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The Earl of Kimberley to Lord Lisgar.

(Copy-Canada-No. 374.)

DOWNING STREET,

17th March, 1871.

MY LORD,-In answer to your telegram received on the 10th instant, stating that in the opinion of your Government, the Canadian Fisheries cannot be sold without the consent of the Dominion, I have already informed your Lordship by Telegraph that Her Majesty's Government never had any intention of advising Her Majesty to part with those fisheries without such consent.

When the Reciprocity Treaty was concluded, the Acts of the Nova Scotian and New Brunswick Legislatures relating to the Fisheries were suspended by Acts of those Legislatures, and the Fishery rights of Canada are now under the protection of a Canadian Act of Parliament, the repeal of which would be necessary in case of the cession of those rights to any Foreign Power.

I think it right however to add that the responsibility of determining what is the true construction of a Treaty, made by Her Majesty with any foreign power, must remain with Her Majesty's Government, and that the degree to which this Country would make itself a party to the strict enforcement of Treaty Rights may depend not only on the literal construction of the Treaty, but on the moderation and reasonableness with which those rights are asserted.

Governor General

The Right Honorable Lord Lisgar,
G. C. B., G. C. M. G., &c., &c., &c.

(Copy-Canada-No. 444.)

I have, &c.,
(Signed)

KIMBERLEY.

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

DOWNING STREET,

17th June, 1871.

MY LORD, I have the honor to enclose, herewith, copies of the Treaty signed at Washington, on May 8th, by the Joint High Commissioners, which has been ratified by Her Majesty and by the President of the United States, and of the Instructions to Her Majesty's High Commissioners and Protocols of the Conferences held by the Commission. The Dominion is, from its geographical position as the immediate neighbour of the United States, so peculiarly interested in the maintenance of cordial relations between that Republic and the British Empire, that it must be a source of satisfaction to the Canadian Government, that Her Majesty has been able to conclude a Treaty for the amicable settlement of differences which might have seriously endangered the good understanding between the two countries.

Moreover, the Rules laid down in Article VI, as to the international duties of neutral governments are of special importance to the Dominion which carries on such an extensive and increasing maritime commerce, and possesses such a considerable merchant navy.

But independently of the advantages which Canada must derive from the removal of the causes of difference with the United States, arising out of occurrences during the civil war, Her Majesty's Government believe that the settlement which has been arrived

at of the questions directly affecting British North America, cannot fail to be beneficial to the Dominion. I need not refer to the well known history of the Fishery question, further than to observe that ever since the termination, by the British Government in consequence of the war of 1812, of the liberty enjoyed under the Treaty of 1783, by American citizens of fishing in the territorial waters of the British Colonies, and the renunciation by the United States, in the Treaty of 1818, of all claim to that liberty, this question has in different forms been the subject of controversy with the United States. Her Majesty's Government have always contended for the rights of the Colonies, and they have employed the British Naval forces in the protection of the Colonial fisheries; but they could not overlook the angry feelings to which this controversy has given rise, and the constant risk that in the enforcement of the exclusion of American fishermen from the Colonial waters a collision might take place which might lead to the most serious consequences, and they would have been wanting in their duty, if they had not availed themselves of the opportunity presented by the late negotiation to remove a cause of perpetual irritation and danger to the relations of this country and the Dominion with the United States.

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The Canadian Government itself 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, but it was certain that however desirable it might be, in default of any complete settlement, to appoint such a Commission, the causes of the difficulty lay deeper than any question of interpretation, and the mere discussion of such points as the correct definition of bays could not lead to a really friendly agreement with the United States. It was necessary, therefore, to endeavour to find an equivalent which the United States might be willing to give in return for the fishery privileges, and which Great Britain, having regard both to Imperial and Colonial interests, could properly accept. Her Majesty's Government are well aware that the arrangement which would have been most agreeable to Canada was the conclusion of a Treaty similar to the Reciprocity Treaty of 1854, and a proposal to this effect was pressed upon the United States Commissioners, as you will find in the 36th Protocol o the Conferences. This proposal was, however, declined, the United States Commissioners stating "that they could hold out no hope that the Congress of the United States won d 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." The United States Commissioners did indeed propose that coal, salt and fish, should be reciprocally admitted free, and lumber after the 1st of July, 1874; but it is evident that looked at as a tariff arrangement this was a most inadequate offer, as will be seen at once when it is compared with the long list of articles admitted free under the Reciprocity Treaty. Moreover, it is obvious from the frank avowal of the United States Commissioners, that they only made this offer because one branch of Congress had recently more than once expressed itself in favor of the abolition of duties on coal and salt, and because Congress had partially removed the duty from lumber, and the tendency of legislation in the United States was towards the reduction of taxation and of duties, so that to have ceded the Fishery rights in return for these concessions would have been to exchange them for commercial arrangements, which there is reason to believe may before long be made without any such cession, to the mutual advantage of both the Dominion and the United States; and Her Majesty's Government are bound to add that whilst in deference to the strong wishes of the Dominion Government they used their best efforts to obtain a renewal in principle of the Reciprocity Treaty, they are convinced that the establishment of free trade between the Dominion and the United States is not likely to be promoted by making admission to the fisheries dependent upon the conclusion of such a Treaty; and that the repeal by Congress of duties upon Canadian produce on the ground that a Protective Tariff is injurious to the country which imposes it, would place the commercial relations of the two countries on a far more secure and lasting basis than the stipulations of a Convention framed upon a system of reciprocity. Looking, therefore, to all the circumstances, Her Majesty's Government found it their duty to deal separately with the

