CHAPTER 2

The Northwest, Vancouver Island, and Canada 1857–1859

The necessity Canada experienced in 1857 to divide and expand was a necessity to extend eastward to a winter port not in American hands and westward to new areas of trade and settlement. To acquire a winter port it was necessary to build the Intercolonial Railway; to occupy the Red River Valley and the prairie lands of the northwest it was necessary to acquire title to lands claimed by the Hudson’s Bay Company under its charter of 1670 and covered by the trade monopoly conferred both by the charter and by the licence of 1838. These matters engaged the attention of the Canadian government and parliament in 1857–58, and in both, the good will and consent, still more the initiative, of the imperial government were prerequisite to success.

Few in Canada then realized what is not commonly recalled now, the vastness of the territories under the company’s jurisdiction. They comprised by far the major part of present-day Canada, extending as they did from Labrador to the Pacific, and from the watershed between the St Lawrence and Mississippi systems to the shores of the Arctic Ocean. This enormous domain was made up of the Rupert’s Land of the charter, comprising at its fullest extent the lands within the watersheds from east, south, and west of Hudson Bay; the Northwestern, or Indian, Territory at its narrowest extent the Mackenzie River system; the Pacific slope from the Rockies to the sea, the central and northern part of which was called New Caledonia; and the company’s colony of Vancouver Island, established in 1849.

The main and central region of this territory was Rupert’s Land, the charter territory. It was divided into two administrative districts: the Southern Department centred at Moose Factory on James Bay, and the Northern Department, administered from Norway House on Lake Winnipeg, to which as well the Northwestern Territory and New Caledonia were subordinate. Of these the Southern Department, although it bordered on Canada, was of little importance or interest to that province. It was and remained terra incognita, into which Canadian traders and lumbermen seldom penetrated, of which Canadians had scant knowledge, and in which they developed slight interest.

The principal reason for this lack of knowledge was the success achieved by the Hudson’s Bay Company in using its position in Canada itself to make Canadian territory a buffer to protect the Southern Department. The “Montreal Department” of the Company handled the forts and leases acquired by the North West Company to prevent Canadian traders penetrating Rupert’s Land by the Saguenay, St Maurice, or Ottawa rivers. It was a long, costly, but successful struggle. By 1857, however, it was ending; the settler had succeeded the petty trader and the lumberman on the Saguenay, the St Maurice, and the Ottawa. In 1858 the lease of the King’s posts on the St Lawrence was surrendered to the Government of Canada. In 1858 Canadian customs officers forced payment at Timiskaming of Canadian duties on goods brought in from James Bay. Settlement had occupied the Ottawa Valley beyond Pembroke. The company now changed its establishments from fur posts using credit and barter with Indians, to retail stores using cash with whites.¹

This absorption of the free trade by competition outside the area of monopoly protected the Southern Department from penetration and helped divert Canadian interest and movement westward along the lakes. Here the Canadian territory along the north shores of Lakes Huron and Superior was also occupied by company posts from Sault Ste Marie to Fort William, and was treated as part of the Southern Department. No great rivers tempted Canadian fur-traders or lumbermen, no broad farmlands drew Canadian settlers. But there were three causes of Canadian intervention. One was the Canadian government’s treaty with the Ojibwa Indians of Manitoulin Island. The presents given under the treaty drew the Indians of the north shore of Lake Superior down and, as it were, activated the line of communication between Canada and the Red River that the Ojibwa had formed since the end of the eighteenth century. The second was the lake fisheries, which drew Canadian fishermen from Georgian Bay to the Sault and into Lake Superior. The third was the prospect of finding copper along the Canadian shores to match that of Michigan and Wisconsin. There had been a rush of prospectors in 1847, and one company had begun to develop a claim on Michipicoten Island, only to have trouble with the local Indians, and so indirectly with the Hudson’s Bay Company.² Among the promoters of this mining rush was Allan Macdonell, Toronto lawyer and speculator, and an ardent and persistent advocate of westward expansion.³ Little came of this boom, but the prospect of mineral finds had been established by Bruce Mines, and the Province of Canada took its first step toward territorial expansion when it created the judicial district of Algoma in 1858 to administer its laws along the north shores of the Lakes.

The boundaries of Algoma to north and west were unknown. To the north this gave no concern; the sombre mystery of that land, its granite ridges, its stands of dusky jackpine and black spruce, its sodden muskeg and lonely lakes, and the final flat marshes flooding out to merge with the salt water of James Bay, drew no one to explore its possibilities. That region lay on the flank of the Canadian territory thrusting westward to Fort William. The urgent question was, how far beyond Fort William did Canadian title extend? There were those who said, on the basis of the old French claims to Canada, to the Rockies; some even, on the ground of discovery, to the Pacific.

If these Canadian claims were ever to be taken seriously in official circles, then all land titles and the authority of the Hudson’s Bay Company from Red River to the Gulf of Georgia would be in question. It followed that if the company were to govern the Northwest for a further period, its position must be confirmed; if it were to be replaced in the southern areas, then its successor must be determined. In 1857 it seemed clear that any faltering in action, any continuance of doubt as to the company’s authority or of the imperial government’s purpose, would be to lose the Northwest to an American penetration of Red River and the Pacific coast. To prevent such a penetration, the company must have its licence renewed, or Crown colonies must be formed on the Pacific and on the Red and Saskatchewan rivers, or Canada must be made the legatee of the company and the Empire in the Northwest and on the Pacific.

Red River and the fur tracts of the Northern Department were indeed moving, if slowly, toward a crisis. In the “thickwood country,” the forest north of the plains of the Red and the Saskatchewan, it is true that the fur trade as organized after the union of the companies in 1821 continued its seasonal rhythm, the winter’s hunt, the summer’s dash of the boat brigades to move furs out and trade goods in. This trade, it seemed, had gone on immemorially and might go on forever, as it was perfectly adapted to the country, its known resources and its people. As long as it could go on, the Hudson’s Bay Company, with its skill, its organization, and its established posts might continue, unless dangers threatening from the plains country to the south should undermine its position in the northern forest.

