<persName ref="prs:pelly_jh"><surname>Pelly</surname>, <forename>John</forename> <forename>Henry</forename> </persName> to <persName ref="prs:grey_g"><surname>Grey</surname>, <forename>George</forename></persName> 10 September 1851, CO 305:3, no. 7742, 384. Pelly addressee Grey

Published by Jim Hendrickson and the University of Victoria.

Pelly, John Henry to Grey, George 10 September 1851, CO 305:3, no. 7742, 384.The Colonial Despatches of Vancouver Island and British Columbia 1846-1871, Edition 2.6, ed. James Hendrickson and the Colonial Despatches project. Victoria, B.C.: University of Victoria. https://bcgenesis.uvic.ca/V515HB09.html. CO 305:03 CO 305 3 7742 384 V.I. 1851 received 11 September co_305_03_00391r.jpg Transcribed from microfilm archives, marked up in Waterloo Script, then transformed into TEI P5 XML.

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Public Offices document. Minutes (11), Enclosures (untranscribed) (2), Marginalia (3).

Pelly writes to Grey to answer questions raised earlier, by one of Blanshard's despatches, on HBC finances, particularly with respect to public buildings, salaries, and taxes on imports on Vancouver Island. Pelly then provides a series of arguments for HBC expenses, which are, in part, informed by the outcome of the Oregon Treaty.

In the minutes, Jadis points out that Blanshard is no longer Governor, and, as such, need not be notified of Pelly's letter; he raises questions, however, on the HBC generating revenue from duties. Elliot then asks that Jadis prepare a statement that details the salient concerns raised by Pelly's letter.

Of the enclosed documents, the first is a letter from Barclay to, presumably, Blanshard, which advises that £4000 was to be spent on public buildings. The second enclosure is an extract of a letter from Barclay to Douglas, which advises that the outlay for public buildings should be only £2000. The voluminous, multi-page minutes on the second enclosure discusses, in detail, the costs and creation of public buildings, the HBC's monopolizing financial and administrative practices, levels of government control and profit, and more.

 Pelly, John Henry
Hudson's Bay House
Grey, George Inserted revisionDesc with @status="proofed". Changed idno @type="received" into a date element. Gave existing date an @type="sent" and reordered bibl contents.
7742, CO 305/3, p. 384; received 11 September 7742 Vancouvers Island
Hudson's Bay House
September 10th, 1851 My Lord

I have received two letters from Mr Merivale enclosing Despatches from the Governor of Vancouver's Island, dated the 28th April and 12th May 1851, and stating your Lordship's wish that I would afford you an explanation of such parts thereof as relate to an intended expenditure on public buildings, and to the payment of Salaries from the proceeds of taxes on Imports.

At the time the communication alluded to by Mr Blanshard was made to that gentleman it was thought that the Fur Trade branch of the Company would require a considerable quantity of land in addition to that which they possessed before the conclusion of the Boundary Treaty in 1846. The Puget Sound Agricultural Company had also intimated their intention to become purchasers of a tract of land near the Fur Trade Reserve. The quantity inin both cases was uncertain, no accurate survey having been made, but in order that the Governor might not be in want of Funds for such public works as might be considered most necessary, Mr Douglas was directed to advance from time to time (as it might be required) the sum of £4000. When however it was found that the land occupied by the Fur Trade at Victoria pre--viouslypreviously to the year 1846 was considered by Mr Douglas to be sufficient for their purposes, the amount to be advanced to the Governor was reduced to £2000, as your Lordship will perceive by the enclosed extracts from a Dispatch to Mr Douglas dated July 16th 1851, in which also a mistake which had been made respecting the house for the Revd Mr Staines was rectified.

As Mr Blanshard has not transmitted to Your Lordship a copy of the letter in which the Governor and Committee of the Hudson's Bay Company stated to him their views with regard to the expenditure onon public buildings and other Colonial objects, I beg leave to hand you a copy of that communication, from which you will see how far he is borne out in the observations contained in his Dispatch, and what were the Company's real objects in directing £4000 to be expended in public works. It was in fact left almost entirely to the Governor and his Council to select both the sites and the works to be erected on them.

On the subject of Captn Grant's efficiency as a Surveyor I can only say that he was recommended to me as peculiarly qualified for the work he had to perform. But when it was found that he neglected his duties another Surveyor of proved ability was sent out, and is at present I have reason to believe employed in Surveying the Victoria District.

