Blanshard's final act as governor was to appoint an executive council of three, Douglas, John Tod, a company veteran, and James Cooper, the Sooke settler whose trading venture had been crushed by the company. He had deferred acting on his instructions to establish ~prescribed institutions" for government of the colony because, as he explained to Grey, any council or assembly would have to be drawn from the few company officers holding the required property qualifications, placing it completely under the company's control.

In planting the first seed of what would presently become a popular movement for responsible government, Blanshard acted on a memorial, in the preparation of which he undoubtedly had a hand, presented by most of the independent settlers. At the head of the list were the names of Rev. Robert Staines, chaplain to the company at Victoria, and James Cooper.

Seven of the 15 signatories were members of the Muir family - the three sons, Andrew, John and Robert, and two nephews, Archibald Muir and John McGregor, who had returned from California to join the elder John Muir and Michael as settlers at Sooke. (Those of the Muir family who left for California had returned and been reunited with John Muir Sr., his wife and young son at Sooke when the memorial was presented to Blanshard. Their stated intention was to press for redress of their grievances against the company, hut in fact only Andrew Muir gave Blanshard a petition setting out his claim against McNeill, Blenkinsop and Beardmore for wrongful imprisonment which had permanently impaired his health. By Dec. 1851, however, three months after talung office as governor, Douglas was writing to Grey in support of an application by Andrew and John Muir to bring 10 more of their relatives from Scotiand, including "young unmarried women of good character," because except for one tenant farmer, the Muirs were the only settlers left at Sooke and should he induced to stay.)

Voicing their apprehension at the impending appointment of Douglas to succeed Blanshard, the petitioners stated "that impartial decisions cannot be expected from a governor who is not only a member of the company, sharing its profits - his share of the profit rising and falling as they rise and fall - but is also charged as their chief agent with the sole representation of their trading interests in this island and on the adjacent coasts."

In light of his own experience with the company which, unlike the settlers, would not deplore his departure, Blanshard readily acceded to their request for appointment of a council "to provide some security that the interests of the Hudson's Bay Company shall not be allowed to outweigh and ruin those of the colony in general."

Appointed on Aug, 27,1851, the council held its first meeting on Aug. 30 and on Sept. 1 Blanshard left Victoria, his departure as uncharitable as his arrival.

Toward the £300 he paid for his passage from London the Hudson's Bay Company contributed £175. For the return journey he had asked Gray to provide him with transportation to Panama, pleading that his health would not stand the rigors of a voyage around Cape Horn. Instead, HMS Daphne took him no farther than San Francisco, leaving him to pay his own way back to London. And Grey's letter, when he finally received it, accepted his resignation without a word of appreciation for his services.

Blanshard had served without salary, paying his own living costs at an inflated rate for which, he said, "my private fortune is utterly insufficient," while the company controlled the colony's scant revenues, almost entirely from coal sales.

Accepting his appointment as governor, "solely in obedience to the company's wishes," (James Douglas: Servaut of Two Empires by Derek Pethick (Mitchell Press Ltd., 1969) p.93.) Douglas was not content with his salary as chief factor and his living cost privileges. He was allowed an annual salary of £800 and even sought unsuccessfully from the company compensation at the rate of £300 a year for the period from March, 1849 to March, 1951 during which, in his own view, he acted as the colony's first governor.

Presiding at the first council meeting on April 28, 1852, with Roderick Finlayson, another company veteran filling the vacancy created by his promotion to governor, Douglas proposed a law, "adapted to the circumstances of the colony," regulating employer-servant relations. Employers apparently were to be above this law, but servants would be subject to summary fine or imprisonment for "insolent language, neglect of duty, and absence without leave of the employer".

Despite its being "considered highly important and necessary," the council deferred its decision, but the proposed law was never discussed again. Presumably a review of the Master and Servant Acts then on the statute books at Westminster convinced Douglas that they gave him all the powers he sought.

Enacted in the 18th century and based on the 14th century Statute of laborers designed to bind laborers and set wages, the Master and Servant Acts were commonly being enforced against British workers at the time. Unlike Douglas' proposed law, they provided for financial penalties against offending employers, although workers convicted of breach of contract were sent to prison. (A Short History of the British People by Dave Morgan (VEB Verlag Enzyklopadie, Leipzig, 1979) p.74. A People's History of England by A. L. Morton (Victor Gollancz Ltd., London, 1935) pp.115116.)

Having set the seal of colonial government on the company's monopoly, Douglas seldom saw the need to consult his council, which met five times in 1852, six times in 1853, twice in 1854 and only once in 1855.

Chafing under the restraints of the company's monopoly and now without any appeal except to the British colonial secretary, the independent settlers alnong the 450 white population of Vancouver Island drew up a petition calling on the British government to revoke the company's grant, to appoint an independent governor and establish an elected assembly.

Their spokesman was to be Rev. Robert Staines, who with his wife Emma also taught school at Fort Victoria. His consistent opposition to Douglas' arbitrary rule had already led the governor to brand him as "a fomenter of mischief and I believe a preacher of sedition," and he readily seized on complaints about Staines' methods of discipline to remove him as a teacher.

