In response to our demand for a large tract of land through the "Fertile belt" of the Hudson's Bay territory, the Governor answered, almost in terror, to the Duke of Newcastle:--"What! sequester our very tap-root! Take away the fertile lands where our buffaloes feed! Let in all kinds of people to squat and settle, and frighten away the fur- bearing animals they don't hunt and kill! Impossible. Destruction-- extinction--of our time-honoured industry. If these gentlemen are so patriotic, why don't they buy us out?" To this outburst the Duke quietly replied: "What is your price?" Mr. Berens, the Governor, answered: "Well, about a million and a half." Finding that our demands for land alongside the proposed road and telegraph were not acceptable to the Governor and Court of the Hudson's Bay Company, we had nothing for it but either to drop the Pacific transit proposal, after many months of labour and trouble, or to take the bold course of accepting the challenge of those gentlemen, and negociating for the purchase of all their property and rights. Before making a decided move, however, I had many anxious discussions with the Duke as to who the real purchaser should be. My strong, and often urged, advice was, that whoever the medium of purchase might be, Great Britain should take to the bargain. I showed that at the price named there could be no risk of loss; and I developed alternative methods of dealing with the question:--That the fur trade could be separated from the land and rights, and that a new joint stock company could be organized to take over the trading posts, the fleet of ships, the stock of goods, and the other assets, rights, and privileges affecting trade, and that such a company would probably pay a rental--redeemable over a term of years, were that needful to meet Mr. Gladstone's notions--of 3 or 3-1/2 per cent, on 800,000_l_., leaving only 700,000_l_. as the value of a territory bigger than Russia in Europe. Such a company would have to raise additional capital of its own to modernize its business, to improve the means of intercourse between its posts, and to cheapen and expedite the transport to and fro of its merchandise. I carefully described the nature of these changes and all that they involved. The Duke seemed to favour this idea. Then I pointed out that, if desired, a land company could be organized in England, Canada, and the United States, which, on a similar principle of rental and redemption, might take over the lands--leaving a reserve of probably a fourth of the whole as the, unpaid for, property of the Government--at the price of 700,000_l_. If these proposals succeeded, then all the country would have to do was to lend 1,500,000_l_. on such security as could be offered, ample, in each case, in my opinion. But I said it must be a condition, if these plans were adopted, to erect the Hudson's Bay territory into a Crown Colony, like British Columbia, and to govern it on the responsibility of the Empire.