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6
REPOET or PROCEEDINGS
AT A
GENERAL MEETING
OP THB
HUDSON'S BAY COMPAIY,
HELD AT THE COMPANY'S HOUSE,
FENCHURCH STREET,
ON TUESDAY, 24th NOVEMBER, 1868.
The Eight HoxVorable
THE EARL OF KIMBERLEY, GOVERNOR,
IN THE CHAIR.
LONDON;
PRINTED BY HENRY KENT CAUSTON & SON
4, LAUEENCE POUNT^EY HILL, CANNON STREET '
?
?6f
^IP*^
REPORT.
On the motion of the Chairman, the Report was taken
as read.
The Chairman : The next resolution is one which is
ordinarily made on these occasions, namely a resolution for
the adoption of the Report of the Committee. Before I
touch upon the questions of importance alluded to in the
Report, I may refer to some minor matters. You will
have observed I have no doubt, that the sales of the furs of
the Company have produced a larger return than they did
last year. That is a satisfactory feature in the present
condition of the trade. As regards the House in Fenchurch
Street, I regret that we have not been able to sell it. It
would of course be exceedingly unwise to sell it at a great
loss. The Committee are exceedingly anxious to part with
it. They have taken opinions as to its value, and the
shareholders may rest assured that they will sell it to the
best advantage when they have an opportunity. Now,
gentlemen, the really important matter which no doubt
has engaged the attention of those who have read this
Report, is the negotiations which we are carrying on with
the government with respect to the cession of your territo-
rial rights. J^Iost of you have perhaps read a letter which
has been addressed to me by Mr. Bonar, a shareholder in
the Company, and which I am very glad to see he has
been good enough to print for our use on this occasion.
a2
<tj*
4
Now, in many things which are said in that letter I concur.
The letter is one which it is exceedingly natural that a
shareholder having a stake in the interests of this Company,
should on an occasion of this kind address to its Chairman,
and I can assure the shareholders, that far from wishing to
deprecate the expression of independent opinion by the
shareholders, the Committee earnestly wish for the expres-
sion of their opinion, which undoubtedly strengthens theui
in the negotiations which they have to carry on. As Mr.
Bonar justly remarks, we are trustees for the Company,
and the shareholders are those who have a stake in the
funds of the Company, and to whom we must look for an
expression of their feelings. I have made these remarks,
in order that no person may suppose that in any observa-
tions I proceed to make with regard to this letter, (for
when I observe upon the letter I am in fact dealing with
the whole question,) that I do so in the slightest unfriendly
spirit towards the writer. There is one point which I will
first take notice of. It refers to a very important question
which was dealt with before I had the honor to be Chair-
man of tlie Company. Mr. Bonar states that he must
renew the complaint which has frequent y been made,
that the Directors have failed to apply the fund subscribed
under the prospectus of 1863, to the purposes expressed in
that prospectus, and have declined to adopt any measures
for the profitable settlement of the Territory. Now that
was a question, which, as I am informed, was very properly
submitted to the shareholders for their vote, and I have
here the numbers of those who voted on that occasion.
The number voting in favor of a motion proposed in the
sense of Mr. Bonar's statement was 122, holding 5308
shares and £106,161 stock. The numbers voting on the
other side were 496, holding 53,942 shares and £1,078,841
stock. Now it is impossible, I apprehend, that you can
expect that the Committee should re-open this question.
8
when it has been so fully and entirely disposed of by the
shareholders themselves, in the most legitimate way in
which their opinion can be taken. Therefore, 1 shall pass
on to another subject, not troubling you with any further
observations upon that. Mr. Bonar is much discontented
that the Committee have not furnished information to the
shareholders upon this occasion, as to the position and
progress of the negotiation. If the Committee had received
a definite answer from the government that they could
have laid before the shareholders — and they thought that
they might have received such a definite answer, even in
the interval between the publication of the Report and this
meeting — they undoubtedly would have brought the whole
subject before the shareholders. They were prepared and
anxious to lay before them all the correspondence which
has taken place ; but it seems to me that any gentlemen
having experience of business must see that, whilst the
correspondence is entirely incomplete, to lay before the
shareholders a portion of that correspondence would be,
not to place them in a position to form any definite j udg-
ment as to what has taken place, but would, in fact,
prejudice the negotiation itself and invite an expression of
opinion, when that expression of opinion could not be
given upon a full knowledge of all the circumstances of the
case. Now let me also point out a very important feature
in the business — one which has been repeatedly painted
out from this chair — namely, that anything the Committee
may do is subject to the ratification of the shareholders.
We have invariably expressed to the government, in our
communications with them, the obligations we are under to
have our acts ratified by the shareholders — we have ex-
pressed that opinion not merely formally, but we have
explicitly stated that it was impossible for us to do more
than pledge our individual opinion, and promise to use such
influence as we might command, in bringing before the
6
shareholders any proposition which we thouglit might
fairly be adopted as a basis of agreement. That is the
position of the matter. Now if you were to pass a distinct
resolution, as I said at a former meeting, that you would
only accept such and such terms, in point of fact that
would be no negotiation at all : it would be merely going
to the government and saying, " This is what the Company
will do: if you don't accept that, we fall back upon a
simple retention of our territory." This seems to me
perfectly inconsistent with all that has hitherto been done,
namely a negotiation which has been conducted by the
Committee, I must assume with the authority of the share-
holders, before I had the honor to be Governor, and which
is still in progress. But let me tell the shareholders this ;
we have not failed to bring fully before the government,
since our last meeting, the views that were expressed in
this room upon that bccasion. We pointed out the expres-
sion of feeling which was then given vent to, and we have
strongly urged the necessity of making full compensation
to the Company for the cession of its territory. Now,
gentlemen, I think it would be wrong in the interests of
the Company itself, to enter into explanations as to what
we have done and what we have proposed ; — therefore I
shall abstain from doing so. But this I am prepared to
say, namely, that if we do not obtain very shortly from the
government a definite answer, and if the negotiations seem
likely to continue in an incomplete state without coming to
a point, then the Committee will lay before the proprietors
the whole state of the case and the entire correspondence.
