The agitation against the Company still continued, but slowly. It seemed difficult for the parties interested in the abolition of the Company's rights to agree upon a single scheme which would be permanently satisfactory, and not too costly. Sir Edmund Head expressed himself in favour of a complete sale of rights and ownership to the Imperial authorities. But this scheme was, as has been seen, beset with almost insuperable difficulties. In November, 1863, Sir Edmund suggested that an equal division be made of the territory fit for settlement between the Company and the Crown, with inclusion of specified tracts in the share of the former; secondly, that the Company construct the road and telegraph; thirdly, that the Crown purchase such of the Company's premises as should be required for military use, and to pay the Company a net third of all future revenue from gold and silver.
In his Speech from the Throne, on the 19th February, 1864, Lord Monk, the Governor-General of Canada, alluded to the matter, which was beginning to engross the public mind.
"The condition," said he, "of the vast region lying on the north-west of the settled portions of the Province is daily becoming a question of great interest. I have considered it advisable to open a correspondence with the Imperial Government, with a view to arrive at a precise definition of the geographical boundaries of Canada in that direction. Such a definition of boundary is a desirable preliminary to further proceedings with respect to the vast tracts of land in that quarter belonging to Canada, but not yet brought under the action of our political and municipal system."
It was hoped by many that the Company could be induced to sell out its rights to the Imperial Government, and out of the territory to carve out a new Crown Colony.
In the course of the ensuing debate on the address, the Honourable William McDougall, Minister of Crown Lands, who was officially concerned in the matter, stated that "the Government of Canada had reached a conclusion upon the advisability of determining whether the Red River territory belonged to Canada or to some other country." The consequence was that a correspondence had been opened with the Imperial Government upon the subject. Mr. McDougall thereupon announced his individual view of the case as being that "Canada was entitled to claim as a portion of its soil all that part of the North-West territory that could be proved to have been in possession of the French at the time of the cession of Canada to the British."
It was not at all likely that the Duke of Newcastle would share such a view, or that he would entirely acquiesce with the suggestion of Sir Edmund Head on behalf of the Company. Under date of the 11th of March, and 5th of April, 1864, he formulated the appended proposals:—
1. The Company to surrender to the Crown its territorial rights.
2. To receive one shilling for every acre sold by the Crown but limited to £150,000 in all, and to fifty years in duration, whether or not the receipts attained that amount.
3. To receive one-fourth of any gold revenue, but limited to £100,000 in all, and to fifty years in duration.
4. To have one square mile of adjacent land for every lineal mile constructed of road and telegraph to British Columbia.