Because of the shortage of funds it was decided that no further appointments could then be made and that only absolutely necessary expenses should be incurred. A valuable lot of scientific instruments, which would be of use in the Natural Philosophy classes, was offered to the College “for £70 if paid in six months, or £81 4s. 6d. if paid after that time.” The Secretary replied that “they would take the instruments but they could not name any period of payment.” The Governors were sorely pinched for funds during this first year, and the anxieties of poverty pressed hard upon the College authorities. In January, 1844, the Governors made a formal demand for the payment of expenses incurred by them amounting to £1,736, and also for the payment of all monies in the Board's possession. The Board had but little money at their disposal and they refused to grant the Governors' request. The gross annual income was then scarcely more than £500, while the salaries and fixed charges amounted annually to £730. The Board accused the Governors of having made “wasteful and extravagant expenditures without precedent or principle,” some of which did not appear to have any connection with the opening or the carrying on of McGill; many of these, they said, were wholly unnecessary, and had never been authorised by the Board, whose consent had not even been asked. The expenditures for contingencies alone, it was pointed out, amounted in five months to more than the total income of three years. “It is obvious,” the Secretary added, “that the Governors and the Board entertain views entirely opposite as to the nature of the trust committed to the Board and to the duties which that trust imposes.... There can be no proper understanding between the Board and the Governors until it can be authoritatively settled which view of the duties and the functions of the Board is right according to law. The Board has no desire to retain funds to which they have no right.” In November, 1844, application was accordingly made to the Law Offices of the Crown for a decision, but as usual the decision was slow in coming. But pending the decision the Board agreed to liquidate the legal debts as far as they were able and they did so to the extent of £1,550. By so doing the Board reluctantly sacrificed a part of the capital of the trust and thereby diminished by £90 the annual income, which was already insufficient. But this payment was only a temporary relief; the debt was in reality over £2,500; other and larger accounts remained unpaid, and liabilities continued to increase.
In May, 1844, in order to make the academic management of the College more democratic, the Governors made provision for the formation of a College Board which should hold weekly meetings. As early as 1841 the Board of the Royal Institution had recommended the formation of a College Council “for the ordinary exercise of discipline,” consisting of the Principal, the Vice-Principal and Professors, the Rector of Christ Church, Montreal, and the Minister of the Church of Scotland, Montreal. This recommendation was not considered, pending the actual opening of the College buildings. The College Board now formed consisted of “the Principal, the Vice-Principal, Professors, and (until the whole number of Professors in the University be increased to six) the Lecturers in the Faculties in Divinity and the Arts, not under the degree of M.A., and of the person holding the office of Secretary, Registrar and Bursar, provided he shall be a graduate of some University in the British Dominions and not under the degree of M.A.” This Board was called “the Caput”; two of the members, with the Principal or Vice-Principal, constituted a quorum. Its duty was to frame rules and regulations for the discipline and internal government of Lecturers, students and “inferior officers” of the College, to supervise the system of living within the College, and to consider applications for degrees, except honorary degrees. It had no jurisdiction over the Medical School.
The period that followed was a period of critical wrestling with financial troubles. The College was suffering from lack of funds. Part of the cost of the erection of the buildings was yet unpaid. An action was instituted against the Governors on account of the College furniture, the payment for which was long in arrears. Tradesmen and workmen were pressing for a settlement of their bills, and lawyers' letters threatening suits were daily coming in. The salaries of Professors were not paid, and in January, 1845, only £250 was given by the Board to pay the combined yearly salaries of Professors, Tutors and Bursar. The Vice-Principal's allowance of fuel for the entire year was reduced to “30 cords of maple wood and 2 chaldrons of coal.” Frequently appeals were made to the Home Government for assistance, but the authorities disagreed in their opinions on the actual state of the College. They had little first-hand knowledge of the facts, and their attitude was one of indifference or at least delay. Lord Stanley wrote from the Colonial Office: “I cannot but regret that the circumstances of this Institution should have hitherto prevented the Province from deriving the benefit which its founder contemplated; and as the chief obstacle at present consists in the want of funds, I am of opinion that measures should be taken to procure the requisite assistance from the Legislature.” On the other hand, Lord Metcalfe, the Governor-General, replied, “The financial prospects of the Institution appear to be more promising than was formerly anticipated.” There the matter for the time ended, and while the authorities waited and differed, the future existence of the College was in grave doubt.
It was apparent, too, that internal dissension was growing within the College itself. Charges in connection with the administration and with the Principal's management were laid before the Royal Institution by the Vice-Principal, who seems to have had the support of certain other College officers, including Professor Wickes, and the Tutor, Chapman. As a result of these charges, combined with the hopeless financial situation in which the College was floundering, the Board of the Royal Institution determined to exercise their visitatorial power and to make an investigation. They would examine the entire working of the College, its discipline, its administration and also the methods of collecting and expending the rents and profits of the Estate of which no adequate accounting had for some time been received. The visitation was made on the 13th and 14th of November, 1844, and the meetings, not always peaceful, were held in the council-room of the College. The Visitors found that there were five Professors or Instructors, while only nine students were enrolled in the college, that there was a lack of harmony among the College officers, “some of whom were not on speaking terms with each other,” and that the outlook was not promising.
The following official report was forwarded to Lord Metcalfe, the Governor-General, by the Lord Bishop of Montreal, the Rev. Dr. Mountain, Principal of the Royal Institution, on December 11th, 1844:
“The Board of the Royal Institution, at the request of Professor Lundy, Vice-Principal of McGill College, and in consequence of a variety of circumstances leading them to believe such a step expedient and necessary, met at Montreal on the 14th November, and, as Visitors of McGill College under the Royal Charter, entered into an examination of the whole affairs of that Institution.
“The general result of their investigation they are now desirous to lay before Your Excellency, both because it is to Your Excellency's interposition that the Board look for obtaining certain important measures, which appear to them indispensable to the prosperity of the College of which they are Visitors and Trustees.
“When the visitation of McGill College took place the Visitors found in it nine students (fewer by half than at the same period last year, and these, with one or two exceptions, boys) under the tuition of a Principal, who is also Professor of Divinity, a Lecturer on Divinity, a Vice-Principal, who is also Professor of Classical Literature, a Professor of Mathematics, and a Classical Tutor; the establishment having also the services of a Bursar, a Beadle and others. The regular expenditure for the College Establishment in salaries and contingent charges is two-fold of the income applicable to it; and the Governors have contracted a debt of £1,550 in opening the College, the various items of which expenditure appeared to the Board to be on a scale of extravagance and wastefulness entirely unsuitable to the pecuniary resources of the Institution. There is a great want of cordiality and harmony among the Professors and Officers of the College; some not even speaking to others. There are no Statutes in operation which are binding in Law.
“The Principal refused to acknowledge the authority of the Visitors, or to furnish them with any information. The united testimony of the College Officers induces the Board to believe that one main reason of the College having received so little support is that the acting-Principal does not enjoy that confidence on the part of the public of which an individual, standing in his position, ought to be possessed....
“The Board also had the testimony of the College Officers that the inefficiency and unpopularity of the College are also, in part, owing to the general want of confidence, rightly or wrongly entertained, in the Vice-Principal, Professor Lundy.