Kupau to the Legislative Assembly, June 17, 1878

Report of the committee on foreign affairs to the Legislative Assembly.

Hon. Godfrey Rhodes, President of the Legislative Assembly:

The committee on foreign affairs, to whom was referred the resolutions of the honorable representatives Nawahi and Pilipo, offer the following report by two of the committee:

Representations made to the Government of Great Britain regarding the effect that the treaty of reciprocity with the United States would have upon British trade with these islands led to the following correspondence:

“Honolulu, May 5, 1877.

“Sir: Her Majesty’s Government have had under their consideration the amount of duty levied upon British produce imported into the Sandwich Islands and the probable effect upon British trade of the differential treatment to which such produce would be subjected under the provisions of the reciprocity treaty between the United States and the Sandwich Islands of the 30th of January, 1875.

“Her Majesty’s Government find that a duty of 10 per cent. ad valorem is actually levied upon certain goods of British origin, and that, by an act of the Hawaiian legislature, dated the 27th of September, 1876, on and after the 9th of October next the duty will in some cases be raised to 25 per cent., while similar goods, the produce of the United States, will be admitted into the Sandwich Islands free of duty.

“I am now instructed by the Earl of Derby, Her Majesty’s secretary of state for foreign affairs, to give, and I hereby do give, formal notice through your excellency to the Government of His Hawaiian Majesty that so long as Articles IV, V, and VI of the Anglo-Hawaiian treaty of the 10th July, 1851, continue in force, Her Majesty’s Government cannot allow of British goods imported into the Sandwich Islands being subjected to treatment other than that which is accorded to similar goods of American origin.

“Her Majesty’s Government, I may observe, are aware that it is open to the Hawaiian Government under Article XVII of the treaty of 1851, by giving twelve months’ notice, to terminate the operation of Articles IV, V, and VI of that treaty, and thus free themselves from all treaty obligations, so far as Great Britain is concerned, in regard to the imposition of customs duties.

“Her Majesty’s Government would, it is true, experience some difficulty in reconciling the adoption of such a course by the Hawaiian Government at the present moment with the spirit of the article above quoted, which gives as a reason for allowing the abrogation of Articles IV, V, and VI, that ‘the two contracting parties may have the opportunity of treating and agreeing upon such other arrangements as may tend still further to the improvement of their mutual intercourse, and to the advancement of the interests of their respective subjects’; whereas the effect of now abrogating those articles would be to place British produce at a grave disadvantage as compared with that of the United States.

“Her Majesty’s Government would, however, as has been already pointed out, not be prepared to deny that His Majesty’s Government, in so doing, were acting within their strict treaty rights; but no notice has been given by the Hawaiian Government of their intention to terminate the articles in question, and Her Majesty’s Government must therefore expect, as they are entitled to do by treaty, that all exemptions or privileges accorded to American produce imported into the Sandwich Islands shall be extended to the produce of Great Britain.

“I renew the assurance of the high respect and distinguished consideration with which I have the honor to be,

“Your excellency’s most obedient, humble servant,

“JAMES H. WODEHOUSE.”

“Department of Foreign Affairs, “Honolulu, May 21, 1877.

“Sir: I am instructed to reply to your note of the 5th instant, the receipt of which I had the honor to acknowledge on the 7th instant. Your note has had the careful consideration of His Majesty’s Government. In it you inform me—

• “First. That Her Majesty’s Government had had under their consideration the amount of duty levied upon ‘British produce’ into these islands, and
• “Second. The probable effect upon British trade, of the differential treatment to which such produce would be subjected under the provisions of the reciprocity treaty between the United States and this kingdom of 30th January, 1875.
• “Third. You state the amount of duty which Her Majesty’s Government find to be levied upon ‘goods of British origin’ by the tariff acts, while similar goods from the United States are admitted free of duty.
• “Fourth. You are instructed to give notice that so long as articles IV, V, VI, of the Anglo-Hawaiian treaty remain in force, Her Majesty’s Government cannot allow of British goods imported into these islands being subjected to treatment other than that accorded to similar goods of American origin.
• “Fifth. You state that Her Majesty’s Government is aware that it is open to this government, by giving twelve months’ notice, to terminate the fourth, fifth, and sixth articles of the treaty of 1851, and thus free itself of all treaty obligations so far as Great Britain is concerned, in regard to the imposition of customs duties.
• “Sixth. That Her Majesty’s Government would have some difficulty in reconciling such abrogation at this time with the spirit of that article, as the effect of such abrogation would be to place British goods at a grave disadvantage, as compared with those of the United States, but that Her Majesty’s Government would not be prepared to deny that this government, in so doing, were acting within their strict treaty rights; that, as no notice has been given of such abrogation by this government, Her Majesty’s Government must expect, as they are entitled to do by treaty, that all ‘exemptions or privileges’ accorded to American produce shall be extended to the produce of Great Britain.

