No. 19. Sir Frederic COPY of a LETTER from Sir Frederic Rogers, Bart., to the Right Honourable Rogers, Bart., to Sir Stafford H. Northcote, Bart., M.P. Sir, Downing-street, 22 February 1869. I AM directed by Earl Granville to enclose, for the information of the Directors the Right Hon. of the Hudson's Bay Company, the copy of a letter which his Lordship has 9 February 1869, received from Sir G. Cartier and Mr. M'Dougall. As the greater part of that letter relates to matters on which the Company and the Colony cannot be expected to agree, and on which Her Majesty's Government has no authority to decide their differences, Lord Granville has felt some doubt whether the settlement of the question would be advanced by forwarding this letter. He considers it, however, necessary to do so, and in doing so to explain clearly the position which he considers himself to occupy. It appears that his Lordship's predecessor entertained the hope that he would be able to arrange the terms of a compromise, under which, with consent of both parties, the sovereignty of the Hudson's Bay Company's Territory would be transferred to the Dominion of Canada. With this view his Grace made to the Company a proposal, respecting which Sir G. Cartier and Mr. M'Dougall write as follows: page 52. "The proposals submitted to the Company by the late Government in the letter of Mr. Adderley of the 1st December last,* were not made at our sug- Page 27. gestion, although we were disposed to think (and so informed his Grace) that if the Company accepted them, the Canadian Parliament might be persuaded to undertake the duties of legislation and government in the territories, on the conditions specified." Your letter of the 13th ultimo† may be considered as a rejection of those pro- + Page 32. posals, and as thus terminating the negotiations instituted by the Duke of Buckingham and Chandos. But in your letter you propose that the matter should be settled by the immediate payment of a fixed sum of money, or by the delivery of bonds, and you express yourself prepared to enter into fuller communication with Lord Granville on this subject. It is, of course, obvious that this negotiation for the purchase of the Hudson's Bay Company's Territory is really between the seller and the buyer, the Company and the Colony; and Lord Granville is of opinion that if the negotiation is revived on this or any other basis, Her Majesty's Government can at present do no good by assuming to frame or suggest terms of accommodation, but can merely offer to act as a channel of communication between these two real parties to the transaction, using its best endeavours to remove any difficulties not inherent in the nature of the case. Acting on this view, Lord Granville communicated to Sir G. Cartier and Mr. M'Dougall a copy of your letter of the 13th. The enclosure to this letter is the answer which he has received.‡ The material sentences, for the present purpose, are those with which the letter concludes. You will observe that the representatives of the Colony state the principles on which they consider the cost of the territory should be calculated, indicating the opinion that the sum of 106,431 l. is the highest which could on any hypothesis properly be demanded by the Company, and express their strong conviction that no money offer which either the Imperial or Canadian Government would deem reasonable would be accepted by the Company. Assuming this to be the case, they ask, on the part of the Dominion Government, either the immediate transfer of the sovereignty of the whole territory, subject to the rights of the Company, or a transfer of the sovereignty and property of all the territory not heretofore validly granted to, and now held by, the Company under its charter. Under these circumstances, Earl Granville directs me to communicate to you the enclosed letter, which, taken in connection with previous correspondence, appears to him to leave little present hope of bringing matters to a settlement by way of compensation. If the Directors of the Company should still think any such arrangement possible, his Lordship will, of course, be prepared to transmit to the Canadian representatives any modified proposal on the part of the Com440. 19 Feb. 1869. Page 52. pany. Failing this, he thinks it proper to invite from the Directors, not any argument respecting the true nature and extent of the Company's claims, from which, as not being before a court of law, he could anticipate no result, but a statement of any objections they may have, whether of principle or detail, to the two counter-proposals now made by Sir G. Cartier and Mr. M'Dougall on behalf of the Canadian Dominion. And it might not be immaterial to add what course the Company would propose to take for securing that life and property are adequately protected and international obligations duly performed in their territory, so long as they remain responsible for its government. I am, &c. COPY of a LETTER from the Right Honourable Sir Stafford H. Northcote, M.P., to Sir Frederic Rogers, Bart. Sir, Hudson's Bay House, London, 26 February 1869.