It would strengthen their hands very much indeed, to have
all that correspondence laid before the proprietors and to
know what their opinion is with regard to what has taken
place. But in the present stage, I am ceitain it would not
be respectful to the government, and that it would be most
detrimental to your interests, if we were to produce the
correspondence, and I must say, for myself, I could not
undertake the responsibility of doing so at the present
juncture.
Gentlemen, I know not that I need enlarge any further
upon this matter, because probably some gentlemen will
wish to express opinions with regard to it, and then I may
have occasion, in answer, to say something further. Before
sitting down, I will only allude to one other point, which
is very important, namely, — the delay in the settlement of
the claims of the Company in the Oregon Territory. We
have been exceedingly dissatisfied with the want of progress
in these negotiations. We have spared no pains in pressing
upon our agent the importance of making more speedy
progress, and we have at last taken the only step which was
within our power to take : we have made a representation
to the Secretary of State for Foreign Affairs, and requested
him to make a representation on the subject to the govern-
ment at Washington. There is no other step we can take.
We have done all in our power, and if the shareholders feel
discontented at the position of this affair, I can assure
them that the feeling is fully shared by the Committee,
and that nothing we can do to bring this business to a
close shall be omitted on our part. I beg leave now to
move the adoption of the Report.
Sir Curtis Miranda Lampson : I beg to second the
motion.
Mr. BoNAR : As the writer of the protest before the
meeting, and as trustee for more than £8,000 stock in this
Company, I cannot accept the assurances of your Lordship,
sincerely as they are given and satisfactory as they are in
some respects, in the place of a direct pledge which alone,
I think, could remove the feelings of anxiety and apprehen-
sion felt by the shareholders. A distinct pledge would
alone remove these apprehensions. At the same time, I
beg to say that if I am not supported by this meeting in
8
the protest I have juBt given, I must request your Lordship
to record it upon the minutes of the day, in view of events
that may happen.
Mr. Eley : I wish to make a few observations with
regard to the Report sent round to the shareholders. I
must confess that anything more inconsequential than the
conclusions arrived at, based as those conclusions are upon
the premises laid down by the directors themselves, I never
heard in my life. Every paragraph in the Report con-
gratulates us upon the high state of prosperity which we
are now in the enjoyment of. We are not merely told that
our prospects for the future are good, but we are referred
to realized results. We are told that the quantity of
furs that we have obtained has been larger ; we are told
that the prices obtained for them have been larger ; that
the articles of merchandise we sent across the water have
been sold at better prices, and that in every respect our
position and prospects are better than they were at the
date of the last meeting. Now the only logical and sensible
conclusion that can be drawn from those premises is that
we should be in the receipt of a larger dividend. I, for
one, do not complain of the dividend per se. If we are
only earning three per cent, or two or one per cent., we
cannot, of course, expect to receive more. But what I
complain of is that the Report is not one which ought to
prove acceptable to business men, inasmuch as it gives us
reasons why we should receive a larger dividend, while, at
the same time, a declaration is made of a dividend one per
cent, less than was declared last year, when our prospects
were not so good and the results realised were not so good.
The diref'cors in their Report tell us the reason of this dimi-
nished dividend is that certain accounts are not made up
and that certain produce has not been sold. If my memory
serves me, we have been told the same thing at previous
meetings when an interim dividend has been declared. I
9
think I am right in saying that lant year, when we received
one per cent, more dividend, the same reasons were given,
but the directors told us that, notwithstanding that, they
felt in a position to declare a dividend of four per cent.
I am not sure whether I am right or not. (" No, no.")
I will take it for granted I am wrong and, even supposing
1 am wrong, to give us paragraph after paragraph shewing
why we should receive a larger dividend and tlien winding
up by recommending a smaller, appears to me most extra-
ordinary. Now if the fact be as I believe it is that, not-
withstanding our prosperous condition, the directors do not
see from their review of the circumstances of the case that
we are likely to earn a greater dividend than three per
cent, for the whole year, why not say so ? Then, as busi-
ness men, we could understand it. Now I wish to make
special reference to some remarks that have been made
with regard to the question submitted to the shareholders
some two years ago with respect to the carrying out of the
condition named in the prospectus — a condition which
was the sole inducement for us to subscribe two millions
of money. I wish to refer to your lordship's answer to
Mr. Bonar, which I think very conclusive, namely, that
the question was submitted to the shareholders and that
the shareholders decided that the condition should not be
fulfilled. But, my lord, you forget one important circum-
stance, that that condition was held out in the prospectus
as an inducement to us to give two millions of money for
property which we could have bought in the market for
one million. Now I cannot help remarking that, of that
two millions that we subscribed, no less a sum than
£500,000, or the greater portion of it, is totally unaccounted
for. We hear names mentioned out of doors and we have
heard sums of money mentioned in connection with those
names. It would be imprudent and perhaps dangerous to
refer to them here, but I, for one, unless the negotiations
10
which you are carrying en with the Canadian government
result satisfactorily to us, should be happy to help Mr.
