Hunt to Rogers (Permanent Under-Secretary)

I am directed by the Lords Commissioners of Her Majesty's
Treasury to request that you will recall the attention of the
Secretary of State for the Colonies to the letter from his
Department of 15th February, and the reply of My Lords of
the 31st May last, relating to a claim of the Government of
British Columbia upon HM Government for a sum of £9051.18.1.

The greater portion, vizt £8592.5.2 of this sum was
claimed in respect of the expenses of the Royal Engineers,
and was founded as stated in the 3rd paragraph of the Acting 
Governor's despatch No 124 of 27 November 1865, upon the
Secretary of States despatch of 13 May 1862 No 123.

It appears to My Lords that the Acting Governor & the
Colonial Auditor have misunderstood the arrangement sanctioned
by that, and the previous despatch of 27 February, not only in
having claimed on behalf of the Colony a larger proportion of
these expenses, than was intended to be charged to the Imperial
Government, in accordance with that arrangement, but also by
referring to the three years previous to 1862; as it will no
doubt be in the recollection of the Earl of Carnarvon, that a
Vote was taken in that year for the arrears of the previous
years, and that the arrangement sanctioned by the despatch was
to be considered as a new one.

On referring to the despatch of 27th February, a draft
of which was sent for Their Lordships approval in the letter
from the Colonial Office of 21st February 1862, it will be
seen that the entire cost, both Imperial & Colonial, of the Royal
Engineers, was estimated to amount to about £22,000 per annum, vizt

Colonial Pay
£12000

Provisions &c
5900

Regimental Pay
3800

Total
£21700

Of this sum HM Government decided that one moiety,
£11000, must be defrayed from the Colonial Revenue—of the
moiety to be paid from Imperial Funds £3800 was to be charged
to Army Funds for the Regimental Pay, and the remaining sum of
£7200 was to be provided by a Parliamentary Grant.

The despatch states that "this sum in addition to the
salary of the Governor will constitute the Estimate to be
submitted to Parliament for British Columbia for the year
1862/3," and the Governor was directed to limit accordingly
the Bills to be drawn on this Board.

On this understanding the sum of £7200 was voted by
Parliament for the following year.

In making out their Account of the sum claimed from HM
Government, the Colonial authorities have not included the
Regimental Pay—the Bills, which are included in the Auditors
Statement, having no reference to this expenditure, which has been
defrayed by a separate set of Bills and the amount charged to Army Funds.

My Lords have ascertained from the War Department that
the Regimental Pay and allowances amounted

for the year 1862,
£4597.1.5.

for the year 1863,
£3625.0.7.

In making up the account between the two Governments these
sums should be included in accordance with the arrangement made
by the despatch of 27th February 1862.

My Lords also observe that the Colonial Authorities have
taken no notice in their account of the payment in this Country,
out of the Parliamentary Grant, of Col. Moody's Colonial Pay
 at the rate of £1200 a year during the year 1862, and up to
14th November 1863, when he left the Colony.

They consider that the payments on that account should have
been included in the general account, and if the account
between the two Governments had been made out in this manner,
vizt in accordance with the arrangement that was sanctioned,
it would be seen that there would not only have been no balance
due to the Colony, but that the Imperial Government has paid more
than the amount originally intended. (See copy of Statements herewith.)

My Lords regret that the circumstances above stated were
lost sight of when Their communication of 31st May was
addressed to your Department.

The claim having been admitted by that letter, They are
unwilling now to revoke its admission, but as only a portion,
vizt £6714.14.11 has been actually paid to the Crown Agents
on behalf of the Colony, They consider that no further issue
in respect of the balance should be made.

With regard to the other items included in the total claim
for £9051.18.1, vizt advances

£200
to
Col. Hawkins

£100

Capt. Lempriere

£157.12
for
Calders Pension

My Lords are of opinion that they must be considered as included in
the sum of £6714.14.11 that has been paid to the Crown Agents.