Soon afterwards, on Feb.22, 1854, Staines took passage on the Duchess of Lorenzo, with San Francisco his first port of call on his long journey to carry the settlers' petition to London. He got no farther than Cape Flattery where the vessel was wrecked in a storm, drowning him and all the crew members except one, who survived his rescue just long enough to tell of Staines' fate.

The settlers' grievances, as long as they could be contained, were of less immediate concern to Douglas than other events bearing on Britain's imperial interests. The discovery of gold on the Queen Charlotte Islands was bringing expeditions from California as word spread. Mindful of the Oregon experience, Douglas feared that if a major find drew a rush of Americans it would be "no easy matter to eject them when firmly established."

His intercession on behalf of John and Andrew Muir had been prompted by the fact that all the other settlers had left Sooke "with the intention of proceeding by the first chance to Queen Charlotte's Island to try their fortune at gold digging."
Ever mindful of the Company's interests, Douglas sent his own expeditions, the brigantine Huron carrying experienced miners, another party of miners from Nanaimo aboard the Uno, and the brig Recovery which, as he reported to Grey, took possession of "the only surface gold vein at Gold Harbor" on the west coast of Moreby Island.

The gold fever subsided and the search was abandoned when it failed to pro duce more than the narrow quartz vein that precipitated it. One outcome, however, was the appointment of Douglas as lieut-governor of the Queen Charlotte Islands in July, 1852.

The outbreak of the Crimean War as Britain and France joined forces with Turkey against Russia in March, 1854, faced Douglas with a perceived threat from another direction, that of a Russian attack on the colony.

Although he had been responsible for implementing its terms, Douglas was apparently unaware of the clause in the 1839 Panhandle lease agreement binding the Hudson's Bay and Russian American companies to fulfill their trade commitments even in the event of war between their two countries.

The clause, maintained and amplified in a new agreement signed in April, 1849, was further defined in another agreement negotiated in March, 1854, whereby Britain undertook not to attack Russian American outposts or ships in harbor, although it reserved the right to seize Russian ships on the high seas and to institute blockades.

Douglas proposed not only raising and arming a temporary defense force of 500 men but, with scant regard for its effect on the company's trade, sending a naval squadron to seize Russian outposts.

He advised the Duke of Newcastle, the new colonial secretary, that "a very serious injury might be inflicted on Russia by taking possession of all their settlements on the American coast north of the Queen Charlotte Islands. Their defenses are on a scale merely calculated to cope with savages and could not be maintained against a regular force of 500 men," thus depriving Russia "of a most valuable branch of trade producing a large public revenue...

He was rebuffed at every turn. His request for 400 muskets, 100 rifles, light guns with carriages, and heavy guns for harbor defenses, as well as munitions, 500 uniforms and a year's supply of victuals, was rejected.

Even his own council demurred at the idea of raising a colonial militia of whites and Natives for fear the Natives might use the weapons against the whites.

His one recourse against possible attack by a Russian privateer was to arm the crew of the company's ship Otter, a token defense force which never saw action.

Honoring the 'limited neutrality' agreement, British warships made no attacks on Russian American settlements throughout the two years of war. The only major battle was fought far across the Pacific. During the week Aug.29 -Sept. 4, 1854 a joint British-French naval squadron carrying some 2,000 marines and seamen bombarded the well fortified stronghold of Patropavlovsk on the Kamchatka Peninsula before landing a force of 700 men in an ill-planned attempt to take the town from the rear. The Russian defenders routed the attack, inflicting heavy casualties, including 52 dead or missing, and the naval squadron was forced to withdraw.

A second planned attack on Petropavlovsk in 1855 was frustrated when the joint naval squadron found the town deserted except for a few American traders. The Russians had dismantled their defenses and evacuated the people to the Amur River.

The uncertainties of international conflict did not distract Douglas from his duty as chief factor to advance the company's fortunes by every means. One was by promoting the company's coal mining ventures which afforded a substantial source of revenue. Another was by securing and expanding the company's land holdings and reserves which could only be expected to increase in value over time.

In 1849, Douglas had been advised by the company's secretary, Archibald Barclay, that he was "to consider the Natives as the righttul possessors of such lands only as they are occupied by cultivation, or had houses built on, at the time when the Island came under the undivided sovereignty of Great Britain in 1846. All other land is to be regarded as waste and applicable to the purposes of colonization...

After giving £1 per head as the average rate of compensation paid in other colonies, Barclay told Douglas to use his own discretion in settling with the Natives for extinction of title.

Douglas met first with the Songhees, who agreed to surrender their lands, except their village sites, from Gordon Head to Albert Head, west of Esquimalt. Rather than an annual payment in perpetuity as proposed by Douglas, the agreement was for 17 shillings payable to each head of family, a total of £103/i 4s.

