The relation of dependence, which the Red River settlement was beginning to assume towards the United States, attracted attention in Canada, and fears were expressed as to the political future of the great hinterland. In 1857, the Toronto board of trade addressed a memorial to the government,[318] pointing out the situation in the north-west, and urged the expediency of establishing a post route and telegraph line between Canada and British Columbia, over Canadian and Hudson's Bay territory.

The government acted upon the suggestion without loss of time. A mail service was opened in the summer of 1858 to the Red River settlement.[319] Mails were carried twice a month between Collingwood and fort William by steamer, and from the latter point to the Red River by canoe. When winter closed the water routes, a monthly packet by dog-sleigh carried the mails, the carrier travelling along the north shore of lakes Huron and Superior.

But this effort to establish a direct connection between Canada and the north-west was not a success. The difficulties of travel placed this route at a hopeless disadvantage with that through the United States, which gave the people of the settlement a direct communication with but seventy miles of transportation on their part. The service was abandoned after two years, and shortly afterwards the improvements in the service of Pembina in the United States system, enabled the settlers on the Red River to exchange mails with the outer world twice each week.

But the failure of this scheme was merely the prelude to the greater scheme, advocated by the Toronto board of trade. The Canadian government opened a correspondence with the Hudson's Bay Company on the questions of a post road and telegraph across the Continent.[320] On its part, the government was prepared to adopt any measure which would facilitate travel over the stretch which lay between the settled parts of Canada and the Hudson's Bay territory. Appropriations were made for roads through to Red River, and it was hoped that free grants of land would induce people to settle along the route.

The discovery of gold on the Saskatchewan, with the anticipated influx of gold-seekers from the United States made the question one of great urgency. The only access to the territories was through the state of Minnesota, and it was feared that the settlement at Red River would inevitably imbibe principles inimical to the British interests. Unless Canada could offer a passage into the territories, equal in accommodation to that afforded by the United States, the territories would in no long time be occupied by foreigners, British rule would virtually have passed away, and the key to the trade to British Columbia and ultimately to China surrendered to rivals.

Dallas, the resident governor of the Hudson's Bay Company, looked at the question from the standpoint of the company's interests. He pointed out that the establishment of a line of communication across the territories of the company would be seriously prejudicial to those interests. The Red River and Saskatchewan valleys, though not in themselves fur-bearing districts, were the sources from which the main supply of winter food were procured for the northern posts, from the produce of the buffalo hunts.

A chain of settlements through these valleys would not only deprive the company of these vital resources, but would indirectly, in other ways, so interfere with their northern trade as to render it no longer worth prosecuting on an extended scale. It would necessarily be diverted into various channels, possibly to the public benefit, but the company could no longer exist on its present footing.

The Canadian government was far from satisfied with this answer. As they saw it, the question resolved itself into simply this: Should these magnificent territories continue to be merely the source of supply for a few hundreds of the employees of a fur-trading company, or be the means of affording new and boundless contributions to civilization and commerce? Should they remain closed to the enterprise and industry of millions, in order that a few might monopolize all their treasures and keep them for all time to come, as the habitation of wild beasts and the trappers engaged in their pursuit?

The postmaster general in making his report to the council estimated that the cost of a road and water connections with Red River would cost £80,000, and from that settlement to the passes of the Rocky Mountains, £100,000, and recommended that the Canadian parliament should appropriate $50,000 a year for a number of years for this project.

The Red River settlement approached the Canadian government on the subject, undertaking to build a road to the head of the Lake of the Woods, if the Canadian or British government would construct a practical passage from lake Superior to meet this road. The British government, to whom a copy of this memorial was sent by Sandford Fleming, replied that plans were almost matured for establishing a postal and telegraphic communication with British Columbia, and it was expected that with the aid of the two colonies, the scheme would be entered upon at no distant date.