Relations with Great Britain. Mr. King to the LONDON, July 4, 1797. such a construction be attempted, it would defeat, in a very considerable degree, the benefit of the article. The footing of sufferance on which the trade stood before the treaty would be preferable. Previous to the treaty. American vessels sometimes obtained freights from the British territories in India to China. It is believed that such freights are still occasionally obtained by the Danes and Swedes; and, likewise, that the ships of these nations obtain permission of the British local Government in India, to take freights from India to different parts of Europe. It would be a very satisfactory measure to the American merchants, if, by a clause in the proposed act of Parliament, these advantages, which are gratuitously enjoyed by the Swedes and Danes, might likewise be enjoyed by the Americans, in such cases as the competent authority in India should allow. All that is desired on this head is, that the treaty may not be construed to incapacitate the Americans from enjoying, by favor, those advantages which, by favor, are occasionally granted to other neutral and friendly merchants. Secretary of State. the build of European ships, and the persons by SIR: In a further conference with Lord Gren- the trade of every European nation. There seems, whom they are navigated, apply, more or less, to ville, respecting the bill for carrying into effect the therefore, no room to complain that they are aptreaty with us, and the remarks that I sent him on plied to America. It may further be observed that subject, his Lordship stated to me the follow-that this restriction has been established by the ing observations upon these remarks, which had been made by the Board of Trade: "Section 1st. The object of this clause of the bill is to equal (as far as respects the United States) the 3d section of 12th Charles II., c. 18; by which the trade with Asia, Africa, and America, is confined to British built ships only. "It is conceived that the discrimination complained of is clearly comprehended under the words "subject always, as to what respects this article, (that is, article 14,) to the laws and statutes of the two countries respectively;" which words cannot be supposed to relate exclusively to duties and prohibitions; no mention whatever being made of duties or prohibitions in any part of the article. "The expression their ships, on which this objection is grounded, is to be found in most of the commercial treaties concluded by Great Britain, particularly in those with Russia and France. But no idea was ever entertained, either here or in Russia, or in France, that by such a stipulation, the French were exempted from the provisions of the eighth section of the Act of Navigation; and no deviation from the spirit or letter of that act can be supposed to be intended by either party, except where it is expressed in the most unequivocal words. "The general principle of the bill (with a variety of exceptions in favor of America) is to put America upon the footing of the most favored European nation. The regulations respecting 5th CoN.-104 Orders in Council, by which the trade has hitherto been regulated; and that, under this restriction, the trade has annually increased, and is now carried on entirely in American bottoms. "The third objection arises from the accidental omission of the words "from thence," in the copy of the abstract. Those words are in the Order of Council, and will be in the act. The restriction upon the American trade is no more than a restriction of the indirect importation of goods, the growth, produce, or manufacture of America; a restriction which applies, in all material articles, to every European nation. All European articles, the importation of which is not confined by the Act of Navigation to British ships, or ships of the build of the country, from whence such articles are brought, or has been since exempted from the operation of that act by particular provisions, will remain free to American ships, in common with all others. "The extended interpretation, given by the remark to one of the clauses of the 15th article, is inadmissible. In the first place, that clause, connected with what precedes it, evidently applies only to the articles, and not to the manner in which they are brought. In the next, the interpretation would completely defeat, by a side wind, the whole principle of the Act of Navigation, and cannot, therefore, be supposed to have been intended." Sections 2, 3, 4, 5, 6, 7, 8. By all these sections the importation of all American articles, in Brit 1 1 1 1 Relations with Great Britain. ish ships, is intended to be left precisely upon the same footing in which it stood by the Orders in Council, from which the words of the proposed act are nearly taken. These have been now acted upon without difficulty for many years, and are clearly understood, both here and in America. It is to be hoped, therefore, that no occasion is given for misrepresentation or misunderstanding, at least in this part of the bill. right of imposing duties on American articles, in any ships, and countervailing duties on such articles in American ships to its full extent; and that both countries might experience much inconvenience from such a conduct. But it may be hoped that both countries are too sensible of their mutual interest to engage in this kind of commercial hostility; and the manner in