* I HAVE the honour to acknowledge your letter of the 22nd instant,* transmitting by Earl Granville's direction, a copy of a letter addressed to his Lordship by Sir George Cartier and Mr. M'Dougall, on the subject of my letter to yourself, dated the 13th ultimo.† The Committee of the Hudson's Bay Company, understand from your letter, that it is not Earl Granville's wish that they should enter into a discussion of the communication from the Canadian delegates, and they therefore refrain from making any comments upon its tone, or criticising and correcting its assertions. If there are any of those assertions to which Earl Granville, himself, attaches weight, the committee will gladly, on their being pointed out to them, offer such observations upon them as may appear to be necessary. As regards the manner in which the Canadian delegates treat the suggestion contained in my letter of the 13th ultimo, that the Canadian Government should complete the purchase of the Company's territory at once, by the payment of a sum of money, or by the delivery of bonds, the Committee desire me to observe, that they might have had some difficulty in gathering from the terms in which the delegates express themselves, whether they were or were not prepared to entertain that suggestion, and to open a negotiation with this Company. But as Earl Granville, who has had personal communication with the delegates, is of opinion that their letter, taken in connection with previous correspondence, leaves little present hope of bringing matters to a settlement by way of compensation, the Committee are forced to adopt the conclusion, that it is intended as a virtual refusal on the part of the delegates to entertain the question in a serious spirit. Should Earl Granville come to the conclusion, that it is desirable that the Committee should renew the offer of communicating fully with him on the subject of a money sale, which they made in my letter of January 13th, they will hold themselves prepared to do so. For the present, and in accordance with what they gather to be his Lordship's views, they consider this matter at an end. It becomes my duty, then, to answer Earl Granville's question (1), whether the Committee have any objections, either of principle or of detail, to make to the "counter-proposals" of Sir G. Cartier and Mr. M'Dougall, and (2), what course the Company would propose to take for securing that life and property are adequately protected, and international obligations duly performed in their territory, so long as they remain responsible for its government. With regard to the first of the two counter-proposals, viz., that the sovereignty of the whole of the territory in question should be immediately transferred to the Dominion Government," subject to the rights of the Company," the committee desire to ask whether it is intended that the rights of the Company should be ascertained and defined before the transfer takes place, or after it. If the former former be Earl Granville's intention, the Committee have no kind of objection to offer to the proposal; but if it be meant that the transfer should take place first, and that the rights of the Company should then be made the subject of litigation in Canada, with a right of appeal to the courts of this country; I must remark that such a course is likely to lead to much inconvenience, expense, and annoyance to all parties concerned, as well as to prove detrimental to the interests of the settlement itself, by the prolongation of an irritating and disturbing controversy. As regards the injustice to this Company involved in such a proposal, I beg leave to refer Earl Granville to Sir E. Head's letter of the 25th January 1868,* to the Duke of Buckingham and Chandos, in which a similar proposal is Page 17. very ably discussed, and to which, and to the extracts from speeches delivered in the Canadian Parliament, which it encloses, the Committee desire to invite Earl Granville's particular attention. The second counter-proposal is, for a transfer to the Dominion Government of both the sovereignty and the property of "all the territory not heretofore validly granted to, and now properly held by the Company under its Charter." Upon this proposal also, the Committee desire respectfully to ask whether the limits of the territory so to be transferred, are to be distinctly set out in the instrument of transfer, so that there may be no room for disputes as to the limits of the respective jurisdictions. Even with the utmost care in this respect, the Committee cannot but feel apprehensive that difficulties will arise in dealings with the Indians, and with the various classes of hunters and traders frequenting those distant regions, if two different systems of administration are introduced into those portions of the extreme North Western Territory, which would be affected by the proposed transfer; especially as the great distance of that territory from Canada, and the difficulty of the communications, will render its administration by the Dominion Government very troublesome. Should, however, Her Majesty's Government decide on this measure, the Committee will do all in their power to arrive at a good understanding with the Dominion Government as to the details of the arrangements which should be made in the two portions of