The dangers were two: a failure of the supply of pemmican from the provision posts on the edge of the buffalo plains, and a serious invasion of the northern forest zone by the free-traders of Red River. The development of both dangers turned upon the state of relations between the company and the Métis of Red River and, more remotely, the warlike tribes of the buffalo plains. The way of life of both the Métis and the Plains Indians depended upon the supply of buffalo; and already some diminution of their numbers was apparent.⁴ The Métis, moreover, were “tripmen” as well as hunters; they furnished the crews of many boats in the brigades on Lake Winnipeg and the Saskatchewan. Some of them also were free-traders, and more were traders’ agents in the free trade which had flourished in Red River since the Sayer Trial in 1849. No one else could deal as well with the Indian hunters. On their good will, then, and on their good behaviour in fact depended the fur trade of the company and the peace of the Northwest. None knew these facts more surely than the company’s Governor-in-Chief in British North America, Sir George Simpson.

The government of this small divided colony rested with the company, but was exercised through the Governor and Council of Assiniboia. This government derived from the charter, and the District of Assiniboia, an area comprised by a radius of fifty miles from The Forks, was a municipal district in the Northern Department of Rupert’s Land. The experiment of having as governor someone who was not an officer of the company, begun with the appointment of Major W. B. Caldwell in 1848,⁵ had been continued in the person of his successor, F. G. Johnson. The council itself was composed of representative men of the settlement, appointed by the governor and committee of the council. This representative character, completely developed by 1857 with the appointment of the Métis representatives, made it possible for the company to keep up the government of the settlement, like all company government, a government by concession and persuasion. The Council of Assiniboia had no effective coercive power to enforce its regulations or the decisions of its courts, except local constables, too few to deal with more than individual breakers of the peace. The pensioners sent out in 1848 and 1850 to act as a sedentary military force in aid of the civil power had neither the numbers nor the character to discharge the role. They were by 1857 simply another element, largely Irish, in the varied population.

As 1856 gave way to 1857, the trade and title of the Hudson’s Bay Company in Red River was threatened from Minnesota and from Canada. An unrest among the Métis, an increase of free trade, the beginning of agricultural settlement and possible political annexation – these were the stages through which the threats, if they developed, would pass. Of the two, that from Minnesota seemed much the more formidable. The trade from St Paul had lasted since 1844 at least; the cart brigades travelling south were longer each year; the prairie trails of the Red River carts were ever more clearly marked. The route from St Paul, though some four hundred and seventy miles long and sometimes menaced by the Sioux or the Ojibwa, was a plain and open one. The cart brigades traversed it with comparative ease; a railway could be built over it cheaply and expeditiously. As compared with the canoe route from Fort William or the boat journey from York Factory, each of roughly the same distance but marked by portages and dangerous waters and through rugged country, that from St Paul was easy and inviting. To the traveller, and to the student of maps, the Red River Settlement seemed destined to be absorbed by a flood of settlement welling up from the south.

The changes were rung on this theme by travellers, writers, and politicians in Canada and Great Britain. But the truth was that the hard-headed “mocassin-ring” of St Paul businessmen was interested at first only in the trade of Red River, and then in the possibility of a railway to the Pacific by a British route which southern Congressmen could not block. To American agricultural settlement and political annexation, there were still in 1857 intangible but sufficient obstacles. Whatever else the Northwest might grow, it could not grow maize, the American corn, and the American frontier farmer was a corn-grower. He would not abandon that crop for wheat as long as cornlands remained available in the United States. Nor could the free soil of the Red and the Saskatchewan be annexed as long as the slave-soil States remained in the American union. For the present, at any rate, the danger of an American land rush in Red River was not a serious one, convenient as it might be as a way of speeding Canadian annexation. The real dangers to the old order in Red River lay in its own free trade and in the Canadian need to expand.

While ripening developments in Red River contained a threat to the old order in the Northwest, those about to begin on the Pacific coast were to end it finally in the next two years. There the colony of Vancouver Island had not prospered since 1849. Only about a thousand colonists were settled at Victoria and Nanaimo. As in Red River, the colonists were divided into those who were servants, or former servants of the company, and those who had come to the island as settlers. An officer of the company, Chief Factor James Douglas, a stern, business-like Scot who lived and moved and had his being in the company, had become governor of the colony in 1851, when its first governor retired. The new settlers felt that the government and affairs of the colony were subordinate to the interests of the company. As in Red River, this feeling was in the nature of things inevitable and, also in the nature of things, not unjustified. The relationship was an embarrassing and unnatural one, which arose partly out of the fact that the licence still held in the colony, partly out of the lack of revenue in the colony to pay for its own upkeep, and partly out of the policy of the imperial government not to assume such charges. And as in Red River, the failure of both company and settler to find other commodities than fur to export increased the frustration and made it necessary to continue the rule of the company as the only solvent enterprise in the colony.

In 1857 the great mainland territory between the Gulf of Georgia and the Rocky Mountains remained the untouched wilderness it had always been. There the fur trade and the salmon fisheries continued as in past years under a licence unchallenged and unresented. The company’s main posts, Fort Langley and Fort George on the Fraser, Fort Kamloops on the Thompson River, and Fort St James on the headwaters of the Peace, collected without interference the annual catches of the interior tribes, the Kootenais, the Shuswap, and the Carriers, and their occasional gleanings of gold. Along the coast the company traded by ships, among them the steamer Beaver, for the furs and other goods of the powerful coastal tribes, the Haidatsa and the Haidas, the proud people of the cedar-board houses atop the beaches, of the great dugout canoes, and the towering fantasies of the totem poles. In all the wilderness along the coast, along the new boundary just about to be surveyed, in the central and northern interior of New Caledonia, there was no government, not a single soldier nor a solitary policeman; there was only the peaceful influence of a commerce adapted to the resources of the country and the needs of primitive culture, and the prestige, carefully calculated and always cannily husbanded, of the great company that ruled by influence alone.

