4

should assume that Her Majesty's Government had undertaken to act upon the principles set forth in the rules which the American Commissioners had proposed, viz. :

That a neutral Government is bound, first, to use due diligence to prevent the fitting out, arming, or equipping, within its jurisdiction, of any vessel which it has reasonable ground to believe is intended to cruise or carry on war against a Power with which it is at peace; and also to use like diligence to prevent the departure from its jurisdiction of any vessel intended to cruise or carry on war as above, such vessel having been specially adapted, in whole or in part, within such jurisdiction, to warlike use.

Secondly. Not to permit or suffer either belligerent to make use of its ports or waters as the base of naval operations against the other, or for the purpose of the renewal or augmentation of military supplies or arms, or the recruitment of men.

Thirdly. To exercise due diligence in its own ports or waters, and as to all persons within its jurisdiction, to prevent any violation of the foregoing obligations and duties.

It being a condition of this undertaking that these obligations should in future be held to be binding internationally between the two countries.

It was also settled that in deciding the matters submitted to him, the Arbitrator should be governed by the foregoing rules, which had been agreed upon as rules to be taken as applicable to the case, and by such principles of international law, not inconsistent therewith, as the Arbitrator should determine to have been applicable to the

case.

The Joint High Commission then proceeded to consider the form of submission and the manner of constituting a tribunal of arbitration.

At the Conferences on the 6th, 8th, 9th, 10th, and 12th of April, the Joint High Commission considered and discussed the form of submission, the manner of the award, and the mode of selecting the Arbitrators.

The American Commissioners, referring to the hope which they had expressed on the 8th of March, inquired whether the British Commissioners were prepared to place upon record an expression of regret by Her Majesty's Government for the depredations committed by the vessels whose acts were now under discussion; and the British Commissioners replied that they were authorized to express, in a friendly spirit, the regret felt by Her Majesty's Government for the escape, under whatever circumstances, of the "Alabama" and other vessels from British ports, and for the depredations committed by those vessels.

The American Commissioners accepted this expression of regret as very satisfactory to them and as a token of kindness, and said that they felt sure it would be so received by the Government and people of the United States.

In the Conference on the 13th of April, the Treaty Articles I to XI were agreed to.

ARTICLES XII To XVII.

At the Conference on the 4th March it was agreed to consider the subjects referred to the Joint High Commission by the respective Governments in the order in which they appeared in the correspondence between Sir Edward Thornton and Mr. Fish, and to defer the consideration of the adjustment of "all other claims, both of British subjects and citizens of the United States, arising out of acts committed during the recent civil war in this country," as described by Sir Edward Thornton in his letter of February 1, until the subjects referred to in the previous letters should have been disposed of.

The American Commissioners said that they supposed that they were right in their opinion that British laws prohibit British subjects from owning slaves; they therefore inquired whether any claim for slaves, or for alleged property or interest in slaves, can or will be presented by the British Government, or in behalf of any British subject, under the Treaty now being negotiated, if there be in the Treaty no express words excluding such claims.

The British Commissioners replied, that by the law of England British subjects had long been prohibited from purchasing or dealing in slaves, not only within the dominions of the British Crown, but in any foreign country; and that they had no hesitation in saying that no claim on behalf of any British subject, for slaves or for any property or interest in slaves, would be presented by the British Government.

Referring to the paragraph in Sir Edward Thornton's letter of January 26, relating to "the mode of settling the different questions which have arisen out of the Fisheries, as well as all those which affect the relations of the United States towards Her Majesty's Possessions in North America," the British Commissioners proposed that the Joint High Commission should consider the claims for injuries which the people of Canada had suffered from what were known as the Fenian raids.

The American Commissioners objected to this, and it was agreed that the subject might be brought up again by the British Commissioners in connection with the subjects referred to by Sir Edward Thornton in his letter of February 1.

At the conference on the 14th of April the Joint High Commission took into consideration the subjects mentioned by Sir Edward Thornton in that letter.

The British Commissioners proposed that a Commission for the consideration of these claims should be appointed, and that the Convention of 1853 should be followed as a precedent. This was agreed to, except that it was settled that there should be a third Commissioner instead of an Umpire.

At the Conference on the 15th of April, the Treaty Articles XII to XVII were agreed to.

At the Conference on the 26th of April the British Commissioners again brought before the Joint High Commission the claims of the people of Canada for injuries suffered from the Fenian raids. They said that they were instructed to present these claims, and to state that they were regarded by Her Majesty's Government as coming within the class of subjects indicated by Sir Edward Thornton in his letter of January 26, as subjects for the consideration of the Joint High Commission.

The American Commissioners replied, that they were instructed to say that the Government of the United States did not regard these clnims as coming within the class of subjects indicated in that letter as subjects for the consideration of the Joint High Commission, and that they were without any authority from their Government to consider them. They therefore declined to do so.

The British Commissioners stated that, as the subject was understood not to he within the scope of the instructions of the American Commissioners, they must refer to their Government for further instructions upon it.

