Peel to Rogers (Permanent Under-Secretary)

I am directed by The Lords Commissioners of Her Majesty's
Treasury to acquaint you, for the information of The Duke of
Newcastle, that They observe with regret the tone exhibited by
the Gentlemen of the Assay Department at
New Westminster in British Columbia, in the correspondence enclosed in the Despatch
of the Governor of that Colony, which accompanied Mr Elliot's
letter of the 22nd Ultimo, particularly as it will be seen
by the observations of The Master of the Mint in his letter of
the 3 Inst, copy of which is forwarded herewith, that the terms
of their engagement do not support their right to any increase of
Salary beyond what they have already received.

My Lords would have been disposed to have expressed, in the
strongest terms, Their sense of the impropriety of the course
taken and the language used by these Gentlemen, and which, as
stated in Governor Douglas' letter of 28 July, appeared to bear very much the complexion of an attempt upon their part to coerce
the Government into a compliance with their demands at a moment
when they believed their services to be indispensable. Such a
course and language on the part of any Servants of Her Majesty
would not, under ordinary circumstances, be tolerated in the
Public Service.

Having regard, however, to the inexperience of these Gentlemen,
and to the fact that their aid has been ultimately given to the
Mintage operations, My Lords will leave to Governor Douglas the
decision as to the propriety of complying with Captain Gossett's
recommendations for an increase of Salary to the several Members
of the Assay Department in consideration of the additional
Duties now devolving on them.

Their Lordships think it right to re-call the attention of the
Secretary of State to the former correspondence on the subject of
the establishment of a Mint in British Columbia, and more
particularly to the grounds upon which My Lords were pleased to
waive the objections which They entertained to the establishment
of an Assay and Refinery Department, under Government Control,
instead of leaving such work to private enterprise.

The grounds upon which My Lords came to the conclusion that this
might be permitted under the circumstances were:

1st That no private Establishment would command the
confidence of the Miners.

2nd That the Government Offices would very soon become self
supporting.

It now appears that the Public has not to any great extent
availed itself of the Government Assay Office, and, consequently,
so far from its being self-supporting that a loss of upwards of
£6000 has already accrued.

There is no information contained in the Papers before this
Board as to what has led to a result so different from what was
anticipated, and Their Lordships request that a Return may be
furnished showing what amount of Work has been performed in the
Assay Office, month by month, since it came into full operation,
the actual current cost of the Office up to the latest period, and
the receipts, accompanied by explanations of the causes which
have led to the apparent failure of the project, and the views
of the Governor with regard to its prospects for the future.

My Lords would also be glad to have the Governor's opinion
as to retaining the office at New Westminster or removing it to Victoria.