An Assistant Surveyor has also been engaged, and is now on his way to the Colony.

With regard to the exorbitant price stated by Mr Blanshard to be demanded by the Company for land, I am not aware, nor do I believe that a farthing more than the original price fixed upon, namely one pound per acre, has ever been demanded by the Company's Agent for any land either without or within the Reserve.

With respect to the payment of the Salaries of the Civil Officers of the Colony out of the proceeds of taxation, I beg to say that I always understood that your Lordship meant the Colony to be established on a self supporting principle, and I know no better mode of procuring the means of defraying such expences than by levying a moderate duty — Say 5 per Cent — on Imports. ⎯ Such a duty, I may observe, would, at present at least, be paid in a great measure by the Hudson's Bay Company; and if calculated on the value of last year's importation would amount to £1400.

I have the honour to be My Lord Your obedient humble Servant JH Pelly The RRight HonbleHonourable Earl Grey&c &c &c
Mr Elliot As Mr Blanshard is no longer Governor it would appear to answer no useful purpose to comm::unicatecommunicate this letter to him? But the last paragraph xxrefers to a question which calls perhaps for some decision whether the Company have or have not the power to raise a Revenue by means of the imposition of duties? 11 Sepr/51 VJ
Mr Jadis. Would you prepare a statement, showing what pointswhat the points are, and what the information addressed. T.FE. 16 Sep
Vide grant terms. T.FE. 20/9. .bdThis is thought to be in reference to Jadis' statement.
Barclay to, it is thought, Blanshard, 1 January 1851, advising that £4000 was to be spent on construction of public buildings, and recommending how it should be spent.
Extract, Barclay to Douglas, 16 July 1851, advising that the outlay for buildings should be only £2000.
Gov. Blanshard 6267}                6824} Sir Jno: Pelly 7742} Van Couvers Island
Mr Elliot/ In these Despatches Governor Blanshard raises objections to the proceedings of the Company on two points—1st the locality of the Public Buildings, on which they had ordered a Sum of £4000 to be expended, and 2dly the payment of Salaries by means of Taxes on "Imports or otherwise" instead of from the proceeds of Land Sales.

On the first point the Governor argues that to erect Public Buildings at the Company's Trading Posts, surrounded by their own Reserves, before a Site for a Town is even fixed upon, would be to defeat in a great degree the object of the Grant, namely the Colonization & Settlement of the Island⎯

Sir John Pelly explains that the Sum so to be expended has been reduced to £2000⎯ that the Buildings are to consist of a Moderate sized GovtGovernment House, a Building for a Church, with Houses for a Chaplain & Schoolmaster. These Buildings are to be maintained & the Salaries paid by "Taxes on Imports or otherwise."

Besides the promotion of the Coloniza::tionColonization & Settlement of the Island, the Imperial GovtGovernment have a further interest in these Buildings, in so far that they have covenanted to reimburse the Company the value of them, should the Crown resume possession of the Island. It would therefore appear to be only proper that the Secretary of State should have the opportunity of exercising some control (both as to the locality and quality) over the construction of any Buildings of any extent which the Company may contemplate ⎯

On the 2d point, the payment of Salaries, the Governor contends that by directing all Salaries to be paid by means of Taxes the Company repudiate the Clause in their Grant which binds them to provide at their own expense allall necessary Civil & Military Esta::blishmentsEstablishments.

Sir John Pelly dismisses this part of the subject with the remark, that he had "always understood that Lord Grey meant that the Colony should be established on a Self Supporting principle, and that he knows of no better mode of procuring the means of defraying the Salaries than by levying a moderate duty on Imports ⎯"

The Clause referred to by Mr Blanshard certainly makes it a condition of the Grant that the entire Civil & Military expenditure required for the protection & Government of any Settlement or Settlements to be formed on the Island should be defrayed by the Company; and a further Clause provides that all monies received for the purchase of Lands & all payments in respect of Coal & Minerals should be applied to the Colonization & Improvement of the Island. Mr Merivale in his Minute on 6824. expresses a doubt whether the Words "Colonization & Improvement of the Island" would include the expense of Civil GovtGovernment, but whatever may be the legal construction which may be put upon the terms of the Grant, there is I apprehend no authority at present existing under which Taxes can be levied, seeing that its there is no Legislature of any description in the Settlement, and no materials for framing one ⎯

