Berens to
Newcastle
[12465, CO 305/13, p. 192; received 17 December
]
Hudson's Bay House
London
16 December 1859
I have the honor to acknowledge the receipt of Mr Merivale's letter
of the 7th instant in which he informs me that Governor Douglas has
reported, with respect to the advance of $27,000 made by Mr Dallas
the Representative of this Company in Vancouver's Island, to defray
the expense of Public Buildings at Victoria that it was
"met by the surrender to Mr Dallas of the site of the Old Public
Offices on condition of his placing at the disposal of Governor
Douglas the sum of money obtained by the Sale."
Mr MerivaleMerivale requests of me to inform your Grace whether any
intimation has been received by this Company of the sale of this
land, and of the arrangement made with Mr Dallas.
The letter which I had the honor of addressing to your Grace on the
4th ulto, and with which I transmitted a Copy of Mr Dallas' letter
to the Secretary of this Company of the 14th September, contains the
latest information we have received upon the subject, and, by
reference to it, your Grace will observe that at that period no
reference is made to the Sale ofof the Land in question and I
consequently presume that it had not then been sold.
[*](#marg1)
With respect to the arrangement made between Governor Douglas and Mr
Dallas in regard to the advance made by the latter of $27,000 I am at
a loss to understand how under any circumstances it could have been
provided for in the manner which Governor Douglas appears to have
represented, because, as we read his communication, while on the one
hand it is suggested that the advance in question was met by the
surrender to MrMr Dallas of the site of the old public offices, it is
added on the other that this surrender is made on the condition of
Mr Dallas placing at the disposal of Governor Douglas the sum of
money obtained by the Sale. Unless it is meant that the Government
are to be responsible to the Company for the amount of such sale,
this Company would appear literally to receive nothing in respect of
the advance that has been made.
[**](#marg2)
But in point of fact, this Company entirely denies the right or power
of Governor Douglas to deal with the land in question at all, as it
formed partpart of the property possessed by this Company in the Island
before the Grant made to them by the Crown and therefore entirely
irrespective of it;
[***](#marg3)
but we have been informed by Mr Dallas that
Governor Douglas had attempted to treat this property as belonging to
the Government, and upon that pretention
had advertised it for Sale.
This course of proceeding was immediately protested against by Mr
Dallas on the part of the Company and, as we gather from Mr Dallas'
communications, it was distinctly understood that inasmuch as the
preparations for the Sale had proceededproceeded so far, and in order not to
cast a slur upon the proceedings of the Governor, who admitted it to
be Fur Trade Land,
[****](#marg4)
the sale should be proceeded with under Mr Dallas'
directions, and on account of the Hudson's Bay Company. It was also
arranged between Governor Douglas and Mr Dallas that as the Public
buildings were urgently required, Mr Dallas should advance—not the
amount of the sale of the land—but the specific sum of $27,000, to
enable Governor Douglas to proceed with the proposed Buildings,
[*****](#marg5)
it being distinctly understood that this advanceadvance was a loan which was
to be reimbursed to the Hudson's Bay Company along with the other
payments made by the Company under the provisions of Her Majesty's
Grant.
I take leave to add that Mr Dallas' views are entirely borne out by
the facts. The land upon which the old Buildings stand was the
undoubted property of the Hudson's Bay Company before the Grant to
them of the Island. The Buildings upon it were also erected at the
expense of the Hudson's Bay Company. Indeed Governor Douglas has
admitted that both the land and thethe Buildings belong to the Company
as your Grace will see by reference to his address to the House of
Assembly of the 7th May, and that fact was confirmed by Mr
Pemberton, the Colonial Surveyor, in the course of a debate on the
subject which took place on the 17th May last.
The land upon which Governor Douglas is now erecting the New Public
Offices has also been represented by that Gentleman to be Government
property, but I have reason to know that it is part of the land held
by the Fur Trade long priorprior to the Grant from the Crown. The Company
therefore will have no claim upon the Government for the value of
this land.
From this statement I trust I have made it evident to your Grace,
that the advance of $27,000 was actually a loan by this Company on
Government account, and that Governor Douglas is in no way justified
in representing the advance as being "met by the surrender to Mr
Dallas of the site of the old buildings."
In order to place before your Grace information on the subject I havehave
the honor of transmitting herewith an Extract from the Address of
Governor Douglas to the Assembly on the 7th of May last, and a Copy
of Mr Pemberton's speech in the Assembly on the 17th of the same
month.
I have etc.