Bonar, if he chose to take action in the matter, in endea-
vouring to discover who it was received that money. Is it
to be supposed for a moment that had we, as business
men, been asked five years ago to subscribe two millions
of money for that which we could have obtained for one
million in the market, and that in return for that two
millions we were to have transferred simply a fur-trade
business — is it to be supposed that one farthing of that
money could have been obtained ? Certainly not. I, for
one, subscribed my money entirely upon the faith of the
promises held out by the directors in the prospectus. I
formed one of a deputation to Sir Edmund Head some two
or three years ago ; I think Mr. Colvile was present at
the time. I pressed very much upon his attention the
fact that those promises were contained in the prospectus,
and I told him in so many words, that it was entirely upon
the faith of those promises that I, for one, subscribed my
money. Sir Edmund Head seemed exceedingly angry that we
did not see that the obstacles to the fulfilment of that condi-
tion were palpable, self-evident, and insuperable. (" What
condition?") The condition that the balance of money
left after the payment of certain things referred to was to
be applied to the colonization of the country. Sir Edmund
Head seemed quite angry (Mr Bonar will bear me out in
what I am saying) that we did not see at once how
palpable, self-evident, and insuperable those objections
were. Well, so far from that being any excuse for the
directors, it forms the gravamen of our complaint. We
say, if those objections are so self-evident and palpable that
no business man can fail to see them, we want to know
why they made the promise they did in the prospectus,
which promise alone induced us to subscribe two millions
of money. Now, my lord, that question has been put from
n
time to time in various forms and shapes. I referred to it
at the last meeting but I have never succeeded in obtain-
ing any reply. It was only after our money had been ob-
tained and after those bonuses had been distributed to the
parties to whom I have referred, that we were told that the
conditions could not be fulfilled. My lord, your high
character warrants me in saying that if you were to enter
into a contract, say with myself, and in virtue of that con-
tract received from me a sura of money and a few years
afterwards you found you could not fulfil the conditions
upon which you obtained that money, and, if, moreover,
you admitted that the obstacles to the fulfilment of the
conditions made by you were so palpable and self-evident
that any business man could not fail to see them, I feel
sure that you would instantly return the money. My
lord, I feel sure that if you will only make an impartial
review of the circumstances I have detailed, you will not
contradict me when I say that our money has been un-
fairly obtained from us. I make that statement most
advisedly. We are suffering from a sense of wrong and
that sense of wrong is added to and intensified by the
knowledge of the fact that of the large sum so obtained from
us by this inducement a very large proportion was distri-
buted in the shape of bonus to those who I presume had
something to do with the concoction of the Report,
pressed the matter upon ihe attention of Sir Edmund Head
and he told me very angrily that the directors were not
responsible for the prospectus. I must confess that I
never listened to any statement with so much surprise in
my life. What do the public suppose when they see a
prospectus put forward with names at the head of it as
directors, of gentlemen who stand nigh in the City of
London ? They, of course, assume at once that the terms
of that prospectus have been settled and are sanctioned by
the directors ; and I want to know if the directors are not
|:
12
|:(::
III
responsible for the terms of that prospectus and if, as they
admitted by the mouth of Sir Edmund Head, the obstacles
to the fulfilment of the conditions they made were so
palpable and self-evident. I want to know how or by what
means they could have been induced to allow their names
to be placed at the head of that prospectus, knowing as
they did full well that the placing of their names there
would be an inducement to the public to subscribe their
money as they did. Now, my lord, this is really the ques-
tion and it is a question that has never yet been answered.
I say that we were induced to subscribe two millions
of money entirely upon the faith of the condition ex-
pressed in the prospectus, for which I hold the directors
responsible; and I say that failing in their endeavours to
effect a satisfactory arrangement on our behalf with the
Canadian government with regard to the cession of our
territory they are morally bound to return us the money
themselves. Of course it sounds a very ridiculous thing,
but I am sure of this that not one of those gentlemen
would condescend to enter into a contract with any Eng-
lish merchant and having obtained a certain sum of
money would turn round and say that the fulfilment of the
conditions entered into was impossible. With regard to
the question having been submitted to the shareholders for
their decision, we know very well that 'shareholders
generally follow in the wake of directors and that nine
times out of ten they do exactly as they are told. That is
what I am afraid of with regard to the negotiations with
the Canadian government. I am afraid that whatever the
directors may recommend to us, the shareholders will like
a flock of sheep follow. My lord, I have referred to the
question in a business manner and I confess I should like
to hear something like an answer to what I have stated.
The Chairman : Nothing can be fairer than the manner
in which the gentleman who has just sat down has stated
13
ng-
of
the
to
for
ers
ike
the
ike
his views, though, perhaps, he was rather severe upon some
matters connected with the management of the Company.
In the first place, let me deal with the statement with
which he commenced — namely, his objection to the charac-
ter of our Report on this occasion, followed as it is by the
declaration of a small dividend. Now, gentlemen, as far as
I am concerned, and I am certainly responsible for this
Report in common with the rest of the directors, I per-
sonally abhor what may be called a rose-colored Report. I
had thought that we had kept the tone pretty much down,
and had not said anything beyond the facts of the case ;
bu* I am sorry to find that, in the minds of some gentle-
men it has seemed to produce too strong an impression.
