proposal a favorable reply was received from Mr. (afterwards Sir George) Simpson and a meeting between the governors of the companies was arranged to complete the agreement." The meeting took place at Hamburg about February 1, 1839; and, on February 6, the lease was signed by the representatives of the companies."

By the terms of this instrument "the whole mainland coast and Interior country belonging to Russia" situated between Cape Spencer and latitude 54° 40′ was leased for the term of ten years to the Hudson's Bay Company, "together with the free navigation and trade of the Waters of that Coast, and Interior Country situated to the Southward and Eastward of a supposed line to be drawn from the said Cape Spencer to Mount Fair Weather". The Russian American Company also included in the lease Fort Dionysius (termed Point Highfield in the instrument) situated on Wrangell Island, and further agreed not to trade in “any of the Bays, Inlets, Estuaries, rivers or lakes in that line of the Coast and in that Interior Country". For this lease the Hudson's Bay Company was to pay 2000 seasoned land otter skins annually and to relinquish the Dryad claim. The agreement contained certain other provisions, by which the British company was to furnish the Russian colonies with supplies at fixed charges.

The chief reason for the Russian American Company entering into this arrangement was the pressure brought to bear upon it by the Imperial Government in demanding a settlement of the Dryad claim, which the British representatives at St. Petersburg had been urging vigorously upon Count Nesselrode. That it secured certain commercial benefits was incidental.

The Hudson's Bay Company apparently had two reasons for desiring the lease; (1) it secured thereby the rivers of the lisière in which it could trap and hunt the river beaver, which were found only in fresh water; and (2) it also obtained control of the entrances to the inland territory of Great Britain east of the line of demarcation.

(1) The skins of the river beaver had in 1832 become the principal article of the fur trade in the southern part of the Russian possessions, and formed the unit of barter. In this particular trade the Americans in their vessels, and the British, operating from their recently estab

lished post at Naas, were the chief competitors." In the desire to secure these skins Mr. Ogden in charge of the Naas station attempted to make an arrangement to supply the Russians with merchandise to be paid for with river beavers." It would appear to have been this particular trade which induced the Hudson's Bay Company to attempt the erection of a post on the Stikine River, which attempt brought about the affair of the Dryad, for Baron Wrangell reported, before that event, that he particularly feared the navigation of the rivers by the Hudson's Bay traders and hunters," for it is the region neighboring upon the rivers which furnishes us with beavers and not the coast." A year later he reported that "without doubt Mr. Ogden's only aim is to occupy the region where the natives living on the coast obtain river beavers, and then with their Canadians to hunt for these furs. It is in this manner that the Hudson's Bay Co. obtains the greater part of their furs wherever they have settlements, since they have almost no need whatever to trade with the natives." The Russian governor proceeded to show how the Canadian trappers carried on their operations in taking the beaver, and asked "Does not this mode of hunting resemble the robbery of a band of brigands who trample on the rights and property of the aborigines? If the Hudson's Bay Co. are allowed to trap river beavers in all the localities where the coast Kolosh of our possessions obtained their furs for trade, then the Kolosh will be brought to the deepest misery."d To secure the right to hunt and trap in the rivers of the lisière was earnestly sought by the Hudson's Bay Company.

(2) The Stikine Indians, besides hunting in their river and streams, carried on with the tribes further inland an extensive traffic in land furs, which they in turn sold to the white traders, and the same methods were employed by the Chilkats and other coast Indians. The mutual trading privileges granted by the treaties of 1824 and 1825 had expired, and in spite of the efforts of the United States minister at St. Petersburg they had not been renewed. Thus the Russians had substantially monopolized this branch of the trade in these regions since February, 1835, when the British right of navigation and traffic within the Russian possessions ceased.

@ U.S. Counter Case, App., p. 1; U. S. Case,

App., p. 265.

bU. S. Counter Case, App., p. 2.

U. S. Case, App., p. 267.

dIbid.,

p. 277.

Ibid., pp. 273, 366.
JU. S. Case, pp. 69–72.

To obtain control of this trade in land furs was, therefore, desired by the Hudson's Bay Company's factor at Naas, for he was thoroughly familiar with its profitable character.

The lease of the mainland of the Russian possessions between Cape Spencer and 54 40', was negotiated by Governor Simpson for these two reasons. That they were deemed of value to the company is evident from the fact that in order to obtain them the Hudson's Bay Company was willing to withdraw a claim of £22,150 and to pay annually for the monopoly of the trade 2000 land otter skins, equivalent to over £2000. The valuable character of the rights secured is further evidenced by the efforts of an American company, through the minister of the United States at St. Petersburg, to obtain a lease (that of the Hudson's Bay Company being about to expire) for which the Americans offered to pay five per cent of their gross receipts from the trade."

