It was said that the appearance of Mr. Lampson's name as Deputy Governor of the new Company had heightened the first feeling of distrust, for this gentleman and his commercial connections had long been the Company's great rivals in the fur marts, carrying on a vigorous competition at all accessible points.[123]
Governor Dallas's Suggestions.
Governor Dallas, almost immediately upon his arrival in Montreal, caused a circular to be issued, addressed to all the factors, completely refuting all these charges and innuendoes. Many conferences took place between Dallas and Watkin as to the working of the Company in the fur territories on the new basis. Dallas kept the Governor and Committee in London fully advised of the state of affairs, accompanied by proposals as to the compensation to be allowed the aggrieved wintering partners. An interesting object, which it was desired to accomplish at this time, was an exchange of boundary between the Company and the United States, so as to permit Superior City being brought into British territory by means of a fair payment and exchange of land. The negotiations looking to this end, although at one time promising, proved a failure.
It was believed that the first measure necessary towards the re-organization of the Hudson's Bay service would be the abolition or modification of the Deed Poll, under which the trade was then conducted. The wintering partners (chief factors and chief traders) had certain vested rights, and these could not be interfered with without compensation.[124]
One mode suggested by Governor Dallas of removing the difficulty was to ascertain the value of a retired interest, and bestow a money compensation to each officer on his entering into an agreement to consent to the abrogation of the Deed Poll. As regarded the shares held in retirement, some of the interests had nearly run out and none of the parties had any voice in the business. The value of a (one-eighty-fifth) share was ascertained to be (on the average of the previous thirteen "outfits") about £408, at which rate a chief factor's retired interest would amount to £3,264, and a chief trader's to £1,632. Adding the customary year's furlough on retiring, a factor's retired allowance would be £4,080, and a trader's £2,040. On such a scale of commutation it would cost the Company £114,500 to buy out its officers.
As a set-off to this outlay Governor Dallas suggested a substantial reduction in salaries. Under the then existing organization the pay of officers in the service was £2,000 to the Governor-in-Chief, £16,000 amongst sixteen chief factors, £14,000 to thirty-five chief traders, and £10,000 to the clerks, a total officers' pay-roll of £38,000. He proposed to cut this down as follows:
| Governor-in-Chief | £2,000 |
| Lieutenant-Governor | 1,250 |
| Four Councillors at £800 | 3,200 |
| Twenty-five chief traders at £300 | 7,500 |
| One hundred clerks at various salaries | 10,000 |
| £23,950 |
But Sir Edmund and his colleagues thought otherwise. The wintering partners were not yet to reap any profit from the sale of the Company's assets. The Deed Poll remained in full force until 1871, when they were paid £107,055 out of the money received from Canada for Rupert's Land and the North-West.
Threatened Deadlock in Red River Settlement.
In 1863 the Company's government had almost come to a deadlock in the Red River settlement. Two cases had just occurred of prisoners having been forcibly rescued from gaol; and they, with about thirty to fifty others implicated in the riots, continued at large, fostering discontent. The only paper published, the notorious Nor'-Wester, was in the hands of the Company's bitterest enemies.[125] The position of those in authority was so disagreeable that it was with great difficulty that Governor Dallas persuaded the magistrates to continue their duties. Governor McTavish, who was in charge of Assiniboine, resigned, and others were prepared to follow his example, including the Governor-in-Chief himself. Fortunately the open malcontents were few in number and the volunteer force was sufficient to protect the gaol and support law and order, were it not for the unwise zeal of the Company's partisans who were ready to engage in a free fight with the agitators. This, beyond question, would have led to a repetition of the Semple tragedy of 1816. It may be noted that the Company's unpopularity in the Red River country, according to Governor Dallas, "arose entirely from the system, not from the faults of its administrators."