Peel to Rogers (Permanent Under-Secretary)

With reference to Mr Elliots letter of the 25 March last, to your
letter of 16 Inst, and other correspondence, I am directed by the
Lords Commissoners of Her Majesty's Treasury to acquaint you, for
the information of the Duke of Newcastle that My Lords have given
full consideration to the Report of Mr Murdoch of 18 March last as
well as the other communications and have conferred further with Mr
Andoe as to the amount which may properly be offered to the Hudsons
Bay Company in full of all their demands as administrators of the
Government of Vancouver Island.

His Grace suggests in Mr Elliots letter that looking to the
importance of putting an end amicably to the outstanding questions
between Her Majesty's Government and the Company, in addition to the
advance already made of £25,000 a payment of £35,000 should be
sanctioned. My Lords concur with His Grace that in the interests of
the Colony it is desirable that the matter should be brought to a
speedy settlement, but they have to observe that after a very careful
and minute investigation by Mr Andoe, and a reference of his Report
to Mr Murdoch, and a further Report, after consideration of Mr
Murdoch's remarks, by Mr Andoe, it appears that both Gentlemen
arrive at nearly the same conclusion, viz that the Balance properly
payable to the Company may be taken at about £25,000.

Their Lordships likewise have fully considered the Reports of those
gentlemen and the other documents on the subject, and concurring
generally in their views would not feel justified in sanctioning the
payment of £35,000.

My Lords desire however further to remark with reference to the
objects and character of the expenditure out of which the claims of
the company arise, and with reference more particularly to some of
the Items in these claims, such as the Commission on the amount of
Land Sales received by the Governor and applied to the Expenses of
the Colony, that a portion at least of the balance which Her
Majesty's Government may now agree to pay in liquidation of the
claims of the company should be defrayed out of Colonial Funds, and
although My Lords cannot admit that the claims of the Company are
established to an extent much exceeding £25,000, yet with a view to
the advantage of the Colony from an early and amicable settlement,
Their Lordships will not object to pay the Company the sum of £30,000
in full satisfaction of all their claims, with a clear understanding
that £5000 of that Amount is to be considered as an advance repayable
by the Colony at the earliest possible opportunity.