At Esquimault and Nanaimo, it is true, ships of the Roayl Navy kept their station. They were there to watch the restless Americans across the Gulf of Georgia, and the Russians to the north in Alaska. Between the great American and great Asiatic power the Navy lay, a quiet presence representing the world power of a force which could operate on all the waters of the world from Sevastopol to Unalaska. This fact had recently been demonstrated when British and French ships had destroyed the Russian base at Vladivostok, and might have captured the Russian posts in Alaska, had not the Hudson’s Bay Company and the Russian Fur Company hastily arranged for the neutralization of Alaska and New Caledonia. As a result the Crimean War did not, as it might so easily have done, end Russian rule in Alaska and replace it by British. No one minded this, except an Anglo-Canadian expansionist, Alfred Robert Roche, who urged in 1855 that Canadian troops help take Alaska in order that Canada might have a voice in the disposition of Russian America after the war.⁶ To such heady aspirations could Canadian expansion rise, and yet have a certain foundation in fact, for much of Roche’s information came from a native of the Northwest and an explorer of the Yukon country, Alexander Kennedy Isbister, already known for his opposition to the Hudson’s Bay Company in 1849. But Alaska was not occupied in 1856, and the general peace, like the peace of the mainland interior, remained unbroken in 1857.

The peace of the fur-trading wilderness north of the 49th parallel, however, was now to be rent by a gold rush. Such a penetration of the British fur territory by an inevitably American rush had, like the Minnesota connection with Red River, been threatening since the great California rush of 1849. As the California diggings ceased to yield, prospectors moved out along the mountain streams, panning for a trace of “colour,” like beagles working an uncertain scent. In early 1856 the northernmost found gold along the Columbia at the border and in the streams of the tableland between it and the Fraser. In the fall of 1856 came news of Indians working gold on the Thompson River.⁷ The news spread down the coast from Victoria, and along the mountain trails of the interior. The prospectors had been sure that gold was to be found; now they turned north to the Fraser. In the spring of 1857 scores, then hundreds, came by boat and by trail, to the gravel bars of the Fraser. By that time about a thousand miners were strung along the river, slowly working the rich, dissolving sands.⁸

Their coming brought two imminent dangers. One was that of an Indian war. The American record in dealing with Indians made the Americans unwelcome to the British tribes.⁹ Their crowding in to exploit the wealth the Indians had discovered, and the probability of a clash between rough miners and the stiff-tempered, independent tribes of the interior, made the danger serious. The other was that a rush of American miners into territory the United States had claimed as late as 1846 would lead to a renewed clamour for annexation of the Pacific coast up to the Russian territory.

As it took many weeks for a dispatch from Victoria to reach London by way of Panama, and as many to return, there was plenty of time for both dangers to be realized before preventive measures could be ordered from London. Only the man on the spot could prevent this by providing the authority and police which by their mere presence might prevent the trouble their absence made likely, if not certain.

That man was James Douglas. Like Simpson a Scottish poor boy who had risen in the service of the company by education, diligence, and a native authority, Douglas had the instincts and decisiveness of a pro-consul. Without hesitation he assumed an authority his commission as Governor of Vancouver Island did not confer, and took the mainland under his jurisdiction in December 1857.¹⁰ By proclamation he declared the rights of the Crown in the minerals of the subsoil as he had done in the Queen Charlotte Islands in 1853, when traces of gold were discovered there. He went on in May 1858 to impose an import duty on goods going up the Fraser to raise a revenue for policing, imposed mining licences for the same purpose, and sent justices of the peace and special constables to the camps to administer justice.¹¹ His calm assumption of power, an exercise in the grand manner of the natural authority so often exercised by the great company, succeeded without a question being raised in the goldfields. Douglas was helped by the presence of ships of the Royal Navy in the gulf, and by the fact that the miners wanted order kept and were prepared to pay for it. But the assumption of authority was an act of courage, and the credit for it Douglas’s, for a smaller man would have stood on his commission and not risked a reprimand for the sake of peace on the Fraser.

If one of the Company’s officers kept the Queen’s peace on the Fraser, the gold rush of 1857–58 was none the less another warning that a fur company could no longer continue as the government of half a continent. The Fraser River rush spelled the end of company rule on the Pacific. There its ending was comparatively simple; there was only a decision not to renew the licence needed to prepare the way for the erection of a Crown colony. It by no means followed that the company’s rule need end between the Rockies and Lake Superior, nor could the charter, like the licence, be terminated by non-renewal or set aside without compensation. The depression that had followed the victory of the free trade in 1849, which led some company officers to think that the company was doomed, had lifted as the company kept up its competition in Red River. By the mid ’fifties Simpson was disposed to think that the company might be able to continue to trade without the licence or the charter.¹² The licence, just granted in 1821 and renewed in 1838 for twenty-one years, would expire unless renewed in May 1859. Yet it might, if renewed, still have its value for, even if the Pacific slope and southern plains had to be yielded to the free trade or to settlement, it still seemed possible in 1856 that the fur trade of the northern forest might yield profits for yet another term, and the licence would give the company authority in those wilds. And if the free trade and Canadian settlement forced a surrender in the south, then the charter might enable the company to enact a price for the surrender, in compensation for commercial rights forfeited and the title to the soil returned to the Crown. It was to confirm the company’s position that Simpson had seized on the report of American cavalry on the buffalo plains to request the dispatch of a force of regular troops to Red River. He persuaded Palmerston’s government to dispatch a detachment of one hundred men of the Royal Canadian Rifles, with twenty women and twenty-six children, from Canada to Red River by way of Hudson Bay in the summer of 1857.¹³ Designed to keep the Métis in order should an American military post be built at Pembina, the force soon became necessary, in Simpson’s view, to maintain the peace in the face of the unrest created by a Canadian threat to enter the trade of Red River.¹⁴

