"With the view of providing the means of telegraphic and postal communication between Canada and British Columbia, across the Company's territory, and thereby of connecting the Atlantic and Pacific Oceans by an exclusively British route, negociations have been pending for some time past between certain parties and Her Majesty's Government and the representatives of the Government of Canada, and preliminary arrangements for the accomplishment of these objects have been made through Her Majesty's Government (subject to the final sanction of the Colonies), based upon a 5 per cent. guarantee from the Governments of Canada, British Columbia, and Vancouver Island. In further aid of these Imperial objects, Her Majesty's Government have signified their intention to make grants of land in portions of the Crown territory traversed by the proposed telegraphic line.
"One of the first objects of the Company will be to examine the facilities and consider the best means for carrying out this most important work; and there can be little doubt that it will be successfully executed either by the Hudson's Bay Company itself, or with their aid and sanction.
"For this, as well as for the other proposed objects, Mr. Edward Watkin, who is now in Canada, will be commissioned, with other gentlemen specially qualified for the duty, to visit the Red River and southern districts, to consult the officers of the Company there, and to report as to the best and safest means of giving effect to the contemplated operations."
A letter of instructions, from the new Governor, dated London, 6th July, 1863, received by me about the 22nd July, after I had made no small advance in the real business, stated:—
"SIR,
"I am authorized by the Committee of the Hudson's Bay Company to request you to proceed on their behalf to the Red River Settlement, for the purpose of reporting to them on the state and condition of this Settlement, the condition of the adjoining territory, the prospect of settlement therein, and the possibility of commencing operations for an electric telegraph line across the southern district of Rupert's Land.
"The Committee have full confidence in your discretion and judgment, but they have deemed it right to associate with you in this inquiry Governor Dallas, of the Red River Settlement, with whom they request you to communicate at once.
"The Committee are aware that it is now so late in the season as to preclude you from doing more than procure such information as may enable them to commence fresh inquiries at the opening of next season.
"I have the honour to be, Sir,
"Your obedient Servant,
"EDMUND HEAD, Governor.
"EDWARD WATKIN, Esq."
I found soon after my arrival in Canada that Governor Dallas was coming down from Red River, and would meet me at Montreal. He was a very able man; cool, clear, cautious, but when once he had had time to calculate all the consequences, firm and decided. He had been for years on the Pacific coast; and, thanks to his prudence, the landing, in 1859, of General Harney, and a detachment of United States troops on the Island of St. Juan, between Vancouver's Island and the mainland, on the Pacific, had been controlled and checkmated, by the proposal of a joint occupation until negotiations had settled the question of right. This right was, afterwards, given away by our Government under the form of an arbitration before the Emperor of Germany. Governor Dallas' opinion of the transaction will be gathered from his letters to me of the 29th and 30th October, 1872, hereafter copied.