Colonial Despatches

With reference to Mr Elliots letter of the 25 March last, to your letter of 16 Inst, and other correspondence, I am directed by the Lords Commissioners of Her Majesty's Treasury to acquaint you, for the information of the Duke of Newcastle that My Lords have given full consideration to the Report of Mr Murdoch of 18 March last as well as the other communications and have conferred further with Mr Andoe as to the amount whichmay may properly be offered to the Hudsons Bay Company in full of all their demands as administrators of the Government of Vancouver Island.

His Grace suggests in Mr Elliots letter that looking to the importance of putting an end amicably to the outstanding questions between Her Majesty's Government and the Company, in addition to the advance already made of £25,000 a payment of £35,000 should be sanctioned. My Lords concur with His Grace that in the interests of the Colony it is desirable that the matter shouldbe be brought to a speedy settlement, but they have to observe that after a very careful and minute investigation by Mr Andoe, and a reference of his Report to Mr Murdoch, and a further Report, after consideration of Mr Murdoch's remarks, by Mr Andoe, it appears that both Gentlemen arrive at nearly the same conclusion, viz that the Balance properly payable to the Company may be taken at about £25,000.

Their Lordships likewise have fully considered the Reports of those gentlemen and the other documentson on the subject, and concurring generally in their views would not feel justified in sanctioning the payment of £35,000.

My Lords desire however further to remark with reference to the objects and character of the expenditure out of which the claims of the company arise, and with reference more particularly to some of the Items in these claims, such as the Commission on the amount of Land Sales received by the Governor and applied to the Expenses of the Colony, that a portion at least of the balance which HerMajestys Majesty's Government may now agree to pay in liquidation of the claims of the company should be defrayed out of Colonial Funds, and although My Lords cannot admit that the claims of the Company are established to an extent much exceeding £25,000, yet with a view to the advantage of the Colony from an early and amicable settlement, Their Lordships will not object to pay the Company the sum of £30,000 in full satisfaction of all their claims, with a clear understanding that £5000 of that Amount is to be consideredas as an advance repayable by the Colony at the earliest possible opportunity.