Such were the reasons that lay behind the company’s request late in 1856 that the licence be renewed.¹⁵ A renewal would strengthen its position both in London and in America. A renewal would, of course, mean an inquiry into the conduct of the company during the term of the expiring licence. The company had its critics and they were watchful. The Aborigines Protection Society was skeptical of the company’s humanity in its dealings with the Indians. Its secretary, F. W. Chesson, was an active and outspoken critic of the company, and became an ally of its Canadian critics and a correspondent of the Globe of Toronto.¹⁶ In London, critics of the company in Canada and Red River had an energetic and influential ally in A. K. Isbister. Isbister had never forgotten his native land, and from helping his friends and relatives in the struggle over free trade in 1844–1849, he had been drawn into research into the company’s history and to the conclusion that the charter had long been invalid. Established as a schoolmaster in London and a member of the College of Preceptors, he was consulted by the Colonial Office and politicians on affairs of the Northwest, and kept up his role as advocate in London for the company’s critics in Red River and Canada. His special plea was that the company be denied control of the Northwest. If necessary, this might be ensured by establishing a penal settlement in the Northwest, a proposal he had put forward in 1850 as transportation to Australia ceased, and again in 1856.¹⁷

The company, however, wanted neither defences nor friends. It had excellent connections with the ministry of Lord Palmerston, chief of whom was Edward Ellice, the “Bear.” Ellice had been one of the principal architects – in his own estimate, the chief architect – of the union of the fur companies in 1821. Now aged, crabbed, and domineering, he was the mentor of the ministry in American affairs, an influence in the Whig party generally, and the tireless lobbyist of the company in society and parliament. Ellice might be expected to see to it that any inquiry, so far as parliamentary management could contrive, would not be unsympathetic to the needs and interests of the company. Ellice’s influence was perhaps evident in the readiness with which the War Office agreed to the request of the Colonial Office that the detachment of the Royal Canadian Rifles should be sent from Canada to Red River. As the Duke of Wellington had pointed out at the time of the Oregon crisis in 1845, to send a small band of troops to a post where they could be relieved or withdrawn only once a year by a difficult route was to risk giving an enemy a cheap prestige victory by their capture. But that danger was now ignored.

Ellice may also have influenced the Colonial Secretary, Henry Labouchere, but it was scarcely necessary to do so to have him apply to the House of Commons for a Select Committee of Enquiry on February 5, 1857.¹⁸ Labouchere’s mind was already made up as to the need for considering the future of the Hudson’s Bay Company territory. He knew some thought must be given to its future, a future he hoped would be compatible with the interests of the company. The personnel of the committee was carefully chosen. While it contained a judicious number of critics of the company, such as William Ewart Gladstone who had opposed the company in the inquiry of 1849, a comfortable majority was in favour of it. It was evident that the inquiry was meant to be a formality, dignified and prolonged, no doubt, but a formality.

It proved in the end, however, after a general election and a reconstitution of the committee which brought to its membership Samuel Christy, one of the most inveterate of the company’s enemies, to be rather more than a formality. Sir George Simpson’s attempt to prove that the interior of North America was a frigid waste, in which the possibility of agriculture was limited and precarious,¹⁹ collapsed in the face of evidence presented by witnesses hostile to the company or indifferent to it, such as Colonel J. F. Crofton, commanding officer of the troops sent in 1846, or the Reverend G. O. Corbett, an Anglican missionary. It became clear that the valleys of the Red and Saskatchewan might admit of agricultural settlement. The Canadian interest in the Northwest, as voiced by representatives of the Canadian government, or by individual Canadians, was taken up favourably by members of the committee such as Robert Lowe and Gladstone who, friendly or unfriendly to the company, shared the growing desire of British politicians to be rid of the responsibility for governing and defending great tracts of North America in face of the growing power of the United States and a Europe made restless by the ambitions of Louis Napoleon and the principle of nationality. Finally, the news of the discovery of gold on the Columbia north of the boundary made it clear that the company’s rule on the Pacific could no longer continue as it was.

When it reported in July, therefore, the committee recommended that Canada’s interest in the Northwest should be kept in view, and that portions of the southern country should be turned over to Canada for administration and colonization, as Canada became ready to assume the responsibility. Vancouver Island should be separated from the company as soon as this might conveniently be done. In the northern forest zone the company should be allowed to continue its trade, and the licence should be renewed.²⁰ The committee did not recommend that the charter should be tested. A compromise report, made up of Labouchere’s, drafted by Herman Merivale of the Colonial Office, and Gladstone’s, drafted by A. K. Isbister,²¹ it was speciously reasonable and properly fair to the company. It ignored, however, the problem of the free trade, the need of connection between the buffalo plains and the fur forest and, above all, the question of compensation for the surrender of lands claimed under the charter. But it did make it clear that the company and the fur trade must retreat before settlement. The report was indeed an indication of how much faster the events which were ending the company’s position in the Northwest were moving in 1857 than they had seemed to do in 1856. It also recognized that in the interests of the Empire, Canada’s desire to annex the Northwest should be recognized and helped. The committee, in short, thought that the imperial claim to the Northwest, no longer tenable by the agency of the Hudson’s Bay Company, should devolve upon a political heir, the Province of Canada, to form an empire within the Empire.

