Berens to Lytton

I have the honour herewith to transmit an Extract of a letter
addressed by Governor Douglas to myself and my colleagues on the
Direction of this Company, on the occasion of his acceptance of the
Office of Governor of British Columbia, under the
Crown.

In his letter to us Governor Douglas intimates that the office has been
conferred upon him on the express condition that he shall relinquish all
direct or indirect connexion with, or interest in the Hudson's Bay
Company; and in order to meet the wishes of the Government in that
respect, he tenders his resignation as an Officer of the Company, and
offers "an absolute sale to the Company of his actual and
prospective interests in the Fur Trade."

Upon this offer on the part of Mr Douglas to sell his retired
interest to the Company I feel it necessary to make an observation. It
has always been my wish, and that of my colleagues, to facilitate as far
as lay in our power a measure which we consider so advantageous to the
public service as the appointment of Mr Douglas to the government of
the new Colony; and we trust that the difficulty which has occurred to us
as to the disposal of Mr Douglas's retired interests, will not be
considered, on our part, as a change in that respect. By the
constitution of the Company, Mr Douglas, as a Chief Factor, is
entitled on his retirement to a small share
(1/85th)

of the profits of the Company for the six years ensuing; but he is, at
the same time excluded from all part in the administration of the affairs
of the Company, and he is not entitled even to ask for accounts. He is
consequently merely the recipient of a certain portion of the profits of
the Company, without any control on his part, and he is expressly
excluded from all voice in the management.

Now the difficulty which occurs to us is this. In the first place
it is utterly impossible for us, in the present circumstances of the
Company, to estimate the value of this retired interest to which Mr Douglas is entitled; and in the second place, even if an approximation of
value could be arrived at, the Directors feel that in the interests of
their Shareholders they would not be justified in adopting the unusual
course of purchasing that interest.

This being the case it seems to us that Her Majesty's Government
might safely abstain from insisting on the literal fulfilment of this
condition. Mr Douglas's position, as regards the Company, is merely
that of an Annuitant for six years, without any active part in its
concerns; and we feel satisfied from our own knowledge of his high
character, that he will not allow this slight connection (if connection
it can be called) to influence him in the performance of his duties to
the Government in the high office to which he is appointed. We make this
suggestion more particularly in the interests of Mr Douglas himself,
who if Her Majestys Government should insist, may find it necessary
to abandon his retired interests altogether.

Mr Douglas, in the latter part of his letter, puts in a claim,
under the separate Commission which he holds as Governor of Queen
Charlotte's Island, "to an additional sum of £300 per annum." We cannot
help feeling that this is a question, not for the Directors of this
Company, but for the consideration of Her Majesty's Government. The
Hudson's Bay Company were never proprietors of the Island; and if the
additional salary demanded should be granted, it can be so only with the
consent of the Government, and on the understanding that the money will
be refunded by the Government to the Company upon the Settlement of the
Colony accounts.