regret that Her Majesty's Government acquiesced in the omission of these claims from the general settlement of outstanding questions between Great Britain and the United States, and the Committee of the Privy Council, while fully participating in that regret, must add the fact that this Fenian organization is still in full vigour, and that there seems no reason to hope that the United States Government will perform its duty as a friendly neighbour any better in the future than in the past, leads them to entertain a just apprehension that the outstanding subject of difference with the United States is the one of all others which is of special importance to the Dominion. They must add that they are not aware that during the existence of this Fenian organization, which for nearly seven years has been a cause of irritation and expense to the people of Canada, Her Majesty's Government have made any vigorous effort to induce the Government of the United States to perform its duty to a neighbouring people who earnestly desire to live with them on terms of amity, and who during the civil war loyally performed all the duties of neutrals to the expressed satisfaction of the Government of the United States. On the contrary, while in the opinion of the Government, and the entire people of Canada, the Government of the United States neglected, until much too late, to take the necessary measures to prevent the Fenian invasion of 1870. Her Majesty's Government hastened to acknowledge by cable telegram, the prompt action of the President, and to thank him for it. The Committee of the Privy Council will only add on this painful subject that it is one on which the greatest unanimity exists among all classes of the people throughout the Dominion, and the failure of the High Commissioners to deal with it has been one cause of the prevailing dissatisfaction with the Treaty of Washington. The Committee of the Privy Council will proceed to the consideration of the other subject of dissatisfaction in Canada, viz., the cession to the citizens of the United States of the right to the use of the inshore fisheries, in common with the people of Canada. The Earl of Kimberley after observing that the Canadian Government took the initiative in suggesting that a joint British and American Commission should be appointed with a view to settle the disputes which had arisen as to the interpretation of the Treaty of 1818, proceeds to state, that "the causes of the difficulty lay deeper than any question of inter"pretation, that the discussion of such points as the correct definition of bays could not "lead to a friendly agreement with the United States," and that "it was necessary there"fore to endeavour to find an equivalent which the United States might be willing to "give in return for the fishery privileges." In the foregoing opinion of the Earl of Kimberley, the Committee of the Privy Council are unable to concur, and they cannot but regret that no opportunity was afforded them of communicating to Her Majesty's Government their views on a subject of so much importance to Canada prior to the meeting of the Joint High Commission.

When the Canadian Government took the initiative of suggesting the appointment of a Joint British and American Commission they never contemplated the surrender of their territorial rights, and they had no reason to suppose that Her Majesty's Government entertained the sentiments expressed by the Earl of Kimberley in his recent despatch. Had such sentiments been expressed to the delegate appointed by the Canadian Government to confer with His Lordship a few months before the appointment of the Commission it would at least have been in their power to have remonstrated against the cession of the inshore fisheries, and it would, moreover, have prevented any member of the Canadian Government from acting as a member of the Joint High Commission unless on the clear understanding that no such cession should be embodied in the treaty without their consent. The expediency of the cession of a common right to the inshore fisheries has been defended on the ground that such a sacrifice on the part of Canada should be made in the interests of peace.

The Committee of the Privy Council, as they have already observed, would have been prepared to recommend any necessary concession for so desirable an object, but they must remind the Earl of Kimberley that the original proposition of Sir Edward Thornton, as appears by his letter of 26th January was, that "a friendly and complete understanding

