Murdoch to Elliot (Assistant Under-Secretary)

I have to acknowledge your letter of 15th instant enclosing a letter
from the Governor of the Hudsons Bay Co in answer to the report on
their Vancouvers Island accounts submitted by Mr Andoe, the
gentleman appointed by the Treasury to examine those accounts.

2. The first item objected to in Mr Andoes report was a charge of
£15,123.19.3 for services extending from 1857 to 1859 omitted in
previous returns. Of this the Governor withdraws £4,000 charged for
the "Otter" Steamer & expresses a willingness to deal with the rest
on some general principle. Before any conclusion is come to on this
point it would be desirable to have the opinion of Mr Andoe who has
examined the detailed accounts.

3. An objection was taken by Mr Andoe to a charge of £2405.13.10
for commission on Land Sales of which a portion of the proceeds only
is brought to the credit of the Crown in these accounts. But as it
is admitted that the balance of the proceeds has been received by the
Governor and applied to the expenses of the Colony the Company are
in my opinion entitled to claim the whole Commission. Whether the
Commission due on payments not brought to credit by the Company
should be paid out of Imperial or Colonial Funds is a question
between the Home and Colonial Governments, not between the Government
and the Company.

4. The general objection to the charge of interest the Company
assume could not be maintained and express their willingness to
discuss the question as to the mode in which interest should be
charged. Upon the general question Government would I presume be
very much guided by Mercantile usage in such matters, with which I am
not acquainted—but on reconsideration I am disposed to modify the
opinion thrown out in my report of 25th May last that no charge for
interest was admissible.

5. The explanation given of the striking difference in the items
making up the charge of £25,550 for introduction of Settlers in the
first account sent in and in the last is remarkable. In the first
instance the Company charged for 350 Settlers only (being one moiety
of the whole number sent out)

Passage £ 8,050

Maintenance & Wages £17,500

£25,550

In their second account they increased the number of Settlers to 557
1/2

and the cost of passage to £12,717. 5.-

But they reduced the cost

of maintenance to £12,925. 9.7

£25,642.14.7

and the sums being so nearly the same they retained the original
claim. This explanation to say the best of it shows a very lax mode
of making out the accounts. It is impossible with such an
explanation before us to feel any confidence in other items which
from their nature are rather estimates than actual expenditure.

6. Another item objected to was interest on the moiety of the
expenditure at Fort Rupert which had been admitted by Government. I
do not understand on what ground Mr Andoe objected to this claim,
unless it is to be understood from his report that the original claim
of £12,469.4.7 included a charge for interest in addition to the
usual charge for interest on the expenditure of the year in which it
is carried to account. There is nothing in the papers sent to us to
show whether this is so or not. If not, I should have been disposed
to consider that if a claim for interest is to be allowed in any case
it should be in this.

7. I would submit that it would be desirable to communicate Mr
Berens' letter to Mr Andoe for any observations he may have to make,
and the Duke of Newcastle might perhaps think it desirable that Mr Andoe should be put in personal communication with us on the subject.
After seeing him we might obtain from Mr Dallas any further
explanations necessary to enable us to submit our views to His Grace.