The secretary of the United States for the department of foreign affairs, to whom was referred a letter to him from the minister of the United Netherlands, of the 20th of February last, enclosing a note of the same date, complaining of an act of the legislature of

the commonwealth of Virginia exempting French brandies imported in French and American vessels from certain duties, to which the like commodities imported in Dutch vessels are left liable, as being contrary to the second article in their treaty with the United States, stipulating that they shall be treated as the most favoured nation, having reported,

That although he has no official knowledge of the said act, yet from the account given of it in the said note, and from other information, he believes that such an act exists.

The second and third articles in the treaty with France respect this subject. The second is in these words: "The most christian king and the United "States engage mutually not to grant any particular "favour to other nations in respect of commerce and "navigation, which shall not immediately become com"mon to the other party, who shall enjoy the same "favour freely, if the concession was freely made, or on "allowing the same compensation, if the concession "was conditional.”

The second article in the treaty with the United Netherlands on the same subject is in these words, viz. "The subjects of the said states general of the Unit"ed Netherlands shall pay in the ports, havens, roads, "countries, islands, cities or places of the United "States of America, or any of them, no other nor "greater duties or imposts, of whatever nature or de"nomination they may be, than those which the nations. "the most favoured are or shall be obliged to pay; "and they shall enjoy all the rights, liberties, privileges, immunities and exemptions in trade, naviga

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❝tion and commerce, which the said nations do or "shall enjoy, whether in passing from one port to ano"ther in the said states, or in going from any of those "ports to any foreign port of the world, or from any "foreign port of the world to any of those ports."

It is observable that this article takes no notice of cases where compensation is granted for privileges. Reason and equity, however, in the opinion of your secretary, will supply this deficiency, and give to both articles exactly the same construction and operation in those cases. Where a privilege is gratuitously granted, the nation to whom it is granted becomes in respect to that privilege a favoured nation, and from that circumstance both the articles in question deduce claims to the like favour; but where the privilege is not gratuitous, but rests on compact, in such case the favour, if any there be, does not consist in the privilege yielded, but in the consent to make the contract by which it is yielded for bargains may, from their objects and circumstances, be sometimes so made as that the consent to make them may be deemed a favour. The favour, therefore, of being admitted to make a similar bargain, is all that in such cases can reasonably be demanded under the article. Besides, it would certainly be inconsistent with the most obvious principles of justice and fair construction, that because France purchases, at a great price, a privilege of the United States, that therefore the Dutch shall immediately insist, not on having the like privileges at the like price, but without any price at all.

Supposing that this reasoning is just, and that the article ought to be so construed, then the first question

that presents itself in the present case is, Whether the grant by Virginia to France of the privilege in question is gratuitous or not.

From the tenor of the act it does appear to your secretary to be gratuitous, and not to partake in the least of the nature of compact.

If this be the true construction of the act, then, in the opinion of your secretary, France did thereupon become, in respect to the privilege granted, a favoured nation; and the Dutch, having a right to be treated as the most favoured nation, have a just claim to be favoured in like manner.

But they are not favoured in like manner, and they complain of it; and hence arises another question, viz. What is to be done?

According to the present state of our national government, the act of Virginia will doubtless continue to exist; and the Dutch will continue to pay more duties than the French on brandies imported there, until the act is repealed.

However well disposed Virginia may be, and doubtless is, to correct every mistake, yet some time must elapse before the next session of their legislature; and therefore the repeal of the act cannot take place immediately.

Your secretary thinks the two following resolves would be proper, viz.

Resolved, That whenever any of these states shall think proper to grant a favour to any foreign nation, such state ought to extend it to such other foreign nations as, by treaties with the United States, are to be treated as the most favoured nations.

Resolved, That a copy of the above resolution, and of the representation of the minister of the United Netherlands, be transmitted to the commonwealth of Virginia, to the end that the legislature of that commonwealth may take the earliest opportunity of revising the act of which the said minister complains, and rendering the same perfectly consistent with the treaty subsisting between the United States and the United Netherlands, and of causing to be repaid whatever extra duties may, in virtue of the said act, be exacted on the brandies there imported in Dutch vessels during the operation of the same.

As the United States have at present no minister or representative at the Hague, through whom it would be most proper to convey whatever Congress might think proper to communicate to their high mightinesses on the occasion, your secretary thinks it would be well to quiet the minds of the states general on this subject, by directing that copies of the aforegoing resolutions be given to their minister; and that he be requested to assure their high mightinesses that Congress are well persuaded that the omission of Virginia in not extending to them the favour granted to France, was entirely inadvertent, and not designed; and they flatter themselves, that the said resolutions, and the respect with which they will be treated by Virginia, will fully manifest to their high mightinesses the good faith and friendship of the United States in general, and of Virginia in particular.

Your secretary thinks he ought not to close this report without adding a few remarks which the conside