one half the number actually sent out, it being supposed that the other half would be engaged by the Puget Sound Company and upon this number of 350the the wages and maintenance for one year was estimated at £50 each giving a total charge of £25,550. It afterwards turned out that the Puget Sound Company did not engage the number expected, and the actual number chargeable as Settlers was 551 1/2 which at £23 per head, amounted to £12,717.5.0. But it was found that the charge of £50 per head for wages and maintenance exceeded the actual outlay which in fact amounted only to about £25 per head so that the reduction in the charge for wages and maintenance was just about equal to the charge for theincrease increase in the number of the Settlers.

For some reason which I cannot understand Mr Andoe proposes to adopt the reduction in the rate of charge for wages and maintenance but not to allow the increase in the actual number of Settlers and thus he contends that there was an overcharge for Settlers to the amount of £4667.5.0.

This proceeding appears so entirely untenable that I feel satisfied that it only requires to be explained to be set right.

The result of the figuresI I have stated would be to make the Company's claim amount to £38,445.14.11 but in order to put an end to further discussion the Company have very reluctantly agreed to accept £35,000 in full.

I trust that your Grace will consider that in doing so they are making a very great sacrifice and that you will therefore be pleased to direct the immediate payment to them of the £30,000 already voted by the House of Commons and that in the next Session of Parliament you will bringforward forward their claim for the remaining £5,000.