should be come to between the two Governments, as to the extent of the rights which belong to the citizens of the United States and Her Majesty's subjects respectively, with reference to the fisheries on the coasts of Her Majesty's Possessions in North America." In his reply, dated 30th January last, Mr. Secretary Fish informs Sir Edward Thornton that the President instructs him to say that "he shares with Her Majesty's Government the appreciation of the importance of a friendly and complete understanding between the two Governments with reference to the subjects specially suggested for the consideration of the proposed Joint High Commission." In accordance with the explicit understanding, thus arrived at between the two Government, Earl Granville issued instructions to Her Majesty's High Commission, which, in the opinion of the Committe of the Privy Council, covered the whole ground of controversy. The United States had never pretended to claim a right on the part of their citizens to fish within three marine miles of the coasts and bays, according to their limited definition of the latter term, and although the right to enjoy the use of the inshore Fisheries might fairly have been made the subject of negotiation, with the view of ascertaining whether any proper equivalents could be found for such a concession, the United States was precluded by the original correspondence from insisting on it as a condition of the Treaty. The abandonment of the exclusive right to the inshore Fisheries without adequate compensation was not therefore necessary in order to come to a satisfactory understanding on the points really at issue. The Committee of the Privy Council forbear from entering into a controversial discussion as to the expediency of trying to influence the United States to adopt a more liberal commercial policy. They must, however, disclaim most emphatically the imputation of desiring to imperil the peace of the whole empire in order to force the American Government to change its commerical policy. They have for a considerable time back ceased to urge the United States to alter their commercial policy; but they are of opinion that when Canada is asked to surrender her inshore Fisheries to foreigners, she is fairly entitled to name the proper equivalent. The Committee of the Privy Council may observe that the opposition of the Government of the United States to reciprocal free trade in the products of the two countries, was just as strong for some years prior to 1854, as it has been since the termination of the Reciprocity Treaty, and that the Treaty of 1854 was obtained chiefly by the vigorous protection of the Fisheries which preceded it, and that but for the conciliatory policy on the subject of the Fisheries, which Her Majesty's Government induced Canada to adopt after the abrogation of the Treaty of 1854, by the United States, it is not improbable that there would have been no difficulty in obtaining its renewal. The Committee of the Privy Council have adverted to the policy of Her Majesty's Government because the Earl of Kimberley has stated that there is no difference in principle between a money payment and "the system of licenses calculated at so many dollars a ton, which was adopted by the Colonial Government for several years after the termination of the Reciprocity Treaty." Reference to the correspondence will prove that the license system was reluctantly adopted by the Canadian Government, as a substitute for the still more objectionable policy pressed upon it by Her Majesty's Government, it having been clearly understood that the arrangement was of a temporary character. In his despatch of the 3rd March, 1866, Mr. Secretary Cardwell observed :-" Her Majesty's Government do not feel disinclined to allow the United States, for the season of 1866, the freedom of fishing granted to them in 1854, on the distinct understanding that unless some satisfactory arrangement between the two countries be made during the course of the year this privilege will cease, and all concessions made in the Treaty of 1854, will be liable to be withdrawn." The principle of a money payment for the concession of territorial rights has ever been most repugnant to the feelings of the Canadian people, and has only been entertained in deference to the wishes of the Imperial Government. What the Canadians were willing under the circumstances to accept as an equivalent, was the concession of certain commercial advantages, and it has therefore been most unsatisfactory to them that Her Majesty's Government should have consented to cede the use of the inshore Fisheries to foreigners, for considerations which are deemed wholly inadequate.

