_Re-organization of Hudson's Bay Company_.
Thus, after a long and continuous period of inquiry and investigation--
a grave game of chess with the Hudson's Bay Company--many anxieties and
a great pecuniary risk, surmounted without the expected help of our
Government, the battle was won. What now remained was to take care that
the Imperial objects, for which some of us had struggled, were not
sacrificed, to indifference in high places at home, or to possible
conflicts between the two Provinces in Canada; and to secure an
energetic management of the business of the fur trade and of land
development by the executive of the Company, whose 144 posts covered
the continent from Labrador to Sitka, Vancouver's Island, and San
Francisco.
It seemed to me that this latter business was of vital and pressing
importance. The Hudson's Bay factors, and traders were, in various
grades and degrees, partners in the annual trade or "outfit," under the
provisions of the "deed poll." This "deed poll" was the charter under
which the hardy officials worked and saved. Their charter had been
altered or varied over the long period since the date of the Royal
concession, in the twenty-second year of the reign of Charles the
Second. The deed poll in existence in 1863 provided that the profits of
the fur trade (less interest on capital employed in the trade, which
belonged to the stockholders who provided it) were to be divided into
100 parts, of which 60 parts belonged to the stockholders, and 40 to
the "wintering partners." The "wintering partners" were the "chief
factors" and the "chief traders." These 40 parts were again subdivided
into 85 shares; and each "chief factor" was entitled to two of such
shares, and each "chief trader" to one share. The clerks were paid by
salary, and only a person who had served as a clerk could be promoted
to a "chief tradership," and only a "chief trader" to a "chief
factorship." Thus all had a direct or remote partnership interest. On
retirement, an officer held his full interest for one year and half his
interest for the succeeding six years.
I had much apprehension that if the unexpected sale and transfer of the
share property, under terms and conditions in every sense unique, were
not frankly and explicitly explained, and under authority, alarm and
misconception would arise; while the news of the transfer would find
its way to distant regions in a distorted fashion, and through
unfriendly sources, long before the explanation and answer could
arrive. My fear, owing to bad management in London, was somewhat
realized, and I found that I had not rushed across the Atlantic, to
perform every service in my power to the undertaking, in June, 1863,
one moment too soon.
Then, having studied the "deed poll," I felt that, unless we made the
factors and traders partners in the whole enterprise--fur trade,
banking, telegraphs, lands, navigation of rivers--on generous terms, we
could not expect to elicit either their energies or their adhesion to a
new order of things.
Further, I saw no way to secure supervision and control over the
Fertile belt, and all around it, except by the construction, to begin
with, of a main line of telegraph from St. Paul to the Hudson's Bay
territory, and thence by Fort Garry to the extreme western post on the
east side of the Rocky Mountains. Such main line to be supplemented by
other subsidiary lines as rapidly as possible. The "wire," to my mind,
was the best "master's eye" under the circumstances. But, apart from
business re-organization, it was most essential to explain everything
to the Government of Canada; and to ascertain the views of political
parties, and of industrial interests, as, also, of religious bodies, as
to future government. In dealing with these questions, I had to assume
an authority which was to have been confided to a delegation, to
consist of Captain Henry Glyn, Colonel Synge, and myself.
On leaving England promptly--the main work being done--Mr. Richard
Potter undertook for me all the details which, if at home, I should
have managed, and he especially took up the discussions at the Colonial
Office, which I had personally carried on, with the Duke, for the
previous period.
Thus it was that the new Board was constituted, and the arrangements
for taking over were made in England without my taking any, further,
part. Sir Edmund Head was appointed Governor at the suggestion--almost
the personal request--of the Duke of Newcastle: some members of the old
Board were retained for the, expected, value of their experience, and
amongst the new members were Mr. Richard Potter and Sir Curtis Miranda
Lampson, a rival fur trader of eminence and knowledge, and an American.
A seat at the Board was left vacant for me.
It may be interesting here to quote what the Duke of Newcastle said, in
explaining, in the House of Lords, the recent transactions with the
Hudson's Bay Company.
TIMES, _July_ 3, 1863. [HOUSE OF LORDS.]
"The DUKE OF NEWCASTLE, in moving the second reading of the British
Columbia Boundaries Bill, said that he should give some further
information as to an extension of the means of communication across
that great interval of country between British Columbia and Canada.
After referring to the system of government which then existed both in
Vancouver's Island and British Columbia, and to the revenues of both
colonies for the previous few years--that of British Columbia being
most remarkable, having nearly doubled itself in two years (the imports
in 1861 being $1,400,000, and in 1862 $2,200,000)--the noble Duke
proceeded to say, that the greatest impediment to the future prosperity
of the Colony was a want of communication with the outer world. He had
stated on a previous occasion that he hoped to be able to state this
year to the House that arrangements had been made to complete the
communications between the Colony and the east of British North
America, and he thought he could now inform their Lordships that such
arrangements would be carried out. He had desired a gentleman of great
experience, knowledge, and energy, who was constantly travelling
between Canada and this country, to inquire whether it would be
possible to effect a communication across the Continent. This
gentleman--Mr. Watkin--had returned with considerable information, and
he had suggested to him to place himself in communication with persons
in the commercial world who might be willing to undertake the carrying
out of such a communication. He had put himself in communication with
Mr. Baring and others, and he believed they had arrived at the
conclusion that if arrangements could be made with the Hudson Bay
Company the undertaking should have their best attention. In order that
these important communications might be made certain, guarantees were
to be given by Canada on the one hand, and British Columbia and
Vancouver Island on the other. A complete Intercolonial railway system
had long been looked forward to by those interested in our North
American Provinces, and it would be impossible to overrate the
importance to this country of an inter-oceanic railway between the
Atlantic and Pacific. By such a communication, and the electric
telegraph, so great a revolution would be effected in the commerce of
the world as had been brought about by the discovery of the Cape of
Good Hope. It was unnecessary to point out to their Lordships of what
importance it would be in the case of war on the other side of the
Atlantic. There was another matter on which he wished to say a few
words. Some eight or nine days ago it was stated in a portion of the
press that the Hudson Bay Company had sold their property. That
statement was not altogether accurate, and certainly it was premature,
for he had been informed within two hours before he came down to the
House that the whole arrangement had only been completed that
afternoon. He had not received any official communication on the
subject, but some of the gentlemen concerned had been kind enough to
inform him of the facts. He had stated on a former occasion that the
Hudson Bay Company had wished to sell. Certain parties in the City had,
in the first instance, entered into communication with them for the
purpose either of purchasing or obtaining permission for a transit
through the Company's possessions. After some negociation the
alternative of permission for a transit was agreed upon. That
conclusion having been arrived at he did not know what it was that
raised the whole question of sale again, but some fortnight or three
weeks ago fresh negociations were opened. Parties in the City proposed
to the Hudson Bay Company to give them by way of purchase a sum of
1,500,000_l_. What had taken place was this: The Hudson Bay
Company very prudently required that the money should be paid down, and
that the whole sum of 1,500,000_l_. should be ready on a given
day, which he believed was yesterday. Of course the intending
purchasers could not carry out that transaction in the course of a
week, and they, therefore, applied to the International Financial
Association to assist them. The Association agreed to do so, and the
money either had been paid or would be on a day arranged upon. A
prospectus would be issued tomorrow morning, and the shares would be
thrown upon the market, to be taken up in the ordinary way upon the
formation of companies. These shares would not remain in the hands of
the Association, but would pass to the Proprietors, as if they had
bought their shares direct from the Hudson Bay Company. Of course the
Company would only enjoy the rights which those shares carried, and no
more. They would, in fact, be a continuation of the Company; but their
efforts would be directed to the promotion of the settlement of the
country: the development of the postal and transit communication being
one of the objects to which they would apply themselves. Of course, the
old Governor and his colleagues, having sold their shares, ceased to be
the governing body, and a new council, consisting of most respectable
persons, had been formed that afternoon. Among them were two of the
Committee of the old Company, with one of whom, Mr. Colville, he had
had much personal communication, and could speak in the highest terms
as a man of business and good sense. There were, also, seven or eight
most influential and responsible people, and the name of the Governor,
Sir Edmund Head, who had been elected to-day, would be a guarantee of
the intentions of the new Company, for no one would believe that he had
entered into this undertaking for mere speculative purposes, or that
the Company would be conducted solely with a view to screw the last
penny out of this territory. While the council, as practical men of
business, would be bound to promote the prosperity of their
shareholders, he was sure they would be actuated by statesmanlike
views. No negociation with the Colonial Office had taken place; and as
this was a mere ordinary transfer, no leave on their part was
necessary. But arrangements must be entered into with the Colonial
Office for the settlement of the country; and at some future time it
would be, no doubt, his duty to inform their Lordships what these
arrangements were."
The Prospectus, as issued in London, for the new organization, at the
end of June, 1863, contained this paragraph:--
"With the view of providing the means of telegraphic and postal
communication between Canada and British Columbia, across the Company's
territory, and thereby of connecting the Atlantic and Pacific Oceans by
an exclusively British route, negociations have been pending for some
time past between certain parties and Her Majesty's Government and the
representatives of the Government of Canada, and preliminary
arrangements for the accomplishment of these objects have been made
through Her Majesty's Government (subject to the final sanction of the
Colonies), based upon a 5 per cent. guarantee from the Governments of
Canada, British Columbia, and Vancouver Island. In further aid of these
Imperial objects, Her Majesty's Government have signified their
intention to make grants of land in portions of the Crown territory
traversed by the proposed telegraphic line.