His next agreement, for the Clallurn lands between Albert Head and Sooke Inlet, cost £30/9s/8d, and a third agreement for the Sooke lands between Sooke Inlet and Point Sheringham, cost £16/8s/8d.

In all, Douglas concluded 14 agreements by which Native bands as far north as Fort Rupert surrendered their lands. But, as he reported to Barclay, "I informed the Natives that they would not be disturbed in the possession of their village sites and enclosed fields, which are of small extent, and that they were at liberty to hunt over the unoccupied land and to carry on their fisheries with the same freedom as when they were the sole occupants of the country."

That assurance was to echo through the courts for the next century as increasingly the rights it recognized came into conflict with provincial and federal laws infringing them.

How Douglas manipulated the prices of goods paid to the Natives to extinguish their land titles became apparent to Blanshard when he examined the accounts for the first agreements. He found that the company had charged three times more for goods paid under the agreements than it charged for goods paid to the Natives when they did work for the colony.

Douglas' explanation of this was that the company did not expect the Vancouver Island grant to be renewed when it expired in Jan., 1854 and then it would be entitled to reimbursement for its expenditures.

"At this rate," Blanshard complained to Grey, "they may continue for the next three years paying away a few goods to Indians to extinguish their claim to the soil, and by attaching an ideal value to their goods they will at the end of that time appear as creditor of the colony in an overwhelming amount, so that the foundation will be laid for a colonial debt, which will forever prove a burden." (In revolting the Vancouver Island grant, the British government allowed the Hudson's Bay Company's claim for £40,290/5s/2d spent on colonization. It also validated land sales within the 3,084 acres around Fort Victoria acquired by the company before establishment of the colony, allowing the company to retain the proceeds. Except for land on which the legislature was built between 1893 and 1898 and sites at the foot of Fort Street already set aside for government use, the company's title to its fort and farm properties was upheld.)

In the same dispatch, Blanshard noted that colonial revenues consisted "of royalties on coal for the last two years," a fact that influenced Douglas' decision to persist in the search around Fort Rupert.

In the fall of 1851 the company brought out some 25 Durham miners to continue exploration under a Scottish coal master, Boyd Gilmour, who was accompanied by his nephew, Robert Dunsmuir, a miner, both under three-year contracts.

Unlike the Muir family, they had mining machinery and good tools, but they were no more successful in finding coal. At the end of a year, after extending the Muir shaft to a depth of 120 feet and sinking several test bores, they had uncovered no workable seams.

When they were first investigated by Roderick Finlayson aboard the Beaver in 1835, he reported the surface coal deposits at Suquash to be of excellent quality. But the coal mined from the thin seams 14 years later proved to be inferior and if the company were to vie with offshore suppliers for the growing steamship trade, it had to find Coal deposits of equal quality.

The company found the deposits it sought at Nanaimo in 1850, although it was slow to appreciate the magnitude of its find. As at Fort Rupert, the information came from a Native visiting the blacksmith's shop under circumstances which made the two similar stories plausible.

At Fort McLoughlin, the visiting Native voiced his astonishment that the coal for the forge was being brought from far across the sea when it could be found strewn upon the shore at Suquash. The observant Dr. William Fraser Tolmie, in charge at the fort, passed the information to Dr. John McLoughlin at Fort Vancouver and Finlayson was instructed to investigate.

At Fort Victoria in 1849, a Native seeking to have his gun repaired scrutinized a piece of coal he picked up in the blacksmith's shop and remarked that this black stone was plentiful where he lived. Joseph McKay, then a company clerk at the fort, promised to reward him if he brought in specimens. Months later, the Native returned with a canoe load of coal. Tested at the smithy, the quality was pronounced excellent.

With an inexhaustible forest for fuel and no knowledge of metal smelting, the Native peoples had no need of coal. Their one use for it was as a substance from which they carved rare lignite pendants. But from their centuries of occupation, they knew the sources of minerals within and far beyond their own boundaries whether or not they used them. If the white people wanted coal, they knew where to find it.

McKay, sent with a prospecting party to inspect the source in 1850, returned to report that he had found a promising seam, but it was two years before Douglas acted. Then, as prospects of finding good coal seams at Fort Rupert faded, he sent McKay back on a second prospecting trip in the summer of 1852. This time he acted quickly, taking J. D. Pemberton, his surveyor, with him to make a personal inspection of the seams reported by McKay.

He followed this up in August by instructing McKay "to proceed with all diligence to Wentuhuysen Inlet, commonly known at Nanymo Bay, and formally take possession of the coal beds lately discovered there for and on behalf of the Hudson's Bay Company." McKay was to forbid all persons to work the coal, either directly or indirecfly through the Natives or others, except under licence from the company, in which case he was to levy a royalty of 2s/6d a ton on all coal mined or purchased from the Natives.

Three weeks alter McKay and his party arrived at Nanaimo Bay aboard the Cadboro~ the ship sailed back to Victoria laden with 480 barrels of coal, the first shipment from a field that in the course of a century would produce more than 50 million tons.

