Canada and the States

by Sir E. W. Watkin

It seemed to me that this latter business was of vital and pressing importance. The Hudson's Bay factors, and traders were, in various grades and degrees, partners in the annual trade or "outfit," under the provisions of the "deed poll." This "deed poll" was the charter under which the hardy officials worked and saved. Their charter had been altered or varied over the long period since the date of the Royal concession, in the twenty-second year of the reign of Charles the Second. The deed poll in existence in 1863 provided that the profits of the fur trade (less interest on capital employed in the trade, which belonged to the stockholders who provided it) were to be divided into 100 parts, of which 60 parts belonged to the stockholders, and 40 to the "wintering partners." The "wintering partners" were the "chief factors" and the "chief traders." These 40 parts were again subdivided into 85 shares; and each "chief factor" was entitled to two of such shares, and each "chief trader" to one share. The clerks were paid by salary, and only a person who had served as a clerk could be promoted to a "chief tradership," and only a "chief trader" to a "chief factorship." Thus all had a direct or remote partnership interest. On retirement, an officer held his full interest for one year and half his interest for the succeeding six years.

I had much apprehension that if the unexpected sale and transfer of the share property, under terms and conditions in every sense unique, were not frankly and explicitly explained, and under authority, alarm and misconception would arise; while the news of the transfer would find its way to distant regions in a distorted fashion, and through unfriendly sources, long before the explanation and answer could arrive. My fear, owing to bad management in London, was somewhat realized, and I found that I had not rushed across the Atlantic, to perform every service in my power to the undertaking, in June, 1863, one moment too soon.

Then, having studied the "deed poll," I felt that, unless we made the factors and traders partners in the whole enterprise—fur trade, banking, telegraphs, lands, navigation of rivers—on generous terms, we could not expect to elicit either their energies or their adhesion to a new order of things.

Further, I saw no way to secure supervision and control over the Fertile belt, and all around it, except by the construction, to begin with, of a main line of telegraph from St. Paul to the Hudson's Bay territory, and thence by Fort Garry to the extreme western post on the east side of the Rocky Mountains. Such main line to be supplemented by other subsidiary lines as rapidly as possible. The "wire," to my mind, was the best "master's eye" under the circumstances. But, apart from business re-organization, it was most essential to explain everything to the Government of Canada; and to ascertain the views of political parties, and of industrial interests, as, also, of religious bodies, as to future government. In dealing with these questions, I had to assume an authority which was to have been confided to a delegation, to consist of Captain Henry Glyn, Colonel Synge, and myself.

On leaving England promptly—the main work being done—Mr. Richard Potter undertook for me all the details which, if at home, I should have managed, and he especially took up the discussions at the Colonial Office, which I had personally carried on, with the Duke, for the previous period.

Thus it was that the new Board was constituted, and the arrangements for taking over were made in England without my taking any, further, part. Sir Edmund Head was appointed Governor at the suggestion—almost the personal request—of the Duke of Newcastle: some members of the old Board were retained for the, expected, value of their experience, and amongst the new members were Mr. Richard Potter and Sir Curtis Miranda Lampson, a rival fur trader of eminence and knowledge, and an American. A seat at the Board was left vacant for me.

It may be interesting here to quote what the Duke of Newcastle said, in explaining, in the House of Lords, the recent transactions with the Hudson's Bay Company.

TIMES, July 3, 1863. [HOUSE OF LORDS.]