"One of the first objects of the Company will be to examine the
facilities and consider the best means for carrying out this most
important work; and there can be little doubt that it will be
successfully executed either by the Hudson's Bay Company itself, or
with their aid and sanction.
"For this, as well as for the other proposed objects, Mr. Edward
Watkin, who is now in Canada, will be commissioned, with other
gentlemen specially qualified for the duty, to visit the Red River and
southern districts, to consult the officers of the Company there, and
to report as to the best and safest means of giving effect to the
contemplated operations."
A letter of instructions, from the new Governor, dated London, 6th
July, 1863, received by me about the 22nd July, after I had made no
small advance in the real business, stated:--
"SIR,
"I am authorized by the Committee of the Hudson's Bay Company to
request you to proceed on their behalf to the Red River Settlement, for
the purpose of reporting to them on the state and condition of this
Settlement, the condition of the adjoining territory, the prospect of
settlement therein, and the possibility of commencing operations for an
electric telegraph line across the southern district of Rupert's Land.
"The Committee have full confidence in your discretion and judgment,
but they have deemed it right to associate with you in this inquiry
Governor Dallas, of the Red River Settlement, with whom they request
you to communicate at once.
"The Committee are aware that it is now so late in the season as to
preclude you from doing more than procure such information as may
enable them to commence fresh inquiries at the opening of next season.
"I have the honour to be, Sir,
"Your obedient Servant,
"EDMUND HEAD, Governor.
"EDWARD WATKIN, Esq."
I found soon after my arrival in Canada that Governor Dallas was coming
down from Red River, and would meet me at Montreal. He was a very able
man; cool, clear, cautious, but when once he had had time to calculate
all the consequences, firm and decided. He had been for years on the
Pacific coast; and, thanks to his prudence, the landing, in 1859, of
General Harney, and a detachment of United States troops on the Island
of St. Juan, between Vancouver's Island and the mainland, on the
Pacific, had been controlled and checkmated, by the proposal of a joint
occupation until negotiations had settled the question of right. This
right was, afterwards, given away by our Government under the form of
an arbitration before the Emperor of Germany. Governor Dallas' opinion
of the transaction will be gathered from his letters to me of the 29th
and 30th October, 1872, hereafter copied.
The Governor and I became fast friends, and our friendship, cordial on
both sides, continued until his death, a very few years ago. The only
fault of Governor Dallas was a want of self-assertion. Brought out by
the Mathesons--hardy Scots of the North--as he was, he made a
reasonable fortune in China: and coming home, intending to retire, he
was persuaded to accept the Governorship of the Hudson's Bay Company on
the death of Sir George Simpson. Meeting at Montreal, our first act of
"business" was to voyage in the Governor's canoe from Lachine through
the rapids to Montreal; a voyage, to me, as almost a novice, save for
my New Brunswick canoeing, of rather startling adventure; but the
eleven stalwart Indians, almost all six feet high, who manned the boat,
made the trip interesting, as it was to me in the nature of a new
experience. These men had been with Governor Dallas nearly 4,000 miles
by river, lake, and portage; and he told me he never knew them to be
late, however early the start had to be made; never unready; always
cheerful and obliging; and that a cross word had never, in his hearing,
been uttered by any one of them. These men made Caughna Wauga, opposite
Lachine, their home, and there were their families.
After the most careful study and discussion of the questions above
alluded to, and others, the discussion extending over a month, we
agreed to various memoranda. The one affecting the re-organization of
management was as follows:--
"The first measure necessary towards the re-organization of the
Hudson's Bay service, will be the abolition, or modification of the
deed poll, under which the fur trade is at present carried on. The
difficulty involved in this proceeding is, an interference in the
vested rights of the wintering partners (chief factors and chief
traders). That might be overcome by some equitable scheme for the
extinction of those rights, which would serve the double purpose of
rendering practicable a reorganization of the service, and a reduction
in the number of superior officers, at present too large. This
reduction would give the opportunity of dispensing with such men as are
inefficient, and of retaining those only likely to be useful. The
Company are under no covenants in reference to the clerks.
"The arrangements of the deed poll are, in outline, as follows:--The
profits of the fur trade (less the interest charge, which goes
exclusively to the stockholders) are divided into one hundred parts; of
those, sixty are appropriated to the stockholders, and forty to the
wintering partners. These last are subdivided into eighty-five shares,
of which two are held by each chief factor, and one by each chief
trader.
"Clerks are paid by salary. Only a clerk can be promoted to a chief
tradership (1-1/85 share), and only a trader to a chief factorship (2-
1/85 shares). The promotions are made by the Company on the nomination
of the chief factors, though this rule has not always been adhered to.
On retirement an officer holds his full interest for the first year,
and half this interest for the succeeding six years. The deed poll
authorizes the Company to put an officer on the retired list, without
reasons assigned, after he has served four years, but they cannot
deprive him of his retired interest except for proved misconduct; but
neither of these regulations has ever been put in force. It is possible
the wintering partners might raise a question whether, under the
existing deed poll, the Company could make any great changes in their
business, or embark in new undertakings, if likely to affect
injuriously the incomes of the officers on the active list, or the
interests of those on retirement.
"One mode of removing this obstacle would be to ascertain the value of
a retired interest, and to give a money compensation to each officer on
his entering into an agreement to consent to the abrogation of the deed
poll. This would involve an outlay of money, but would also be
productive of a considerable subsequent annual saving.
"The eighty-five shares belonging to the wintering partners are, at
this date, held as follows:--
15 chief factors 30 shares
37 " traders 37 "
10 retired chief factors 13 "
10 " " traders 5 "
---
85 "
===
"As regards the shares held on retirement, some of the interests have
nearly run out, and none of the parties have any voice in the business.
"The value of a 1-85th share has been, on the average of the last
thirteen outfits, which have been wound up (1846-1858), about
408_l_. At that rate a chief factor's retired interest would
amount to 3,264_l_., and a chief trader's to 1,632_l_., less
discount, supposing payment to be made at once, instead of its being
spread over nine or ten years. On the other hand, the invariable custom
of the service has been to allow every officer one or more year's
furlough on retiring, which has come to be considered almost a right;
when more than one year has been granted, it has been by special
favour. Adding one year's furlough, a factor's retired allowance would
be 4,080_l_., and a trader's 2,040_l_. The discount being
taken off, to render them equal to cash, would make a factor's
allowance about 3,000_l_., and a trader's 1,500_l_.
"The cost of commutation, on the above scale, would be--
15 chief factors, at 3,000_l_ L45,000
37 " traders, at 1,500_l_ 55,500
18 shares held on retirement, about 14,000
--------
L114,500
========
"Without allowing a year's furlough, the above amount would be reduced
about one-sixth.
"The outlay would only be called for in the case of such officers as
are already retired, and of such as under a new agreement might not be
re-engaged. The retired interest of the officers who might enter into a
new engagement would be provided for in the revised deed poll.
"As a set-off for the outlay on commutations would be a large reduction
in the pay of officers, to be hereafter noticed, and the Company would
also receive actual value for their money; and on buying out the
wintering partners they would become possessed of their 4/10th share of
the profits of the trade.
"Under the present organization the pay of officers in the service is
about as follows:--
Governor-in-Chief L 2,000
16 chief factors 12,000
35 chief traders 14,000
Clerks, about 10,000
-------
L38,000
=======
"The following would probably prove a more efficient staff:--
Governor-in-Chief L 2,000
Lieutenant-Governor 1,250
4 councillors, at 800_l_ 3,200
25 chief traders, at 300_l_ 7,500
100 clerks, at various salaries, about 10,000
-------
L23,950
=======
"The saving of 14,000_l_. per annum would soon reimburse the
Company's outlay in buying up the present interests of the factors and
traders.
"The system of making the pay of officers (of the upper grade)
dependent on the success of the business, has worked well, and might be
advantageously continued, in a modified form, to be hereafter noticed.
"The duties of the officers of the proposed reduced staff would be
adapted to the existing distribution of the territory into departments
and districts, which are as follows:--
"There are four main divisions--the Northern, Southern, Western, and
Montreal Departments, roughly bounded as follows:--the 'Western'
embraces all the country west of the Rocky Mountains; the 'Northern' is
composed of the country east of the mountains, as far as Lake Winnipeg
and Lac la Pluie, and from the American frontier to the Arctic Sea; the
'Southern' embraces the southern and eastern shores of Hudson's Bay;
and the 'Montreal' extends from Lake Superior down the Gulf of St.
Lawrence to Labrador. These departments are divided into districts, and
in each district are several posts. The limits of districts are fixed
by local peculiarities; but commonly embrace some large river, on which
the various stations are planted--such, for example, as the McKenzie
and the Saskatchewan. There are twenty-three districts on the east side
of the mountains; to the west such subdivision of the business is now
scarcely practicable, and is being abandoned. To proceed to the duties
of the officers.
"The Governor-in-Chief would fulfil his present large functions, and be
the medium of communication between the Company and their officers in
the country.
"Under the present system the Governor is supposed to maintain a
personal supervision of the whole service. This is practically
impossible, the country being too large to enable him to travel over
more than a limited section of it in each season. To relieve him of
that heavy duty, and at the same time to maintain a real and close
personal inspection, one of the four councillors might be stationed in
each department, of which, in the absence of the Governor, he would be
the chief officer, and held responsible for all local details, and the
various posts in which he should periodically inspect and report upon.