which the British Government proposes, at present, to exercise its rights, is perfectly remote from such idea. "The mode of imposing the countervailing duty stated to be obscure, and another more simple is proposed. "It is true that non-enumerated unmanufactured goods and merchandise, which were importable under the Orders in Council on the British planta-is tion duties would be importable, by this act, on the duties payable by the most favored nation. The difference is not believed to be material, because the chief articles of that sort are specified in the next section, and are thereby made importable on the British plantation duties; and because there are but few articles, besides those specified, which pay less duty, or are duty free, when imported from a British plantation. There will, however, be no objection to restore non-enumerated unmanufactured goods and merchandise to the footing on which they stood by the Orders in Council; and the bill will be brought into the House of Commons upon that principle. "All the material articles of the American trade, which might, according to the treaty, have been subjected to the heavy duties now payable on many of them by the most favored nation, are put upon a par with the same articles from British colonies, and pay either a very low duty, or no duty at all. Among the latter are pot and pearl ashes, bar and pig iron, and most articles of wood. "Indigo was omitted among the enumerated articles, as the insertion of it was stated by the officers of the customs to be superfluous; it being importable, under certain regulations, from all countries, duty free. "The general stipulation respecting duties in the treaty is, that the duties on American articles shall not be higher than are, or shall be, payable on the like articles from any other foreign country; and the provisions of the former sections prove that this country is sensible of the principles of policy stated in the remark. "Had the right of imposing duties been exercised to its full extent by one general clause subjecting American articles to no higher duties than those payable on similar articles from any other foreign country, obscurity would have been avoided; a countervailing duty (in addition to such duties) of ten per cent. on their amount might have been imposed. The rule would have been simple in itself; and simple in its operation; but the most material articles of the American commerce would have been exposed to heavy, and, in many instances, insupportable burdens. All the apparent obscurity and complexity of these provisions, which, however, will be found, upon examination, to be sufficiently intelligible. arises from the desire on the part of the Government of this country of favoring the American commerce in its most important branches. "The rule proposed in the remark is not indeed (nor could it be expected that it should be) that rule which is above stated as the most simple. But it is suggested that ten per cent. should be imposed upon the duties payable on American goods imported from America in British ships. It will be found, upon examination, that this is exactly what is done in all cases to which such a rule is applicable. "Section 10 applies this rule to all the articles included in section 2. Section 14 applies it to the articles included in section 4. Section 11 relates to bar and pig iron, pot and pearl ash. "These articles are generally subject to duty, but, when imported from the British plantations, with certificates, are duty free. "By section 3, these articles, when imported from the United States in British ships, are put upon the same footing as if imported from the Britplantations, with certificates, and are therefore duty free. "According to the treaty, such further duty may also be imposed as may be (not equal to, but) adequate to countervail the difference of duty on the importation of European and Asiatic goods into the United States, in British and Americanish vessels. The object of retaining such a right was by no means to check American trade, but to protect British navigation, on the same principle on which America has protected her own; and the manner in which it is now proposed to be exercised will be found, upon examination, liberal; never exceeding, and, in most cases, falling within the limits prescribed by the treaty. "The interpretation given to the last clause of the 15th article is far from clear or admissible; but, even if it were true that, at the period referred to, the American Government might increase the now subsisting difference between the tonnage and other duties on British and American ships, it is also true that the British Government might exercise their "As the imposition of 10 per cent. upon nothing is impossible, it is imposed upon the amount of the duty payable on importation from the British plantations without certificates. "This duty on pot and pearl ash is about 28. 4d. per cwt.; the ten per cent. will be about 24d. "This duty on pig iron is about 5s. 9d. per ton; the ten per cent. will be about 64d. per ton. "This duty on bar iron is about £3 18. 