Fisheries, and to endeavour to find some other equivalent; and the reciprocal concession of free fishery 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 them to be an equitable solution of the difficulty. It is perfectly true that the right of fishery on the United States coasts, conceded under Article XIX, is far less valuable than the right of fishery in Colonial waters, conceded under Article XVIII, to the United States, but on the other hand, it cannot be denied that it is most important to the Colonial fishermen to obtain free access to the American market for their fish and for fish oil, and the balance of advantage on the side of the United States will be duly redressed by the Arbitrators urder Article XXII. In some respects a direct money payment is perhaps a more distinct recognition of the rights of the Colonies than a tariff concession, and there does not seem to be any difference in principle between the admission of American fishermen for a term of years in consideration of the payment of a sum of money in gross, and their admission under the system of Licenses, calculated at so many dollars per ton, which was adopted by the Colonial Government for several years after the termination of the Reciprocity Treaty. In the latter case, it must be observed, the use of the Fisheries was granted without any tariff, concession whatever on the part of the United States, even as to the importation of fish.

Canada could not reasonably expect that this country should, for an indefinite period, incur the constant risk of serious misunderstanding with the United States; imperilling, perhaps, the peace of the whole Empire, in order to endeavour to force the American Government to change its commercial policy; and Her Majesty's Government are confident that, when the Treaty is considered as a whole, the Canadian people will see that their interests have been carefully borne in mind, and that the advantages, which they will derive from its provisions, are commensurate with the concessions which they are called upon to make. There cannot be a question as to the great importance to Canada of the right to convey goods in bond through the United States, which has been secured to her by Article XXIX; and the free navigation of Lake Michigan, under Article XXVIII; and the power of transhipping goods, under Article XXX, are valuable privileges which must not be overlooked in forming an estimate of the advantages which Canada will obtain. Her Majesty's Government have no doubt that the Canadian Government will readily secure to the citizens of the United States, in accordance with Article XXVII, the use of the Canadian Canals, as, by the liberal policy of the Dominion, those Canals are already opened to them on equal terms with British subjects; and they would urge upon the Dominion Parliament and the Legislature of New Brunswick, that it will be most advisable to make the arrangement as to duties on lumber floated down the St. John River, upon which the execution of Article XXX as to the transhipment of goods, is made contingent.

The freedom to navigate the St. Lawrence, which is assured to the United States by Article XXVI, has long existed in fact, and its recognition by Treaty cannot be prejudicial to the Dominion, which moreover, obtains in return, the free use of certain rivers on the Pacific side of the Continent.

I must not omit to notice that, by Article XXXIV., the dispute as to the Island of St. Juan, is to be submitted to arbitration; and provision has thus happily been made for the amicable termination of a long-standing and difficult controversy at a time when, in consequence of the union of British Columbia with the Dominion, this boundary question has become matter of interest to the whole Confederation of British Provinces.

I have thus gone through those parts of the Treaty which immediately touch the Dominion; but a question of much moment remains as to the course which should be taken during the present fishing season, pending the enactment by the respective Legislatures of the Laws necessary to bring the Fishery Articles into operation.