Once, or oftener, in each year, a meeting of the Governor and the four
councillors should be held, at any time or place most convenient--say,
Fort Garry, Montreal, or elsewhere. Aided by such a council, the
Governor would be accurately informed as to details in every part of
the country, and able to deal satisfactorily with all local questions.
"The duty of the Lieutenant-Governor would be to relieve the Governor-
in-Chief of some share of his labours, and to act in his absence as
President of Council.
"The chief traders would, as a general rule, be placed at the head of
districts, and the clerks in charge of posts.
"The very efficient class of officers known as 'postmasters' would
remain as at present. They are usually men who have risen from the
ranks from merit; and, being good interpreters, and Indian traders, are
commonly placed in charge of small posts. Their scale of pay is rather
less than that of clerks, and they are rarely advanced to any higher
rank; indeed, their ambition is satisfied when they are made
postmasters.
"Reverting to the mode of paying officers, and making their incomes to
some extent dependent on the success of the business, it might answer
to give them an interest as stockholders. Instead of paying a chief
trader 300_l_. per annum, he might have 250_l_., and a sum of
1,000_l_. of stock placed to his credit, of which he would receive
the dividends only, the stock itself reverting to the Company when his
connection with them terminated.
"A councillor might have 700_l_. pay and the dividends on
2,000_l_. stock. It would also be a great encouragement to the
officers, and secure prolonged service, to give them an annual increase
of stock--say, 200_l_. to be added for every year's service. Thus,
if a man did not get as early promotion as he expected, he would still
benefit by length of service.
"The principle of retired interests might be maintained, by allowing
the officers to receive the dividends on the stock they held at
retirement for--say, seven or ten years, before it reverted to the
Company.
"To carry out these arrangements, it would be necessary to set aside in
trust about 150,000_l_. stock. But the Company would lose nothing
by it, as they would save in salaries what they gave in dividends.
"At the outset only 35,000_l_. of the stock would be called for,
with an increase of 5,400_l_. per annum. Even allowing for a
considerable retired list, it is doubtful if the whole 150,000_l_.
would ever be appropriated; and of course the dividends on whatever
portion was not appropriated would revert to the Company.
"In the revision of the deed poll, it would be essential to retain the
clauses which secure to the Company the right to place officers on the
retired list, and to dismiss them for misconduct.
"The mode of keeping the accounts, both in London and in the country,
is one of much importance, requiring early consideration. At present
there are no accounts, properly speaking, kept at the posts; and very
great delay occurs in ascertaining the results of the business from
London. It is essential to introduce some system of analysed post
accounts, which should keep the Governor and his Council fully informed
of the state of the business at every post, and by which they might
judge of the management of the officers in charge. There is now no
practical check on extravagance or dishonesty, except that arising from
the upright principles of the officers in the service. The adoption of
a system of local audit appears the best remedy for many of the
existing evils.
"The Company's agent at New York (Mr. Wm. McNaughton), who is a
valuable officer, has not at present sufficient employment to make his
position worth occupying. As there is a valuable market in New York to
which it would, at certain times, be advantageous to send buffalo
robes, wolves' and some other furs, which could be done without
interference with the market in England, it is important to render the
New York agency more efficient.
"(Signed) A. G. DALLAS.
"(Signed) EDWARD W. WATKIN.
"_7th August_, 1863."
This memorandum was sent home to Governor Sir Edmund Head, with other
papers.
On the serious questions of the future relations of the vast territory
to Canada and the Mother Country; how it could best be settled; how it
should be governed; what arrangement as to boundaries, and so on--I had
many and serious conferences with public men. And in answer to many
questions as to my own views, I drew up the following memorandum, as a
_resume_ of the whole subject. It is now nearly twenty-four years
old. I have read it again and again. I am not ashamed of it. I see
nothing to retract; little to alter:--
"The present state of government in the Red River Settlement is
attributable alike to the habitual attempt, encouraged, perhaps very
naturally, in England and in Canada, to discredit the traditions, and
question the title of the Hudson's Bay Company, and to the false
economy which has stripped the Governor of a military force, with
which, in the last resort, to support the decisions of the legal
tribunals. No other organized Government of white men in the world,
since William Penn, has endeavoured to rule any population, still less
a promiscuous people composed of whites, half-breeds. Indians, and
borderers, without a soldiery of some sort, and the inevitable result
of the experiment has, in this case, been an unpunished case of prison-
breaking, not sympathised in, it is true, by the majority of the
settlers, but still tending to bring law and government into contempt,
and greatly to discourage the governing body held responsible for
keeping order in the territory.
"At the same time it must be conceded, that, while government by a
merchant organization has eminently succeeded, up to an obvious point
of time and circumstances, in the cases both of the East India and
Hudson's Bay Companies, and is still applicable to the control and
management of distant districts, it contains within itself the seeds of
its own ultimate dissolution. In fact, the self-interest, however
enlightened, which brings a dividend to stockholders, is opposed to the
high impartiality and absence of individualism which should
characterize a true Government. Individuals and corporations may trade
and grow rich,--Government may not; they may embark in constant
speculation, while it cannot; they must either insensibly measure their
dealings by consequences, as affecting _gain_, or be suspected of
doing so, while the interest of Government is not individual, but
collective; its duty being, to give facility to the acquirer, security
to the possessor, and justice and equal protection to all.
"Therefore, although the Government of Red River has had few faults and
many excellences, and has been marked by a generous policy, in many
instances it has been, and is, open to suspicion; because the
commercial power which buys furs, trades with Indians and whites alike,
and is, in fact, the great merchant, storekeeper, and forwarder of the
country; appoints a Governor and assistants, places judges upon the
bench, selects magistrates, and administers the law, even amongst its
possible rivals and trade competitors. Such a state of things is
unsound in principle, and ought only to be continued until a stronger
and permanent Government can be organized; at the same time it can only
be continued in safety, on the opening up of the country, by arming the
Governor with a military force of reasonable amount.
"That the Hudson's Bay Company _can_ govern the country
efficiently, on this obvious condition of all other Governments, is
clear enough; and the peaceable relations between the Indians and the
whites, and between the various tribes themselves, throughout the whole
of this enormous territory, as well as the general state of health and
occupation of the aborigines, prove how perfect and wise has been the
management of the country. But government of Indians, who can be
employed and traded with, and who at last become more or less dependent
upon the Company's organization, as in this case, is one thing,--
government of a large and expanding colony of free white men is quite
another.
"It is a question whether the government of the Indians can or ought to
be changed, for a long period to come, so completely is the Indian life
now associated with the operations of the Company. Of course, the
settlement of a new or an extended colony, involves the extinguishment
of Indian rights within the area proposed; and while the outside
district not set apart, would still be roamed over by the Indians, and
be valuable for the fur trade, its limits must, from time to time, be
narrowed by further additions to the circle of civilization and free
government. Thus, the Hudson's Bay Company, if dispossessed of the
government of Red River, and the proposed new Colony, would still
manage and govern where it traded, and would still preserve sobriety,
order, and peace amongst the Indian tribes of its territory thus
limited.
"It may happen that the Hudson's Bay Company may be compelled to govern
everywhere, by the refusal of the Home or Canadian Government to
encounter the responsibility and expense, which at first might be
serious, and which, as regards cost, must be greater in their hands
than in those of a Company using portions, of its business organization
for purposes of administration. It is well to look these probabilities
fairly in the face.
"Such a necessity may arise from the indisposition of certain schools
of politicians at home to incur Colonial expense, and the
responsibility of defending a new nation flanking the United States; it
may happen, owing to the refusal of Lower Canada to widen out the
borders, and thus increase the political power of Upper Canada; or it
may be objected in Canada generally, that the finances of the country
will not, at present, prudently authorize the maintenance of a new
Canadian military force; and again, the Indian war in Minnesota, which
may spread itself, may raise up fears of Indian wars in the new country
to be settled.
"Should the Hudson's Bay Company be compelled, then, to continue to
govern the whole territory, the first essential, as before said, is a
military force. That force may consist partly of regular troops, partly
of mounted irregulars or militia, and it need not, in their hands, be
large. The population is suited to military pursuits, and the half-
breeds mounted would make an excellent irregular cavalry. And the next
essential would be a convention and treaty with the United States, as
to boundary and transit through the United States and Hudson's Bay
territory respectively, for purposes of travel, and commerce, and of
postage, and the telegraph.
"Then the limits of colonization must be defined, and it must be
maturely considered at the outset, and decided as to how far, and in
what form, and how soon, the principle of self-government shall be
introduced. It is assumed that a thriving and expanding colony of white
men neither can nor ought to be taxed and governed without their own
consent, obtained in some form or other; and that it would be both
unwise and unjust to attempt a permanently autocratic government. This
is a most serious question, and the Act 31st George III., under which
Canada was governed until 1841, would appear to solve the difficulty.
The general scheme of government of that Act might operate so soon as
the new Colony had a population of (say) 50,000, and its provisions
might be elaborated into a constitution, to be voted by the Colony in
general assembly, so soon as the population reached (say) 300,000.