For bringing the coal samples to Victoria, the Native who afterwards became a local celebrity as the 'Coal Tyee' had his gun repaired free of charge and received a bottle of rum. The Natives who dug much of the coal shipped in the first year were paid in trade goods - in one instance during Douglas' first visit £11 in trade goods for 50 tons worth $11 a ton at Nanaimo and $28 at San Francisco. But for the vast wealth below the land they surrendered they got nothing.

Douglas, writing to Barclay in 1851, noted "the request of the governor and committee that I should take an early opportunity of extinguishing the Indian claim in the coal district," and assured him that he would act 'as soon as I think it safe and prudent to renew the question of Indian right, which always gives rise to troublesome excitements and has on every occasion been productive of serious disturbances."

The eventual treaty by which the company and its successors acquired a great coalfield followed the pattern of earlier agreements, recognizing only the Natives' title to their village sites and fields and the right to hunt and fish throughout their former territory.

Confident that the Nanaimo seams would justify his long search, Douglas bent his efforts to obtaining sufficient coal to keep his two ships, the Cadboro and Recovery, running between Nanaimo and Victoria with full cargoes.

In August, he went with John Muir, his son Robert, and nephews Archibald Muir and John McGregor to assist McKay in organizing the work, still largely being done by Natives who, in McKay's words, could "earn at the rate of one shirt per diem." In October he ordered Gilmour and Dunsmuir to dose the coal workings at Fort Rupert, leaving only the trading post there, and move with their miners to Nanaimo.

The settlement at Colville, named for Andrew Colvile, the company's governor, until it officially became Nanaimo in 1860, was slowly taking shape. The rows of log cabins along the shore housing the Muir family had to be extended when Gilmour's miners arrived from Fort Rupert early in 1853 and by the summer a three-storey bastion had been built to shelter the small population in the event of Native attacks, particularly by the feared Haidas in their long sweeps by up to 1,000 warriors down the coast.

Douglas had sought to avoid the complaints about food that had fueled the Fort Rupert strike by paying the miners one shilling a day for rations, but his efforts to get greater production embroiled him in another dispute over rates of pay. The miners estimated that the 30 tons of coal they were required to produce each month worked out at four shillings a ton, including the shilling a day for rations, and that the company's rate of 2s/6d for each additional ton was not enough. The assistant miners felt that since they were paid half the miners' rate, they should only produce half as much coal, and they wanted 2s/6d for each additional ton.

After juggling figures to dispute these demands, Douglas offered the miners 2s/9d for each additional ton and the assistant miners 2s/6d for each additional ton provided they produced three-quarters of the 30 tons required of miners. Miners and assistant miners alike rejected his offer and McKay could hardly implement his suggestion that an example be made of the men's leaders to force acceptance without aggravating his production problems.

As the demand increased for Nanaimo coal, equal in quality to British coal but far cheaper landed at San Francisco, despite a 24 percent duty, Douglas turned again to the company's London headquarters for skilled miners. The company turned to the little town of Brierley Hill in the Black Country of Staffordshire to find them.

The Industrial Revolution was transforming Britain, defacing large areas of a green and pleasant land with the slag heaps of its coal mines and the fumes and soot of its forges and factories, converting streams into sewers. In their quest for profits, the new industrial capitalists paid scant heed to the housing and health of the men, women and children toiling long hours to produce those profits, victims of accidents in the workplace and epidemics in their insanitary homes. Only when their revolt against their misery raised the spectre of revolution did they offer any concessions while massing troops and police to attack huge rallies demanding adoption of the People's Charter.

The Chartist movement had its Origin in a petition formulated in 1837 and published in 1838 by the London Working Men's Association. Its six demands included universal suffrage, the secret ballot, payment of MPs, abolition of property qualifications for MPs, equal electoral districts and annual parliaments.

Embodied in a draft bill supported by 1.2 million signatures, it was rejected by parliament, which banned all meetings and ordered the arrest of Chartist leaders. A second petition organized by a newly formed National Charter Association obtained 3.3 mimon signatures and its rejection by parliament in 1842 brought demands for a general strike.

Britain was in the grip of an early depression and workers protesting wage cuts, such as that reducing Scottish miners' pay from five or six shillings a day to 2s/6 or 2s/9d, were on strike in many places. A trade union conference in Manchester called on "the people of all trades and callings to forthwith cease work until the charter become law" and a general strike was called in lancashire. But, beset by division in the Chartist leadership and facing troops sent to crush them, the strikers were forced back to work.

The strength of the Chartist movement was already waning in 1848 even though the third petition rejected by parliament contained two million signatures. Sensing this, the government massed 100,000 troops and artillery in London and followed this show of force with attacks on meetings and arrests of leaders around the country.

