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John Palliser
Observations on the Proposed Annexation of Rupert's Land and the Monopoly Rights of the Hudson's Bay Company

Confidential Despatch to the Secretary of State for the Colonies
Registered CO Montreal March 13-1858

March 30, 1858.


Although my mission from the Colonial office is merely an exploring one yet much has come under my notice both from experience in the country and intercourse with all classes English, French, Canadian, Half Breeds and Indians inhabiting the H.B. Territory. I therefore take the liberty of offering a few remarks and suggestions valuable only perhaps because coming from an impartial observer like myself.

The question which I now enter upon has been some time before the Political world, both in England, and in Canada and I do not think its solution has yet been arrived at either in The House of Assembly in Canada, nor by the Committee of the House of Commons last year. The Question is

"Is there a better System of Government for The North American Indian Territories than that of The Hudson Bay Company and if there be" "What is it"?

The object of the enquiry before the House of Assembly in Canada, is, (as I understand it) to ascertain what government would be best adapted to further the civilisation of the whole country at present under the sway of The Hudson Bay Company.

The enquiry in England arose from the Hudson Bay Company applying for a renewal of the license to trade in the British Indian Possessions not comprised in the limits held by them under the Charter of 1670. Before the Committee of the house of Commons not only the monopoly of trade in the licensed territory was brought under review but also that in the Chartered territory. The Object of that committee was the same as that of the House of assembly in Canada, with this modification of it, that the House of Assembly took a Canadian view of it The House of Commons an Imperial one.

It was attempted to show that these views were identical but from the Nature of the Case it was not so -

While Canada asserted its rights to the occupancy of a section of country fit for cultivation and plied the home Government with arguments founded on a gigantic amplification of their dominions to the shores of the Pacific and a visionary commercial scheme that shd embrace The East Indies & China -

The Imperial Authorities felt the duty incumbent on them of ascertaining the necessities of the People dwelling in the Indian territories and of adopting the mode of Government which presents the most favourable characteristics of progression in civilisation.

I have no hesitation in expressing my conviction that no Government which Canada is in the power of conferring could succeed in attaining so desirable an object. The Experience which I have obtained from personal observation, and searches while conducting The North British America Exploring Expedition, between lake Superior and Red River Settlement convinced me that any route forced through that region either by land or by water or by a combined means of both could only be carried out at a vast expense and therefore never become a reproductive expenditure.

The people of Canada too must now have some opportunities of judging the nature of the difficulties of communicating with Red River from the Surveying expedition which their Government sent out there last year, and must be convinced that there are physical obstructions of no common order independent of climate, that stand in the way of their proposed Annexation of Red River, when all these draw backs are ascertained (i e)

1st. The impossibility of governing a country at such a distance from the seat of Government in Canada. 2nd. The utter hopelessness of the competition in trade in Hudson Bay, which always can be cheaper done by the way of York Factory with England than by Lake Superior with Canada 3rd. The great expense of opening up Roads & their uselessness when complete 4th. The probability of Indian disturbances which wd. necessitate the conveyance of troops from Canada and minor causes of disquietude and outlay without any adequate compensation.

When these are fully known I think Canada will best forward its own views and interests & stand on surer ground by advocating some other cause in the laudable attainment of a Government adapted to civilise Hudsons Bay.

If Canada give up all ideas of annexation (as I think it must) the course left open for her to pursue will be to enquire into and report to the Imperial government upon the most feasible practical plan of fostering civilisation in a country bordering her own.

This reduces the consederation of the subject to the question - "Is there a better System of government for the Indian territories than that of the Hudson Bay Coy.;" and if there be "What is it?"

Admitting as a principle confirmed by long experience that a monopoly of trade has been best conducive to the well being of the Indian population, simply, as a wild population I shall proceed to show that however desirable a monopoly may be, it is unattainable now and for evermore!!