94d. per ton; the ten per cent, about 5s. 74d. "These will be the only duties payable on these articles, even when imported in American ships; whereas the duties which might have been imposed, consistently with the treaty, would have been, Relations with Great Britain. on pig iron above, £31 10s. per cwt. ad valorem; and on bar iron, above £3 7s. per ton. The importation of iron from America consists almost entirely of pig iron, on which the proposed duty is merely nominal. Section 13 relates to unmanufactured wood and staves, upon which no duty is payable when imported from the British plantations. The imposition of 10 per cent., on the proposed principle, was here also impossible; and the 10 per cent. is therefore imposed upon the lowest duties on wood and staves imported from foreign countries, that is, when so imported in British ships. American unmanufactured wood and staves, as well as the articles in section 11, will, therefore, pay nothing when imported in British ships; and when imported in American ships, only one-tenth part of the duty payable on the same articles when imported from any other country in British ships. "This can hardly be conceived to be, in any instance, a prohibitory duty. It will, in fact, be, upon most articles, little more than nominal. The duties paid by the wood of other countries, amounted, last year, to about £350,000; of which America paid no part whatever. "Section 12. These articles are in no case duty free. They do not, therefore, require the same special provision with the articles included in section 11. But the rule proposed in the remark is exactly applied to them. "Section 15. The proposed additional duty on tobacco imported in American ships is 18d. per 100 lbs. weight. "The present custom-house duty on British plantation tobacco, imported in British ships, is 6d. per pound, i. e. 50s. per 100 pounds weight; the ten per cent. upon this would be 5s. It is not necessary to observe how far the adoption, in this case, of a specific sum, instead of a proportion of a duty, is favorable both to American commerce and navigation. "If the proposed tax upon American commodities, even when imported in American vessels, is conceived to be a heavy burden, it is desired that the duties now payable in America upon all articles of British commerce, should be compared with those which, after passing the proposed bill, will be payable in Great Britain upon all articles of American commerce. A glance of the eye over such a comparative table would supersede the necessity of further argument upon this head. "It should, however, be observed, that the rate of custom duties has, of late, been considerably increased in America. On comparing the tax table of August, 1790, with the bill which commenced on the last day of March, 1795, (subsequent to the date of the treaty.) it will be found that the duties on all the articles of British trade have been raised in different proportions, varying from the addition of one-third, to the addition, in many instances, of a tax equal to the original duty. The difference of duty, on importing the same articles in British or American ships, has indeed still been only ten per cent. ; but it is evident that this ten per cent., when calculated upon a larger sum, imposed, in fact, a heavier burden; and, if a literal interpretation were to be insisted upon, might be argued, "to increase the then subsisting difference between the duties payable on the importation of any articles in British or American vessels ;" which increase is particularly provided against in the fifteenth article. "Sections 21 to 26. The doubt implied in the remarks on these sections, whether the tonnage duty proposed to be levied on American ships is within the stipulation of the treaty, rests upon a supposition (which cannot be admitted) that the contracting parties were ignorant of the difference then existing in the light, and other duties, payable in British ports by British or American vessels. That difference was, in fact, notorious to both parties; and, notwithstanding that the right reserved is expressly to impose a tonnage duty equal to (not adequate to countervail," as expressed in another part of the same article) that which shall be payable by British vessels in America. "It might further be stated that light-house duties, or tolls, never have been considered, as yet, in the negotiation or construction of any treaty of commerce, as public duties; they are, in truth, not so: they are of service to many foreign ships which never enter a British port, and they are so various, according to the different voyages made by different ships coming into our ports, that any attempts to calculate any countervailing duty, with a reference to these tolls, would be deficient, if not impracticable. "The right reserved by the treaty is not, however, proposed to be exercised to its full extent, as the intended tonnage duty of 2s. per ton, is not equal to the tonnage duty payable in America by British ships, but to the difference between the duty payable in America on British and American ships. "The light duties on all ships vary in the different ports of Great Britain, each ship being charged for the toll of such lights only as she passes; but no tolls are collected in any of the outports by the corporation of Trinity House, except the light duties. In London, American and other ships, besides the toll to the several lights, pay a duty of about 8d. per ton, (under the denomination of Trinity duties) for the buoys and beacons, which are very numerous. "The tolls for the benefit of the lights are, in general, double on American and other foreign ships to what British ships pay. "With respect to the light duties on American ships passing up St. George's channel, the