Although it would be years before the demands of the People's Charter were enshrined in law, (In his well researched A Short History of the British People, Morgan gives a summary of the six points of the People's Charter and the dates of their subsequent implementation: 1 - Universal manhood suffrage (a vote for every man over 21). It is interesting that in the first draft of the six points votes were demanded for men and women, but in the course of discussion, women were excluded. Manhood suffrage was achieved by 1918 and votes for all women only in 1928. The voting age was lowered from 21 to 18 in 1969. 2 - Votes by secret ballot - achieved in 1872. 3 - Payment of MPs - achieved in 1911. 4 - Abolition of property qualiflcations for MPs - achieved in 1918. 5 - Equal electoral districts - obtained gradually between 1885 and 1918.) the movement was instrumental in extracting important reforms from parliament, among them the Coal Mines Act of 1842.

In his report, R. H. Franks, who investigated conditions in British mines under a commission of inquiry established in 1840, described the pit bottoms as 'common sewers' along which women and girls crawled half naked harnessed 'like horses' to the bogie (truck) of coal.

"However incredible it may appear, yet I have taken the evidence of fathers who have ruptured themselves from straining to lift coal on their children's backs," he wrote. The loads the children carried ranged from 100 to 200 pounds and their pay was four pence to a shilling a shift.

The act forbade women to work underground - but not above ground, loading and sorting - and set 13 as the starting age for boys (In British Columbia an act forbidding the employment underground in coal mines of women and boys under 12 was only passed in 1877. The act allowed boys under 14 to work five six hour days a week.). The mineowners, however, succeeded in forcing through an amendment reducing the starting age to 10 and allowing boys between 10 and 13 to work three 12-hour shifts a week.

The political demands of the Chartist movement and the infusion of socialist ideas had their influence on the Staffordshire miners and Brierley Hill was no exception. Expressing the growth of trade union consciousness as skilled workers strove to exert their collective strength, they had won higher wage rates than those paid in other coalfields. But this did nothing to change the miserable conditions under which they lived and worked and from which emigration offered the only hope of escape.

The five-year contract offered by the Hudson's Bay Company must have been tempting to the 23 Brierley Hill miners who accepted it. Whatever hardships they might face in an unknown and distant land, they could not be worse than the familiar miseries of the only place they knew and they would still be with those among whom they had grown up.

The £15 advance was temptation enough, although it would be deducted from their first year's pay of £76. For this they would be expected to work 10 hours a day, six days a week, a total of 310 days a year.

To obviate the grievances that had ignited the Fort Rupert strike, the contract stipulated that every man must do whatever mining or laboring work he was assigned. And even though their pay would not start until they were at the coalface, all were expected to work as laborers aboard ship.

The most devious clause in the contract covered production. To circumvent the refusal of the miners already employed at Nanalmo to increase their monthly output beyond 30 tons, the company craftily inserted a monthly production requirement of 45 tons, offering the 2s/6d for additional tonnage already rejected by the Nanaimo miners. This must have been acceptable to those signing and not until they reached Nanaimo would they learn how they had been deceived.

Five and a half months alter they left London aboard the Princess Royal on June 3, 1854, the Brierley Hill miners and their families reached Esquimalt and were transferred to the Beaver and Recovery for the final leg of the voyage to Colvile Town. The long and arduous voyage in cramped quarters around Cape Horn had taken its toll. One miner and a miner's wife had been buried at Honolulu. Seven children, two of them born at sea, had died during the voyage. It must have been with a great sense of release from the constrictions of life at sea that the immigrants stepped ashore on Nov.27 to see the rough barely furnished houses against the dark background of the forest that were to be their new homes.

At Nanairno, Boyd Gilmour had replaced John Muir, who had returned to his farm and lumber mill at Sooke, and been joined by Andrew Muir in superintending the mining operation. To succeed McKay when his contract was up the company appointed Capt. Charles Edward Stuart, who would soon find himself facing his own labor problems. Gilmour, in turn, when his contract expired was determined to return to Scotiand and he tried to induce Dunsmuir to return with him. But Dunsmuir's wife, Joan, no less determined to remain in the new land, persuaded her husband to stay.

It would be years before Dunsmuir uncovered the Wellington coal seam at Divers lake from which he would extract a fortune, but he soon found an opportunity to advance himself.

Whatever their grievances and their bearing on the discrepancy between the two production quotas, the Brierley Hill miners went on strike in Sept. 1855. Dunsmuir had his own reasons for opposing the strike. He was about to seek permission from Douglas to work independently under license and he feared it would lessen his chances. When some of those refusing to work confided in him that they planned to go to the U.S., he did his utmost to dissuade them. He was more successful in persuading some of the Scottish miners not to join the strike.

On Sept.12 Stuart, attempting to handcuff a striker who was threatening violence, was assailed by other miners who dragged the striker free. The next day nine of the strikers were gone, apparently to Bellingham where coal had been discovered two years earlier.

Presumably the Scottish miners influenced by Dunsrnuir continued to work, but Stuart's subsequent comment about "the rest being too lazy to work" was more a reflection on his lack of concern for their grievances than on men accustomed to working l0-hour days.

Stuart's next step was one that would be taken many times in ensuing years. He ordered the wives and families of the absent miners to vacate their homes, a dire threat to people for whom there was no place to go. The threat was lifted a few days later after all except one of the absent miners returned with no recourse other than to ask for their jobs back. The company needed them, but on its own terms. They were reinstated at a much lower wage rate.