The United States asserts that these facts conclusively establish that the Hudson's Bay Company considered all the inlets and estuaries of the mainland between Cape Spencer and 54° 40′ to be under Russian dominion, together with a considerable extent of the rivers emptying into the sea in that region.

If Great Britain secured by the treaty of 1825 the heads of all the principal inlets and the rivers, except the estuary of the Stikine, as now claimed in the British Case, the Hudson's Bay Company would have had no object in leasing the lisière, much less in abandoning a large claim and paying a considerable rental for the privilege. British subjects had the perpetual right to navigate the rivers crossing the Russian mainland; they could, therefore, enter these for the purpose of hunting the river beaver, since the habitat of the animal was fresh water streams and ponds, and all the fresh water of the coast was, according to the present British contention, within British territory.

If Great Britain owned the heads of the main inlets along the coast, nothing was to be gained by leasing from Russia the promontories and precipitous outer shores of the mainland. The routes from the interior, by which the Coast Indians carried on their trade in furs with the tribes inland, connected with the heads of the larger inlets, the best example being at the extremity of the Lynn Canal where trails led across the mountains from the Chilkat and Chilkoot Inlets.

a British Case, App., p. 151.
26626- -4

U. S. Counter Case, App., p. 34.

The Hudson's Bay Company, if the line of demarcation contended for in the British Case was the correct one, would have gained no advantage by the lease that it did not already possess. The reciprocal trade privilege had expired and it could have retained a monopoly of the trade in river beaver and land furs, without paying large sums for the exclusive right. That the company did not possess such monopoly except by title from Russia through the lease is apparent.

It is asserted in the British Case" that the lease of the lisière to the Hudson's Bay Company "cannot be put forward as affecting the boundary", that the "lease sets up no boundary", and that it is "impossible to detect the recognition of any sovereignty on the part of Russia, except over the portion of the territory given her by the Treaty". To the last proposition the United States agrees, but from the others it dissents. It has already been shown that a boundary was set up in the lease, the southern boundary of 54° 40′ north latitude. It is submitted that the lease, interpreted by the acts and utterances of the parties, directly bears upon other portions of the line in controversy.

Two years after Governor Simpson signed the lease at Hamburg he visited the ceded territory. A narrative of his journey was published in 1847, in which he mentioned the lease, and added: “Russia, as the reader is, of course, aware possesses on the mainland, between lat. 54° 40′ and lat. 60, only a strip, never exceeding thirty miles in depth; and this strip, in the absence of such an arrangement as has just been mentioned, renders the interior country comparatively useless to England". If Great Britain had possessed the heads of the inlets, Governor Simpson would never have written the last clause of the foregoing sentence.

The summer before the lease was executed the Russians made surveys of the mouth of the Chilkat River and of Taku Inlet. This region came within the leased territory and, therefore, the Russian American Company was prohibited from trading with the natives of that region. The chief factor of the Hudson's Bay Company in 1840 complained to the Russian governor that he had been informed that the Indians in the neighborhood of Cross Sound had been selling their peltry to a Russian trading vessel, and that, if it was true, it was sufficient reason for the lessee to withhold its rental. This charge Governor Etholine ap. 85. U. S. Case, App., p. 318. CU. S. Case, pp. 80, 81.

denied, but stated that, through some of the tribes living on the islands, furs had been purchased which came originally from Chilkat, and that these would be kept for the Hudson's Bay Company." Later in the year, he wrote: "After June 1, there came only one canoe here from Chilcat, from which we bought 18 river beavers (sent to you with the last steamer)."

This action of the Russian governor was in compliance with the provisions of the lease, that the Russian American Company "shall not have any communication for the purposes of trade with any of the tribes of Indians occupying or inhabiting that Coast or Interior Country [described as between Cape Spencer and 54° 40′]. And shall not receive in trade, barter or otherwise any of the Furs, Peltries or produce whatsoever of the Mainland Coast or Interior Country already described." e If Chilkat was not within the leased "mainland coast and Interior country belonging to Russia," then the Russian American Company was not violating its covenants by trading through other Indians for the furs secured there; and, if Chief Factor Douglass had not, likewise, understood the head of Lynn Canal to be within the Russian possessions, he would not have entered his complaint against the Russian traders. Both parties to the lease thus recognized that it embraced that inlet and its branches.

The agreement was renewed in 1849, the Russian American Company having secured imperial sanction for its continuance and was subsequently extended by several renewals until the territory was transferred to the United States.

In the year 1857 a select committee of the House of Commons conducted an investigation of the affairs of the Hudson's Bay Company. During the sessions of the committee a map was produced, which was later published as part of the report of the committee (Map No. 35 in the Atlas accompanying this Counter Case). The territories occupied by the company were an essential part of the investigation, and this map was referred to and relied upon constantly. It distinctly shows the extent of the lisière leased from Russia, the boundary line being drawn about all the inlets and approximately ten marine leagues from their heads.