1	               October 1993
     3	                  John Palliser's Observations 
     4	          on the Proposed Annexation of Rupert's Land 
     5	                              and 
     6	         the Monopoly Rights of the Hudson's Bay Company
     9	                              ....edited by Marijan Salopek
    11	     [Editor's Note:  The text below is a true
    12	     representation of the original as penned by John
    13	     Palliser; obvious errors in usage, spelling,
    14	     punctuation, syntax, etc. have not been corrected.]
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    18	Confidential Despatch to the Secretary of State for the Colonies
    20	Registered CO                      Montreal March 13-1858
    21	March 30, 1858.
    23	Sir,
    24	     Although my mission from the Colonial office is merely an
    25	exploring one yet much has come under my notice both from
    26	experience in the country and intercourse with all classes
    27	English, French, Canadian, Half Breeds and Indians inhabiting the
    28	H.B. Territory.  I therefore take the liberty of offering a few
    29	remarks and suggestions valuable only perhaps because coming from
    30	an impartial observer like myself.
    31	     The question which I now enter upon has been some time
    32	before the Political world, both in England, and in Canada and I
    33	do not think its solution has yet been arrived at either in The
    34	House of Assembly in Canada, nor by the Committee of the House of
    35	Commons last year.  The Question is
    37	          "Is there a better Systim of Government for The
    38	     North American Indian Territories than that of The
    39	     Hudson Bay Company and if there be" "What is it"?
    41	The object of the enquiry before the House of Assembly in Canada,
    42	is, (as I understand it) to ascertain what government would be
    43	best adapted to further the civilisation of the whole country at
    44	present under the sway of The Hudson Bay Company.
    45	     The enquiry in England arose from the Hudson Bay Company
    46	applying for a renewal of the license to trade in the British
    47	Indian Possessions not comprised in the limits held by them under
    48	the Charter of 1670.  Before the Committee of the house of
    49	Commons not only the monopoly of trade in the licensed territory
    50	was brought under review but also that in the Chartered
    51	territory.  The Object of that committee was the same as that of
    52	the House of assembly in Canada, with this modification of it,
    53	that the House of Assembly took a Canadian view of it The House
    54	of Commons an Imperial one.
    55	     It was attempted to show that these views were identical but
    56	from the Nature of the Case it was not so --
    57	     While Canada asserted its rights to the occupancy of a
    58	section of country fit for cultivation and plied the home
    59	Government with arguments founded on a gigantic amplification of
    60	their dominions to the shores of the Pacific and a visionary
    61	commercial scheme that shd embrace The East Indies & China -- 
    62	The Imperial Authorities felt the duty incumbent on them of
    63	ascertaining the necessities of the People dwelling in the Indian
    64	territories and of adopting the mode of Government which presents
    65	the most favourable characteristics of progression in
    66	civilisation.
    67	     I have no hesitation in expressing my conviction that no
    68	Government which Canada is in the power of conferring could
    69	succeed in attaining so desirable an object.
    70	     The Experience which I have obtained from personal
    71	observation, and searches while conducting The North British
    72	America Exploring Expedition, between lake Superior and Red River
    73	Settlement convinced me that any route forced through that region
    74	either by land or by water or by a combined means of both could
    75	only be carried out at a vast expense and therefore never become
    76	a reproductive expenditure.
    77	     The people of Canada too must now have some opportunities of
    78	judging the nature of the difficulties of communicating with Red
    79	River from the Surveying expedition which their Government sent
    80	out there last year, and must be convinced that there are
    81	physical obstructions of no common order independent of climate,
    82	that stand in the way of their proposed Annexation of Red River,
    83	when all these draw backs are ascertained (i e)
    85	1st. The impossibility of governing a country at such a distance
    86	from the seat of Government in Canada.
    87	2nd. The utter hopelessness of the competition in trade in Hudson
    88	Bay, which always can be cheaper done by the way of York Factory
    89	with England than by Lake Superior with Canada
    90	3rd. The great expense of opening up Roads & their uselessness
    91	when complete
    92	4th. The probability of Indian disturbances which wd. necessitate
    93	the conveyance of troops from Canada and minor causes of
    94	disquietude and outlay without any adequate compensation.
    96	     When these are fully known I think Canada will best forward
    97	its own views and interests & stand on surer ground by advocating
    98	some other cause in the laudable attainment of a Government
    99	adapted to civilise Hudsons Bay.
   100	     If Canada give up all ideas of annexation (as I think it
   101	must) the course left open for her to pursue will be to enquire
   102	into and report to the Imperial government upon the most feasible
   103	practical plan of fostering civilisation in a country bordering
   104	her own.
   105	     This reduces the consederation of the subject to the
   106	question -- "Is there a better System of government for the
   107	Indian territories than that of the Hudson Bay Coy.;" and if
   108	there be "What is it?"?