After all, if you will examine the statements, you will find
that they do not amount to quite so much as has been re-
presented. In the first place, we tell you that the fur re-
turns have been landed in excellent condition, which, no
doubt, is a fact, and that the estimated value shows an in-
crease compared with last season — of course, we can only
give an estimate. Next we say that there has been an ad-
vance in the prices of many of the staple articles of the
trade, notwithstanding the large amount of goods offered
for sale. We then go on merely to mention that the trade
is somewhat improved in Vancouver's Island and British
Columbia. On the other side, we refer to the disastrous
famine in the Red River Settlement, which will cause a
serious increase in our expenses. With respect to the Red
River famine — to which I ought to have alluded in moving
the Report — I desire to express, on behalf of the Com-
mittee, and I am sure I may do so on behalf of the whole
Company, their thanks to those gentlemen who liberally
subscribed upon the occasion of our asking the public to
aid us in relieving that distress. Although the amount
may not seem to have been very large, altogether about
£2,800, yet it was not so much the largeness of the amount
14
If
I!
II
t'!
as the time when the money was subscribed that was of
importance. It was of importance to be able to send out
at once by telegraph orders to purchase a quantity of flour,
and to make other preparations to meet this distress. I am
happy to say that we have since received from Governor
Mactavish information that the money sent out and the in-
structions given will be sufficient to enable him to meet the
crisis. This may seem a small matter as regards the
general prospects of the Company, but it is not a small
matter with regard to the sympathy shown to the popula-
tion living in our territory, and the feeling of the Company
with regard to the settlers there. I hojie, at all events, that
the action of the Committee in that respect will be unani-
mously approved in this room. But to return to the cha-
racter of our Report : I say that the statements that we
have made are not altogether of that rose-colored hue which
they have been represented. We are toH that the dividend
is smaller than it was last year. I the nt that the experi-
ence of last year had shown that the interim dividend which
was declared at the corresponding period of the year was
too large, and that it was very important that the Com-
mittee should not declare an interim dividend larger in
proportion than the ultimate dividend might warrant. It is
evidently much better that that interim dividend should be
very cautiously declared. If afterwards the expectations
are fulfilled, then a larger dividend may ensue; but, to de-
clare a large interim dividend now, and subsequently to
have a smaller one, is evidently to mislead the share-
holders, and is not a proper policy to adopt. I wish further
to make this observation that, although we mention an im-
provement in the trade, the money which may come from
that is not yet realised. There are symptoms of improve-
ment ; but, when you are merely pointing out symptoms of
imj ient, and have not got the money in hand, because
a Cciisiderable proportion of the furs are not yet sold, to
15
t is
dbe
tions
de-
y to
liare-
ther
im-
rom
ove-
is of
ause
base upon those favorable expectations a declaration of
dividend, is as contrary to sound finance and good principles
of business as anything the directors could do. Now, we
adhere to the opinion that we have favorable prospects of
trade upon the whole ; but we also say that we do not
think that the results as yet obtained would warrant us in
telling the shareholders, and we have not told them that
there would be an increased dividend. Now, I come to the
statements which have been made concerning the non-ful-
filment of the prospectus which was issued by the Financial
Company, who purchased the shares from the old Com-
pany. Gentlemen will see that I am not personally in a
position to make a statement with regard to the actions of
my colleagues with the same authority as those gentlemen
themselves could make it. All I can say is this, I certainly
endeavoured, before I joined the Company, to infoim
myself of the nature of these transactions, and I satisfied
my own mind that there was nothing which was not of a
legitimate nature in them, otherwise I should not have felt
justified in joining the Committee. It is not for me to ex-
press an opinion as to whether it was or was not prudent in
the shareholders to purchase their shares at so large an
amount, considering that they now stand at 14f or 14^,
and that they purchased them at par. I can only say that
I regret extremely that the calculations of those gentlemen
did not turn out more favorable. AVhat I have undertaken
to do is this, as far as I have charge now of the interests of
the Company, to endeavour to make that use of the terri-
torial rights which the Company possess, to obtain for them
a just and fair compensation, and, as far as we cm, to
secure the legitimate rights and interests of the Company.
The shareholders purchased the territorial rights that the
Company possessed, with the right of turning them to ac-
count in whatever might seem to be the best way. Now,
if they determined when the poll was taken that the best
m
Ir::
16
way was not to colonize the country, I think they deter-
mined rightly. I have not the least hesitation in saying so,
because I think it would have involved a very large expen-
diture, which would not have been attended with results
beneficial to the shareholders' pecuniary interest. But that
does not prevent the shareholders, in the event of a transfer
of their territory, from making a reasonable claim for com-
pensation adequate to the vast amount of territory which
they possess. Because they may not have been able to
turn their territory to account in the manner in which they
at first anticipated, it does not follow that they should now
think that that territory is to be given away for nothing. I
shall be no party to any such transaction. I cannot tell
what may be the result of the negotiations and of the posi-
tion of the Company, which requires, no doubt, very care-
ful handling. What has recently taken place is certainly
of great importance. A confederation has been formed in
British North America, and an Act of Parliament has been
passed in which power was given to the Government, on
an address from the Canadian Parliament, to transfer the
rights of this Company to Canada, upon such terms as the
Queen might be advised by the Government to consent to.
I do not for a moment doubt that the Government would
have dealt honorably with the Company ; but the Act cer-
tainly placed you to a certain extent in their hands. The
Act of last Session was an improvement, and far more
explicit as regards the rights of tLe Company. It was a
great satisfaction to us to see that Act passed. The Act
says that a surrender is to take place on such terms and
conditions as shall be agreed upon between Her Majesty's
Government and the said Governor and Company ; so that
we are recognised, as we always ought to have been recog-
nised, as one of the parties to this transaction, and I am
confident that, if we act with firmness and, at the same
time, in a reasonable spirit. Government will treat this Com-
17
\Q
pany fairly, and tliat, eventually, a just agreement will be
come to. Well, gentlemen, I cannot say that I can give
any further answer to the dark intimations which have
been given as to sums of money having been received by
gentlemen connected with the management of the Company.
