Murdoch and Rogers to Merivale (Permanent Under-Secretary)

We have to acknowledge your letter of 28th ultimo, enclosing a further
letter from the Hudson's Bay Company on the subject of their claim to
be reimbursed the expenses incurred in searching for Coal at Fort Rupert in Vancouvers Island.

2. In our Report of 26th March last we pointed out, that this
claim must depend upon the question whether, if this mine had
succeeded, it was the intention of the Company to sell or Lease it to
themselves, or in any way to hold or work it for their own
advantage—or whether the proceeds would have been carried to the
public Revenue, the Company receiving no more than the percentage
allowed them by the Grant of 19th January 1849. This question
having been put to the Company they reply, that they cannot bring
evidence of an intention to carry the proceeds of the mine to the
public account because as no proceeds were ever accrued the question
never arose, nor do they explicitly state that any such intention
existed. But they allege that the search for coal was undertaken as
a means of promoting Colonization—that it had the effect of adding a
number of Miners and other Emigrants to the population—and,
therefore, that if they have no strictly legal right, they have an
equitable claim to the liberal consideration of H.M. Government.
They add that the Coal Mine at Nanaimo has hitherto been
unremunerative.

3. The claim then being abandoned as a matter of right it only
remains to be considered whether there are sufficient grounds in
equity to require or justify its admission.
This as it appears to us, must depend on the question whether the
Company were bound in their capacity of owners and Governors of the
Colony to find employment for Emigrants after their arrival in the
Colony, and whether it was judicious to send out a class of Laborers
for whom employment at their own occupation could be found only upon
works undertaken by the Company. It appears to us that the answer to
this question must be in the negative. The object of the Crown in
handing over the colonization of Van Couvers Island to the Company
was that it should be settled by a self supporting population, and
the Company acting for the Crown were bound to regulate their
selection of immigrants with reference to that object. If, as
appears to have been the case, they introduced immigrants of a
particular class and fitted only for a special description of labor,
which they alone could provide, it must be inferred that they did so
with a view to their operations as a Commerical Company, not to their
obligations as Colonizers and owners of the Island. And considering
that they had already an unremunerative Coal Mine at Nanaimo and that
there was no reasonable prospect of any immediate increase in the
demand for Coal we can hardly think that the introduction of so large
a number of Miners was judicious.

4. Upon the whole, therefore, we are compelled to express our
opinion that the Hudsons Bay Company are not entitled in equity to be
repaid the amount claimed on account of the works at Fort Rupert.