es and circumstances.

In Canada, no opportunity was omitted, either in Parliament or by the
press, to demonstrate the importance to the Atlantic and Lake Provinces
of extending settlements into the prairies of Assinniboin and
Saskatchewan,--thereby affording advantages to Provincial commerce and
manufactures like those which the communities of the Mississippi valley
have conferred upon the older American States. Nevertheless, the
Canadian government declined to institute proceedings before the English
Court of Chancery or Queen's Bench, to determine the validity of the
charter of the Hudson's Bay Company,--assigning, as reasons for not
acceding to such a suggestion by the law-officers of the crown, that
the proposed litigation might be greatly protracted, while the public
interests involved were urgent,--and that the duty of a prompt and
definite adjustment of the condition and relations of the Red River
and Saskatchewan districts was manifestly incumbent upon the Imperial
authority.

This decision, added to the indisposition of Lower Canada to the policy
of westward expansion, is understood to have convinced Sir E.B. Lytton
that annexation of the Winnipeg basin to Canada was impracticable, and
that the exclusive occupation by the Hudson's Bay Company could be
removed only by the organization of a separate colony. The founder of
British Columbia devoted the latter portion of his administration of
the Colonial Office to measures for the satisfactory arrangement of
conflicting interests in British America. In October, 1858, he proposed
to the directors of the Hudson's Bay Company that they should be
consenting parties to a reference of questions respecting the validity
and extent of their charter, and respecting the geographical extent of
their territory, to the Judicial Committee of the Privy Council. The
Company "reasserted their right to the privileges granted to them by
their charter of incorporation," and refused to be a consenting party to
any proceeding which might call in question their chartered rights.

Under date of November 3, 1858, Lord Caernarvon, Secretary of State for
the Colonies, by the direction of Sir E.B. Lytton, returned a dispatch,
the tenor of which is a key not only to Sir Edward's line of policy,
but, in all probability, to that of his successor, the Duke of
Newcastle. Lord Caernarvon began by expressing the disappointment and
regret with which Sir E.B. Lytton had received the communication,