the now united territory, and to facilitate the establishment of a strong administrative system in both. As regards any transfer of the sovereignty without a distinct definition of the limits to be assigned to it, and by virtue merely of vague general words, the Committee feel that they need not point out to Earl Granville that such a step would not only be open to the objections which I have already mentioned in the case of the former counter-proposal, but to the further and very serious one that it must lead to constant conflicts of authority, and to frequent political embarrassments. The Company can hardly be expected to provide for the security of life and property, and the due performance of international obligations, if their boundary is left unsettled, and their title to important parts of their territory unrecognised. It is, probably, unnecessary for me to pursue this argument at any length. I have now to advert to the last question put by Earl Granville-that relating to the course which the Company would propose to take for the government of their territory so long as they remain responsible for it. The Committee desire me in the first place to remind his Lordship that they have no authority to give a pledge on the part of the shareholders of the Company, and that they can only undertake to submit certain proposals to them, and to use their own influence to secure their adoption. Subject to this reservation, the Committee are prepared to enter at once into free communication with Earl Granville as to the measures which should be adopted for the purpose to which he adverts. As his Lordship is aware, a resolution was agreed to by this Committee, as long ago as in August 1863, to the effect that, in the opinion of the directors, it was expedient that the authority, executive and judicial, over the Red River Settlement and the south-western portion of Rupert's Land should be vested in officers deriving such authority directly from the Crown, and exercising it in the name of Her Majesty. In adopting this resolution, the Committee intended to indicate their desire for the establishment of a Crown Colony in this portion of their territory. They still believe that this would be the most satisfactory plan that could be pursued, and they are prepared to discuss it with Her Majesty's Government if they are encouraged to do so. I am to state that the Committee would be willing either to advise the sur render of such proportion of the Company's proprietary rights as might be found to be a fair equivalent for the charge which the establishment of a Crown Colony would throw upon the Imperial Exchequer, or to recommend the Company, retaining its proprietary rights, to take upon itself the whole of the pecuniary burden. The Committee are satisfied that a territory which, in the present undeveloped state of its communications, supports a trade of the annual value of more than 400,000 l., and which possesses a large amount of highly fertile soil, requiring no great expenditure for its clearance and cultivation, is perfectly capable of supporting the expense of any government that it may be required to maintain; and they have little doubt that, if the state of the case were fairly laid before the shareholders, and if the moral support of the Imperial Government were distinctly assured to them, the necessary funds would readily be forthcoming. Of course if Her Majesty's Government should be of opinion that the great objects in view could be equally well attained by the exercise of the powers actually possessed by, or which might be granted to, the Company, and should consider that it would be preferable to adopt this method of government rather than to erect the territory into a Crown Colony, the Committee would at once fall in with such a suggestion, and would request Earl Granville to state to them what establishments would, in the opinion of Her Majesty's Government, be sufficient to meet the necessities of the case. It can hardly be necessary for me to add that in the event of such an arrangement being made, the Company would rely upon the cordial co-operation of the Government in submitting any needful measure to Parliament, and in protecting the Settlement from any trespass or interference on the part of Canada. In conclusion, I am to observe that it is on many accounts important that the directors of this Company should soon communicate to the shareholders the progress of this negotiation, and should lay the correspondence before them. They trust that Earl Granville will have no objection to their doing so. No. 21. Sir Frederic to the Right HOD. COPY of a LETTER from Sir Frederic Rogers, Bart., to the Right Hon. Sir, Downing-street, 9 March 1869. EARL GRANVILLE has had under review the correspondence which has passed respecting the proposed transfer to Canada of the jurisdiction and territorial rights of the Hudson's Bay Company in North America. It is, in Lord Granville's opinion, of very great importance that this question should be settled on a permanent footing, and with little delay. He does not disguise the interest which Her Majesty's Government have in this Settlement. It is not creditable to this country that any inhabited