All I can say is, that I do not hold in my possession
the conscience of any man, but, as far as I know the cha-
racter of the Committee of this Company, I should require
the most stringent proof before I could believe that any of
those gentlemen, in whose honor I have perfect faith, could
be a party to such a transaction as has been hinted at. If
they could, I have been most lamentably deceived in them.
That is my opinion : but I must repeat I speak for myself
only, and not for others. I hope that the management of
the Company, as long as I am connected with it, at all
events, whether approved by the shareholders or not, will
be carried on in such a manner as to bear the strictest
inquiry.
Mr. Gekstenberg : The shareholder who spoke last
stated that the subscription had not been fairly obtained.
Now, I do not think there could be anything more incon-
siderate, more unjust, and more disadvantageous to the
interests of the Company than to make such a statement
without accompanying it with sufficient proof. I will tell
you why I consider the money has been fairly obtained.
The Company was introduced by the Financial Society
and a prospectus was placed before the public. I was one
who originally subscribed, but, although it has, as the
chairman said, turned out to be a bad speculation, I con-
sider that I am bound by my bargain. Nothing was
concealed. There were three elements. First, tlie business
of the Company — that was fairly and correctly stated ;
secondly, the assets in hand ; and, thirdly, the anticipation
of the value of the territory. With regard to the first, I
have never heard any proof that it was not sufficiently
B
18
stated, therefore, I cannot say that the money has not been
fairly obtained. With regard to the anticipation, a serious
charge has been brought against the directors — they may
have been mistaken in their calculations. I will allude to
that presently. The Financial Society issued a prospectus in
1863 at a time of great commercial speculation. I knew
perfectly well, although I had nothing to do with it — I was
absent, even, from London — that we were paying two
millions for one million ; but we were fairly told that it was
BO, consequently, the money was fairly obtained, and we
must stand by our bargain whether it has turned out good
or bad ; it is no use crying off after it has turned out bad.
A Shakeiiolder: The bargain has not been kept.
Mr. Gerstenberg : That is another question. I only
wish to point out that it is very undesirable to make any
vague charges. If you bring forward charges, let us
examine them and see what they are. Look at the case
of Overend, Gurney and Company. That company was
sold for £500,000. In that case there was a secret deed,
and the state of the case was not fairly put before the
shareholders, and, therefore, it is attempted to make ihe
directors liable. But I maintain that when a speculative
society, which was openly formed for the puipose of intro-
ducing speculative business, places before the public a
company and an undertaking, and fairly states what it
really means to do, it is unbuainess-like to cry off when
you find that it has not turned out so profitably as you
expected. If you are a shareholder of the Financial
Society, you will find that several hundred thousand
pounds have gone into their pockets. Nobody believed
that they did the business for nothing. If you wanted to
know the particulars you ought to have inquired before
you asked for shares, and not complain now that you see
that you paid an extravagant price £it a time of over-
speculation. In the last century, in Holland, they paid
19
llie
live
ro-
a
it
lieu
oil
ial
nd
ed
to
re
ee
1-
id
6,000 florins for a tulip at the time of that great speculative
mania. Now, with regard to the territory, we have grave
cause for dissatisfaction. We paid one million premium
for the value of the territory which we were going to
colonize. Now, the directors have certainly not fulfilled
the anticipations of the shareholders and their own pro-
mises and engagements made in the prospectus, and I do
not think that they have acted with becoming courage and
enterprise in such a Company as this. The Hudson's Bay
Company was a very adventurous and courageous under-
taking from the beginning. Now, it is said that the old
directors were not courageous and adventurous enough,
and the public were asked to pay a million pounds premium
to somebody for obtaining this territory and making a
proper use of it. I am far from sharing in the very
pusillanimous decision or judgment that the directors have
arrived at, that the territory is not worth a million ; I
believe it is worth two millions in proper hands. I have
given particular attention to the subject, and I have read
the admirable pamphlet of Mr. Dodds on this question. It
has never yet been shown to my satisfaction, nor, I believe,
to the satisfaction of the public, that this territory cannot be
made available, and that the ])romises held out in the pro-
spectus cannot be realized. Mr. Bonar, two years ago, with
praiseworthy zeal in the interests of the Company, proposed
to call the shareholders together and to form a Committee.
I was anxious to join such a Committee, but when it was
suggested that a Company should be formed, with subscrip-
tion, registration, and so on, I declined it, because I thought
it was a state within a state. If Mr. Bonar had followed
the advice of some of his friends and formed a consultina:
committee, it would not have ended in nothing, or worse
than nothing. Mr. Bonar, unfortunately, was obliged to
leave Europe on that occasion, and the
Mr. Dodds' hands. Two years ago.