"The grand basis of all successful settlement--the land--presents fewer
difficulties than might have been imagined, because the admirable model
of the land system of the United States is before us, and no better can
be devised to enable a country to grow up side by side with the
Republic. Reliable surveys and plans, cheap and unclogged titles to the
land in fee, a limited upset price of not exceeding $1-25/100 an acre;
division of the land saleable into regular sections; the issue of land
warrants and regulations as to location, which will prevent, as far as
may be, monopolies of land in the hands of speculators--are all
essential conditions, and whatever power governs, they must be equally
observed.
"Again,--reserves of land, on a liberal scale, must be made to support
schools and churches, and to assist roads and other public works
conducted by the Government.
"But let it be hoped that this necessity of continued government by the
Hudson's Bay Company may be avoided by the wise and far-sighted action
of the Home Government and of Canada. No beneficial decision can be
arrived at without the concurrence of both powers, for each have rights
and ideas in some respects differing, and Canada especially has the
deepest concern in the future organization of the North-west. In
selecting a governing power for such a country, the strength and
influence of that power are the grand essentials. Even with equal
enlightenment, these essentials could not be overlooked. A weak
Government would invite attack, deter investment, and check general
confidence.
"Apart from the government by the Hudson's Bay Company, there appear to
be these alternatives:--
"1. Government by Canada annexing to her territory a tract of country
extending to the limits of British Columbia, under some reasonable
arrangement with the Hudson's Bay Company, fairly protective of their
rights, and which arrangement ought not to be difficult to draw out,
when once the principle of the settlement of the country, and the land
system, and extent of land reserves, are agreed upon.
"2. Government by the Crown, as a separate Crown Colony, totally
independent of Canada.
"3. Government by the Crown as a separate Crown Colony, with
federation, more or less extensive, with Canada, and the establishment
of a customs union between the new and old communities.
"It must always be observed that a decision as to the fate of this
territory must be immediately made. It cannot wait political
necessities elsewhere, or be postponed to suit individual wishes. The
fertile country between Lake Winnipeg and the Rocky Mountains will be
now settled, since that is now a fixed policy, and its plan of
government must be in advance of, and not lag behind, that settlement.
The electric wire, the letter post, and the steamboat, which two years
more will see at work, will totally change the face of things; and as
Minnesota has now 250,000 inhabitants, where, in 1850 there was hardly
a white man, so this vast district may, when once it can be
communicated with from without, with reasonable facility, be flooded
with emigrants, not forgetting a very probable rush of English, Irish,
and Scotch farmers, and settlers from the United States, who here will
find a refuge from conscription and civil war.
"The discoveries of gold, and the disturbed state of the border Indians
in Minnesota, are both unanswerable reasons of necessity for the
immediate establishment of a permanent form of Government, and fixed
laws and arrangements for the settlement and development of the
country.
"1. The government of the North-west, as an 'annexe' to Canada,
possesses advantages of contiguity and similarity of ideas on the part
of Canadians and the probable settlers. Canada, it will be said, has a
good and responsible Government, and why not now extend its machinery
to the 1,300 miles between the height of land and the Rocky Mountains?
"But will Canada accept the expense and responsibility, and, more
especially, is it just now politically possible? Were Canada
politically and practically one united country, the answer would be
perhaps not difficult. But Canada, for the present, is really two
countries, or two halves of one country, united under the same form of
government, each half jealous of the mutual balance, and neither half
disposed to aggrandize the power or exaggerate the size of the other.
"Would Lower Canada, then, submit to see Upper Canada become, at one
bound, so immensely her superior? And would Upper Canadian statesmen,
however personally anxious to absorb the North-west, risk the
consequences of such a discussion as would arise? Would it be possible,
in fact, to found a Government based upon the platform of accepting the
responsibility of settling, defending, and governing the North-west? If
not, then, however desirable, the next best alternative must be chosen.
"Assuming that at some period, near or distant, the British North
American Provinces, between the Atlantic and the Pacific, unite in a
federal or legislative union, and thus become too great and too strong
for attack, that next best alternative would point to such
arrangements, as respects the North-west, as would lead on to and
promote this union, and not stand in its way. Thus, disputes about race
and customs should, if possible, be avoided by anticipation, and the
constitution and power of the new Colony should foreshadow its
connection with the countries to the east and to the west. Future
isolation should be forbidden, while present independence should be
accorded.
"2. The above assumption tends to throw doubt upon the desirability of
establishing a Crown Colony, separate in all respects from Canada, and
able to shut out or let in Canadian produce and manufactures at its
pleasure. This is a danger to be foreseen and avoided.
"The new Colony, placed between Canada and the Pacific, must be
essentially British, in the sense of its forming one secure link in a
chain of British nations, or, in the interests of Canada, it had better
never be organized. The power and _prestige_ of the Crown is
essential to this end, and a separate Colony, even, would have many
advantages _per se_. It would also save Canada the cost of a new
Government at a time when financial pressure and political majorities
would be in the way. A Crown Colony could not be looked upon with
jealousy in Canada, while government by the Hudson's Bay Company would
be so regarded.
"3. But a Crown Colony with such a federation as would not alter the
political balance of Upper and Lower Canada, and with a system of free
trade with Canada, would appear to solve the whole difficulty; and if
so, the scope of the federative principle would be matter to be settled
between Canadian statesmen and the Colonial Office. The interchange
between the North-west and Canada appears to be an absolute necessity
in the interest of the latter. As Government, however, would require
taxation, the new Colony must, in all probability, have its Custom-
house; and it should be considered whether the Custom-house of Canada
would not serve, as far as the eastern frontier is concerned, for the
new Colony. If so, why should not duties, on a scale to be agreed upon
under constitutional powers to agree, be levied on imported foreign
goods, by Canada, and the duties be divided between the two powers in
agreed proportions? Were this done, at least in the beginning, expense
would be saved to the new Colony, a revenue would be easily collected
for it, through existing machinery, and Canada would obtain the revenue
and trade. Of course the scale of duties must be moderate, so as not to
excite dissatisfaction, by establishing dear prices, and it would be
the interest of Canada to make them so, for the more she stimulated the
growth of the new customer, the better for the trade. On the other
hand, the new Colony would be insured a market and an outlet for its
own productions, and would be content, therefore, to accept a
reasonably high scale of duties, levied for revenue purposes only, on
its articles of foreign consumption."
I discussed the question involved at length with the Honorable George
Brown and with his brother Gordon, at Toronto. I felt the importance of
having the views, and, if possible, the concurrence of the leader of
the "Grit" party. He led me to think that he concurred with me; and I
sent him a copy of this document. He kept it some time, and then re-
directed it to me without remark. Afterwards, I received a verbal
message to the effect that "It would not do at all." I became convinced
that nothing "would do at all" with a small band of men--who, at that
time, had objects of their own--in Upper Canada. Some of them--few in
number, I am happy to know, and impecunious--appeared to consider the
old corporation of the Hudson's Bay in the light of Blucher, when
driving through the streets of London, "Mein Gott! what a plunder."
Some of them tried their best to confiscate the property; and once or
twice, by weakness and vacillation in London, they almost gained the
day.
Governor Dallas and I also carefully considered the telegraph question;
the route, the cost, and the best agencies to complete its very early
construction.
The two agreements, which, as matter of history, I here copy, were
intended to bring about the complete connection of the Hudson's Bay
territories direct with England and with the United States.
"Memorandum of Agreement between Mr. Edward W. Watkin and Mr. O. S.
Wood (subject to the approval of the Montreal Telegraph Company and the
United States Telegraph Companies, affected by this Agreement, and also
by the Governor and Committee of the Hudson's Bay Company) for
completing telegraphic communication between the Atlantic and Pacific.
"1. The Montreal Telegraph Company to construct a new line of telegraph
between Father Point and Halifax, _via_ Dalhousie and Mirimichi,
to be completed on or before the 1st October, 1865; and also a line
from the telegraph at Arnprior to the Hudson's Bay post at the Sault
St. Marie, to be completed on or before the 1st October, 1865, with all
necessary instruments, stations, staff, and appliances for a first-
class through and local telegraph line.
"2. The Hudson's Bay Company (directly or through parties to be
appointed by them, as they may elect) to construct a telegraph line
from Fort Langley to Jasper House, thence to Fort Garry, and on to the
United States boundary, near Pembina, to be completed on or before the
15th October, 1865; and also a telegraph from Fort Garry to the
Hudson's Bay post at Fort William, at the head of Lake Superior; and
also to make arrangements with other parties to erect a telegraph from
Fort William to the Sault St. Marie, with all necessary instruments,
stations, staff, and appliances for a first-class through and local
telegraph line: provided always that the construction of the telegraph
between Fort Garry and Sault St. Marie is dependent upon arrangements
with the Canadian Government, and that it is understood that, failing
or pending these arrangements, the route to be adopted shall be
_via_ Detroit, St. Paul, and Pembina to Fort Garry.
"3. The telegraph from Fort Langley to Halifax to be worked for all
through business as one through system, and the through rates to be
divided _pro rata_ the mileage, except that for the lines west of
the Sault St. Marie (to be erected by the Hudson's Bay Company as
above) an additional mileage proportion of thirty-three per cent. over
the actual distance shall be allowed, until those lines pay ten per
cent per annum on the outlay, after paying all operating and other
expenses, including repairs and renewals, and this allowance shall be a
condition with the United States lines between Canada and the Hudson's
Bay boundary.
"4. Arrangements to be made by the Montreal Telegraph Company, with
parties in the United States, for the construction of a telegraph from
St. Paul to the connecting point near Pembina.