In October, Dunsmuir and Ed Walker, who also had opposed the strike, received permission to operate independently on what became known as 'Dunsmuir's Level'. Soon their production so impressed Stuart that he assigned three more men to work under Dunsmuir, two of them miners who had returned from Bellingham to be personally reprimanded by Douglas at Nanairno for breaking their contracts and then rehired at the much reduced wage.

The Nanaimo miners had lost their first strike, as they would lose others in the course of struggles waged over decades, but they would go on to leave their political imprint on a new province and shape an enduring tradition.

Douglas, however, was facing other challenges to his autocratic rule. The complaints and proposals for redress set out in the settlers' petition of 1854 had not gone unheeded by the British government, for the 70 petitioners included not only the settlers but members of Douglas' executive council and company officers.

While the company had succeeded in obtaining a five-year extension of its Vancouver Island grant in 1854, it was encountering opposition from many quarters as it prepared to seek a renewal of its charter in 1859, not least from The New Industrialists in the Canadas who saw its monopoly as a barrier to their expansion westward.

In 1856, Douglas was advised by British colonial secretary Henry labouchere that the legality of his continuing to rule through an appointed executive council was in question and he was instructed to establish an elected assembly.

The petitioners of 1854 had sought a legislative council, the majority of whose members would be elected every four years by colonists owning not less than 200 acres, and an assembly of nine members to be elected every three years. They wanted the franchise, limited by the terms of the governor's commission to those owning 20 or more acres, extended to those occupying houses or paying rent of £10 a year, as well as those owning farm lands to the value of £10 or city lands to the value of £20.

Even Douglas, while declaring that he was "utterly averse to universal suffrage, or making population the basis of representation," favored extending the franchise to all those "holding a fixed property stake, whether houses or lands, in the colony." Labouchere held that the franchise could be extended by the proposed assembly, whose first duty should be to validate all the measures passed by the appointed executive council.

The first election in August, 1856, was an exercise giving the semblance of democracy but virtually devoid of democratic content. In Nanaimo the 20acre qualification excluded all the miners from voting. There, with land ownership of £300 the qualification for nomination, no one was eligible to stand and John F. Kennedy, a retired company officer, was appointed by the executive council to represent the district.

Of the four electoral districts, Victoria, Esquimalt-Metchosin, Sooke and Nanalmo, only in Victoria where five candidates vied for the three seats, was there any contest. When the writs were returned it was apparent that Douglas had merely broadened the base of his autocratic rule and that the new assembly and its appointed colonial officials were part of what its opponents would presently call the Family-Company-Compact.

The speaker of the assembly, Dr. Helmcken, one of the two members for Esquimalt-Metchosin, was now Douglas' son-in4aw by his marriage in 1852 to Cecilia, one of Douglas' five surviving daughters. His fellow member, Thomas Skinner, was agent for the Puget Sound Agricultural Company. The three successful candidates in Victoria were J. D. Pemberton, the surveyor, James Yates, a saloon keeper, and E. E langford, who resigned alter his property qualifications were challenged and was replaced by Joseph McKay, the company's former mine superintendent at Nanalmo. The member elected for Sooke was John Muir, whose son Andrew, denounced as the strike leader at Fort Rupert, had been appointed sheriff and sergeant-at-arms.

The two top colonial officials were Chief Justice David Cameron, Douglas' brother-in-law, and A. C. Anderson, retired company chief trader, the collector of customs.

Douglas' appointment of Cameron had been controversial. A merchant in British Guiana where he married Douglas' sister, Cecilia, he had moved to Vancouver Island in 1853 and been given a clerical post in the Nanaimo coal operation. Since he had no legal experience, on or off the bench, Douglas' defense of him as a man of integrity who would "not willingly commit an act of injustice" did nothing to assuage the critics.

At the head of this Family-Cornpany-Cornpact stood the executive council, ali past or present company officials - Douglas, John Work, Roderick Finlayson and John Tod.

While Douglas had strengthened his autocratic rule, the Hudson's Bay Company's monopoly that provided the basis for that rule was coming to an end.

In London, a select committee of the House of Commons was established in 1857 to inquire into the company's administration before assenting to renewal of its charter. Its hearings, stretched over close to six months, heard all the familiar charges from 24 witnesses, among whom were Blanshard and Cooper, who had resigned from Douglas' executive council.

Combatting charges that the company continued to supply liquor to the Natives, Sir George Simpson maintained that the practice, widespread before the merger of the Hudson's Bay and North West companies, had been eliminated in Rupert's land and northern areas of the North-West Territory. He conceded, however, that 'small quantities' of the 4,900 gallons of liquor imported annually were given to Natives on the Saskatchewan and at Rainy River. His testimony was amplified by Lieut.-Col. J. H. Lefroy, who claimed that "the necessity of meeting the Americans to some degree with their own weapons had obliged a very limited use of spirits, but the rule ... was that for one gallon of rum they put (in) seven gallons of water..."