At the Conference on the 3rd May the British Commissioners stated that they were instructed by their Government to express their regret that the American Commissioners were without authority to deal with the question of the Fenian raids, and they inquired whether that was still the case.

The American Commissioners replied, that they could see no reason to vary the reply formerly given to this proposal; that in their view the subject was not embraced in the scope of the correspondence between Sir Edward Thornton and Mr. Fish under either of the letters of the former; and that they did not feel justified in entering upon the consideration of any class of claims not contemplated at the time of the creation of the present Commission, and that the claims now referred to did not commend themselves to their favour.

The British High Commissioners said that under these circumstances they would not urge further that the settlement of these claims should be included in the present Treaty, and that they had the less difficulty in doing so as a portion of the claims were of a constructive and inferential character.

ARTICLES XVIII TO XXV.

At the Conference on the 6th of March the British Commissioners stated that they were prepared to discuss the question of the Fisheries, either in detail or generally, so as either to enter into an examination of the respective rights of the two countries under the Treaty of 1818, and the general law of nations, or to approach at once the settlement of the question on a comprehensive basis.

The American Commissioners said, that with the view of avoiding the discussion of matters which subsequent negotiation might render it unnecessary to enter into, they thought it would be preferable to adopt the latter course, and inquired what, in that case, would be the basis which the British Commissioners desired to propose.

The British Commissioners replied, that they considered that the Reciprocity Treaty of 5th June, 1854, should be restored in principle.

The American Commissioners declined to assent to a renewal of the former Reciprocity Treaty.

The British Commissioners then suggested that, if any considerable modification were made in the Tariff arrangements of that Treaty, the coasting trade of the United States and of Her Britannic Majesty's possessions in North America should be reciprocally thrown open, and that the navigation of the River St. Lawrence and of the Canadian Canals should be also thrown open to the citizens of the United States on terms of equality with British subjects.

The American Commissioners declined this proposal, and objected to a negotiation on the basis of the Reciprocity Treaty. They said that that Treaty had proved unsatisfactory to the people of the United States, and consequently had been terminated by notice from the Government of the United States, in pursuance of its provisions. Its renewal was not in their interest, and would not be in accordance with the sentiments of their people. They further said that they were not at liberty to treat of the opening of the coasting trade of the United States to the subjects of Her Majesty residing in her possessions in North America. It was agreed that the questions relating to the navigation of the River St. Lawrence, and of the Canadian Canals, and to other commercial questions affecting Canada, should be treated by themselves.

The subject of the Fisheries was further discussed at the Conferences on the 7th, 20th, 22nd, and 25th of March. The American Commissioners stated that if the value of the inshore fisheries could be ascertained, the United States might prefer to purchase, for a sum of money, the right to enjoy, in perpetuity, the use of these inshore fisheries in common with British fishermen, and mentioned 1,000,000 dollars as the sum they were prepared to offer. The British Commissioners replied that this offer was, they thought, wholly inadequate, and that no arrangement would be acceptable of which the admission into the United States, free of duty, of fish the produce of the British fisheries, did not form a part; adding that any arrangement for the acquisition by purchase of the inshore fisheries in perpetuity was open to grave objection.

The American Commissioners inquired whether it would be necessary to refer any arrangement for purchase to the Colonial or Provincial Parliaments.

The British Commissioners explained that the fisheries within the limits of maritime jurisdiction were the property of the several British Colonies, and that it would be necessary to refer any arrangement which might affect Colonial property or rights to the Colonial or Provincial Parliaments; and that legislation would also be required on the part of the Imperial Parliament. During these discussions the British Commissioners contended that these inshore fisheries were of great value, and that the most satisfactory arrangement for their use would be a reciprocal tariff arrangement, and reciprocity in the coasting trade; and the American Commissioners replied that their value was over-estimated; that the United States desired to secure their enjoyments, not for their commercial or intrinsic value, but for the purpose of removing a source of irritation; and that they could hold out no hope that the Congress of the United States would give its consent to such a tariff

arrangement as was proposed, or to any extended plan of reciprocal free admission of the products of the two countries; but that, inasmuch as one branch of Congress had recently, more than once, expressed itself in favour of the abolition of duties on coal and salt, they would propose that coal, salt, and fish be reciprocally admitted free; and that, inasmuch as Congress had removed the duty from a portion of the lumber heretofore subject to duty, and as the tendency of legislation in the United States was towards the reduction of taxation and of duties in proportion to the reduction of the public debt and expenses, they would further propose that lumber be admitted free from duty from and after the 1st of July, 1874, subject to the approval of Congress, which was necessary on all questions affecting import duties.

The British Commissioners, at the Conference on the 17th of April, stated that they had referred this offer to their Government, and were instructed to inform the American Commissioners that it was regarded as inadequate, and that Her Majesty's Government considered that free lumber should be granted at once, and that the proposed tariff concessions should be supplemented by a money payment.