Perhaps it would not be too much to say, even were it attainable, it would be a policy pregnant with no earthly good, that Indian tribes, should have no ulterior object, than that of hunting furs, for civilised communities.

It is well known that Opposition does exist in the Fur territories. There would be no difficulty in ascertaining for the Government how extensive that opposition is It is sufficient for my purpose to know it as a fact that cannot be denied, and that it brings with a train of evils simply because the laws of a monopoly cannot cope with the illicit trade.

Unfortunately for the monopoly, the people engaged in this trade are inhabitants of the Indian land and born on its soil These people most of them Half Breeds are British subjects and whatever the rights and privileges of the Hudson Bay Company may be under the Charter, They think it a very hard case that they should be debarred from trading in the land of their birth, and that Foreigners (as the British company undoubtedly are to them) should have a vested priviledge which as British subjects the inhabitants are not permitted to enjoy -

There appears to be a shadow of Justice in this complaint. Just or not! - the opposition exists and nothing short of extirpating the people engaged in it can ever stop it Unless legislation be adopted to the evils incidental to this opposition, the country will become as unfit for sober traders to live in, as it was in the time of the feuds of the North West and Hudson Bay Companies. The trade however will be characterised by this difference, that, in the former opposition it was a company of traders opposed to another company of traders - each under well recognised systims, while on the present occasion, it is a body of traders opposed to detached individuals without a systim, who start off at a moments notice to a desultary trade with Indians that are at the same time away from the influence or inspection of the Company. This mode of trading has a prejudicial effect morally on the Indian, It teaches him duplicity to the Company, for the illicit trader and he mutually understand that the transaction must be kept a secret from the Company

Generally too, the trade is a spiritous liquor one and its attendant immorality is too well known to need comment here. To oppose this trade the Company also use spirits To quash illicit trade seems impracticable Force would only introduce the Elements of discord, the passions of the rival traders would be roused, anger might result in bloodshed and the end, none can see

As a trade that requires physical force to support it, is not in consonance with the prevailing opinions respecting commerce, the deduction naturally springing from the consideration of the monopoly and its present opposition is to annul the monopoly, and curb the opposition by wholesome restraint or in other words so to legislate as to put the present traders and their opponents on the same level

My own experience of the Fur traders is that they are honest honorable men disliking above all things this systim of opposition that compels them to resort to a factious trade I feel persuaded that the Greatest Calamity that could befal the Indian wd be to destroy the present Fur trade and its immense ramifications.

The traders thoroughly know their work and how to do it, with their systim they convey within the reach of every Indian in the territories the means of hunting and the necessaries for his existence and their annihilation wd produce the misery and distruction of thousands of Indians.

Leaving this branch of the subject for a while I wd call your attention to the constitution of the existing trade. It is conducted on the principle of Capital being supplied by the Stockholder: the whole expences of the trade inclusive of London expences are charged against the trade every item is paid for by the trade and 5 per cent per annum charged on the capital besides, likewise paid by the trade.

The whole outlay both Principal and interest is repaid before the profit and loss sheet is struck - Then the profits are divided 4/10ths to the partners in the Indian country (called wintering partners) and 6/10ths to the stockholders in England whoever they may be. In other words 4/10ths are considered an ample remuneration for all the active duties, and 6/10ths for all the passive ones, so that - shutting out the view of the Chartered rights - If the Wintering partners were working with their own capital, - at the same expence to the trade and conducted on precisely the same principle, - they would after paying 5% p.c. for working capital be richer annually by 6/10ths of the whole income of the Fur trade

Looking at this state of things in conjunction with the leading idea that the Hudson Bay Company lay so much stress upon in their application for a monopolitical license viz "That Indians are unfit from their habits and want of education to mix with white men" - I would ask how it comes that there has been no Systim of National education attempted by the Company - Surely these 6/10ths (after paying what is considered a sufficiency to active agents and all expences incidental thereto) - are - Indian earnings and if (as the Company assert) the Indians are not fit for the society of civilised beings, ought not some portion of these 6/10ths to be devoted to their education and benefit.