Questioned about the condition of the Native peoples, Simpson and Lefroy differed. Simpson held that the Native population was increasing in the northern forest belt, but declining on the prairies through smallpox epidemics and warring among the Native peoples themselves. Lefroy, a surveyor, comparing his estimates with those made earlier by Sir John Franklin, the explorer, argued that the northern population also was decreasing.

The major charge against the company was its systematic discouragement of colonization to protect the profits of its fur trade. Since 1840 these had averaged £65,573 a year and still constituted its largest source of revenue, augmented by its diversification into coal, timber, fisheries, wheat and livestock on the Pacific coast. (The committee of the Aborigines Protection Society estimated in 1857 that British shareholders had received £20 million in profits from the fur trade.) Only two colonies had been established - Selkirk's Red River Colony, re-conveyed in 1834, and Vancouver Island, with its restrictive settlement scheme. Except in the Red River district, no settlers were allowed to take up land near its trading posts.

Conscious of how Oregon had been lost a decade earlier, committee members and witnesses alike voiced the fear that calls for annexation would follow any influx of Americans, whether seeking land or gold, unless areas suitable for agriculture were opened to settlement.

Both Simpson and Edward Ellice, who had emerged as the company's most influential shareholder, were taken aback by the doubt cast upon their assertions that weather and soil conditions made no part of their territories, including the Red River district, well suited to agriculture.

Labouchere, the committee chairman, and other members reminded Simpson of the company's successful farm at Fort Langley, and quoted his own comments about the agricultural potential of the land between lake of the Woods and Rainy River from his book, Journey Around the World.

In Canada, the hearings stimulated a public discussion in the press and through pamphlets that had been under way since Lord Durham's report appeared in 1839. Durham, sent to the Canadas as high commissioner and governor-general alter crushing of the 1837-38 Rebellion, had recommended institution of responsible government and legislative union of the two provinces to ensure English supremacy.

The Act of Union passed in 1840 implemented one of Durham's proposals by uniting Upper and Lower Canada under one government. It provided for an appointed legislative council and an elected assembly in which Upper Canada, with the smaller population, and Lower Canada, with the larger population, each had 42 members. It denied equal status to the French language by abolishing its use in assembly reports and records and phasing out its use by members alter 15 years. (The legislative council in which members held office for eight years became an elected body in 1056, reverting at Confederation to an appointed senate patterned after the British House of lords.) Allocation of government powers and interpretation of their instructions enabled successive governors to deny or advance responsible government.

Not until Lord Elgin was appointed governor-general in 1849, announcing that he would "give to my ministers all constitutional support, frankly and without reserve..." was responsible government attained.

Durham's report had advocated the building of railways to link and facilitate development of the British colonies. Elgin's appointment coincided with the promotion of various schemes to implement his recommendation.

Canada was emerging from the depression into which it had been plunged as Britain reversed its mercantilist policy of protective tariffs and trade restrictions. Repeal of the Corn laws in 1846 eliminated the preference given to Canadian wheat in the British market. Farmers were left with a surplus of grain they could not dispose of because the Navigation Acts confined trade to British ships and barred foreign vessels from ascending the St. Lawrence. The milling industry, which had expanded by importing U.S. wheat and shipping the flour under the preferential tariff, was hit hard. Bankruptcies mounted in the mill-towns and unemployment was widespread. Farmers and merchants alike raised an outcrv against the Navigation Acts and in 1849, under pressure from its own industrialists, Britain repealed them.

Railroad construction provided the impetus for a new era of industrial expansion and financial concentration that lifted Canada out of the depression. In the decade between 1850 and 1860 rail lines were extended from a mere 106 kilometers to 3,304 kilometers, including completion by the Grand Trunk Railway of the Montreal-Toronto line in 1856.

To finance this surge of railroad construction, with its accompanying political corruption and graft, promoters secured nearly $23 million in loans, which eventually became gifts, from the Canadian government, and some $10 million from county and municipal governments.

The old money of the fur trade was transmuted into the new money of rising capitalism. The Family Compact, described by Durham as "a petty, corrupt, insolent Tory clique," made its last desperate bid to retain power in 1849. That year the Tory government of William Henry Draper was replaced by the Reform government of Robert Baldwin and Louis Hippolyte, which introduced a bill to indemnify those in Lower Canada who had suffered losses in the 1837-38 Rebellion.

In face of a strenuous campalgn of opposition led by the Tories, the assembly passed the bill by a vote of 47 - 18. The Tories then directed their campaign of protest meetings and petitions to Elgin, demanding that he withhold assent. When Elgin stood by his decision to respect responsible government and gave his assent to the bili, the Tories turned to violence.

Through the Annexation Association, to which many Montreal merchants belonged, they issued a manifesto calling for annexation to the U.S. Since the Parti Rouge program advocated republican government for Lower Canada, the manifesto was calculated to win support among its followers, while cynically using that support to deny indemnity to those who had favored the Patriotes' republican aspirations in 1837.