H.H. Berens
GovrGovernor
Mr Merivale
It is evident I think after comparing this letter with the Governors
despatch of the 12th September (10759) and examining the wording of
the 4th and 5th pages of that despatch, that the sum realized by
the sale of the site of the old Buildings was placed at the disposal
of Governor Douglas
as a loan by the Hudsons Bay Company's agent, and not as was
inferred from the words of the despatch as the price of land which
belonged to the Colonial Government but to which they were unable to
grant a title. Mr Dallas (the Coys agent) states that this loan
was made on a distinct understanding that it was to be included with
the other improvements made by the Hudsons Bay Company to be paid for
by HM's GovtGovernment. GovrGovernor Douglas denies that it was any part of his
plan to throw the cost of the new Buildings on HM's GovtGovernment. On this
point therefore there is a distinct contradiction in the two
statements, and Governor Douglas' despatch is certainly calculated to
mislead.
Refer to the Governor with reference to the Duke of Newcastle's
despatch No 24 of 1st Decr?
HT Irving
17th Decr
I agree with Mr Irving as to what is to be done.
But the more important part of this letter to us is that to which I
have called attention in pencil, in which the company claims certain
parts of Vancouver's Island (we do not know how much) as their own,
in right of property, antecedent to and independent of Lord Grey's
grant of the whole island—"Fur Trade Land" as they call it.
This claim rests of course on the same grounds as that which they
press to similar property in British Columbia. And, as I have said
before, I apprehend it to be clearly without foundation.
It is worth while on this head to refer to the beginning of the
correspondence of August 1848. It will be seen that the Company
began by asking "to be confirmed" in the ownership of land in V.I.
which they occupied thereby admitting (though cautiously) that they
had no title except on confirmation from the Crown. The
correspondence ended in a grant of the
whole island, in which no distinction whatever is made
respecting land previously owned by them, & the whole
island was made repurchasable by the Crown. I apprehend therefrom
that their case falls absolutely to the ground.
The British Columbia question is to be referred to the Judl
Committee, & so I suppose must this: but I cannot but record my
opinion that it is a mere afterthought of the Company, who are
anxious to press every claim, however preposterous, in order to back
up
those claims on which they have a good or plausible case.
HM
D 23
I am sorry to say there appears to be too good ground for this
serious charge. It is not to be believed that this claim had been
ever thought of when the others were put in. It appears to me that we
should not appear even to admit it so far as to submit it without
challenge to the Judl Commee. I think we should state that it is
incomprehensible and ask for an explanation.
Refer as proposed to GovrGovernor whose proceedings are no less
unintelligible.
N
25
Memorandum
Mr Merivale
In obedience to the directions of the Duke of Newcastle we had an
interview, on the 2nd instant, with the Chairman, Deputy Chairman and
one of the Directors of the Hudsons Bay Co, on the subject of the
questions now in dispute between them and H.M. Government. Those
questions relate:
First—to the amount to be paid to the Company on the resumption
of Vancouvers Island by the Crown—and
Second—to the Company's claim to Land in British Columbia.
In
In respect to the first the point in dispute had at one time been
reduced to the question as to who should bear the expense of
searching for Coal at Fort Rupert, amounting to £12469.4.7. The
claim originally sent in by the Company amounted to £225,699.9.11.
In conformity with an opinion of the Law Officers of the Crown they
subsequently amended their claim by leaving out all but three items,
vizt
£ S D
1. Balance for public works and Establishments.....8,505.6.11
2. Cost of sending out Settlers ..................25,550.-.—
3. Expense of Searching for Coal at Fort Rupert[…]12,469.4.7
£46,524.11.6
To the two first items (assuming the details to be properly
supported
by vouchers) no objection was taken, but the last being objected to,
on the ground that it appeared to stand on precisely the same ground
as the Nanaimo Mine (which was not assumed by the Company) and that
it did not fall within the expenditure which the Crown was found to
take over, a reference was proposed on the point to Sir J. Coleridge.
The Company refused this partial reference but proposed that the
whole question of their claims should be referred to Sir J. Coleridge
or the Judicial Committee of the Privy Council. They withdrew at the
same time their assent to the principles laid down by the Law
Officers opinion of July 1858, and reverted to the original claim
sent in by them in February 1858 subject to a deduction of £27,959,
in respect of property belonging to them before the grant of the
Island.