I emphatically deny the incapacity and want of intellect in Indians and half breeds, or their incapacity for instruction, and a settled life - But this will not come in one day - nor be produced without an effort - Why not make an effort of the Kind? I do not condemn the Hudson Bay Company nor conceive that they are acting wrongly in this absorption of 6/10ths of the profits - As merchants they are entitled to profits I only advance this argument with the ulterior purpose of showing that the Indians are entitled to an education fund, founded on their own industry. -

All the rights and privileges of The Hudson Bay Company under the Charter are marketable

Anyone with funds who is willing to buy, the market value is ascertainable and the transfer is as easily effected as any Government Stock or Public investment Were it not so I would not have written so boldly on this great question and I have no other desire than to act justly towards all parties interested in it. From the foregoing considerations I arrive at the following deductions

Let the British Government pay The Hudson Bay Company the market price for their stock - assume all their Assets and liabilities and thus Abolish The Charter!

Let the Capital employed in the trade be transferred to the existing body of Fur traders now known as The wintering partners of the Hudson Bay Company and the Imperial Government give up to them, all the present fur stations, the fur traders paying the Government 5% for Capital until it be refunded to the Exchequer

That the whole country be opened to free trade with the proviso that all fur traders (the present fur traders inclusive) take out a license for every station or house in which the fur trade is conducted

That the Fur trade be illegal except in such licensed station or house

That spirits for Indian consumption be interdicted

That two distinct Colonial Governments be constituted, one on The Pacific with the seat of Government at Victoria Vancouver's Island, embracing for territory, the land on the West side of the Rocky Mountains, Vancouvers Island and Queen Charlotte's Islands - The other - all the lands east of the Rocky Mountains with Head Quarters at Red River.

That an Indian council be appointed for protecting Indian interests and superintending Indian Education in both colonies, and to create a fund for national education

Let an average be taken since 1821 of the 6/10ths profits and let this be the basis of the estimate of annual charges hereafter on the resources of the two Colonies

As Vancouvers Island has already a representative government it will only be necessary to enlarge its machinery, but Rupert's land will require a new constitution embracing both the legislative and executive departments -

These are not theories resulting from books and meditations in a study but from experience on the shores of Lakes Superior & Winnipeg, on the Red and Saskatchewan Rivers, also from conversations with intelligent wintering Partners of the Hudson Bay Company who have give me the benefit of their experience in Canada Hudson Bay - Vancouvers Island, and the Counting house in London.

I hardly think that The Hudson Bay company in London will altogether approve of this scheme, but the following paragraph taken from Governor Shepherd's letter to the Rt. Honble H. Labouche`re M P dated Hudson Bay House 18 July 1857. shows that their opposition will not be factional. It is a noble tribute to civilisation and an honor to the high minded writer.

"The Board will be ready to bow to any decision which her Majesty's Govnt may consider it for the Public interest to take with regard to the maintenance or abolition of the exceptional rights and trade of The Hudson Bay Company relying confidently on the justice of Her Majesty's Government and of Parliament for just compensation to the present stockholders, and a due consideration of their factor traders and servants in the Indian Country if the time shall have arrived in the opinion of H. M. Govt. for the abolition of the Monopoly" In conclusion I beg to say that I have been induced to communicate with you on this subject, by motives of interest for the Indians and half breeds, who inhabit these territories, I feel myself so thoroughly competent to do so being able to exercise on this subject a judgment unbiassed by favour or prejudice - for I am one of the few that have ever traversed the country who have not either been in the interests of, or at variance to The Hudson Bay Company.

I am Sir Yours Obedntly -

John Palliser, Captn Commanding North British America Exploring Expedition


Source: Britain, Public Records Office, Colonial Office 6/29 "P", folios. 70-82.

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