Murdoch to Elliot (Assistant Under-Secretary) 1702, CO 305/19, p. 376; received 18 February

Emigration Office

17 February 1862

I have to acknowledge your letter of 15th instant enclosing a letter from the Governor of the Hudsons Bay Co in answer to the report on their Vancouvers Island accounts submitted by Mr Andoe, the gentleman appointed by the Treasury to examine those accounts.

2. The first item objected to in Mr Andoes report was a charge of £15,123.19.3 for services extending from 1857 to 1859 omitted in previous returns. Of this the Governor withdraws £4,000 charged for the "Otter" Steamer & expresses a willingness to deal with the rest on some general principle. Before any conclusion is come to on this point it would be desirable to have the opinion of Mr Andoe who has examined the detailed accounts.

3. An objection was taken by Mr Andoe to a charge of £2405.13.10 for commission on Land Sales of which a portion of the proceeds only is brought to the credit of the Crown in these accounts. But as it is admitted that the balance of the proceeds has been received by the Governor and applied to the expenses of the Colony the Company are in my opinion entitled to claim the whole Commission. Whether the Commission due on payments not brought to credit by the Company should be paid out of Imperial or Colonial Funds is a question between the Home and Colonial Governments, not between the Government and the Company.

4. The general objection to the charge of interest the Company assume could not be maintained and express their willingness to discuss the question as to the mode in which interest should be charged. Upon the general question Government would I presume be very much guided by Mercantile usage in such matters, with which I am not acquainted—but on reconsideration I am disposed to modify the opinion thrown out in my report of 25th May last that no charge for interest was admissible.

5. The explanation given of the striking difference in the items making up the charge of £25,550 for introduction of Settlers in the first account sent in and in the last is remarkable. In the first instance the Company charged for 350 Settlers only (being one moiety of the whole number sent out) Passage £ 8,050 Maintenance & Wages £17,500 £25,550

In their second account they increased the number of Settlers to 557 1/2 and the cost of passage to £12,717. 5.- But they reduced the cost of maintenance to £12,925. 9.7 £25,642.14.7 and the sums being so nearly the same they retained the original claim. This explanation to say the best of it shows a very lax mode of making out the accounts. It is impossible with such an explanation before us to feel any confidence in other items which from their nature are rather estimates than actual expenditure.

6. Another item objected to was interest on the moiety of the expenditure at Fort Rupert which had been admitted by Government. I do not understand on what ground Mr Andoe objected to this claim, unless it is to be understood from his report that the original claim of £12,469.4.7 included a charge for interest in addition to the usual charge for interest on the expenditure of the year in which it is carried to account. There is nothing in the papers sent to us to show whether this is so or not. If not, I should have been disposed to consider that if a claim for interest is to be allowed in any case it should be in this.

7. I would submit that it would be desirable to communicate Mr Berens' letter to Mr Andoe for any observations he may have to make, and the Duke of Newcastle might perhaps think it desirable that Mr Andoe should be put in personal communication with us on the subject. After seeing him we might obtain from Mr Dallas any further explanations necessary to enable us to submit our views to His Grace.

I have the honor to be Sir Your Obedient Humble Servant T.W.C. Murdoch