Canada and the States

by Sir E. W. Watkin

"I have no doubt that Governor Dallas's own letters will more than corroborate what is stated in this memorandum, and I need not suggest that the most anxious and immediate attention of yourself and the Committee be directed to these discoveries, and to their political and other necessities and consequences.

"Having possessed myself of so much information in reference to the subjects referred to Governor Dallas and myself, I think we shall be able to fulfil the wishes of the Governor and Committee, Governor Dallas being here, accompanied by Mr. Hopkins, without the necessity of my proceeding on this occasion to the Red River; though, should further discussion with the Governor lead to our joint impression that such a visit would be advantageous, I shall not hesitate to undertake the journey.

"In advance of some memorandum to be prepared for you by Governor Dallas and myself, and which I shall beg him to be good enough to draft, I would mention that I have suggested that the Governor issue a circular to the employes of the Company, stating briefly the nature of the recent changes of proprietorship in the Company, and thereby having the tendency to remove any misconceptions which might arise, and which, I regret to learn, have in some few quarters appeared amongst the factors and other officers of the Company, who, as partners in the trade, have considered themselves entitled to be consulted by the late Governor and Council on the subject of the transfer.

"Governor Dallas informs me that the outfit of 1862-3 will show very much improved results; and I have little doubt that the wise and energetic measures which he has initiated since his tenure of office will bring abundant benefits in every direction. The result in the western district, which, if I recollect rightly, exhibited a loss, and which, in the past year, with all exclusive privileges taken away, gives a profit of no less than $166,000, is a convincing proof of what may be effected by improved business organization and thorough energy and firmness. It has, however, been matter of considerable anxiety to me to learn that it is Governor Dallas's desire to return to England next year.

"As regards the future management of the fur trade, Governor Dallas is of opinion that a considerable reduction may be made in the number of the employes; and that by a judicious weeding out of those who, in all large establishments managed from a distance, either were originally, or have become, inefficient, not only will expenses be saved, but a much larger trade be carried on.

"In any considerable change of personnel, the partnership rights of the factors will have to be considered; and one of the gravest and most difficult subjects of consideration will be, how to reconcile the rights of these gentlemen in a share of profit with that reorganization which the commercial interests of the Company evidently require.

"These changes can only be made after discussion with the factors and chief officers; and in some cases it may be desirable to buy out individual interests on a more or less extended scale.

"The 40 per cent. of the net profit of the Company allowed to the factors, in addition to the salaries of considerable amount, is a heavy drain, and involves other considerations opposed to rigid discipline, which need not be further touched upon here, but which are sufficiently obvious. This re-organization can only be effected by giving to the Governor very large and exceptional powers, and without delay. If these powers are given, I am quite confident that the results will be such as abundantly to satisfy the Committee. Hitherto, as it appears to me, far too little discretion has been permitted; and the practice of sending all the accounts home to England, and dealing with them in such a manner that the Governor could not tell from time to time how the financial results of expenses and profits were progressing, has produced its inevitable consequences. In future, I feel convinced, it will be found matter of the utmost consequence to concentrate the accounts at Fort Garry, and to send copies of the vouchers, journals, and ledgers from Fort Garry to England, instead of adopting the reverse practice, and endeavouring, as hitherto, to make the accounts travel as long a distance and be made up over as remote a time as possible. With proper telegraphic and postal communication between the principal posts of the Company and Fort Garry and Montreal, there is no reason why the accounts should ever be two years in arrear in future.

"As regards the settlement of the country, and, involved in that important question, the state and prospects of the Red River, the discoveries of gold above alluded to involve very serious considerations.

"Assuming a rush of miners to different portions of the territory, the machinery of Government for the preservation of order cannot be for a moment neglected, or its construction be delayed. This involves, again, the question of the establishment of a new colony. Is that colony to be governed by the Hudson's Bay Company, who are essentially a trading and landowning corporation, or is it to be governed in the name of her Majesty, the Hudson's Bay Company, so far as the limits of the Crown Colony are concerned, becoming merely traders and landowners, and ceasing to govern as at present?