18 Sepr/51 V.J
Mr Hawes I am so little familiar with the arrangements at Vancouver's Island, that I feel a difficulty in expressing any positive opinion. It appears to me that unless it has been determined immediately to survey and lay out a Town, there could be no very grave objection to placing these buildings at the Company's post which, I suppose, is the only place at all inhabited? ⎯ As to the question of Taxes, I should think that Sir J. Pelly is right, and that the intention was only to have a self-supporting Colony. Surely it could not be meant that the Company was to pay the GovtGovernment at Vancouvers out of their profits on the Fur Trade in Canada? ⎯ As to the want of a power of legislative action, I do not know how the facts stand or what were the views of GovtGovernment ⎯ T.FE. 20 Sept
7748. Vancouvers Island. I think Mr Merviale should see these Papers.

1. As to the buildings being placed in the midst of the Companys reserves I think it objectionable, unless very clear provision be made for a free access to them in the event of the surrender of the charter.

2. I think, before any such outlay is made very full information should be given & a distinct sanction obtained together with the consent of the Treasury, considering that they may have to be purchased by the Crown under the Charter.

3. I should reject the revenue being raised by taxes on imports. If the fund from Land sales, or rent, or minerals are insufficient to pay the Civil Expenditure, it may perhaps be the only present resource. But it should be limited in point of time & amount. But before this is conceded I think some further information is wanted. What prospect is there of any Land fund, or any revenue from Coals or Minerals? What is the proposed cost of the Civil GovtGovernment?

4. In reference to Mr Barclays Letter — I think there is as much reason for submitting the plans & Estimates involving the outlay of 2000 £ (now proposed) as there was for the outlay of the 4000£, to the GovrGovernor & Comee. — And further that these plans & Estimates should before any expense is incurred be submitted to the SecycompanySecretary of State & the Treasury.

5. I do not now clearly understand how the 2000£ is to be appropriated. It is not to be laid out on land not purchased — I suppose therefore the proposed outlay is wholly in the Company's Land — which I think objectionable.

6. Every step in this transaction requires great care & some impartial authority is much wanted. The Company has an interest of its own — opposed to the Public Interest. The GovrGovernor is on bad terms with the Company & it is very difficult under present circscircumstances to come to any satisfactory conclusion.

7. Sir J. Pelly passes rather lightly over that part of the Letter of Sep 30th which insists upon some control over & inspection of the Public Buildings to be erected, on the part of H.M. GovtGovernment. It is now important to make this clear.

BH
There is nothing pressing in this & the subject may stand over till both Mr Merivale & myself are in London. ⎯ G. 29/
7748 Vancouver's Island Mr Peel As farther complaints have just reached us of the administration of Vancouver's Island (see 10,075) I forward these papers again, which had been reserved for Ld Grey's consideration. I have but little to add to what has been already said.

1. I think with Mr Hawes that public works of any magnitude on the island ought to be erected under the superintendcy of the GovrGovernor in Council, & the consent of the Treasury also obtained to them, for the reason state stated in the last letter on the subject to Sir J. Pelly (annexed) If (as may be hoped notwithstanding present appearances) the Company can repay themselves this expenditure out of the sale of land, then the Treasury has no further interest in the matter, but if it should become necessary at the end of the past trading license to resume the Island while the Company's expenditure is not repaid, GovtGovernment will have to make it good, & therefore must have this control.

2. I do not know distinctly what is meant by the H.B.C's "reserves." They have a right to reserve land for public purposes. If they reserve lands for the establishment of their own farms in order to sell produce at a profit, they ought to pay a "reasonable" price for the same, that is, debit themselves to the Colony to that amount: & if they do not do so, it is ground of foreiture in 1854.

3. The locality of the buildings is matteris a matter of natural observation: nevertheless if the HBC are to be the managers of the island, it seems more convenient that they should be in the middle of their "reserves" than anywhere else. It is common in these cases to object to the separate consequences of a plan when the real objection is to the principles of the plan itself, which must be judged by their general merits.