matter was left in
Mr. Dodds came
B 2
20
I'
here and proposed a resolution that this question of coloni-
zation should be dealt with. Something very mild and very
timid, indeed, was proposed at the meeting. It was agreed
before, that it should not be put to the vote of the share-
holders who were absent and could not hear the arguments,
but that it should be put to the vote at the meeting. How-
ever, Mr. Dodds, although he had agreed to that course,
gave way to the great persuasive powers and dexterity of
Sir E. Watkin, who said, " We must take the opinion of
all the shareholders." Gentlemen, I do not agree in that
at all. I believe the shareholders who come to this meeting
and take an interest in the affairs of the Company are the
proper persons to decide upon the policy to be pursued,
and not those other shareholders who are absent and who
have not before them the means of arriving at a just con-
clusion. I regret extremely that the Board of Directors
have not given way to the almost unanimous opinion of the
shareholders present on that occasion, that something
should be attempted to redeem the promise in the pro-
spectus. If the directors have such a bad opinion of the
result, I believe it would have been wise policy to yield to
the pressure of Mr. Bonar and others and make au
attempt, because, having sacrificed £1,000,000 for good-
will, it would not have been too adventurous to sacrifice
perhaps £50,000 or £80,000 more in making such an
attempt. I do not wish to go into the question further. I
refer the shareholders to the excellent speech and pamphlet
of Mr. Dodds, who demonstrated that the contiguous terri-
tory of North America is progressing steadily, and that the
value of the land has increased enormously. We have an
unoccupied territory unequalled in the world, and such land
in given quantity which is constantly required must rise in
value. If the directors had, even at an extravagant ex-
pense, reclaimed a few thousand, or even a few hundred
acres, the value of the surplus land would have been anti-
i'
21
the
to
ai\
>od-
ifice
an
I
Ihlet
;rri-
the
an
land
in
lex-
red
inti-
cipated, and risen in the market. That is the case every-
where in Europe and in difFerent'parta of America. As soon
as a few acres begin to be of value there come speculators
to buy the out-lying land at a higher price, and I maintain
that, if the directors had made an attempt to cultivate some
part of the territory, if they had chosen the most accessi-
ble and the best land to make a beginning, our anticipa-
tions would have been more than realised. I think it is not
yet too late to press this upon the consideration of the
directors. I think this Company is one entirely of specu-
lation. We are not like gentlemen who invest their money
at the Bank rate of 2 or 2^ per cent. I consider that the
directors have been too timid, too prudent, too conscientious,
very likely. I do not charge them with any bad faith in
any respect. I believe they are conscientiously desirous of
promoting the best interests of the Company, but I think it
requires that the shareholders should put a little pressure
upon them. The noble Chairman has said that we must
abide by the majority. Now, the law of the land formerly
was representation by majority, but, since we have got the
Minority Clause, I think that something might be done to
carry out the views of the minority in companies of this
kind.
Mr. Eley : Allow me to say one word in explanation.
It has been said that I was not justified in saying what I
did, because I did not prove my statements. The reading
of one paragraph alone will prove them. I think I was
very explicit, and I do not consider that Mr. Gerstenberg
has given me any reply. This is the paragraph to which I
allude, in the prospectus issued with the sanction of our
Directors. " Consistently with these objects," — (that is the
Fur Trade) — " the outlying estates and valuable farms will
be realised where the land is not required for the use of the
Company. The Southern District v»ill be/* — not may be
or we hope may bey but will be, — " opened to European
.'i'
(:
99
colonization under a liberal and systematic scheme of land
settlement.'' And in order that you might not think that
there were any obstacles in the way of carrying out this
scheme, they go on to tell you : — " Possessing a staff of
factors and officers who are distributed in small centres of
civilization over the territory, the Company can, without
creating new and costly establishments, inaugurate n new
policy of colonization, and at the same time dispose of
mining grants." That proves my case.
Mr. Newmarch : Allow me to suggest that one or two
points have been left out of view. In the first place, it is
not very wise in the middle of a negotiation with the
Canadian government, to speak lightly of our territorial
rights. I believe that the figure at which these rights
stand in the accounts of the Company, is a very low figure,
and I am firmly of opinion, that the lapse of time which
has taken place since the first formation of the Company,
has very much increased the real value of those territorial
rights. It is true, as has been suggested, that certain
definite intentions were entertained at the time the Com-
pany was altered from the old to the new form, and tiic
paragraph which has just been read is very strong evidence
of the views which were then entertained. But the pro-
prietors of the Hudson's Bay Company do not require to
be reminded that during the four or five years during
which the Company has been in operation, very important
changes have been in progress, not only in Canada itself
but in all the countries surrounding the Hudson's Bay
Territory. Mr. Gerstenberg, who spoke so well, said he
thought it would have been worth while for the Committee
to incur even so large an expenditure as £50,000 or
£80,000 in order to carry out the experiment of coloniza-
tion. The gentleman who preceded him complained that
there was no dividend. Now, the proprietors must bear in
mind that this is a Company which has no uncalled capital,
23
and therefore the expenditure of £60,000 or £80,000 for
colonization really means no dividend at all. It means the
application of the current revenue of the Company to what,
after all, may turn out an unprofitable investment. In the
face of that fact, I think the Committee exercised only due
care and discretion in postponing, I do not say abandoning-
an experiment of that kind, until it can be ascertained what
terms the Canadian Confederation will offer for our terri-
tory. It was known that we were in the market, it was
known that we had these territorial rights, but unfortu-
nately there was some degree of legal doubt and uncertainty
about the ratification of these rights. Those doubts and
that uncertainty have now been entirely removed by the
Act of last year. That Act is most important in the
history of the Company, and it has placed the Company in
a much better position to negotiate than it was in before.
We are in a position now to negotiate upon the best terms
we can with the Canadian Confederation. The negotiation
is going on, and it is very much assisted by the position
we now hold before Her Majesty's government. I believe
that the negotiation, if it is allowed to take its course
quietly and firmly, will come to a successful issue, and will
justify even the very large figure which, in the year 1863,
was put upon our territorial rights. Mr. Gerstenberg was
quite right when he said that the territory which the
Company possesses is entirely unrivalled. There is no
such territory available, either on the continent of North
America or elsewhere, and those territorial rights which we
possess are distinctly and legally representative of that
great property and those great capabilities. I believe they
are \. rth everything which the Company has asked for
them, but I do submit as a matter of prudence that we are
not taking quite the best course in our own interest, to
speak disparagingly of the article we have to sell. We
have a valuable article to sell, and if we cannot make a
24
bargain with the Canadian Confederation we can fall back
upon the policy originally marked out, and if need be,
adopt the course indicated by the previous speaker, namely,
to incur some large expenditure, but I hope the proprietors
will bear in mind that expenditure must affect their own
dividend.
