Under date of November 3, 1858, Lord Caernarvon, Secretary of State for the Colonies, by the direction of Sir E.B. Lytton, returned a dispatch, the tenor of which is a key not only to Sir Edward's line of policy, but, in all probability, to that of his successor, the Duke of Newcastle. Lord Caernarvon began by expressing the disappointment and regret with which Sir E.B. Lytton had received the communication, containing, if he understood its tenor correctly, a distinct refusal on the part of the Hudson's Bay Company to entertain any proposal with a view of adjusting the conflicting claims of Great Britain, of Canada, and of the Company, or to join with her Majesty's government in affording reasonable facilities for the settlement of the questions in which Imperial no less than Colonial interests were involved. It had been his anxious desire to come to some equitable and conciliatory agreement, by which all legitimate claims of the Company should be fairly considered with reference to the territories or the privileges they might be required to surrender. He suggested that such a procedure, while advantageous to the interests of all parties, might prove particularly for the interest of the Hudson's Bay Company. "It would afford a tribunal preeminently fitted for the dispassionate consideration of the questions at issue; it would secure a decision which would probably be rather of the nature of an arbitration than of a judgment; and it would furnish a basis of negotiation on which reciprocal concession and the claims for compensation could be most successfully discussed." With such persuasive reiteration, Lord Caernarvon, in the name and at the instance of Sir E.B. Lytton, insisted that the wisest and most dignified course would be found in an appeal to and a decision by the Judicial Committee of the Privy Council, with the concurrence alike of Canada and the Hudson's Bay Company. In conclusion, the Company were once more assured, that, if they would meet Sir E.B. Lytton in finding the solution of a recognized difficulty, and would undertake to give all reasonable facilities for trying the validity of their disputed charter, they might be assured that they would meet with fair and liberal treatment, so far as her Majesty's government was concerned; but if, on the other hand, the Company persisted in declining these terms, and could suggest no other practicable mode of agreement, Sir E.B. Lytton held himself acquitted of further responsibility to the interests of the Company, and proposed to take the necessary steps for closing a controversy too long open, and for securing a definitive decision, due alike to the material development of British North America and to the requirements of an advancing civilization.