I find that on the conclusion of the Reciprocity Treaty, in June. 1854, and previous to its ratification, the then American Secretary of State (Mr. Marcy) expressed the hope of his Government that American Fishermen would not be molested if they should at

once attempt to use the privileges granted by that Treaty. A despatch was therefore addressed to the Governor of the North American Colonies, recommending that the wish of the United States Government should be acceded to, and that the American fishermen should be immediately admitted to the Colonial fisheries. The result was that the various Colonial Governments at once admitted the American fishermen to the fisheries, although the Legislative Acts necessary to give effect to the Treaty were not passed till late in the autumn. It is evidently most desirable that a similar course should be pursued on the present occasion; and you will perceive from the notes which have passed between Sir E. Thornton and Mr. Fish, copies of which I enclose, that the United States Government have made an application similar to that which they made in 1854; and that Her Majesty's Government have engaged to recommend to the Colonial Governments that it should be acceded to. Her Majesty's Government are of course aware that the Colonial Governments have no power to set aside the fishery statutes by their own authority; but it is entirely within their power to take no active steps to enforce those statutes and to suspend the instructions to the Colonial Cruisers to exclude American citizens from the fisheries, just as it is in the power of Her Majesty's Government to suspend the action of Her Majesty's Cruisers, although the Imperial Fishery Statute is still in force.

Her Majesty's Government have no desire whatever to attempt to interfere with the entire right of the Colonial Legislatures to refuse to pass the acts necessary to give effect to the Treaty, though they would deeply deplore that a course which they believe would be most impolitic should be taken; but, on the other hand, they have too much confidence in the wisdom of those free Assemblies, to anticipate any such result; and they are confident that the Canadian Government would be as desirous as Her Majesty's Government that no untoward collision should occur during the present season which might prejudice the fair consideration of the Treaty, both by the American Congress and the Colonial Parliaments; and that, on a full consideration of the circumstances, they will see that the responsibility of incurring the risk of such a collision would be far heavier than that of removing, so far as they have the power, the obstacles to the provisional enjoyment by American citizens of the privileges which it is intended by the Treaty to secure to them for a longer time.

I cannot conclude this Despatch without expressing the gratification which it has given Her Majesty's Government to have had the valuable assistance of Sir J. Macdonald, in the negotiation of this Treaty. Whatever view may be taken in Canada of the merits of the Treaty, it must be an unqualified cause of satisfaction to the Canadians to know that they were represented by a Statesman holding so distinguished a position in the Canadian Government, and so well able, from his knowledge and experience, to put forward with the greatest force and authority the arguments best suited to promote the claims and interests of the Dominion.

I have, &c.,

(Signed)

Governor-General

The Right-Honorable Lord Lisgar,
G.C.B, &c., &c., &c.

KIMBERLEY.

INSTRUCTIONS TO HER MAJESTY'S HIGH COMMISSIONERS, AND PROTOCOLS OF CONFERENCES HELD AT WASHINGTON BETWEEN FEBRUARY 27 AND MAY 6, 1871.

No. 1.

Earl Granville to Her Majesty's High Commissioners.

FOREIGN OFFICE, February, 9, 1871.

My LORD AND GENTLEMEN,-The Queen having been graciously pleased to appoint you to be Her Majesty's High Commisioners to proceed to Washington for the purpose of discussing, in a friendly spirit, with Commissioners to be appointed by the Government of the United States, the various questions on which differences have arisen between Great Britain and that country, and of treating for an agreement as to the mode of their amicable settlement, I inclose the necessary full powers, and have the honour to convey to you the following instructions for your guidance.

It is the earnest desire of Her Majesty's Government that the important negotiation with which you are entrusted should be conducted in a mutually conciliatory disposition, and with unreserved frankness in your communications with the High Commissioners or Members of the Government of the United States with whom you may be placed in communication, and they believe that this object cannot be better attained than by leaving you full discretion as to the manner in which the subjects which may engage your attention should be discussed.

The principal subjects will probably be :

1. The Fisheries.

2. The free navigation of the River St. Lawrence and privilege of passage through the Canadian Canals.

3. The transit of goods through Maine, and lumber trade down the River St. John. 4. The Manitoba boundary.

5. The claims on account of the " Alabama," "Shenandoah," and certain other cruizers of the so-styled Confederate States.

6. The San Juan water boundary.

7. The claims of British subjects arising out of the Civil War.

8. The claims of the people of Canada on account of the Fenian raids.

9. The revision of the rules of Maritime Neutrality.

Copies of all the correspondence which has been presented to Parliament respecting the questions will be forwarded for your use.

1. The Fisheries.

On the termination of the Reciprocity Treaty of the 5th of June, 1854, by the United States' Government, the discussions respecting the rights of American fishermen under Article I of the Convention of the 20th of October, 1818, which had been set at rest by the Reciprocity Treaty, were revived, and, although temporary measures were taken to avoid pressing with severity upon American fishermen by the adoption of a system of licenses, it has been found impracticable to continue that system indefinitely; and, on its withdrawal, much excitement has been occasioned among the coast population of the Eastern States of the Union by the capture of boats engaged in illegal fishing, contrary to the Convention of 1818.

The corresponder.ce will put you in possession of the facts of the several captures,

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