English channel, and the northern lights, the following is an accurate statement of the light duties paid by an American ship of 200 tons, and a British ship of the same burden, viz: An American ship of 200 tons, passing through the English channel to London, pays £. s. d. to the numerous lights on the coast 10 16 8 And, on her return 10 16 8 Which is 18. Id. per ton, each way. If the same ship proceeds to the Baltic, the additional lights amount to 4 1 3 Which is less than 5d. per ton, and is payable Relations with Great Britain. "So that an American ship of two hundred tons would pay £35 14s. 7d. (not £69 3s. 4d. as stated in the remarks) for a voyage from America to Liverpool or Bristol, from thence to London, from London to the Baltic, and home to America. "A British ship, for the same voyage, would pay £19 178. 11d. India, though sanctioned by custom, appears, by some late decisions in our own courts of justice, to be contrary to law: and it will be necessary to make some general legislative provision upon that subject. The directors of the East India Company will then be legally authorized to give directions for the admission of neutral ships, subject to such regulations as they may think proper: provided, only, that they are not inconsistent with any act of Parliament for regulating their trade, nor with any treaty. "By the proposed clause, the intercourse stipulated by the treaty is exempted from the discretion of the directors, and put upon the footing of right. With respect to all other intercourse, American ships will be capable of profiting, in common, with others, of such advantages as may be granted by favor." From the tenor of these observations, it was evident that most of the points were so far settled as to leave little hope of alteration. I, however, insisted upon the equity of the objection against the tonnage duty, as well in my conference with Lord Grenville, as with a subsequent one that I had with Lord Liverpool. The answer was, that their light duties were not a branch of revenue; that the terms of the treaty left no room for construction; and that, independent of their desire to encourage their own navigation, the balancing of their light duties against our tonnage duties would constitute a precedent that would operate to their disadvantage in their future treaties with other nations. I concluded the discussion, on this head, by observing that it was reasonable to suppose, that the parties did intend to put their navigation upon an equal footing, in their intercourse with each other; that it was plain that this equality would not exist under the proposed tonnage duty, and that there remained no other mode of correcting the inequality, but by our Government's imposing and collecting a duty under the denomination of light money. Light-houses in Europe are generally supported by a duty, imposed, for that special purpose, upon all ships, and the duty is commonly double upon foreign ships. I have not discovered that these tolls, or duties, have ever been included in the computation frequently made in the adjustment or equalization of the taxes imposed by different nations upon the ships which enter their ports. "In the course of the above voyage a ship passes, and has the benefit of thirty-six lights; every one of which leads her clear of the most dangerous sands, shoals, or rocks; and American ships always avoid the payment of lights for their passage through the English Channel, if bound to a foreign port, by not entering a British port, unless bound there to deliver, or forced in by distress of weather; and then they only pay for such lights as they receive benefit from; and although American ships pay their light duties for the passage up and down the channel, yet if such ships do not pass all the lights, in the several channels, These duties are not considered as a branch of which they have paid for, either by not returning revenue; from the manner in which our tonnage down channel, going north about, or never return-duty is levied, collected, and paid, it is deemed to ing, the duties they paid for the several lights they have not passed are returned to them. "Section 28. Nothing can be further from the intention of this country than any idea of so construing the treaty as to incapacitate the Americans from enjoying by favor, the advantages which are granted occasionally, by favor, to other friendly and neutral merchants. Nothing in the section can have any such effect. It does no more than permit American ships to carry on the trade as stipulated by the treaty. "The intercourse which neutral ships have been allowed to enjoy with the British territories in be a branch of our revenue, though a considerable portion of the amount of the duty is annually applied to support our light-houses, beacons, buoys, &c. It merits consideration, not only in reference to this country, but likewise as it respects the similar duties of other European nations, whether we ought not to impose, in like manner with them, a particular and adequate duty upon all ships for the support of our light-houses. In these conferences I urged, but without success, the objection that I had before made against the full countervailing duty upon fish oils; as the Relations with Great Britain. countervailing right was not exercised in its full extent in respect to tobacco and rice, I suggested the policy of a small additional duty only, to the very high duties already