Mr. Skinneu : I believe, gentlemen, that the feeling of
the proprietors must be that thev have embarked in this
Company, not to carry on a fur trade but to realize valuable
property. I did not embark in it as a fur trading operation,
and I think all the energies of the Committee, assisted as
they will be now by the feeling of the general body of the
proprietors, must be directed to realizing the land to the
utmost. Whether that is to be done by negotiations or by
the course suggested by the last speaker, is a matter which
must be left in abeyance. I hope the Committee will not
entertain for a moment any proposition coming from the
Canadian government, which will involve us in surrendering
our rights without ample consideration. I am induced to
make this remark, in consequence of what has been stated
in a circular issued by a very respectable member of the
Company. I read with great distrust and apprehension
that there was really such a proposal before the Committee,
that we should, without consideration or with some very
remote consideration, not appreciable by the Company,
surrender our valuable territorial rights. As to our title to
the land, there can be no question about it. It has been
challenged repeatedly, and repeatedly confirmed. We did
not want the Act of Parliament of last session to confirm
it. I agree with the last speaker, that the Act places the
Company in a better position, because power is given to
guarantee interest upon the money that may be paid to us
for the purchase of our rights. I should be loth to encou-
rage any proposals from the government which are not
based upon giving the Company ample pecuniary consid-
V. ration.
25
Mr. Sewell : It will be in your lordship's recollection, and
I think in the recollection of your lordship's colleagues, that
the vote of the shareholders to which you have referred as
supporting the policy of the directors in non-colonization
against the expressed wish of a large number of share-
holders on the other side, was not taken upon the merits
of the thing itself, but was made on the part of the Com-
mittee a question of confidence. I am averse ever to
depart from the motto '' De mortuis nil nisi honum," but 1
must say with reference to your predecessor that he took
me personally and my colleagues by surprise when at the
meeting which followed our interview he did make it a
question of a vote of confidence. I had put that question
to him in something like these words : " We should be
very sorry to do anything which would induce any resigna-
tion on the part of the Committee." I felt very strongly
at that time that we were very much in the position of
men who had embarked everything they had on board
some vessel with a well-known captain and crew. We
had embarked £2,000,000 of property unuer the idea and
in the hope that we should be carried to some El Dorado,
but after months of disappointment and weariness and
storms we came, as it were to the captain and said, " Will
you tell us why we do not get to land ?" Then you turn
round and say, " If you do not confide in us we will leave
the helm and you shall carry the vessel whither you will.
You are no sailors and you will all go to the bottom."
That is what I felt to be the practical course pursued by
any board of direction who upon the just representation
of their shareholders turn round and say, " If you do not
trust us take the matter into your own hands." My lord,
I speak for myself and I speak conscientiously. We are
not accustomed to see the value of our property depreciated
in this way. What we complain of is this : there is a page
in the history of this Company which the Committee have
!i
26
never revealed to the shareholders. I do not wish to
bring any charge against your lordship or any of your col-
leagues, but when rumours are made that large sums have
been taken out of the capital of the Company and given
for compensation or something of that kind, we should
like the Committee to place confidence in the shareholders
and be willing to explain it. If it is all clear there is no
reason why it should not be explained. You ask from us
implicit confidence. We should probably support you in
all that you are doing. But we are kept in the dark, but
some morning we may find in some Canadian newspaper
that this territory has been made over to the Government
for some inadequate price. If Mr. Newmarch had read
the prospectus carefully he would have seen that there
would be no subtraction from our dividend in consequence
of colonization. The prospectus says that the Committee
began with a handsome sum of £370,000 for the express
purpose of extending the operations of the Company.
Where is that sum ? Of course it is amongst the assets of
the Company, but if you are not going to colonize I beg to
suggest that you ought to give us back that money. You
have more capital than you want, and I am sure you would
meet the wishes of a large body of the shareholders if you
would return it. In the view of an entire abnegation of
the colonization scheme, I would move that the Committee
should take this subject into consideration and see whether
the capital of the Company could not be diminished.
Mr. Brodrick : I should like to say a few words upon
the question of the Oregon territory. It is said that my
Lord Stanley has been spoken to on the subject. The
matter is in an extraordinary position, but still I feel that
the Governor cannot be held responsible for laches com-
27
Ion
he
lat
mitted with regard to those claims. It may be difficult to
induce Secretaries for the Colonies to act in the executive,
and produce the results that might be expected ; but I
am sure that you will allow that a single word said in
Parliament in asking for papers and showing that there
was a negotiation between the Imperial Government and
the States Government, would have brought the matter
to book.
The Chairman : I am unwilling to take up the time of
the proprietors by entering upon a matter very simple in
itself. The question of our claims in the Oregon territory
was so far settled three or four years ago that a convention
was concluded between the States Government and the
Government of the Queen, by which commissioners were
appointed to regulate the claims. But a commission
often goes on very much like a Chancery suit. I do not
believe that the business has been neglected, but it trails its
slow length along. It ought to have been settled long ago.