part of Her Majesty's dominions should be without a recognised government, capable of enforcing the law, and responsible to neighbouring countries for the performance of international obligations. The toleration of such a state of things in parts of the Hudson's Bay Company's Territory, is unjust to the inhabitants of that territory, and is not without danger to the peaceful relations between this country and the United States, and this danger and injustice are likely to increase in proportion as the mining and agricultural capabilities of what is called the "Fertile Belt," begin to attract settlers from the east and south. To Canada the settlement of the question is not less important, as removing a cause of irritation between it and its neighbours, and even with the mother country itself, as destroying an obstacle to that which has been looked upon as the natural growth of the Dominion, as likely to open an indefinite prospect of employment to Canadian labour and enterprise, and lastly as enlarging the inducements which Canada is able to offer to the British immigrant. It is no small matter that it would enable Her Majesty's Government at once to annex to to the Dominion, the whole of British North America proper, except the colony of British Columbia. 4 To the Hudson's Bay Company, it may almost be said to be necessary. At present the very foundations of the Company's title are not undisputed. The boundaries of its territory are open to questions of which it is impossible to ignore the importance. Its legal rights, whatever those may be, are liable to be invaded without law, by a mass of Canadian and American settlers, whose occupation of the country on any terms they will be little able to resist, while it can hardly be alleged that either the terms of the Charter, or their internal constitution are such as to qualify them under all these disadvantages, for maintaining order, and performing the internal and external duties of government. The prejudicial effect that all these uncertainties must have on the value of the Company's property is but too evident. The interest of all parties thus evidently pointed towards an immediate and definite adjustment, Lord Granville has been most unwilling to abandon the hope of bringing it about, by way of amicable compromise. He is fully alive to the difficulties of such a compromise. He does not conceal from himself that the estimate which the Company form of the nature and value of their rights, is widely different from that which is formed by the gentlemen who represent Canada. Nor can he undertake to express any opinion whatever, as to the relative correctness of those estimates. Indeed it would be impossible to do so without knowing to what extent the claims of the Company would be supported by the judgment of a court of law. But after repeated communications with both parties his Lordship is convinced that he will be serving the interests of the Dominion, of the Company, and of this country, by laying before the Canadian representatives and the directors of the Company a distinct proposal which, as it appears to be, it is for the interest of both parties to accept, and in support of which Her Majesty's Government would be prepared to use all the influence which they could legitimately exercise. If the proposal is really an impartial one, Lord Granville cannot expect that it will be otherwise than unacceptable to both of the parties concerned. But he is not without hope that both may find, on consideration, that if it does not give them all that they conceive to be their due, it secures to them what is politically or commercially necessary, and places them at once in a position of greater advantage with reference to their peculiar objects than that which they at present occupy. The terms which his Lordship now proposes, are as follows: 1. The Hudson's Bay Company to surrender to Her Majesty all the rights of government, property, &c., in Rupert's Land, which are specified in 31 & 32 Vict. c. 105, s. 4, and also all similar rights in any other part of British North America, not comprised in Rupert's Land, Canada, or British Columbia. 2. Canada is to pay to the Company 300,000 l. when Rupert's Land is transferred to the Dominion of Canada. 3. The Company may, within 12 months of the surrender, select a block of land adjoining each of its stations, within the limits specified in Article 1. 4. The size of the blocks is not to exceed acres in the Red River Territory, nor 3,000 acres beyond that territory, and the aggregate extent of the blocks is not to exceed 50,000 acres. 5. So far as the configuration of the country admits, the blocks are to be in the shape of parallelograms, of which the length is not more than double the breadth. 6. The Hudson's Bay Company may, for 50 years after the surrender, claim in any township or district within the Fertile Belt, in which land is set out for settlement, grants of land not exceeding one-twentieth part of the land so set out. The blocks so granted, to be determined by lot, and the Hudson's Bay Company to pay a rateable share of the survey expenses not exceeding an acre. 7. For the purpose of the present agreement, the Fertile Belt is to be bounded |