Incited by the Tories' strident campaign, a mob pelted Elgin with refuse as he left Montreal. later in the day, the mob marched on the Parliament Building where the assembly was still in session. Driving the members out under a hall of stones, the mob wrecked the building and set it ablaze. The attack set off three days of rioting, finally quelled by soldiers and police, as one outcome of which the capital was moved from Montreal to Toronto.

The Tories' last resort was to appeal to the British government to disallow the bill. Two leading spokesmen for the Family Compact, Sir Allan MacNab and William Cayley, went to London to plead their case, but the British government refused to intervene. Instead, it upheld Elgin's position and the principle of responsible government on which it was based.

In the political realignment that followed, the remnants of the Family Compact were combined with the right wing of the Reformers to form the LiberalConservative Party of John A. Macdonald, who became prime minister in 1856.

The Opposition, composed of left wing Reformers and others, regrouped as the Grits in Upper Canada and the Parti Rouge, led by Louis Joseph Papineau, in Lower Canada.

MacNab, as leader of the High Tories, and Macdonald, as leader of the more moderate Liberal-Conservatives, took into their ranks such erstwhile Reformers as Sir Francis Hincks and Sir George Etienne Cartier, who had fought with the Patriotes at St. Denis, but who were now among those bought over in the promotion of railroad construction.

The physical barrier to railroad expansion was the rivers and lakes, the rocks and muskeg west of lake Superior, the terrain through which the fur brigades had threaded their own expansion westward. The political barrier was the Hudson's Bay Company through its charter to Rupert's land, its license to the North-West Territory and its Vancouver Island grant.

At Labouchere's invitation, the Canadian government named Draper, who had become chief justice of the Supreme Court since his Tory government was dismissed by Elgin, to represent it before the select committee. In a move supported by resolutions from county and municipal governments, it also appointed its own select committee to inquire into the powers vested in the Hudson's Bay company by its charter.

At the centre of the Canadian government's case in the diplomatic exchanges that followed was its hope to have the company's charter ruled invalid by the Privy Council or at least restricted to the Rupert's land grant. A ruling to this effect would deny or greatly reduce payment of compensation.

The company's case rested on acceptance of the charter's validity throughout two centuries of occupation and its refusal to be a consenting party to any legal test of its established rights. And while title to the territory held under license remained with Britain, the company exercised actual control through its network of trading posts.

The issue of the charter's validity was never submitted to the Privy Council. The Canadian government maintained that it was the British government's responsibility to decide the territory's future. The British government felt that having recognized the validity of the charter for so long, it had no legal case.

Before the select committee the company submitted its own case through Simpson and Ellice with compelling arguments.

The company was prepared to relinquish its Vancouver Island grant, although it wanted to retain its exclusive trading rights on the mainland west of the Rockies. And it was prepared to cede any part of its territory east of the Rockies for settlement provided the Canadian government undertook the cost of governing the territory ceded and maintained a police force to protect the company's fur trading rights.

Otherwise, they asked, how would Britain hold the territory, in which the company had maintained peace and order in contrast to the violence in the U.S.? How could fur-bearing animals be protected against the wholesale slaughter that was certain to follow free trade in furs across the border?

When the committee brought its report down it created a sensation both in Britain and Canada.

It proposed that "the districts on the Red River and the Saskatchewan" should be "ceded to Canada on equitable principles" and that the company relinquish Vancouver Island, with provision for eventual extension of the colony over the mainland west of the Rockies. Those parts of the territories not required or unsuitable for colonization should be left with the company.

The company had its critics, but it also had its supporters on the committee, one of who was Edward Ellice, whose father had presented the company's case. Its influence reached into high political and financial circles and it used it to limit the committee's recommendations to revocation of the Vancouver Island grant.

Since the validity of its charter had not been tested before the Privy Council, it could claim compensation for surrender of territory estimated to be worth some £1 million. Canada did not have the money and Britain, which did, was not prepared to accept the financial burden.

After an address to the British House of Commons in which it pledged to correct the abuses set out in the committee's report, the company obtained another renewal of its charter, shorn only of the Vancouver Island grant.

On Vancouver Island the decision had little immediate effect. Except for the accounting of revenues and expenditures, the administration continued unchanged. As governor, Douglas presided as before over the executive council, maintaining his autocratic rule. As chief factor, he directed the company's business from Victoria as he had done for 14 years.

In London, however, despite its success in obtaining renewal of its charter, the company recognized that it could not maintain its monopoly against the pressures building in Canada for expansion and in Britain for consolidation of the British colonies. Against the inevitable day when it must surrender its charter, it began to reorder its affairs and engage in negotiations to ensure that it did so on the most favorable terms. (For surrender of Rupert's Land and the North-West Territory in 1869 the Hudson's Bay Company received $300,000 from the Canadian government, reservation of two sections of land not exceeding one twentieth in each township, and some 50,000 acres in the vicinity of its trading posts. Except for its trading rights, the company relinquished all the powers conferred by its charter.)