Canada’s interest in the Northwest sprang from a desire to appropriate the trade of Red River and to settle its lands. The commercial interest was the prime one, even if no more at first than a desire to enter the free trade in furs. Since 1821 the Hudson’s Bay Company had always feared some revival in Canada of the old North West Company. At the close of 1856 “a new North West Company”* seemed to be taking shape. The central figure in the promotion was Allan Macdonell, who had already busied himself in trying to develop the mineral resources of the north shore of Lake Superior. His next venture in westward expansion had been an attempt in 1851 to persuade the Canadian parliament to charter the Lake Superior and Pacific Railway. The Standing Committee on Railways refused, because the Indian and Hudson’s Bay Company titles stood in the way of the land grant asked to finance the line.²² In the next year Macdonell tried to obtain an act of incorporation for a Canadian ship canal at Sault Ste Marie. Again he failed, and in 1853 he attempted to revive the project of a Pacific railway. A rival group attempted to gain authorization for another line in 1854, and Macdonell returned to the charge in 1855. Associated with Macdonell in his efforts and the necessary publicity was A. R. Roche, who advocated a Pacific railway as well as the seizure of Alaska, and in 1856 published influential articles in the Montreal Gazette on the richness of the Northwest. More important was George Brown, whose Globe began to speak sporadically of the need to assert Canada’s interest there. A Canadian expansionist party was forming.

Behind the party other expansionist interests gathered. The hope of finding minerals north of Lakes Huron and Superior was renewed by the reports of government surveys in 1856.²³ The opening of the Northern Railway to Collingwood in the same year led to an attempt to establish a line of steamships from that port to the upper lakes.²⁴ The Ottawa Valley was stirred by similar ambitions, to be realized by a canal to Georgian Bay, so much so that when Philip M. Vankoughnet of Toronto, a member of the government, campaigned for election as legislative councillor for the Rideau district, he chose to make a speech in Ottawa on September 15 in which he claimed that the Northwest belonged by right to Canada, that the charter was invalid, and that Canada should claim the Northwest with all its riches. He was actually assisted in preparing this speech by Roche.²⁵ While the ministry might not choose to support Vankoughnet’s claims, he was the first public man to voice the expansionist ambitions of Canada.

Vankoughnet was, in fact, associated with the commercial expansionists in Toronto, These were now being aroused by Allan Macdonell, who urged the Toronto Board of Trade on September 19 to study the commercial possibilities of the Northwest, described by him in the language of enthusiasm. So encouraged was he that he prepared the prospectus of a new North West Company which would challenge the monopoly of the Hudson’s Bay Company.²⁶ The Board of Trade, for its part, met again on December 3 to hear various gentlemen acquainted with the Northwest. Among these were Macdonell and Captain William Kennedy, uncle of A. K. Isbister and a native of Red River, just back from his voyage in search of Sir John Franklin. Macdonell and Kennedy spoke so effectively that the Board adopted a resolution protesting against the monopoly of the Hudson’s Bay Company, and agreed to petition the Canadian parliament on the subject.²⁷ The momentum set up was such that before December ended, Macdonell and a group of associates in Toronto announced that a company would be formed to exploit the trade of the Northwest. In January Captain Kennedy was dispatched to Red River by these men to begin an agitation for annexation to Canada.

So quickly did the expansionist temper of 1856 flare up. Promoters like Macdonell and publicists like Roche suddenly found themselves riding the crest of a wave, where before they had been unable to raise a ripple. The fact was that their efforts had coincided with Toronto’s need for a hinterland if it were to grow to the stature its leading men now began to envisage. The Globe, then more the voice of Toronto business than of the Upper Canadian countryside, made this clear. “Let the merchants of Toronto consider,” it wrote, “that if their city is ever to be made really great – if it is ever to rise above the rank of a fifth rate American town – it must be by the development of the great British territory lying to the north and west…”²⁸

The Globe, however, like the Reform party that George Brown led, had to combine the votes of the rural counties of western Canada with the business interests of Toronto. In endorsing the commercial interest of Toronto in the Northwest, it had to undertake to enlist agrarian support for the Canadian annexation of that territory. In this also the time was ripe. The need for fresh land for settlement was urgent in Upper Canada. Canadian farmers and their sons were predisposed to listen to tales of new lands for settlement, especially if they were prairie lands without stone or stump. Already doubts about the climate of the Northwest were dissolving. The Globe dismissed contemptuously references to “frozen regions of the Hudson Bay territory” in a rival newspaper by pointing out that the isothermal lines in any good American school atlas revealed that the Saskatchewan prairies had a climate of the same summer temperature as New York. This information reflected the records of the Hudson’s Bay Company posts in the Northwest, and the results of the American railway exploring parties and of Commodore Matthew Perry’s survey of the Japanese current of the North Pacific. The information was being made public by Lorin Blodget of the Smithsonian Institution, and his complete findings were published in September 1857 under the title of The Climatology of North America.²⁹

Blodget concluded from his study of this material that climate was not determined by latitude alone, but was greatly affected by the relative distributions of land and water masses and the direction and character of ocean currents. The British-American Northwest as far as the Athabasca country, he found, admitted the growth of cereals such as wheat, barley, and oats, and the Saskatchewan and Red River valleys had a summer rainfall superior to that of the lands to the south. Blodget therefore pronounced a vast region of the Northwest suitable for settlement, and in so doing became the darling of the publicists of Toronto and St Paul, and one of the actual openers of the Northwest to settlement. His quiet language had the sweep and style of the empire-builder: “The assertion may at first appear unwarranted,” he wrote, “but it is demonstrable that an area not inferior in size to the United States east of the Mississippi, now almost wholly unoccupied, lies west of the 98th meridian and above the 43rd parallel, which is perfectly adapted to the fullest occupation by civilized nations.”³⁰

