"3. But a Crown Colony with such a federation as would not alter the political balance of Upper and Lower Canada, and with a system of free trade with Canada, would appear to solve the whole difficulty; and if so, the scope of the federative principle would be matter to be settled between Canadian statesmen and the Colonial Office. The interchange between the North-west and Canada appears to be an absolute necessity in the interest of the latter. As Government, however, would require taxation, the new Colony must, in all probability, have its Custom- house; and it should be considered whether the Custom-house of Canada would not serve, as far as the eastern frontier is concerned, for the new Colony. If so, why should not duties, on a scale to be agreed upon under constitutional powers to agree, be levied on imported foreign goods, by Canada, and the duties be divided between the two powers in agreed proportions? Were this done, at least in the beginning, expense would be saved to the new Colony, a revenue would be easily collected for it, through existing machinery, and Canada would obtain the revenue and trade. Of course the scale of duties must be moderate, so as not to excite dissatisfaction, by establishing dear prices, and it would be the interest of Canada to make them so, for the more she stimulated the growth of the new customer, the better for the trade. On the other hand, the new Colony would be insured a market and an outlet for its own productions, and would be content, therefore, to accept a reasonably high scale of duties, levied for revenue purposes only, on its articles of foreign consumption." I discussed the question involved at length with the Honorable George Brown and with his brother Gordon, at Toronto. I felt the importance of having the views, and, if possible, the concurrence of the leader of the "Grit" party. He led me to think that he concurred with me; and I sent him a copy of this document. He kept it some time, and then re- directed it to me without remark. Afterwards, I received a verbal message to the effect that "It would not do at all." I became convinced that nothing "would do at all" with a small band of men--who, at that time, had objects of their own--in Upper Canada. Some of them--few in number, I am happy to know, and impecunious--appeared to consider the old corporation of the Hudson's Bay in the light of Blucher, when driving through the streets of London, "Mein Gott! what a plunder." Some of them tried their best to confiscate the property; and once or twice, by weakness and vacillation in London, they almost gained the day. Governor Dallas and I also carefully considered the telegraph question; the route, the cost, and the best agencies to complete its very early construction. The two agreements, which, as matter of history, I here copy, were intended to bring about the complete connection of the Hudson's Bay territories direct with England and with the United States.