The Committee of the Privy Council need not enlarge further on the objectionable

features of the treaty, as it bears on Canadian interests. These are admitted by many, who think that Canada should make sacrifices for the general interests of the Empire. The people of Canada, on the other hand, seem unable to comprehend that there is any existing necessity for the cession of the right to use their inshore fisheries without adequate compensation. They have failed to discover that in the settlement of the so called Alabama Claims, which was the most important question in dispute between the two nations, England gained such advantages, as to be required to make further concessions at the expense of Canada, nor is there anything in the Earl of Kimberley's despatch to support such a view of the question. The other parts of the treaty are equally, if not more advantageous to the United States than to Canada, and the fishery question must consequently be considered on its own merits; and if so considered no reason has yet been advanced to induce Canada to cede her inshore fisheries for what Her Majesty's Government have admitted to be an inadequate consideration. Having thus stated their views on the two chief objections to the late Treaty of Washington, the Committee of the Privy Council will proceed to the consideration of the correspondence between Sir Edward Thornton, and Mr. Fish, transmitted in the Earl of Kimberley's despatch of the 17th June, and of His Lordship's remarks thereon. This subject has already been under the consideration of the Committee of the Privy Couneil, and a report dated the 7th June, embodying their views on the subject was transmitted to the Earl of Kimberley by your Excellency. In his despatch of the 26th June, acknowledging the receipt of that report, the Earl of Kimberley refers to his despatch of the 17th of that month, and "trusts that the Canadian Government will on mature consideration "accede to the proposal of the United States Government, on this subject." The committee of the Privy Council, in expressing their adherence to their report of the 7th June, must add, that inapplicability of the precedent of 1854, under which the action of the Canadian Parliament was anticipated by the Government, to the circumstances now existing, appears to them manifest. The treaty of 1854 was negotiated with the concurrence of the Provincial Governments represented at Washington, and met with the general approbation of the people, whereas the fishery clauses of the late treaty were adopted against the advice of the Canadian Government and have been generally disapproved of in all parts of the Dominion. There can hardly be a doubt that any action on the part of the Canadian Government in anticipation of the decision of Parliament would increase the discontent which now exists. The Committee of the Privy Council request that Your Excellency will communicate to the Earl of Kimberley the views which they entertain on the subject of the Treaty of Washington in so far as it affects the interests of the Dominion.

(Certified)

WM. H. LEE,

Clerk Privy Council,

(Copy.-Canada-No. 561.)

The Secretary of State for the Colonies to the Governor General.

DOWNING STREET, 23rd November, 1871.

MY LORD,-Her Majesty's Government have not failed to consider with attention the Report of the Committee of the Privy Council of the Dominion on the Treaty of Washington, which was enclosed in Your Lordship's despatch, No. 143, of August 15th. I need scarcely say that Her Majesty's Government regret that your Ministers should have found so much to object to in the provisions of the Treaty, but they remain themselves of opinion, for the reasons which were fully stated in my despatch of June 17 last, that, looked at as a whole, the Treaty is beneficial to the interests of the Dominion.

I shall endeavor, as far as possible, to avoid entering into further discussion of the clauses of the Treaty which apply especially to Canada, as I cannot think that any

50

advantage would result from a prolonged controversy between the two Governments as to the details of the Treaty, and the manner in which the negotiation was conducted. There are, however, two or three statements in the Report which it is necessary that I should not leave unnoticed.

The Committee seem to be under the impression that the right to participate in the Colonial Inshore Fisheries has been conceded to the United States without the previous consent of Canada. On this I have to observe that provision has been made for obtaining the assent of Canada in the manner which is strictly in accordance with constitutional usage, namely by stipulating that the fishery articles shall not come into force without the previous assent of the Dominion Parliament. If the Crown were to conclude a similar Treaty as regards the Fisheries of the United Kingdom, the assent of the Imperial Parliament would be reserved in no other manner.

I must also point out that the Committee are under an entire misapprehension in supposing that the cession of the Fishery rights is to be made for "what Her Majesty's "Government have admitted to be an inadequate consideration." If you will refer to my Despatch of June 17th, you will find that it was there stated that "the reciprocal concession of free fishing with free import of fish and fish-oil together with the payment of such a sum of money as may fairly represent the excess of value of the Colonial over the American concession seems to Her Majesty's Government to be an equitable solution of the difficulty."

Lastly, I must advert to the statement that "when the Canadian Government took the initiative in suggesting the appointment of a Joint British and American Commission, they never contemplated the surrender of their territorial rights, and they had no reason to suppose that Her Majesty's Government entertained the sentiments expressed by the Earl of Kimberley in his recent despatch. Had such sentiments been expressed to the delegate appointed by the Canadian Government to confer with His Lordship a few months before the appointment of the Commission, it would at least have been in their power to have remonstrated against the cession of the inshore fisheries, and it would moreover have prevented any member of the Canadian Government from acting as a member of the Joint High Commission, unless on the clear understanding that no such cession should be embodied in the Treaty without their consent."