imposed upon this article. I was answered, that in tobacco and rice we were not rivals, but that in the whale fishery we were so; that, even against high duties, large quantities of our spermaceti oil, and occasionally cargoes of our brown oil, were sold in England, and that our skill and situation gave us great advantage over others in this branch of industry. My efforts have been more successful in respect to our trade to India. A clause was added to the bill, giving it a retrospective operation from the time of the exchange of the ratifications of the treaty, by which the insurances which had been made here upon our ships in that trade will become legal. Another clause which had been added to protect such of the British officers against suits as, after the conclusion of the treaty and before the passage of the bill, had seized American ships trading to India, was rejected. This clause had been inserted in the bill with a special reference to the capture, by Lord Keith, at the Cape of Good Hope, of the ship Argonaut, Collect, master; its rejection leaves the remedy in full force, as well against the underwriters as against Lord Keith. I found, in the course of these conferences, that our construction of the 13th article of the treaty, in respect to the outward voyage to India, would be admitted by this Government; and that we have a right, under that article, to go to India from England, Madeira, or any other country, and with productions collected and taken on board at any place, instead of being confined to a direct voyage from America to India; a construction of the article that the East India Company have endeavored to establish. I likewise found the greatest readiness to put us upon as good a footing as any other nation in the trade which, by favor, may be carried on with India. A late decision in Westminster Hall had shown, that the trade hitherto carried on by foreigners with the British possessions in India, was against the navigation act: a bill has, therefore, been brought into Parliament, vesting in the directors of the East India Company a power to permit such trade under such regulations as may be judged advisable. These regulations will be principally for the purpose of preventing British subjects carrying on a trade under foreign flags; our ships, by this bill, will have an equal right with those of other nations in amity with Great Britain, to share in the coasting trade of India, in the freightage from India to China, and from India to Europe, the restrictions and limitations in our treaty notwithstanding. The bill for carrying the American treaty into effect has passed into a law. The bill permitting the ships of nations in amity with Great Britain to trade to the British possessions in India, under certain regulations, is before Parliament, and will probably pass into a law. (See page 3239.) I annex copies of sundry papers which have passed between the Court of Directors and the Board of Control, respecting as well this bill as that which has passed into a law for carrying into effect the American treaty. With perfect respect and esteem, I have the honor to be, sir, your obedient and faithful ser| vant, RUFUS KING. Papers referred to in the preceding letter: LINCOLN'S INN, 31st May, 1797. SIR: A case has lately occurred in the Court of King's Bench respecting the trade of foreigners to India, which renders some law upon the subject necessary. An action was brought upon a policy on the cargo of an American ship loaded in the British territories in India. Lord Kenyon held, that it was against the act of navigation for foreigners to export from, or import into the British territories in India, any goods whatever; and therefore nonsuited the plaintiff. If this decision be right, a Danish, or Swedish, or American ship, loading her cargo in India, is liable to be seized and confiscated, and some law must be passed to set the matter right. The attention of the Board of Trade was called to the point by the American Minister. They sent the subject to the Board of Control, who thought the proper mode of remedying the evil was, to put the trade under the regulation of the East India Company. By their directions, I have prepared the accompanying act, to be submitted to the Court of Directors. I have the honor to be yours, &c. J. ANSTRUTHER. HUGH INGLIS, Esq. Mr. Dundas to Mr. Inglis. WHITEHALL, 14th June, 1797. SIR: I have received your letters enclosing two clauses which are wished to be inserted in the bills now pending in Parliament, one for carrying into effect the treaty with America, the other for regulating the trade to be carried on with India by the ships of nations in amity with Great Britain. and I shall shortly give you my reasons why Í These subjects are closely connected together, would deem it very impolitic to bring either of The East India Company have opposed this those propositions under discussion. I do not think bill. though I have good reason to be satisfied Parliament would agree to adopt them; and, therethat they have done so, not from an aversion to fore, all the unpopularity likely to arise from the our participation in the trade, but from an appre-discussion would attach on the East India Comhension that British capital and British subjects pany alone. would engage in it, to the injury of the company's monopoly. First, with regard to the clause respecting the American intercourse with India, I think the clause |