With such scientific backing, Brown and the Globe could turn confidently to the work of having rural western Canada, through the Reform party, endorse the desire of the commercial interests of Toronto to annex the Northwest. On December 15, 1856, eighteen Reform members of parliament and thirty-two newspaper editors called for the annexation of the Hudson’s Bay territory.³¹ On January 8, 1857, several hundred Reformers and Grits met at the Temperance Hall in Toronto. They drafted a party platform for the ensuing session and anticipated election. The eighth plank called for the annexation of the Northwest.³² The Reform journals paid little attention to this addition to standard Reform planks, such as representation by population, but the ministerial press objected strongly to the adoption of what, in view of Vankoughnet’s Ottawa speech, they chose to consider a government policy. However that might be, Brown and the Globe had swung the Reform party and much of rural Upper Canada to the support of the commercial drive of Toronto for the trade of the Northwest. The criticisms tended only to confirm the Globe in its suspicion that the ministry, with its powerful support from Lower Canada, was indifferent or even opposed to northwest expansion.

The Canadian ministry, in fact, had had to face up to the question of what Canada’s interests were in the future of the Northwest. Labouchere had written in December to inform Head of the proposed inquiry into the conduct of the Hudson’s Bay Company and the future of its territory, and to ask whether Canada wished to be represented before the committee.³³ The executive council recommended to Head that Canada should be represented by an agent who might inquire into “the rights of the Hudson’s Bay Company in North America.” It urged that the boundary between Canadian and company territory be determined and, echoing Vankoughnet’s Ottawa speech, remarked that “the general feeling here is strongly that the Western Boundary of Canada extends to the Pacific Ocean.”³⁴

So far the ministry had acted as even the most ardent expansionist could have wished. But when in the Speech from the Throne the Canadian representative was named, there was prolonged criticism. It was that of Chief Justice William Draper of the Court of Common Pleas. The criticism was based on the claim that it was harmful to the Bench to employ a chief justice in a political mission. But the criticism was undoubtedly motivated by dislike of Draper as a former Conservative leader and a cautious jurist who might be sympathetic to the chartered rights of the company.

Draper’s preliminary instructions in no wise justified such fears. He was to press any legal or equitable claims Canada might have “by its territorial position or its past history,” and he was to emphasize the danger of a “sudden and unauthorized influx of immigration from the United States.”³⁵

To inform Draper of the nature of Canadian claims, a report was prepared in the office of the Commissioner of Crown Lands by William Macdonell Dawson, a strong expansionist, and by A. R. Roche, now a clerk in the same department.³⁶ The report was, of course, signed by the then Commissioner, Joseph Edward Cauchon of Quebec. It was a sweeping document, as might have been expected from its provenance, and in effect declared that the Hudson’s Bay Company had in law no territorial rights and that the time had come “when Canada must assert her rights.”³⁷ But the executive council was not prepared to adopt claims so sweeping. It did, however, appoint Alfred Roche as Draper’s assistant, and in April it sent Draper his final instructions. These were “the right” of Canada to take for settlement any lands with which it could open communication in order to make union with Canada possible; the taking by the imperial government of steps to keep American immigrants from claiming territory; and finally the right to explore and survey the lands beyond the boundary supposed to separate Canadians from company territory.³⁸

These cautious and realistic instructions were far short of the claims of the expansionists, or of the hopes of the Toronto businessmen and the Globe. Their disappointment was sharply expressed when they read of Draper’s evidence before the Select Committee. As instructed, Draper advanced no legal claims and raised no questions of the validity of the charter. He cannily held to a request that the boundary separating Canada from Rupert’s Land should be defined.³⁹ The suggestion astutely avoided the question of the validity of the charter, while raising the question of the extent of the territory covered by the charter. A definition of the boundaries, Draper held, might in fact give Canada all of the territory the expansionists claimed under the old French title.⁴⁰

Such finesse did not at all appeal to the Canadian annexationists or to the critics of the company, such as the Aborigines Protection Society. They felt that their commercial and humanitarian ends would best be served by ending the company’s rule entirely. The Globe itself saw the cautious government stand more and more as a betrayal of Canadian interests to the Hudson’s Bay Company and Sir George Simpson, and as further evidence of the domination of the Taché-Macdonald ministry by the French who, the Globe considered, were opposed to the acquisition of the Northwest because this would increase the territory and population of Upper Canada without adding anything to Lower Canada or giving it any counterpoise. A. A. Dorion, the Rouge leader, had raised the question in March: “Would the Northwest be divided between the two sections of Canada,” or “form an integral part of Canada as a whole?”⁴¹

In this, Dorion and the Globe touched on an issue that was to rise recurrently thereafter, that of the place of the English and French languages and institutions in the Northwest. But the raising of the issue by the Globe in 1857 greatly exaggerated any doubts there may have been in the ministry about acquiring the Northwest because of racial relations. There were plenty of reasons for caution – the question of the charter, the cost of expansion – to impose delay without facing prematurely the question of what institutions Canada would establish in the Northwest. If there were any successful pressure to go slowly, its source may have been indicated when Joseph Cauchon, the late member of the cabinet responsible for the expansionist memorandum, suffered a defeat second to that occasioned by his failure to have the vote for the Grand Trunk Railway matched by one for the North Shore Railway. That railway was to be built westward along the Ottawa, and Cauchon was its president. In July Sir George Simpson was elected president of the North Shore, defeating Cauchon,⁴² and the railway never reached Lake Huron. Simpson, it may be supposed, would push no railway towards the Northwest.