"5. The Sault St. Marie and Sarnia to be respectively the boundaries of
the Montreal Telegraph Company and of the Hudson's Bay Company and
their representatives, for the purposes of this Agreement.
"6. This Agreement to be for twenty-five years.
"(Signed) EDWD. W. WATKIN.
"(Signed) O. S. WOOD.
"Montreal, _August_ 10_th_, 1863."
"Agreement between Mr. Edward W. Watkin and Mr. O. S. Wood, for the
construction of the telegraph between Fort Garry and Jasper House, and,
if hereafter agreed, between Fort Langley and Jasper House, and Fort
Garry and the United States boundary near Pembina (subject to the
approval of the Governor and Committee of the Hudson's Bay Company in
England).
"1. Mr. Wood to construct a telegraph, and all needful works and
stations, from Fort Garry to Jasper House, at the cost of the Hudson's
Bay Company, and to put the same in full operating order, and also
instruct, and where necessary provide, the staff for the operation and
repair of the line.
"2. Mr. Wood to proceed with Governor Dallas to St. Paul, with as
little delay as possible, and on to Fort Garry, if necessary; and to
make all arrangements required for transporting the telegraph wire,
insulators, fittings, instruments, and other materials to Fort Garry;
for distributing all materials from Fort Garry; for cutting, preparing,
and distributing the poles; and generally for commencing and for
completing the work (including a system of posts at proper distances
apart) in an efficient manner, and at the earliest period.
"3. Mr. Wood to receive the cordial aid and cooperation of the staff of
the Hudson's Bay Company in carrying out this work, under the orders,
instructions, and control of Governor Dallas.
"4. Mr. Wood's travelling and other necessary expenses, and the
salaries and other necessary expenses of his assistants, to be paid,
and, in consideration of his services, he is to receive the sum of ten
thousand (10,000) dollars, as a fixed payment; one-third to be paid on
the storage of the materials as above at Fort Garry, one-third upon the
completion of two hundred (200) miles of the telegraph, and one-third
on the completion and operation of the whole line between Fort Garry
and Jasper House; and further, should the whole be completed prior to
the 15th October, 1864, Mr. Wood is to receive a bonus of two thousand
(2,000) dollars, so soon as the line has been one month in operation;
and should the whole cost of the work not exceed thirty thousand
(30,000) pounds sterling, Mr. Wood to receive a further bonus of
fifteen per cent. on all savings upon that sum, payable when the line
has been in operation twelve (12) months.
"5. Should the telegraph lines between Fort Langley and Jasper House,
and Fort Garry and the United States boundary near Pembina be ordered
to be constructed, and the Hudson's Bay Company desire it, Mr. Wood to
undertake the construction, on proportionate terms.
"(Signed) EDWD. W. WATKIN.
"(Signed) O. S. WOOD.
"Montreal, _August_ 10_th_, 1863."
"MEMORANDUM _by Mr. Wood as to supply of Materials_.
"MONTREAL,
"_August_ 10_th_, 1863.
"DEAR SIR,
"We shall want 40,000 insulators--they will cost from $6 to $8 per 100;
35,000 red cedar top pins will cost $3 per 100; 40 sets of telegraph
instruments at $60 per set; main and local batteries, $500.
"As some of these articles ought immediately to be prepared, since
their preparation takes a little time, I will at once, in accordance
with our understanding of this morning, order a small quantity, and the
remainder when I receive your confirmation of the whole arrangement. In
the meantime I shall go to New York personally, to arrange the exact
form and description of insulator, it being very desirable to have this
article of the most perfect description.
"Yours faithfully,
"(Signed) O. S. WOOD.
"EDWD. W. WATKIN, Esq."
My official letter to Sir Edmund Head from Montreal, 24th July, 1863,
summarized all my proceedings up to its date.
"MONTREAL,
"_July_ 24_th_, 1863.
"SIR,
"I have the honour to acknowledge your official letter of the 6th July,
requesting me to proceed to the Red River Settlement, for the purpose
of reporting upon the state and condition of that Settlement, of the
condition of the adjoining territory, the prospects of settlement
therein, and the possibility of commencing operations for an electric
telegraph line across the southern district of Rupert's Land; and
associating with me in this inquiry Governor Dallas, of the Red River
Settlement, with whom you request me to communicate at once.
"I observe that the Committee consider the lateness of the season will
preclude me from doing more than procure such information as will
enable them to commence further inquiries at the opening of the next
season.
"In consequence of verbal communications received before leaving
England, and suggestions unofficially received from members of the new
Committee, I have deemed it my duty, though unofficially, to
communicate with the Canadian Government, and with those gentlemen
likely to form the Government of Canada, should any change of ministry
take place on the opening of Parliament, so as, as far as possible
(unauthorized as I was), to prevent antagonism to the operations of the
new organization pending official communication and explanations from
the Governor and Committee.
"No one can be better aware of the state and views of parties in Canada
than yourself. The leader of the present Government expresses a strong
opinion in favour of the settlement of a separate Crown Colony in the
Hudson's Bay district, and this also is the view taken by Mr. Cartier
and Mr. J. A. Macdonald, and is strongly concurred in by Mr. Cazeau,
the Vicar-General, who, as you are aware, leads the Catholic party in
Lower Canada. On the other hand, the feeling of Mr. Geo. Brown and the
'Grits,' as heretofore expressed, has been in favour of annexing the
Hudson's Bay territory to Canada, thereby securing that preponderance
which would practically settle the question of the future government of
the whole country.
"The views of the Duke of Newcastle, and also, so far as I understand
them, the views of yourself and your colleagues, being in favour of the
establishment of a separate colony unconnected with Canada, I consider
the discussions which have taken place have now put the question in its
right position here; but at the same time I shall endeavour to see Mr.
George Brown, and give such explanations, unofficially, as may at all
events prevent his considering that he has not been consulted in this
important transaction.
"I have also placed myself in communication with many of those who have
advocated the settlement of the North-west, including Professor Hind,
who has explored much of the district; and, at my request, Professor
Hind has written a memorandum, and letter upon the gold discoveries in
the Hudson's Bay territory, which I now enclose.
"I have no doubt that Governor Dallas's own letters will more than
corroborate what is stated in this memorandum, and I need not suggest
that the most anxious and immediate attention of yourself and the
Committee be directed to these discoveries, and to their political and
other necessities and consequences.
"Having possessed myself of so much information in reference to the
subjects referred to Governor Dallas and myself, I think we shall be
able to fulfil the wishes of the Governor and Committee, Governor
Dallas being here, accompanied by Mr. Hopkins, without the necessity of
my proceeding on this occasion to the Red River; though, should further
discussion with the Governor lead to our joint impression that such a
visit would be advantageous, I shall not hesitate to undertake the
journey.
"In advance of some memorandum to be prepared for you by Governor
Dallas and myself, and which I shall beg him to be good enough to
draft, I would mention that I have suggested that the Governor issue a
circular to the employes of the Company, stating briefly the nature of
the recent changes of proprietorship in the Company, and thereby having
the tendency to remove any misconceptions which might arise, and which,
I regret to learn, have in some few quarters appeared amongst the
factors and other officers of the Company, who, as partners in the
trade, have considered themselves entitled to be consulted by the late
Governor and Council on the subject of the transfer.
"Governor Dallas informs me that the outfit of 1862-3 will show very
much improved results; and I have little doubt that the wise and
energetic measures which he has initiated since his tenure of office
will bring abundant benefits in every direction. The result in the
western district, which, if I recollect rightly, exhibited a loss, and
which, in the past year, with all exclusive privileges taken away,
gives a profit of no less than $166,000, is a convincing proof of what
may be effected by improved business organization and thorough energy
and firmness. It has, however, been matter of considerable anxiety to
me to learn that it is Governor Dallas's desire to return to England
next year.
"As regards the future management of the fur trade, Governor Dallas is
of opinion that a considerable reduction may be made in the number of
the employes; and that by a judicious weeding out of those who, in all
large establishments managed from a distance, either were originally,
or have become, inefficient, not only will expenses be saved, but a
much larger trade be carried on.
"In any considerable change of personnel, the partnership rights of the
factors will have to be considered; and one of the gravest and most
difficult subjects of consideration will be, how to reconcile the
rights of these gentlemen in a share of profit with that reorganization
which the commercial interests of the Company evidently require.
"These changes can only be made after discussion with the factors and
chief officers; and in some cases it may be desirable to buy out
individual interests on a more or less extended scale.
"The 40 per cent. of the net profit of the Company allowed to the
factors, in addition to the salaries of considerable amount, is a heavy
drain, and involves other considerations opposed to rigid discipline,
which need not be further touched upon here, but which are sufficiently
obvious. This re-organization can only be effected by giving to the
Governor very large and exceptional powers, and without delay. If these
powers are given, I am quite confident that the results will be such as
abundantly to satisfy the Committee. Hitherto, as it appears to me, far
too little discretion has been permitted; and the practice of sending
all the accounts home to England, and dealing with them in such a
manner that the Governor could not tell from time to time how the
financial results of expenses and profits were progressing, has
produced its inevitable consequences. In future, I feel convinced, it
will be found matter of the utmost consequence to concentrate the
accounts at Fort Garry, and to send copies of the vouchers, journals,
and ledgers from Fort Garry to England, instead of adopting the reverse
practice, and endeavouring, as hitherto, to make the accounts travel as
long a distance and be made up over as remote a time as possible. With
proper telegraphic and postal communication between the principal posts
of the Company and Fort Garry and Montreal, there is no reason why the
accounts should ever be two years in arrear in future.