The American Commissioners then stated that they withdrew the proposal which they had previously made of the reciprocal free admission of coal, salt, and fish, and of lumber after July 1, 1874; that that proposal had been made entirely in the interest of a peaceful settlement, and for the purpose of removing a source of irritation and of anxiety; that its value had been beyond the commercial or intrinsic value of the rights to have been acquired in return; and that they could not consent to an arrangement on the basis now proposed by the British Commissioners; and they renewed their proposal to pay a money equivalent for the use of the inshore fisheries. They further proposed that, in case the two Governments should not be able to agree upon the sum to be paid as such an equivalent, the matter should be referred to an impartial Commission for determination.

The British Commissioners replied, that this proposal was one on which they had no instructions, and that it would not be possible for them to come to any arrangement except one for a term of years and involving the concession of free fish and fish-oil by the American Commissioners; but that if free fish and fish-oil were conceded, they would inquire of their Government whether they were prepared to assent to a reference to arbitration as to money payment.

The American Commissioners replied, that they were willing, subject to the action of Congress, to concede free fish and fish-oil as an equivalent for the use of the inshore fisheries, and to make the arrangement for a term of years; that they were of opinion that free fish and fish-oil would be more than an equivalent for those fisheries, but that they were also willing to agree to a reference to determine that question and the amount of any money payment that might be found necessary to complete an equivalent, it being understood that legislation would be needed before any payment could be made.

The subject was further discussed in the Conferences of April 18 and 19, and the British Commissioners having referred the last proposal to their Government and received instructions to accept it, the Treaty Articles XVIII to XXV were agreed to at the Conference on the 22nd of April.

ARTICLES XXVI TO XXXIII.

At the Conference en the 6th of March the British Commissioners proposed that the Reciprocity Treaty of June 5, 1854, should be restored in principle, and that, if any considerable modifications in the Tariff arrangements in force under it were made, the coasting trade of the United States and of Her Britannic Majesty's Possessions in North America should be reciprocally thrown open, and that the navigation of the River St. Lawrence and of the Canadian Canals should be thrown open to the citizens of the United States on terms of equality with British subjects.

The American Commissioners declined this proposal, and in the subsequent negotiations the question of the Fisheries was treated by itself.

At the Conference on the 17th March the Joint High Commission considered the subject of the American improvement of the navigation of the St. Clair Flats.

At the Conference on the 18th March the questions of the navigation of the River St. Lawrence and the Canals and the other subjects connected therewith were taken up. The American Commissioners proposed to take into consideration the question of transit of goods in bond through Canada and the United States, which was agreed to.

The British Commissioners proposed to take into consideration the question of opening the coasting trade of the lakes reciprocally to each party, which was declined. On the proposal of the British Commissioners it was agreed to take the question of transhipment into consideration.

The British Commissioners proposed to take into consideration the reciprocal registration of vessels, as between the Dominion of Canada and the United States, which was declined.

At the Conference on the 23rd March the transhipment question was discussed and postponed for further information on the motion of the American Commissioners.

The transit question was discussed, and it was agreed that any settlement that might be made should include a reciprocal arrangement in that respect for the period for which the Fishery Articles should be in force.

The question of the navigation of the River St. Lawrence and the Canals was taken up.

The British Commissioners stated that they regarded the concession of the navigation of Lake Michigan as an equivalent for the concession of the navigation of the River St. Lawrence.

As to the Canals they stated that the concession of the privilege to navigate them in their present condition, on terms of equality with British subjects, was a much greater concession than the corresponding use of the Canals offered by the United States.

They further said that the enlargement of the Canals would involve the expenditure of a large amount of money, and they asked what equivalent the American Commissioners proposed to give for the surrender of the right to control the tolls for the use of the Canals, either in their present state or after enlargement.

The American Commissioners replied that, unless the Welland Canal should be enlarged so as to accommodate the present course of trade, they should not be disposed to make any concessions; that in their opinion the citizens of the United States could now justly claim to navigate the River St. Lawrence in its natural state, ascending and descending, from the 45th parallel of north latitude, where it ceases to form the boundary between the two countries, from, to, and into the sea; and they could not concede that the navigation of Lake Michigan should be given or taken as an equivalent for that right; and they thought that the concession of the navigation of Lake Michigan and of the Canals offered by them was more than an equivalent for the concessions as to the Canadian Canals which were asked. They proposed, in connection with a reciprocal arrangement as to transit and transhipment, that Canada should agree to enlarge the Welland and St. Lawrence Canals, to make no discriminating tolls, and to limit the tolls to rates sufficient to maintain the Canals, pay a reasonable interest on the cost of construction and enlargement, and raise a sinking fund for the repaying within a reasonable time the cost of enlargement; and that the navigation of the River St. Lawrence, the Canadian Canals, the Canals offered by the United States, and Lake Michigan should be enjoyed reciprocally by citizens of the United States and by British subjects. This proposal was declined by the British Commissioners, who repeated that they did not regard the equivalent offered by the United States as at all commensurate with the concessions asked from Great Britain.

At the Conference on the 27th of March the proposed enlargement of the Canadian Canals was further discussed. It was stated on the part of the British Commissioners that the Canadian Government were now considering the expediency of enlarging the capacity of the Canals on the River St. Lawrence, and had already provided for the enlargement of the Welland Canal, which would be undertaken without delay.