   109	     Admitting as a principle confirmed by long experience that a
   110	monopoly of trade has been best conducive to the well being of
   111	the Indian population, simply, as a wild population I shall
   112	proceed to show that however desirable a monopoly may be, it is
   113	unattainable now and for evermore!!
   114	     Perhaps it would not be too much to say, even were it
   115	attainable, it would be a policy pregnant with no earthly good,
   116	that Indian tribes, should have no ulterior object, than that of
   117	hunting furs, for civilised communities.
   118	     It is well known that Opposition does exist in the Fur
   119	territories.  There would be no difficulty in ascertaining for
   120	the Government how extensive that opposition is
   121	     It is sufficient for my purpose to know it as a fact that
   122	cannot be denied, and that it brings with a train of evils simply
   123	because the laws of a monopoly cannot cope with the illicit
   124	trade.
   125	     Unfortunately for the monopoly, the people engaged in this
   126	trade are inhabitants of the Indian land and born on its soil 
   127	These people most of them Half Breeds are British subjects and
   128	whatever the rights and privileges of the Hudson Bay Company may
   129	be under the Charter, They think it a very hard case that they
   130	should be debarred from trading in the land of their birth, and
   131	that Foreigners (as the British company undoubtedly are to them)
   132	should have a vested priviledge which as British subjects the
   133	inhabitants are not permitted to enjoy --
   134	     There appears to be a shadow of Justice in this complaint.
   135	     Just or not! -- the opposition exists and nothing short of
   136	extirpating the people engaged in it can ever stop it
   137	     Unless legislation be adopted to the evils incidental to
   138	this opposition, the country will become as unfit for sober
   139	traders to live in, as it was in the time of the feuds of the
   140	North West and Hudson Bay Companies.  The trade however will be
   141	characterised by this difference, that, in the former opposition
   142	it was a company of traders opposed to another company of traders
   143	-- each under well recognised systims, while on the present
   144	occasion, it is a body of traders opposed to detached individuals
   145	without a systim, who start off at a moments notice to a
   146	desultary trade with Indians that are at the same time away from
   147	the influence or inspection of the Company.  This mode of trading
   148	has a prejudicial effect morally on the Indian, It teaches him
   149	duplicity to the Company, for the illicit trader and he mutually
   150	understand that the transaction must be kept a secret from the
   151	Company
   152	     Generally too, the trade is a spiritous liquor one and its
   153	attendant immorality is too well known to need comment here.
   154	     To oppose this trade the Company also use spirits
   155	     To quash illicit trade seems impracticable
   156	     Force would only introduce the Elements of discord, the
   157	passions of the rival traders would be roused, anger might result
   158	in bloodshed and the end, none can see
   159	     As a trade that requires physical force to support it, is
   160	not in consonance with the prevailing opinions respecting
   161	commerce, the deduction naturally springing from the
   162	consideration of the monopoly and its present opposition is to
   163	annul the monopoly, and curb the opposition by wholesome
   164	restraint or in other words so to legislate as to put the present
   165	traders and their opponents on the same level
   166	     My own experience of the Fur traders is that they are honest
   167	honorable men disliking above all things this systim of
   168	opposition that compels them to resort to a factious trade
   169	     I feel persuaded that the Greatest Calamity that could befal
   170	the Indian wd be to destroy the present Fur trade and its immense
   171	ramifications
   172	     The traders thoroughly know their work and how to do it,
   173	with their systim they convey within the reach of every Indian in
   174	the territories the means of hunting and the necessaries for his
   175	existence and their annihilation wd produce the misery and
   176	distruction of thousands of Indians
   177	     Leaving this branch of the subject for a while I wd call
   178	your attention to the constitution of the existing trade.  It is
   179	conducted on the principle of Capital being supplied by the
   180	Stockholder:  the whole expences of the trade inclusive of London
   181	expences are charged against the trade every item is paid for by
   182	the trade and 5 per cent per annum charged on the capital
   183	besides, likewise paid by the trade
   184	     The whole outlay both Principal and interest is repaid
   185	before the profit and loss sheet is struck -- Then the profits
   186	are divided 4/10ths to the partners in the Indian country (called
   187	wintering partners) and 6/10ths to the stockholders in England
   188	whoever they may be.  In other words 4/10ths are considered an
   189	ample remuneration for all the active duties, and 6/10ths for all
   190	the passive ones, so that -- shutting out the view of the
   191	Chartered rights -- If the Wintering partners were working with
   192	their own capital, -- at the same expence to the trade and
   193	conducted on precisely the same principle, -- they would after
   194	paying 5% p.c. for working capital be richer annually by 6/10ths
   195	of the whole income of the Fur trade
   196	     Looking at this state of things in conjunction with the
   197	leading idea that the Hudson Bay Company lay so much stress upon
   198	in their application for a monopolitical license viz "That
   199	Indians are unfit from their habits and want of education to mix
   200	with white men" -- I would ask how it comes that there has been
   201	no Systim of National education attempted by the Company --
   202	Surely these 6/10ths (after paying what is considered a
   203	sufficiency to active agents and all expences incidental thereto)
   204	-- are -- Indian earnings and if (as the Company assert) the
   205	Indians are not fit for the society of civilised beings, ought
   206	not some portion of these 6/10ths to be devoted to their
   207	education and benefit.