"As regards the settlement of the country, and, involved in that
important question, the state and prospects of the Red River, the
discoveries of gold above alluded to involve very serious
considerations.
"Assuming a rush of miners to different portions of the territory, the
machinery of Government for the preservation of order cannot be for a
moment neglected, or its construction be delayed. This involves, again,
the question of the establishment of a new colony. Is that colony to be
governed by the Hudson's Bay Company, who are essentially a trading and
landowning corporation, or is it to be governed in the name of her
Majesty, the Hudson's Bay Company, so far as the limits of the Crown
Colony are concerned, becoming merely traders and landowners, and
ceasing to govern as at present?
"All the difficulties at Red River--which, after all, have been much
exaggerated, and can be very easily dealt with--would be disposed of at
once were a Governor, appointed by the Crown, to be sent out; and it
does not follow that representative institutions need at first be
granted, though ultimately they would become matter of necessity. The
great object of the Governor and Committee--and Governor Dallas and
myself perfectly agree in the view--should be to induce the Colonial
Government to found a Crown Colony under arrangement with the Hudson's
Bay Company with the least possible delay.
"Such a Government would not only relieve the Hudson's Bay Company of
an immense responsibility, but it would render titles to land sold by
them, and claims to interest in the minerals, far more certain,
marketable, and profitable than at present.
"The commercial re-organization of the Company is a matter perfectly
easy in the hands of Governor Dallas, empowered to act in accordance
with his own best judgment; but this question of the government of the
country is, after all, the grand difficulty, and, if successfully
negociated, the grand hope of success as regards the future settlement
of this vast district.
"As to the suitability of an immense portion of the district west of
Fort Garry for eligible settlement, Governor Dallas--who has now made
journeys of 1,800 miles in the last year--has no doubt whatever; and I
trust that the old traditional phantoms of inhospitable deserts will be
finally dismissed from the minds of the new Governor and Committee,
especially when they have before them the many letters and reports in
evidence of the true state of affairs, which must be in possession of
the Company in Fenchurch Street.
"As regards telegraphic communication, I have made every inquiry
necessary upon the subject, and Governor Dallas agrees with my views of
the importance of connecting the Hudson's Bay posts by telegraphic
communication.
"Subject to further discussion, I may indicate my opinion that the
route suggested by Governor Dallas through the Hudson's Bay territory,
viz., from Jasper House by Edmonton, Carlton, and Fort Pitt to Fort
Garry, would be the proper route for a telegraph.
"This portion, as it seems to me, should be constructed at once, and by
the Hudson's Bay Company.
"Were it to be constructed in Canada, it would not cost more than
15,000_l_. sterling. It may cost less, though in some cases it may
cost more, through your territory; though I am inclined to think that
it may be constructed for 20,000_l_. as an outside sum, and that
it is impossible that the cost of this portion of the work should
exceed 30,000_l_. in any event.
"This outlay being sanctioned, the connection with the American
telegraph through Minnesota would be a matter of negociation; and the
extension of telegraphic communication to Fort William on the one side,
and to Fort Langley on the other, would depend upon the subsidies to be
obtained from Canada, and from British Columbia and Vancouver Island.
"I have the assurance of the present leader of the Canadian Government,
that the offer to give a subsidy, made last year, will be officially
renewed, and I shall endeavour to get this promise put into writing,
and send it to you home.
"British Columbia, I assume, would do what the Colonial Office
requested, but, in any case, we ought not to commit ourselves to a
through communication through Canada and British Columbia without a
clear understanding as to the subsidies. At the same time, if you, the
Hudson's Bay Company, have command of one thousand miles of telegraph,
enabling you to transmit information through your own channels with a
new expedition, you will practically have command of the future
discussion of this large question.
"I have obtained estimates, and made calculations of the cost of these
telegraphic operations, and I have selected a very eligible gentleman,
Mr. Wood, the Manager of the Montreal Telegraph Company, who, I am
quite sure, will carry out the operation, with the assistance of the
employes of the Hudson's Bay Company, and under the orders of Governor
Dallas, with perfect success.
I should recommend that immediate steps be taken; and there is no
reason, in my opinion, why all the materials should not be on the
ground by the end of the coming winter, since much of it can be taken
by canoe, and the remainder may be taken across the snow in the winter;
and why may not the whole telegraph from Jasper House to Fort Carry be
completed by September in next year?
"The present attitude of the Sioux Indians in the State of Minnesota
deserves serious attention. Little Crow has waited upon Governor
Dallas, and the Governor has written to General Sibley.
"I have suggested whether a visit to Washington would not be desirable,
and that the opportunity of assisting the American Government to make
peace with these troublesome Indians should be improved, by attempting
to get a settlement of your Oregon claims.
"I have the honour to be, Sir,
"Your most obedient Servant,
"(Signed) EDWARD W. WATKIN.
"Sir EDMUND WALKER HEAD, Bart., &c. &c.,
"Governor, Hudson's Bay Company."
Finding, however, that the Governor and his Committee were not prepared
to act with the energy and preciseness I had desired, I closed my,
unpaid, mission by the following letter of 26th August, 1863, from my
house, Norfolk Street, Park Lane.
"NORFOLK STREET, PARK LANE,
"_August_ 26, 1863.
"MY DEAR SIR,
"I have to thank you for sending me copies of the official letter from
the Secretary of the 13th instant, in reply to my report and private
letter of the 24th July, and of your private notes of the 13th and 18th
instant, the latter noticing my letter of the 4th instant.
"I desire at once to say that the heads of arrangement which I have
written down with the Montreal Telegraph Company and with Mr. Wood, for
your consideration, were of course entirely subject to the sanction of
the Governor and Committee of the Hudson's Bay Company. And, in
accordance with what I understood to be your views, when to-day you
were good enough to leave the Deputy-Governor in order to see me in the
board room by appointment, I shall consider it my duty to cancel all
that has passed, in such a manner as, I trust, will be perfectly
satisfactory to your colleagues. There will then remain nothing beyond
a responsibility for a few essential materials, as to which time was an
object, amounting to not more than a few hundred pounds at the utmost,
which I shall take entirely upon myself, under the circumstances of
doubt and difficulty as to the opinions of the shareholders of the
Hudson's Bay Company which you represented to me. And with a desire to
avoid similar complaints, I do not propose to make any charge whatever
for my own expenses, or, if I may be excused the word, services, in
connection with the mission I have had to undertake. That mission,
however, cannot go without explanation, for I am anxious to avoid all
misconception now, or hereafter, and I desire, therefore, by a frank
statement, at once to court contradiction, should it be merited.
"Having had much to do with the discussions which led to the transfer
of the Hudson's Bay Company's property, I had expressed my willingness,
inconvenient as it must be to me, to act as a member of a proposed
commission of three, including Captain Glyn, R.N., and Captain Synge,
R.E., whose duty would be to investigate the position of the
undertaking at its head establishment,--to report upon the re-
organization of its business, the development of its mineral resources,
the settlement of portions of its territory as a new colony, and the
opening up of the country by the telegraph and by means of transit.
Captain Glyn and Captain Synge had both been consulted, and the Duke of
Newcastle had been applied to to obtain leave for Captain Synge at the
War Office. I had been led to believe that my services were considered
of some value, and I left England on the 20th June, expecting that
Captain Glyn and Captain Synge would follow me in a week, and that we
should at once proceed to Red River, and send home a first, but full,
report by the beginning of October. I understood also that such a
report was desired, to clear away any objections to the operations of
the re-organized Company which might be factiously raised. And when,
after my arrival in Canada, I received the prospectus with your name as
Governor of the Company at its head, I found a condition of that
document to be that I was to examine and report and advise generally,
in concert with other gentlemen, specially qualified for the duty, not
only upon the question of telegraphic and postal communication, but
also as to the other objects proposed in the scheme officially laid
before the public.
"Before leaving England, I repeatedly pressed the necessity of
communicating with the Governor and 'wintering partners' of the Company
in America, so that they should not hear of the transfer of the
property for the first time from the newspapers; and I expected to be
specially authorized to give the needful information and assurances. I
was no party, I beg to say, to this mention of my name in the
prospectus; but my friends and business connections who may have taken
shares on the faith of my name, will naturally hold me responsible
accordingly. Still, anxious to witness the success of a project which,
energetically managed, is so intrinsically sound, I refrained from
writing to you to decline the responsibility, hoping that the original
plan of delegation, though delayed, would be carried out. That plan, I
must observe, involved not a mere commission of engineers to explore
the route for a telegraph to Jasper House, as assumed in the
Secretary's letter of the 13th inst., but far wider objects, the
realization of which would, I venture to think, have given satisfaction
at home, and have dissipated many misconceptions, now existing,
inimical to the interests of the new proprietary.
"Your letter to me of the 6th July did not reach me till the 20th, and
in the meantime the newspaper notices in England led to many official
and unofficial inquiries from me, involving difficulty of answer. I
found, in fact, that the staff of the Hudson's Bay Company was quite at
fault, and that public men in Canada misunderstood the objects of the
new organization, for want of information very simple in its nature,
but which--except so far as the prospectus authorized me--I had no
right to supply.