4. The question of the import duty is not free from difficulty. I do not think the meaning of the grant was to bind the Co. to be at the expense of colonizing the island without any regular means of remuneration & simply as a trading speculation. And it is not clear on the words of the Commission & Instructions whether such a power is not given to the GovrGovernor & Council provisorily, until the Assembly can be constituted. But the general idea of the establishment certainly was, that it was to be a free colony. Doubts would be entertained (especially after the discussion of last session) whether after the general grant of a Constitution the Crown itself could authorize the imposition of taxes by a Governor. And I think that inasmuch as there is a fund — the land sales & minerals — devoted to the "Colonization & improvement" of the island, this is the source from which preliminary expenses, such as that of governing the colony until a legislature with power of taxation can be established, were really meant to come: if the necessary expenses exceed this, the Company have bound themselves to furnish them in the first instance.

At all events I should certainly not advise acceding to this scheme of Sir J. Pelly's without the advice of the A. & Sol. Genl.General (The H.B.C. might levy port dues, &, for the use of their wharfs & landing places: but, in their own right, clearly nothing more.)

5. I will just mention that (with reference to something said in 10,075) the Co. have no monopoly of the sale of articles of supply to ships & or to their own settlers in the island legally, though practically it is probable enough they possess one.

HM. D. 8./51
See separate sheets within. ⎯ G.
7742 & 10,075 Van Couver's Island

The last of these letters must be transmitted to the Hud=son'sHudson's Bay Company at the same time observing with reference to the former that I am by no means satis=fiedsatisfied with respect to the manner in whwhich the island has been managed by the Company. ⎯ I hope that with a view both to the interest of the Company itself & for that of the settlers more efficient mea=suresmeasures may be taken for its colonizatn & for improving the conditn of the inhabitants. ⎯ The chief points which call for observatn are the following. ⎯

1st As to public works. ⎯ I think it is quite neces=sarynecessary that the government shdshould have some control over what is done in this way for the reasons noticed in the former minutes, but on the other hand having regard to the very irregular means of communicatn with the island & the great delay which wdwould arise from the requiring the previous sanctn of the Treasury before buildings are undertaken I think it will be enough to say that the GovrGovernor must send a full report upon all works that he contemplates & must furnish to this departt accounts of the expenditure incurred. ⎯

2d With regard to the reserve of land for the Company, I agree with Mr Merivale that if the Compy reserve land for any but strictly public purposes they are bound to credit the colony with a price for the land equal to what they wdwould charge private individuals, & to spend this money in the necessary expenses of the settlement & expense either in sending out emigrants (who clearly shdshould be married men) or in openg roads & making more land accessible. ⎯ It is obvious that no private individuals can be expected to buy land […] if all the land most valuable from its positn is reserved by the Company for their own use witht applying the price which wdwould have been charged for it if sold for the benefit of the Colony. ⎯

3d With regard to import duties — I considered it to have been clearly understood at the time the ar=rangementarrangement with the Company was made, that no such duties cd be imposed until the number of inhabi=tantsinhabitants had increased enough to admit of the calling together of an Assbly, I apprehend that there clearly is no authority but that of Parlt or of a representative Assbly by which taxes can be levied in the island, this shdshould be pointed out. ⎯

4 On the subject of the alleged monopoly of the Co their special attentn must be called to the statements which have been made, remindg them that they are not legally en=:titledentitled to such a monopoly & expressing my hope that they have not indirectly endeavoured to establish one by refusing to traders who might be inclined to compete with them, […] ground in suitable situatns for buildg stores & shops, or by denying them any other facilities for carrying on trade which it may be in the power of the Company to with-hold. ⎯ Any such proceeding I shdshould regard as a great abuse & a departure from the spirit if not from the words of the agreement entered into with the GovtGovernment call which wdwould call for its interventn. ⎯ It may be added that I have reason to believe that owg to the advantageous market for coals & also for Agricultural produce created by Cali:forniaCalifornia I have reason to believe that there wdwould be […] a considerable influx of settlers into V.C. Island if the Hudson's bay Co wdwould give them the encouragement which it is both their duty & their obvious policy to afford. ⎯

G. 10/12/51
This text runs perpendicular to main body text; see image scan.Ansd 20 Dec/51Draft with Admity Letter 10075.
This is objectionable especially as regards the possible future surrender of the charter.
This marginal note is by Merivale, and is in reference to this paragraph, number 2; see image scan.(Probably are really reserved for the Puget's Sound Company—which is said to be the H.B.C. under another name)