"SIR,
"I am directed by the Duke of Newcastle to acknowledge the receipt of
your letter of the 27th of December, and to express his Grace's regret
that so long, though quite unavoidable, a delay should have occurred in
replying to it.
"I am now desired to make to you the following communication: -
"Her Majesty's Government are of opinion that they cannot apply to
Parliament to sanction any share in the proposed subsidy by this
country; and though they take great interest in the project
contemplated with so much public spirit by the gentlemen represented by
you for carrying a telegraphic and postal communication from the
confines of Canada to the Pacific, they do not concur in the opinion of
the Canadian delegates that the work is of such special 'Imperial
importance' as to induce them to introduce for the first time the
principle of subsidizing or guaranteeing telegraphic lines on land.
"Her Majesty's Government are further of opinion that without a
submarine Transatlantic telegraph the proposed line in America will be
of comparatively small value to the Imperial Government, and that
whenever a scheme of the former kind is renewed, it is almost certain
that this country must be called upon to bear a much larger charge for
it than that which it is now proposed to devolve upon the British
Colonies in respect of the land-telegraph and communication.
"As Canada has offered to bear one-half of the proposed guarantee, the
Duke of Newcastle is prepared to recommend, and his Grace has no doubt
of ready acquiescence, that British Columbia and Vancouver Island shall
pay the sum of L10,000 per annum, as their share of L20,000 (being at
the rate of L4 per cent, on a capital of L500,000), to commence when
the line is in working order.
"It will, however, be necessary, before any proposal is made officially
to the Colonies, that the Duke of Newcastle should receive further
details. It is requisite that his Grace should be informed what
provision will be proposed as to the duration of this subsidy; what
conditions as to the right of purchasing the line, and to what
authorities that right should belong; and on what terms the whole
arrangement may be revised in the event of the Hudson's Bay Company
coming to any agreement for the sale of their territory.
"There will doubtless be other provisions which the Colonies will
expect.
"I am, Sir, your obedient Servant,
"T. F. ELLIOT.
"E. W. WATKIN, Esq."
I close this narrative of the Pacific Transit Scheme with the despatch
of the 1st May, 1863, which summarises the proposals made and generally
concurred in. These long discussions were not abortive, for they led up
to the great question of the buying out of the Hudson's Bay Company,
without which neither successful Confederation, nor its child the
Canadian Pacific Railway, would have been achieved in this generation.