The ministry also made no difficulty about yielding to the opposition’s pressure for a bolder policy toward northwest expansion. On May 11, on the motion of the Honourable T. L. Terrill, of the government, seconded by George Brown, of the opposition, a select committee was appointed to inquire into the rights of the Hudson’s Bay Company, the renewal of the licence, the character of the soil and climate of the Northwest, and its fitness for settlement.⁴³ Before the committee met, a vote of £5,000 “towards opening a communication with Red River” was carried, along with one of £10,000 for a survey of the Ottawa River, itself a measure to prepare for the opening of the Northwest.⁴⁴

When the Canadian committee met on June 6, it sat only one day and heard submissions from three witnesses – Allan Macdonell; George Gladman, a native of the Northwest and a former chief trader of the Hudson’s Bay Company; and William Macdonnell Dawson, of the Crown Lands Department. The committee made no report, but simply printed the testimony of these three ardent expansionists and hostile critics of the Hudson’s Bay Company.⁴⁵ But in July it was decided to dispatch a party to explore the means of communication with Red River, the expedition to be commanded by George Gladman. Simon J. Dawson, brother of William Macdonnell Dawson, was a leading member of the party, as were Henry Youle Hind of Trinity College, Toronto, and Charles de Salaberry, son of the hero of Chateauguay. The government had at last given the expansionists their head, even if there was some complaint that the expedition was a picnic organized for the sons and nephews of cabinet ministers.⁴⁶

The Canadian party had an English counterpart. When the inquiry by the Select Committee was being organized in Westminster, Captain John Palliser of County Meath, Ireland, a traveller and hunter who already knew the plains of the American West, as described in his Solitary Rambles and Adventures of a Hunter in the Prairies, resolved to explore the British Northwest to determine the question being raised about its climate and utility. Sir Roderick Murchison, President of the Royal Geographical Society, thoroughly approved of his purpose but thought government support desirable. He approached Labouchere, who agreed, and a grant was voted for an expedition. Palliser’s instructions were to report on the possibility of building a railway from Fort William to Red River, the agricultural potentialities of the plains west of Red River, and the character of the passes through the Rockies south of the Yellowhead Pass.⁴⁷

The election of that winter, by strengthening the Reformers of Upper Canada in the new Assembly, gave added weight to the demand for annexation embodied in their platforms of January 1857, and now reiterated in a rally at Toronto and by similar meetings elsewhere. The acquisition of the Northwest thus became an element in the sectional struggle, and even in the seat-of-government question. Not only would the annexation of the Northwest end for all time the equality of the two sections of Canada; its possibility had added to the desirability of making Ottawa the capital and therefore to the Lower Canadian opposition to the Queen’s choice. The ministry’s stand on the question of the future of the Northwest thus affected its position in the Province at every point.

It is understandable, therefore, that it took some time and care to define the ministry’s position. In December Labouchere had written Head to propose that Canada should assume the task of testing the charter by legislation and of giving a government to Red River and such other territory as it might claim.⁴⁸ The dispatch was received on January 22, 1858. But no effort was made to answer it until May, and then by resolution moved in the Assembly on the eighteenth of that month by the Honourable T. J. Loranger. The resolution proposed that the imperial government should have the validity of the charter and the location of the boundary determined by reference to the Judicial Committee of the Privy Council. The resolution also proposed that there should be no renewal of the exclusive licence to trade, that land in the Northwest should be transferred as needed by Canada, and that Canada should pay the company no compensation for such land. This was the position taken up in the instructions to Draper, and its reiteration now bitterly disappointed the expansionists. Led by William Macdonnell Dawson, now a Reform member of the Assembly, and by Cauchon, they bitterly attacked the resolution. It passed, however, and Head notified the new colonial secretary, Lord Stanley, of its provisions.⁴⁹ There the matter stood until August.

The expansionists, as a matter of fact, were facing not only the cautious policy of the ministry; they were also facing the effects of the great depression of 1857. During the winter of 1857–58, enthusiasm for capturing the trade and lands of the Northwest declined decidedly. But the coming of spring and Hind’s glowing report on the climate and soil of the Red and Assiniboine valleys⁵⁰ renewed the hope of 1857. Not only was a second expedition planned under Hind’s direction (Gladman having been dismissed for mismanagement), but the capitalists who had sent Kennedy to Red River petitioned in May for the incorporation of the North-West Transportation, Navigation and Railway Company.⁵¹ Signers of the petition included William McMaster, William P. Howland, John Gordon Brown, brother of George, John McMurrich, Lewis Moffatt, W. H. Boulton, the Honourable Philip Vankoughnet, and Sanford Fleming, engineer of the Northern Railway, now showing for the first time that interest in a Pacific railway which was to govern his life henceforth. The bill to grant the petition was presented in the Assembly on May 12 and, after various amendments restricting its operations to “Canadian” territory for fear of trouble with the Hudson’s Bay Company or the Indians, became law in August.⁵² If the commercial expansionists could only overcome the effects of the depression, they now had an instrument with which to press their invasion of the Northwest. And the news of the gold on the Fraser gave them hopes that means would be forthcoming to press forward.

The gold rush had also made a great difference there, and had created a new challenge to British policy. When Douglas’s dispatch announcing his assumption of authority on the mainland reached London, Labouchere had ceased to be colonial secretary – Palmerston’s government had fallen, and been replaced by the second Derby ministry, in which Lord Stanley was Labouchere’s successor. He faced the issue of whether Douglas could be supported by the Crown in his assumption of authority while the Hudson’s Bay Company still held its licence. He finally reached the conclusion that the licence would terminate, without claim to compensation, if and when a colony was formed. He therefore decided to commission Douglas as lieutenant-governor of the mainland,⁵³ and by so doing not only upheld Douglas in his bold initiative, but took the first step toward the erection of a Crown colony in the company’s territory on the mainland.