"Several of the Hudson's Bay Company's chief factors and traders had,
it appeared, addressed a memorial to the then Governor and Committee,
some months ago, upon the rumoured sale of the property, and had been,
as stated to me, informed that no transfer was likely to take place, or
would in fact be undertaken without previous consultation; and yet
these gentlemen learnt for the first time from the public papers that
new arrangements had been made. It was not unnatural, therefore,
considering the relations of these gentlemen with the Company, that
they should feel much annoyed; nor was it, perhaps, surprising that an
influential member of the body should have predicted a general
resignation of the factors 'from Labrador to Sitka,' followed by a
confederation amongst them, in order to carry on the fur trade in
competition with the Hudson's Bay Company, they possessing, as was
said, 'the skill, the will, and the capital to do it.'
"The appearance of Mr. Lampson's name as Deputy-Governor, in the
absence of any prior explanation, aggravated the first feeling of
distrust; for it was said that he and his connections had been, and
then were, the Company's great, and often successful, rivals in the fur
trade, carrying on a vigorous competition at all accessible points.
"The arrival of Governor Dallas at Montreal some days before my receipt
of your letter of the 6th July, enabled these misconceptions to be
dealt with; and the issue of a circular by the Governor, together with
many personal explanations, and some firmness on the part of Mr.
Dallas, will, I trust, very soon remove the want of confidence and
dissatisfaction on the part of the staff, which at first looked
threatening. These explanations, of course, took time, and rendered the
Governor's presence in Canada necessary.
"Governor Dallas and myself made various opportunities of meeting
members of the present and of the late Government of Canada, and of
talking over the subject of the North-west, and of its organization and
government; and I feel convinced that these unofficial discussions were
of considerable use, and may help to prevent antagonism and territorial
claims on the part of Canada, which, in my opinion, might be very
embarrassing, and ought to be foreseen and avoided. Possibly the
following article in the Government organ, written by order, and handed
to me by the Honorable W. P. Howland, will best exhibit, without
further troubling you, the friendly spirit of the Canadian Government
before I left for England:--
"(From the _Quebec Mercury_.)
"'The recent announcements concerning the transfer of the title and
territory of the Hudson's Bay Company to a new corporation have
naturally awakened considerable interest in Canada. So far, however, no
specific intimation of the opinions of the new Company has been given.
It is understood that they will not confine themselves to a mere
following in the footsteps of their predecessors, but that
colonization, telegraphy, the opening up of common roads, and
eventually of railroad communication, enter into the scheme which,
whether as regards the interests at stake or the capital involved, may
be said to be colossal in its character. It is no doubt anticipated by
the new Company that the Canadian Government and people will cheerfully
aid them in an enterprise which evidently concerns us so closely.
Speaking in general terms, we presume that it may be conceded that such
anticipations have been correctly formed. The development of Canadian
territory, or of British territory immediately adjacent to it, could
never be a matter of indifference to the Government or people. Though
young in years, still Canada cannot forego those aspirations regarding
the future which are naturally suggested by the magnificent domain
which, stretches along the northern portion of the Continent. It is for
Canadians to occupy and eventually to govern it, and any means which
point to the furtherance of an object which may be called spontaneous
in the Canadian mind must engender solicitude and evoke encouragement.
"'When Messrs. Howland and Sicotte were in England, they expressed
their opinion that Canada would be willing to aid the "Atlantic and
Pacific Transit Company" in their enterprise of opening up
communication across the Continent through British territory. Upon
their return to this country, the matter was fully discussed, and it
was understood, subsequently, that the Government of that day was
prepared to recommend an appropriation of $50,000 per annum, provided
that the Company gave the necessary assurances of their ability to
commence and carry out the work. Since that time, however, those who
formed that Association appear to have enlarged the field of their
operations, and have included the whole of the Hudson's Bay Company,
with their territory, _prestige_, and appliances, within the scope
of their operations. But the same general policy which suggested the
recommendation of the $50,000 referred to, would also prompt similar
assistance to the New Hudson's Bay Company. It can be of little moment
to Canada by whose agency the western territory is developed--that
which is wanted is development.
"'Judging, then, by what has gone before, and from the exigencies which
the spirit of progress imposes upon all Governments, it is not
improbable when the new Company has itself determined what they will
do, in what shape their enterprise will be promoted, that reasonable
assistance will be given them. At present, it seems hardly likely that
any exact conclusion has been made by themselves in this matter. Mr.
Watkin, in whom a wide and just confidence is placed, not only by the
shareholders in the new enterprise, but by the British Government
itself, is here, engaged, no doubt, in collecting from the various
sources within his reach such information as will enable him to report
fully upon the matter. That done, the Company will be able to make
propositions and to solicit the kindly aid of Canada. Looking at the
wide field for enterprise that will be opened up; at the speedy
colonization that is likely to take place, consequent upon the recent
discoveries of gold; at the prospect that Canada may be made the high
road for commerce between the great East and West; that the trade of
the St. Lawrence, and all the various and manifold interests connected
with it, will be inspired with new and energetic vitality,--from these
and many other considerations it must be evident that the policy for
Canada, let her political position as to parties be what it may, is to
extend a friendly and greeting hand to those who come with capital and
confidence to become the pioneers of a new order of things, which
cannot fail to pour riches into the lap of Canada, and to lay the
foundation of a prosperity which can be at present but dimly imagined.'
"The importance of assisting the work of opening up the North-west for
telegraphic and postal purposes would, I believe, be alluded to in the
Governor-General's speech on the 15th. [Footnote: This was done, and
the following is an extract from the speech of the Governor-General of
Canada, on opening Parliament:--
"I have received a despatch from the Secretary of State for the
Colonies, enclosing copies of a correspondence between Her Majesty's
Government and the agent of the 'Atlantic and Pacific Transit and
Telegraph Company,' in reference to a proposal made by that Company for
the establishment of a telegraphic and postal communication between
Lake Superior and New Westminster, in British Columbia. The importance
of such an undertaking to the British North American Provinces, both in
a commercial and in a military point of view, induces me to commend the
subject to your consideration. Copies of the correspondence shall be
laid before you, and I feel assured that should any proposal calculated
to effect the establishment of such communication on terms advantageous
to the province be submitted to you, it will receive encouragement at
your hands."] But whatever may be the extent or the value--as to which
latter point I fear my opinion does not, as I regretted to find, quite
coincide with yours--of the sympathy and support of Canada, any new
bias in favour of your projects, as promised in your prospectus, has
been mainly aided by the belief which, entertaining it, I inculcated,
that without loss of time, and with the promptness and energy of
English merchants, the new Government of the Hudson's Bay Company would
establish, with the aid of the provinces east and west of the Hudson's
Bay territory, but without shirking its own share of duty, telegraphic
and postal communication in British interests, available for
commercial, and requisite for other and even more serious, purposes.
That the works would be begun at once, and that the Hudson's Bay
Company, so long obstructive, would now set an example of despatch, and
that that which had long been hoped for and promised by others, would
now be accomplished by them as the pioneer works of an early settlement
of the cultivatable portions of the country.
"It is obvious that, unless materials are supplied and plans arranged
before the end of September, the overland operations must wait a year's
time. Therefore, apparently under a misapprehension of your wishes or
policy, as our interview of yesterday showed, I looked out for the best
practical man I could find fit to undertake the construction of a
telegraph and system of posts, enabling postal and telegraphic service
to be worked together. I found that man in Mr. O. S. Wood, an American
settled in Canada, the engineer and manager of the 4,000 miles of
telegraph owned by the Montreal Telegraph Company, which pays 23 per
cent, upon its capital of 100,000_l._; and believing him to be
exactly the man for the occasion, I agreed with him, subject to your
sanction, to superintend and be responsible for the erection and
operation of a telegraph and system of posts between Fort Garry and
Jasper House. I do not trouble you with the document, as it is to be
cancelled, so far as your Company is concerned; but I may shortly state
that it proposed the completion of the works by October, 1864, and in
addition to a liberal, but not excessive, payment for Mr. O. S. Wood's
work, responsibility, and experience, it awarded a percentage upon all
savings on the total sum of L30,000_l._, the outside estimate
taken for the whole job, and a small premium for all time saved in the
completion of the work. These payments were to be so made that the
integrity, completeness, and success of the work would be their main
condition.
"I also made a very important conditional agreement with this Montreal
Telegraph Company, under which they were to extend a new and
independent, or precautionary, line of telegraph from Halifax (Nova
Scotia) to Mirimichi and on to Father Point, connecting with the other
existing telegraphs up to Arnprior (Ottawa), and another telegraph from
Arnprior to the Sault St. Marie, where you have a trading port. On the
other hand, subject to the aid of Canada and British Columbia, your
Company were to extend, or obtain the extension of, a telegraph from
the Sault by Lake Superior to Fort Garry, and another by Jasper House
to Fort Langley. All these telegraphs were to be completed by October,
1865. The Montreal Company were also to obtain the extension of the
Minnesota telegraph to your boundary near Pembina, you extending your
telegraph to that point. Thus, assuming the Fort Carry and Jasper House
telegraph to be completed by October, 1864, and knowing that this, and
the telegraph from Fort Langley to Jasper House, could be finished as
easily, a complete and independent Atlantic and Pacific telegraph,
stretching for more than 1,000 miles through your territory, might have
been secured,--always assuming that this season of 1863 were saved,
which was the great practical object before me. I obtained, as a
condition, that in dividing the rates paid for messages, your
telegraphs should have a bonus of 33 per cent. so long as your capital
did not pay a clear 10 per cent. dividend.