"The DUKE OF NEWCASTLE, in moving the second reading of the British Columbia Boundaries Bill, said that he should give some further information as to an extension of the means of communication across that great interval of country between British Columbia and Canada. After referring to the system of government which then existed both in Vancouver's Island and British Columbia, and to the revenues of both colonies for the previous few years—that of British Columbia being most remarkable, having nearly doubled itself in two years (the imports in 1861 being $1,400,000, and in 1862 $2,200,000)—the noble Duke proceeded to say, that the greatest impediment to the future prosperity of the Colony was a want of communication with the outer world. He had stated on a previous occasion that he hoped to be able to state this year to the House that arrangements had been made to complete the communications between the Colony and the east of British North America, and he thought he could now inform their Lordships that such arrangements would be carried out. He had desired a gentleman of great experience, knowledge, and energy, who was constantly travelling between Canada and this country, to inquire whether it would be possible to effect a communication across the Continent. This gentleman—Mr. Watkin—had returned with considerable information, and he had suggested to him to place himself in communication with persons in the commercial world who might be willing to undertake the carrying out of such a communication. He had put himself in communication with Mr. Baring and others, and he believed they had arrived at the conclusion that if arrangements could be made with the Hudson Bay Company the undertaking should have their best attention. In order that these important communications might be made certain, guarantees were to be given by Canada on the one hand, and British Columbia and Vancouver Island on the other. A complete Intercolonial railway system had long been looked forward to by those interested in our North American Provinces, and it would be impossible to overrate the importance to this country of an inter-oceanic railway between the Atlantic and Pacific. By such a communication, and the electric telegraph, so great a revolution would be effected in the commerce of the world as had been brought about by the discovery of the Cape of Good Hope. It was unnecessary to point out to their Lordships of what importance it would be in the case of war on the other side of the Atlantic. There was another matter on which he wished to say a few words. Some eight or nine days ago it was stated in a portion of the press that the Hudson Bay Company had sold their property. That statement was not altogether accurate, and certainly it was premature, for he had been informed within two hours before he came down to the House that the whole arrangement had only been completed that afternoon. He had not received any official communication on the subject, but some of the gentlemen concerned had been kind enough to inform him of the facts. He had stated on a former occasion that the Hudson Bay Company had wished to sell. Certain parties in the City had, in the first instance, entered into communication with them for the purpose either of purchasing or obtaining permission for a transit through the Company's possessions. After some negociation the alternative of permission for a transit was agreed upon. That conclusion having been arrived at he did not know what it was that raised the whole question of sale again, but some fortnight or three weeks ago fresh negociations were opened. Parties in the City proposed to the Hudson Bay Company to give them by way of purchase a sum of 1,500,000_l_. What had taken place was this: The Hudson Bay Company very prudently required that the money should be paid down, and that the whole sum of 1,500,000_l_. should be ready on a given day, which he believed was yesterday. Of course the intending purchasers could not carry out that transaction in the course of a week, and they, therefore, applied to the International Financial Association to assist them. The Association agreed to do so, and the money either had been paid or would be on a day arranged upon. A prospectus would be issued tomorrow morning, and the shares would be thrown upon the market, to be taken up in the ordinary way upon the formation of companies. These shares would not remain in the hands of the Association, but would pass to the Proprietors, as if they had bought their shares direct from the Hudson Bay Company. Of course the Company would only enjoy the rights which those shares carried, and no more. They would, in fact, be a continuation of the Company; but their efforts would be directed to the promotion of the settlement of the country: the development of the postal and transit communication being one of the objects to which they would apply themselves. Of course, the old Governor and his colleagues, having sold their shares, ceased to be the governing body, and a new council, consisting of most respectable persons, had been formed that afternoon. Among them were two of the Committee of the old Company, with one of whom, Mr. Colville, he had had much personal communication, and could speak in the highest terms as a man of business and good sense. There were, also, seven or eight most influential and responsible people, and the name of the Governor, Sir Edmund Head, who had been elected to-day, would be a guarantee of the intentions of the new Company, for no one would believe that he had entered into this undertaking for mere speculative purposes, or that the Company would be conducted solely with a view to screw the last penny out of this territory. While the council, as practical men of business, would be bound to promote the prosperity of their shareholders, he was sure they would be actuated by statesmanlike views. No negociation with the Colonial Office had taken place; and as this was a mere ordinary transfer, no leave on their part was necessary. But arrangements must be entered into with the Colonial Office for the settlement of the country; and at some future time it would be, no doubt, his duty to inform their Lordships what these arrangements were."

The Prospectus, as issued in London, for the new organization, at the end of June, 1863, contained this paragraph:—