In the spring of 1858, the movement of miners to the Fraser goldfields became a rush. Douglas reported a thousand white men in the goldfields or on the way; one party of four hundred had put in to Victoria on its way to the Fraser. So heavy was the inrush of goods and men that in May, Douglas issued a proclamation forbidding American boats to enter the Fraser with arms, ammunition, or spirits, and threatening to confiscate any goods imported without licence from the Hudson’s Bay Company. By the beginning of July he estimated ten thousand had come to Vancouver Island and the Fraser.⁵⁴ He had issued 2,525 monthly mining licences at five dollars a piece.⁵⁵ He had appointed justices of the peace on the mainland from among British subjects, and headmen among the Indians, to maintain order. He also appointed gold commissioners to collect the licence fees. In addition, he had five hundred men at work building a road to the upper Fraser by “Harrison’s River,” but he disposed of no troops or police, as the only support he had came from HMS Plumper and HMS Satellite.⁵⁶ Douglas still remained much alone on the teeming Pacific coast.

In London, however, Sir Edward Bulwer Lytton succeeded Stanley as colonial secretary in May, when the latter moved to the Foreign Office. The change produced no change of policy, but in place of Labouchere’s indolent skepticism and Stanley’s phlegm, Lytton brought his nervous imagination and excitable temperament. A distinguished novelist, overanxious to win political distinction, he could visualize the great possibilities dawning in British North America, but he let his imagination shape his visions into fixed conclusions. He confirmed Stanley’s approval of the initiative Douglas had taken, but sharply rebuked Douglas for the May proclamation which seemed a measure designed to uphold the monopoly of the company.⁵⁷ On July 8 Lytton introduced a bill to create a temporary form of government on the mainland. The Crown, through a lieutenant-governor, was to administer the colony and to make laws until 1862, when Parliament would review the situation. The lieutenant-governor was empowered to nominate a council and establish a representative assembly. This provisional form of government was adopted because, said Lytton, what was happening on the Fraser was not settlement, but a gold rush, “a speculative excursion.” As Vancouver Island had a “free constitution,” it would be kept separate, but the Crown was authorized to annex the new colony to Vancouver Island if the legislature of that colony should desire it. The jurisdiction of the Canadian courts under the Act of 1803 and the licence of the Hudson’s Bay Company would end with the establishment of the new government.⁵⁸ The new colony was to be known as New Caledonia, as the northern and central parts of the mainland had been called, but that designation was changed to British Columbia to avoid confusion with the French Pacific island. The gold mining colony of British Columbia was proclaimed at Fort Langley on the Fraser on November 17, 1858.

The refusal of the imperial government, however, to incur major expenses or establish permanent institutions in organizing British Columbia was particularly significant, because the Fraser gold rush, more than anything else, suggested the feasibility of a British-American federation. Lytton himself was aware of this. Despite observations on the nature of the gold rush in presenting his bill to the Commons, he hoped that it might lead to settlement and serve as a primer in the establishment of that chain of British colonies from the Atlantic to the Pacific to which reference had been made in the Speech from the Throne in April 1858. In this hope, however, Lytton was not thinking of a union of British America based on Canada; he was thinking of separate colonies, enriched by the gold of the Fraser and the agriculture of the Red River, and bound together by commerce and a Pacific telegraph and railway. In short, he seemd to think economic union under imperial direction was possible without British American political union. In the debate on the British Columbia bill, when a motion was made by J. A. Roebuck, seconded by Lord Bury, that a province be created in central British America as “a counterforce” to the United States and a link with the Pacific coast, Lytton spoke glowingly of the prospects of British America: “Already in the large territory which extends west of the Rocky Mountains from the American frontier up to the skirts of the Russian domains, we are laying the foundations of what may become a magnificent abode for the human race, and now, eastwards of the Rocky Mountains, we are invited to see, in the settlement of the Red River, the nucleus of a new colony, a rampart against any hostile inroads from the American frontier, and an essential arch, as it were, to that great viaduct by which we hope one day to connect the harbours of Vancouver Island with the Gulf of St Lawrence.” But, he affirmed, Canada was not up to forming such a colony, and there remained the obstacle of the charter.⁵⁹

The imperial government would not take the initiative in the political union of British America; and it seemed Canada could not. The truth was that Canada, as constituted, and in the existing balance of its parties, could not assume the government of the Northwest nor take the initiative in the federation of British America. It was this that Macdonald and Cartier sensed when they imposed caution on the instructions to Draper and in the Loranger resolution. It was this, in effect, that Alexander Galt said in his speech on the principle of the double majority on May 21: “If the claims of Canada on the vast territories of the Red River and the Saskatchewan were conceded, we could not govern them by our Crown Lands Department…. It was clear they must find some other mode of Government, and that mode was to be found only in the Federal plan, unless they were prepared to abandon their claims altogether, and to allow the Crown to constitute them distinct colonies by themselves.”⁶⁰

The acquisition of the Hudson’s Bay Company territory, that is, in whole or in part, was not really a practical possibility until Canada had been divided and reunited federally with provision for incorporation in the federal union of the other colonies and territories of British America. It was this that Head, with his calm, donnish wisdom wrote when he forwarded the Loranger resolution, now an Address of Both Houses, on September 9, as he wound up the business of the session after the Double Shuffle and the adoption of confederation as a government policy. “Canada will not readily undertake the Government of the Red River Settlement as a charge on its own revenues.” But, he went on, “the reversion…of the fee of the colony” should be Canada’s. He concluded that “if any approximation is made to a Union of a federal character among the several North American colonies, the new settlements might easily be aggregated to the Union, and it is perhaps one great recommendation of this scheme at the present moment that it will admit of their extending westward the body of our North American colonies.”⁶¹

The cost, the difficulties imposed by distance, the friction of sectional politics, the rivalries of a speculative and expansionist economy, these might be resolved by a federal union. In 1858, both Canadian and imperial governments evaded the taking of the initiative in the Northwest, the initiative of testing the validity of the charter. But the Canadian government had taken the initiative in proposing a federal union of British America. That initiative, however, would require the concurrence of the imperial government and the Atlantic provinces of British America.