   208	     I emphatically deny the incapacity and want of intellect in
   209	Indians and half breeds, or their incapacity for instruction, and
   210	a settled life -- But this will not come in one day -- nor be
   211	produced without an effort -- Why not make an effort of the Kind?
   212	     I do not condemn the Hudson Bay Company nor conceive that
   213	they are acting wrongly in this absorption of 6/10ths of the
   214	profits -- As merchants they are entitled to profits I only
   215	advance this argument with the ulterior purpose of showing that
   216	the Indians are entitled to an education fund, founded on their
   217	own industry. --
   218	     All the rights and privileges of The Hudson Bay Company
   219	under the Charter are marketable
   220	     Anyone with funds who is willing to buy, the market value is
   221	ascertainable and the transfer is as easily effected as any
   222	Government Stock or Public investment  Were it not so I would not
   223	have written so boldly on this great question and I have no other
   224	desire than to act justly towards all parties interested in it.
   225	     From the foregoing considerations I arrive at the following
   226	deductions
   227	     Let the British Government pay The Hudson Bay Company the
   228	market price for their stock -- assume all their Assets and
   229	liabilities and thus Abolish The Charter!
   230	     Let the Capital employed in the trade be transferred to the
   231	existing body of Fur traders now known as The wintering partners
   232	of the Hudson Bay Company and the Imperial Government give up to
   233	them, all the present fur stations, the fur traders paying the
   234	Government 5% for Capital until it be refunded to the Exchequer
   235	     That the whole country be opened to free trade with the
   236	proviso that all fur traders (the present fur traders inclusive)
   237	take out a license for every station or house in which the fur
   238	trade is conducted
   239	     That the Fur trade be illegal except in such licensed
   240	station or house
   241	     That spirits for Indian consumption be interdicted
   242	     That two distinct Colonial Governments be constituted, one
   243	on The Pacific with the seat of Government at Victoria
   244	Vancouver's Island, embracing for territory, the land on the West
   245	side of the Rocky Mountains, Vancouvers Island and Queen
   246	Charlotte's Islands -- The other -- all the lands east of the
   247	Rocky Mountains with Head Quarters at Red River.
   248	     That an Indian council be appointed for protecting Indian
   249	interests and superintending Indian Education in both colonies,
   250	and to create a fund for national education
   251	     Let an average be taken since 1821 of the 6/10ths profits
   252	and let this be the basis of the estimate of annual charges
   253	hereafter on the resources of the two Colonies
   254	     As Vancouvers Island has already a representative government
   255	it will only be necessary to enlarge its machinery, but Rupert's
   256	land will require a new constitution embracing both the
   257	legislative and executive departments --
   258	     These are not theories resulting from books and meditations
   259	in a study but from experience on the shores of Lakes Superior &
   260	Winnipeg, on the Red and Saskatchewan Rivers, also from
   261	conversations with intelligent wintering Partners of the Hudson
   262	Bay Company who have give me the benefit of their experience in
   263	Canada Hudson Bay -- Vancouvers Island, and the Counting house in
   264	London.
   265	     I hardly think that The Hudson Bay company in London will
   266	altogether approve of this scheme, but the following paragraph
   267	taken from Governor Shepherd's letter to the Rt. Honble H.
   268	Labouche`re M P dated Hudson Bay House 18 July 1857. shows that
   269	their opposition will not be factional.  It is a noble tribute to
   270	civilisation and an honor to the high minded writer.
   271	     "The Board will be ready to bow to any decision which her
   272	Majesty's Govnt may consider it for the Public interest to take
   273	with regard to the maintenance or abolition of the exceptional
   274	rights and trade of The Hudson Bay Company relying confidently on
   275	the justice of Her Majesty's Government and of Parliament for
   276	just compensation to the present stockholders, and a due
   277	consideration of their factor traders and servants in the Indian
   278	Country if the time shall have arrived in the opinion of H. M.
   279	Govt. for the abolition of the Monopoly"  In conclusion I beg to
   280	say that I have been induced to communicate with you on this
   281	subject, by motives of interest for the Indians and half breeds,
   282	who inhabit these territories, I feel myself so thoroughly
   283	competent to do so being able to exercise on this subject a
   284	judgment unbiassed by favour or prejudice -- for I am one of the
   285	few that have ever traversed the country who have not either been
   286	in the interests of, or at variance to The Hudson Bay Company.
   288	                              I am
   289	                                   Sir
   290	                                 Yours Obedntly --
   292	                                        John Palliser, Captn
   293	          Commanding North British America Exploring Expedition
   296	Source:
   298	     Britain, Public Records Office, Colonial Office 6/29 "P",
   299	fos. 70-82.
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