Colonial Despatches

Mr Elliot
We shall probably hear from the Foreign Office on the subject of this letter, but in the mean time it may [be] of use to endeavor to ascertain from our own Records how far the assertion made by the Company that they formed a permanent establishment on San Juan not with a view to any advantage to themselves but at the instigation of the Imperial Govt is borne out by facts.

In Decr 1852 Govr Douglas first announced the claim set up by the Americans to the Island in the Canal de Arro. In the month of Novr 1853 he reported that he had asserted the Sovereignty of the Queen to all the Islands—and he adds the Islands are "unoccupied by any settlement whatever except a fishing Station established some yearsyears ago by the H.B. Company on the Island of San Juan."

It thus appears that the Company had a certain interest in the Island before any difficulty with the Americans arose.

But it further appears from the Extract of a letter from Govr Douglas to the Company dated 26 May 1854 (only five months later than the date of the Desp. above quoted) "that there was a flourishing fur trade settlement on San Juan in charge of Mr Griffen" (an Agent of the Company) and also sheep numbering about 1644. "These proceedings, the Govr adds, have caused the jealousy of our Neighbours & we have been repeatedly threatened but as yet we hold our ground."

There is nothing in our Records so far as I can discern to shew that the settlement was formed at the instance of the Govt and it is somewhat remarkable that in a letter addressed to the Company on the subject of this Settlement (see 1962) the following phrase is used, "correspondence relating to the occupation for the benefit of the Company of the Island of San Juan". It may therefore be fairly inferred that this Department at least did not at that date admit that the settlement was formed & the Island occupied by the Company "solely to secure its possession to the British Crown". On this ground the Company now prefer a claim to compensation for losses alleged to have been sustained by them.

Mr Fortescue
I forward this important letter for your consideration, with Mr Jadis's useful Memorandum of such facts, bearing on the subject, as appear on record here.

Duke of Newcastle
When are claims on the part of the H.B.Co. to cease? Here is a new & startling one sprung upon us, of the grounds of wh. you could not possibly have been aware, altho' Mr Berens assumes that you must be so. It is difficult however to make out what the claim is—whether re-imbursement of past expenditure upon the Sheep-farm on St. Juan, or a promise of contribution towards it in future, (if it sh. be retained for public purposes), or both. The letter to us, tho' ambiguous, may refer only to the future—that to the F.O. includes the "past."

You will see by the Papers that the occupation by the Co. of San Juan took place after a very singular correspondence with the F.O. and that the C.O. knew nothing of it until afterwards. We do not appear to possess that correspondence, and cannot give a decided answer to the present letter until we know exactly what passed at that time, & how far the Sec. of State for Foreign Affairs may have committed himself to the Co. It is not likely however that the Co. have anything more to show for their claim than we have before us, which amounts, I think, to very little. The occupation of San Juan was no doubt of importance for the purpose of securing it to the Crown, but it was also of great importance to the Co. for the purpose of securing it as a portion of what were then their dominions, and of keeping off American squatters & Traders whose presence at such a place, at the door of their great Trading-post, Fort Victoria, wd. have been extremely inconvenient & injurious to them. It wd. seem that the Co. occupied the Id with the permission, perhaps with the encouragement of the F.O., but not, as Mr Berens says, at its "instigation." Nor does there seem any reason to think that the Sheep-Farm on San Juan was regarded in any other light than as "a Fur-trade Settlement", as Govr Douglas calls it.

If it had been regarded by the Co. not as a portion of their private trading property, but as coming under the head of property held or outlay incurred on acct. of the Government &c of V. Id, it ought to have been included in their accounts sent in to H.M.'s Govt. It must be one thing or the other.

Again, the settlement has been a loss to the Co. in consequence perhaps of American interference. But wd. they have shared the profit with the Govt, had there been one? Was it in any sense a Govt establishment? It seems to me that the claim cannot be entertained as to the past. As to the future occupation, the question is a different one, on wh. you will no doubt consult the F.O.

The cool presumption upon our credulity with which the H.B.C. now assure us upon every occasion that each of their trading enterprizes which they find either failing or inconvenient to themselves were "undertaken with no view to advantage or profit to themselves" but either at the instigation of or to further the objects of the Govt is only surpassed by their marvellous ingenuity in finding fresh claims for large compensation out of the public purse in such rapid succession that they seem likely before long to absorb the "Chinese Indemnity" if they are not carefully watched.

This appears to me of all their claims the most monstrous, and Mr Jadis' Minute read by the light of former papers and a Minute of Mr Merivale of March 1856 hardly leaves room for the charitable supposition that it is made in good faith.

I doubt whether the F.O. will write to us on the subject, Mr Berens letter to Ld J. Russell having been written on the 20th Novr, and I think we must communicate with them before any answer is given to the H.B.C.

The question as to the future must depend upon whether Ld J.R. thinks it necessary or desirable to pay the Co for holding on till the difference with the U.S. is settled. I am disposed to think not, & the answer should be in effect—"mind your own business and we will mind ours, go or stay as suits your own trading objects," but as to the past I have no doubt whatever. They have no claim to any reimbursement, and I entirely agree in Mr Fortescues remarks. Everything shews that the whole thing is either an afterthought or was purposely held back when the first statement of their claims was sent in.

Draft, Colonial Office to E. Hammond, Foreign Office, 4 January 1861, expressing Newcastle's views respecting the company's claim and requesting any information on the subject that the Foreign Office can supply.

Draft, Rogers to Berens, 26 January 1861, advising that both Newcastle and Lord John Russell felt the company had no claim upon the government in respect of their establishment at San Juan, and suggesting the company should not retain it "for any longer period than suits their own convenience or is conducive to their own profit."

Berens to Lord John Russell, Foreign Office, 20 November 1860, inquiring whether the government wished them to abandon or to maintain their establishment on San Juan Island, and in the latter event, requesting assurance "that the Company will be reimbursed for their past and future outlays."

A.G. Dallas to Thomas Fraser, 12 September 1860, reporting the current state and prospects of the company's farming operations on San Juan and suggesting that a settlement from the crown should be sought.