The Deputy-Governor : Some reflections have been
made with reference to the interests the directors may have
had in the exchange of this property, which render it de-
sirable for me to enter into some explanations. This Com-
pany was brought out by the International Financial
Society, and most of the present directors were solicited by
them to become directors. They had nothing whatever to
do vvith the bargain between the old Hudson's Bay Com-
pany and the Financial Company. Whatever that bargain
may have been, we are not in the secret, and are not in any
way responsible for it. None of the directors here were
holders of the old Hudson's Bay Stock to any large
amount. And as to the New Stock they have never
held more than a moderate amount. We were solicited
28
to become directors, and an early application was made
to me, thinking I knew sometliing about the fur trade.
I was able to make conditions with reference to our
joining the Board. And what were those conditions ? The
International Financial Society bought this property for
j£l, 500,000, and, in the prospectus, they demanded
£2,000,000. I told them I could not consent to £500,000
being made by the transaction, and that they must pay
to the Hudson's Bay Company £200,000 in cash, other-
wise I could not consent to become a director; and,
further, they must guarantee that the money should all be
raised. They entered into those obligations ; and, in order
to carry them out, what did they do ? They thought it de-
sirable to keep a large number of the shares, which were
finally sold at a discount, leaving them a very moderate
profit on the transaction. With regard to the statements
made in the prospectus, what were they ? It was stated
that the previous business held out a prospect of 4 per cent,
per annum dividend. Well, we have paid 4| per cent.
There was a clause with reference to colonization ; but,
after the directors obtained information about the manage-
ment of the business in the interior, the expenses required
to make roads, build steam-boats, and, above .'II, to supply
provisions to the new settlers, they found that it would be
necessary to spend a large portion of the available capital
of the Company for that purpose. They felt that, if they
waited, the property would increase in value, and they
would be able to get a return for their money, otherwise
they might lose the whole stake ; and, in their desire to do
what was best for the interest of the proprietors, they issued
a report and circular, stating their views, and asking the
proprietors to vote with reference to colonization. The
29
gentleman who last spoke said it was a question of confi-
dence. Sir E. Head may have said that the directors would
retire in case another policy was carried out. Very likely
they would have done so, because they would have felt
that they were no longer able to manage the affairs of the
Company successfully, and would desire to leave them to
other hands. Sir E. Head honestly did what he thought
best for the interest of the shareholders ; and I do say that,
if we had thus early carried out the proposed policy of
colonization, instead of your getting 4 per cent, dividend,
you would have had none at all. There is no doubt
whatever that you are not in a worse position for not
having early carried out that policy. There may come a
time when it may be necessary to alter our plans. At
all events we should not have done our duty towards
you if we had attempted colonization prematurely in the
way that several gentlemen have recommended.
A Shareholder : What has become of the £370,000 ?
The Deputy-Governor : The working capital of the
business has increased and must necessarily increase. The
stock of goods in hand is larger. We bought several new
ships, and it is impossible to carry on the trade from year
to year without some increase in the capital. All the
money we have is employed, — fully employed.
The Chairman : 1 agree with Mr. Newmarch that it
would be to the last degree unwise, in this room to depre-
ciate the value of the territory we possess. I believe that,
far from our territory being worth less than it was a few
years ago, it is worth more, and for this simple reason.
The territory adjoining ours, principally occupied by the
State of Minnesota, has been in rapid process of coloniza-
tion, "and naturally, as colonization approaches nearer to
m
li
our border, the time comes more near when our land will
be available for settlement. I should have said, in addition
to what has been mentioned as an objection to the coloni-
zation scheme, that it has always struck me, that even if
this Company could, — I do not at this moment wish to
express an opinion upon the matter, which would require
very mature examination, — even if this Company could
embark in a scheme of colonization, it never could be
profitable to embark in it until the settlement has nearly
reached our border. It is quite obvious that, whenever the
day comes that the whole of the Territory of the United
States bordering upon our own possessions is completely col-
onized, there will be a natural overflow of settlement into
our territory, and if we should still hold the territory, that
is, if we should not be able to make a satisfactory bargain
for parting with it to the Canadian Confederation, the
question of colonization would then assume a different
aspect. I say that, because 1 should not like it to go forth
to the world that it is the opinion of the Committee or of
the shareholders, that the Company possesses no alternative
whatever but that of parting with its property, at any
sacrifice, to the Canadian Confederation. Our view and
policy is this : it has always been stated in the previous
negotiations that have taken place by the C<^mmittee, that
this Company would not stand in the way of any reason-
able arrangement which might be drijred by the govern-
ment : and I think we are bound not to do so. As trustees
of a large portion of territory under the Queen, it would be
quite useless for us to suppose that we could permanently
stand in the way of an arrangement which Parliament and
the government might think neiassary for the colonization
of so great a territory, but this I am quite sure we have a
I
31
right to insist upon, namely, that if we are to be put aside
we shall reccve, as aU bodies in si™i,ar circumstances do
ece ve m th,s country, which is pre-eminently distinguished
for .ts respect for proprietary rights, a just and fair c:mpen-
TheCHAiBMAN: I have "ow to submit another motion
to t us meetmg,v.., that Mr. Wdlian. Quilter beappoin ed
-I- ....... Xr t'zzrzi:t
''""'■" ''- ^'S-fi^d his desire not to be proposed it'
as aud,tor, and the Committee are of opinio' tha isT
necessary to suggest to the shareholders to elect any per ot
n ns place. His salary of £150 a year will thus b'e' ed
he Company. It will be sufficient that the professi ,at
p"^t,:eT::r-'^'-^^'--^'''-".»rta„t
The motion was carried unanimously
A vote of thanks to the chairman having been parsed
and duly acknowledged, the meeting adjourned.
H. K. c.„„o.s- & so., r^^^^^Tz:^;;;;;;;;^;:;^^