It is true, no doubt, that in the conversation which I had with Mr. Campbell on the subject of the appointment of a joint British and American Commission, I did not allude to the possibility of such a Commission leading to an arrangement by which United States' fishermen should be admitted to participation in the Colonial inshore fisheries; but I could not then anticipate that an extended negotiation embracing all the questions at issue between Great Britain and the United States would arise out of the proposal to appoint a Commission upon the Fisheries; and when the Joint High Commission was appointed, it was distinctly intimated through Your Lordship to Sir John Macdonald, with reference to the Fisheries, before he accepted the office of Commissioner, that it was impossible for Her Majesty's Government to pledge themselves to a foregone conclusion on any particular point before entering into the negotiation.

(Copy-No. 13.)

The Governor General to the Secretary of State for the Colonies. OTTAWA, January 22, 1872. MY LORD, I have the honor to enclose for Your Lordship's consideration a Minute of the Privy Council of the Dominion, which conveys the reply of that body to Your Lordship's Despatch, No. 561, of the 23rd of November last, and urges the request for an Imperial guarantee to a Canadian loan, not to exceed four millions, i.e., half the amount to be expended on the railway to the Pacific, and the enlargement of the St. Lawrence Canals.

20th January,

1872.

2. This proposal the Council recommend, as in their opinion, the best mode of adjusting all demands on the score of the Fenian claims, and of surmounting the difficulties in the way of obtaining the consent of the Canadian Parliament to the measures necessary to give effect to the Treaty of Washington.

The Right Honorable

The Earl of Kimberley.

I have, &c.,

(8igned) LISGAR.

COPY of a Report of a Committee of the Honorable the Privy Council, approved by His Excellency the Governor General in Council on the 20th January, 1872.

The Committee of the Privy Council have had under their consideration the Earl of Kimberley's Despatch to Your Excellency, dated the 23rd of November, 1871, on the subject of the Report of the Privy Council dated the 28th of July, and transmitted in Your Excellency's Despatch of the 15th of August. The object of that Report was to explain to Her Majesty's Government that much dissatisfaction prevailed in Canada owing to the absence of all provision in the Treaty of Washington for the settlement of the losses incurred by Canada, in consequence of the raids of citizens of the United States on British Territory, and also owing to the cession of the Canadian fisheries for an inadequate consideration. The Committee of Council were aware, from the Earl of Kimberley's Despatch of the 17th of June, 1871, that Her Majesty's Government were very desirous that the Acts necessary to give effect to the fishery clauses of the Treaty of Washington should be passed by the Canadian Parliament, and they had hoped that some proposition might be made by Her Maiesty's Government, in reply to their Report, that would enable them to propose such measures with a fair prospect of success.

In the Earl of Kimberley's Despatch to Your Excellency, dated 23rd of November, no reference whatever is made to the subject of the Fenian Raids, and with regard to the fishery clauses of the Treaty the only inference to be drawn from the despatch is that the objections raised by the Committee of Council are of very little weight.

The Committee of Council readily admit that further controversial discussion on the points on which differences of opinion unfortunately exist between the two Governments would be unprofitable. It is, however, due both to Her Majesty's Government and to themselves that they should frankly explain to the former the conclusion at which they have arrived on the two questions discussed in their Report of 28th of July last.

They maintain that Canada has a just claim to compensation for the expenses incurred in consequence of the Fenian Raids. It seems unnecesssary to support this opinion by further argument.

Although the Committee of Council deem it unnecessary to dwell on the objections which they entertain to the Fishery clauses in the Treaty, they desire to offer an explanation with reference to the Statement in their former Report, to which the Earl of Kimberley has taken exception, and which was to the effect that Her Majesty's Government had ceded the rights of Fishery for what they, admitted to be an inadequate consideration.