At our interview we found the Directors decided in their
determination not to accept a reference of any isolated portion of
their claim to arbitration. They alleged that their operations
generally in Vancouver Island hadhad been a loss to them—that as far as
the Company was concerned the most advantageous course would be that
they should surrender the whole of their property in the Island on
the terms of the grant of 1849—that they were confidently assured by
their legal advisers that, with the deduction above described,
[*](#marg6)
they were entitled to do so, and that they were not bound in any way
by an opinion of the Law Officers to which they had not been parties.
We felt precluded by the correspondence between the Colonial Office
and the Company from lending any countenance to the proposed opening
of the whole question, and even had it been otherwise we should have
thought it very inexpedient that the Government should be driven to
such a result. After much debate, therefore, we threw out as a
possible basis of Settlement that the expense of the Fort Rupert Mine
should be divided between the Government and the Company and that the
Island (except the establishments of the Company) should be regranted
to the Crown on the payment of the amount which might be found to be
due on the first two items specified in the amended claim of the
Company plus half the expense of the Fort Rupert Mine. This
according to the accounts before us would amount to about £40,000,
but as the first item has as yet been made up only to the end of 1857
we cannot state precisely what the amount would now be. It will more
probably be less than more—but under any circumstances it is one of
the charges that must necessarily fall on the Crown. The Directors
without pledging themselves left us under the impression that such a
proposal if made to them would not be refused.
The grounds on which we recommend this compromize are 1st that the
Government cannot, in our opinion, hold the Company to their
admission of the principle of the Law Officers opinion of July 1858,
and compel them to agree to a reference on the single point of the
Fort Rupert Mine. 2nd that if this cannot be done there is no
choice between such a compromize as we propose and a reference of the
whole question. 3rd that looking toto the looseness of the wording of
the grant it is impossible, notwithstanding the Law Officers opinion
to feel sure that an arbitration would not go against the Crown.
4th that if the Crown were compelled to defray the whole expense of
the searches at Ruperts Mine and to take over the whole of the
Company's establishments and effects, the money paid for them (stated
in the Company's first account at about £190,000) would be to a great
extent wasted and 5th that under any circumstances great delay must
occur and the Settlement of the Island be meanwhile arrested. The
possible saving of about £6,000 would we think but inadequately
compensate for the risk of loss and the certainty of delay which
would be thus incurred. If the Duke of Newcastle should acquiesce in
the arrangement we have suggested it would be necessary that a
proposition to that effect should be addressed to the Company. At
present the matter stands merely as a suggestion by this Board of a
possible arrangement.
Second in regard to their Land in British Columbia we found the
Directors inaccessible to a compromize. They stated that much of the
Land (that at Fort Langley for instance) had been in their occupation
since 1802-3 that this occupation, taken in connection with the Oregon
Treaty, had given them they considered a legal title—that they were
prepared to
sell to the Crown at a fair valuation any portion of their land
which might be required for public purposes, but that they were not
prepared either to accept in exchange for it the same extent of Land
in another part of the Colony, or a Crown title to a smaller extent
at the same spot. Under these circumstances there seems no course
open but either to recognize the Company's title or to obtain a legal
decision as to its validity. As the first course ought not we
presume, to be adopted except as a matter of necessity, it only
remains to consider in what manner the question as to the Company's
title can be most conveniently raised. Probably it will be thought
best to require them to state their case in suchsuch a form as will admit
of its being brought under the consideration of the Judicial
Committee.
TWCM
FR
5 Decr 1859
Mr Fortescue
As to 1. I think Mr Murdoch's recommendation had better be followed.
And as to 2. on the whole I agree: though it is not really a legal
question at all.
HM
D 7
CF
9
I approve of both recommendations—of the
first without any hesitation, and of the second as upon the
whole the best and fairest that has occurred to myself.
Is it necessary to obtain Treasury sanction to the first
before we propose it to the Company?
N
10
Mr Merivale
I send you the Drafts of two letters to the H.B.Co. the one about
land in B. Columbia prepared by Sir F. Rogers the other respecting
the retransfer of Vancouvers Island by myself. Have you observed
that in the letter of 10 July (7160) Mr Berens points out that the
Co have not received any express notice of the intention to
repurchase Vancouvers Island—but only an intimation that it was the
intention of HM GovtGovernment to advise the exercise of the power of
repurchase. I do not suppose that the Co have any disposition to
take advantage of such a plea, but I have thought it as well to draw
your attention to it, since they have thought it worth while to start
it.
TWCM
17 Decr/59
I am quite aware of the omission to give definite notice: & have once
or twice called attention to it. But the difficulties of the subject
have prevented any distinct steps from being taken. I add, for
approval, a few words to this effect for it seems to me required?
HM
D 22