"To this end, I advised you to confirm the order of 175 tons of
charcoal wire and of the insulators, post pins, batteries, and
instruments needed for the length between Fort Garry and Jasper House
(the wire from England, and the other material from Canada and the
United States), at a total cost, already given you in complete detail,
estimated, when delivered at Fort Garry, as not to exceed
10,000_l._. This statement of cost, and a reference to my past
statements, will answer the question in Mr. Fraser's letter of the
13th, as to whether I had calculated the heavy expense of carriage--
20_l._ per ton to Fort Garry. The question shows that it had not
been calculated in Fenchurch Street that the poles and timber would be
got in the country, and that the whole weight of material to be sent to
Fort Garry was about 200 tons at the most.
"I may pause, however, in answer to another similar question, about the
relative prices of American and English wire, &c., to say, that the
best market for wire is England; and the best market for the less
important articles is the United States, while the proper prices
chargeable for the best article by the best houses are known to all
practical men. I may add, as I am asked what is the weight per mile of
telegraphic wire, that 'best charcoal No. 9 electric wire' is 320 lbs.
to the mile of 1,760 yards.
"On leaving this subject, I may add, that if on further consideration
you determine to store the material above named (cost and carriage
10,000_l._) at Fort Garry, there is yet time to get it out to St.
Paul, and some, if not all, may go through to Fort Gany. There is a
post three days per week to Fort Garry, and posts go through all parts
of your own territory regularly, the 'Winter Express' leaving Fort
Garry on Christmas Day. Though, in my humble opinion, not the best
thing, still the transmission and storage of that material would be
looked upon as an evidence of your intentions, and would help to keep
you right in Canada and in your own territory, as also in British
Columbia, and would expedite a final and favourable decision as to the
proposed subsidy. So strong is my opinion, that I am ready to join any
four or five gentlemen of your Committee feeling an interest in the
work, in providing and paying for the material itself, if you will send
it through at once.
"It will, I assume, be apparent to you how necessary it is to keep the
section of telegraph in your own special district in your own hands.
Your organization, also, will enable you to convey and erect material
very cheaply. As to all details, I refer to the papers already sent
over containing full particulars, and showing quantities, kind, cost,
means of conveyance, and, more important than all, character of country
and proposed route; the latter from the personal experience and
knowledge of the country of Governor Dallas and Mr. Hopkins, whose
reliability and capacity as advisers no one will question.
"While in Upper Canada, I received proposals for the establishment of
steamers on your rivers and lakes: and no doubt these could be arranged
for; but as the telegraph is to stand over for the present, I do not
add to the length of this paper by any statement on this head.
"I would call attention, however, to the exploration of Dr. Hector, on
behalf of the Canadian Government, of the lands adjoining Lakes Huron
and Superior. Dr. Hector has surveyed a line of road all the way up to
Dog Lake; and Mr. McDougal, the present Commissioner of Crown Lands,
appears ready to recommend the gradual, but rapid, construction of
roads throughout this territory, and onwards to that of the Hudson's
Bay Company. Possibly you may consider the suggestion which I made in
reference to obtaining an independent outlet to Lake Superior, in the
direction of Superior City, as well worthy of consideration.
"As respects the alleged discoveries of gold, upon which some doubt is
thrown in Mr. Fraser's letter of the 13th, I have merely to add that
the testimony of Governor Dallas is important, and that the report of
Professor Hind appeared to me to contain valuable evidence and
reasoning, which can be tested by the further explorations of a
geographical commission, for which purpose either Professor Hind, or
Sir William Logan, or Mr. Sterry Hunt, or all these well known
Canadians, are at once available. Professor Hind's suggestion as to the
supply of quicksilver by the Company to miners, may or may not be
valuable to a Company desiring to retain the lead of trade in portions
of its own territory; but a reference to his report will show that it
was not proposed to you as an immediate measure, as surmised. In any
case, it is undoubted that gold exists in districts east of the primary
rocks of the east flanks of the Rocky Mountains, and that persons are
seeking for it in greater or less numbers. We have yet to learn how far
the information has spread, and what influence it may have upon the
movement of the American population. But, great or small, it is a fact
affecting the settlement of the community, which enlarges the general
pressure for a decision as to how large tracts of your territory,
suitable beyond doubt for human habitation, are hereafter to be
governed for the good of the people who may come, and so as to preserve
British ascendency in your part of the Continent. Both Governor Dallas
and myself have had many discussions as to this, and you have before
you already both his views and mine. But the paper gives a
_resume_ of the general case as presenting itself to many
thoughtful persons, known to you in Canada, and belonging to the
various political parties. It was desirable to record their ideas, and
I present them for what they may be worth, wishing you to understand
that the proposal for federation and a joint Custom-house is the view
of Mr. George Brown. On the other hand, Mr. Cartier, and even Mr.
Sandfield Macdonald, desire to see a separate Crown Colony established.
"I now come to the all-important matter of the wise, economical, and
efficient working of the business of the Company in America. The paper
drawn up under the instructions of Governor Dallas by Mr. Hopkins, and
discussed at length between us, is offered to you as an attempt to
solve a difficulty which must be got rid of if more business is to be
done at less cost, and if the competition around you is to be met, as
it easily may be, with thorough success. The deed poll is an
arrangement standing in the way of change and extension of your
operations: it covers legal questions which some day may give you
trouble; and it may be modified in some such manner as that suggested
by your assent in the first place, and by the judicious action of
Governor Dallas, who should receive your instructions soon, consequent
thereon.
"The proposal to substitute a contingent and temporary interest in so
much stock of the Company for the 40 per cent. of profits now given to
the chief factors and traders, may assist you in placing your unissued
shares, in a mode leading to a very large annual saving, to be
accompanied by an evident increase of efficiency. For, able as your
staff is in general, there are many useless, and even mischievous,
persons under pay or profits; and the unfortunate propensities of Sir
George Simpson did not lead in his latter years, I fear, to the
improvement of the moral tone of your servants. There are cases of
favouritism and abuse not at all creditable, such as that of the
employment of Sir George's illegitimate son, and the retention of a
chief trader notoriously useless and drunken, for many years after the
chief factor of his district had reported his demerits to the local
governor. But the service is popular, and there can be no difficulty in
keeping up a staff fully able to cope with the sharp and energetic men
employed by the American traders,--your permanent rivals in business.
"It is perhaps unnecessary further to explain the reasons of my not
proceeding to Red River. As before stated, I had expected to do so in
company with Captains Glyn and Synge, without whom I should have
hesitated to undertake the more extended and responsible task at first
proposed. I did not in any event expect that Governor Dallas would come
to Canada prior to the receipt of your official letter of the 6th July,
and for which I had been waiting from the 30th June until the 20th
July; and when he arrived, and especially when I found that the
purposes of my proposed journey had been in great measure previously
fulfilled by him, it became a question of whether it ought not to be
postponed. He had already folly advised the Governor and Committee of
the 'state of the Red River Settlement,' of its 'suitability for
settlement,' and of the general and highly favourable features of the
tracts, over which he had travelled for 1,800 miles in various
directions. The best route for a telegraph could be, and was,
suggested, to you from his own observations, corroborated and added to
by the personal experience of Mr. Hopkins and others, who had often
traversed the districts, and had resided for years therein. The entire
feasibility of constructing a telegraph across the Continent was not
only confirmed by these experiences, but by the practical views of
persons consulted, who had set up lines through even more difficult and
wilder tracts of country.
"Therefore the objects you appeared to have before you were realized,
if not directly through me, yet through the colleague you had selected
for me, your own local governor, of whom I cannot express too high an
opinion, having been his almost constant companion for above a month,
during which every detail, so far as we could grasp it, was thoroughly
discussed.
"Having given my best attention and labours to the whole subject for
some years, and believing that I might be of more service to you here,
since Governor Dallas could not be spared to come home, and could not
prudently have left Canada until he had put all your business there in
order, I exercised no unwise discretion in returning to England.
"I have now to ask your forgiveness for the length of this paper, and
to express my readiness to give any further explanations in my power,
while wishing you and your colleagues quite to understand that I have
no desire whatever--but far the contrary--to obtrude myself upon you in
the control of an enterprise which I honestly believe can be made
completely successful by the exercise of even ordinary energy and
skill, and which ought to be safe and certain in such experienced and
able hands as yours.
"I have the honour to be, dear Sir,
"Yours faithfully,
"EDWD. W. WATKIN.
"Sir E. W. HEAD, Bart.,
_"Governor of the Hudson's Bay Company."_
One other object I desired to accomplish, was an exchange of boundary
between the Hudson's Bay and the United States, with the view to
Superior City being brought into British territory by a fair payment
and exchange of land. The negociation looked very hopeful at one time,
but it was not followed up in London, and it fell to the ground. There
are few people who understand that it is not only desirable to do the
right thing, but to do it at the right time--that is, when
circumstances favour the doing.
I am entitled to say that, owing to the non-acceptance, at the time, of
our proposals, much delay in realizing the great object of settling the
government and colonizing the territory arose: inadequate terms for the
sale and purchase of the vast landed estate of the Company had to be
accepted from Canada; and the "wintering partners," not made real
partners, as recommended by Governor Dallas and myself, but held at
arm's length, had, at last, to be compensated for giving up the old
"deed poll" with a sum of 107,055_l._, paid in 1871--ten years
after the date of our report to Sir Edmund Head.
But, "all's well that ends well," and the great work is, at last,
accomplished.