“To facilitate a reply, I have taken the liberty thus to summarize your note.

“Referring to the first and third points of this summary of your note, I have to say that the duties in this kingdom are levied upon certain goods or classes of goods, and not upon ‘British produce’ or ‘goods of British origin.’ This explanation I deem necessary to avoid a misunderstanding of the manner in which your proposition is stated, because a differential duty placed by our laws upon. ‘British produce’ or ‘goods of British origin,’ as such, might be held to be a violation of existing treaty obligations.

“The fourth point of your note contains the notice alluded to, which, doubtless, is occasioned by the conclusion of Her Britannic Majesty’s Government, as stated in the second point, viz, the differential treatment to which British produce would be subjected under the Reciprocity Treaty with the United States.

“His Majesty’s Government are glad to be assured by you that this notice is not intended in any way as a menace or threat against this government in regard to the enforcement of its revenue laws. It is, however, a matter of regret to His Majesty’s Government that you have not more clearly set forth the grounds upon which, under the Anglo-Hawaiian treaty of 1851, this notice is given, which, in the opinion of this government, is not warranted by the interpretation it gives that treaty.

“The Anglo-Hawaiian treaty of 1851 is a compact between the two governments, entirely reciprocal in its nature. The first article stipulates for perpetual friendship; the second, that ‘there shall be between all the dominions of Her Britannic Majesty and the Hawaiian Islands a reciprocal freedom of commerce.’ Article III, that any favor or immunity whatever in matters of commerce and navigation which either party may grant to citizens of any other state shall be extended gratuitously if the other concession shall have been gratuitous, or in return for a compensation as nearly as possible of proportionate value and effect, to be adjusted by mutual agreement, if the concession was conditional.

“This article clearly acknowledges the right of either party to make riciprocal conventions, and clearly lays down the doctrine of compensation, and the liability of either party to be held to compensate if they claim like privileges.

“Article IV stipulates: No other or higher duty shall be imposed on the importation into the dominions of either country of any article the growth, produce, or manufacture of the other, than are or shall be payable on the same article being the growth, &c., of any other country.

“This clearly shows the intention of both parties that their goods were to be admitted by each other on the same terms and for the same compensation as those of any other foreign country, or for considerations of proportionate value and effect. Though the fourth, fifth, and sixth articles treat of specific questions of import and export duties and charges, they are to be construed in connection with the spirit of the whole treaty, which nowhere enunciates the doctrine that Great Britain is to enjoy or claim any rights under it which other nations have stipulated for and purchased without herself giving equal compensation. Such a doctrine would be subversive of the principle of reciprocal freedom of commerce, announced in the second article as one of the leading principles of the treaty.

“The twelfth article declares that the diplomatic agents and consuls of her Britannic Majesty on the Hawaiian Islands shall enjoy whatever privileges, exemptions, and immunities are or may be granted there to the diplomatic agents and consuls of the same rank belonging to the most favored nation.

“No other article in the treaty claims for Great Britain equal privileges with other powers with the force and distinctness of this. The fourth article only alludes to duties imposed, no mention being made of exemptions given for consideration; but this article stipulates for ‘whatever privileges, exemptions, and immunities are or may be granted,’ &c.

“If any article could be construed to do violence to what this government has always held to be the spirit of this treaty, and claim such privileges or exemptions free of the obligation to give the same compensation as other nations, this could; and yet, when the question arose as to your rights as her Britannic Majesty’s commissioner and consul-general under that article to enjoy the privileges enjoyed by the consul of France, you were informed in a dispatch of June 11, 1887, that Lord Stanley (present Earl Derby) had had under his consideration, and consulted the proper law officer of the Crown, and that Her Majesty’s Government were not entitled to claim the peculiar privileges granted to the French consul by the twenty-first article of the French treaty. You were further advised that as that article was one of reciprocity, that unless Her Majesty’s Government were able and ready to concede the same privileges they could not claim them.

“This accords with the Parliamentary utterances of that eminent statesman, especially when, in reply to a question regarding the admission of French goods to the disadvantage of British trade under the reciprocity treaty between Portugal and France, he said that inasmuch as that had been done in return for special concessions granted by the Government of France, &c., the Government of Great Britain had no right to protest or complain. It cannot be supposed that Her Britannic Majesty’s Government intend at its convenience to attach one meaning to an article of the treaty on consular privileges, and a different meaning to a similar article on duties imposed, or that it makes a distinction between duties exempted for special concessions by Portugal to France, and similar exemptions for similar concessions by Hawaii to the United States of America.

“A case decided by the Supreme Court of the United States in the matter of Old-field vs. Marriott (10 Howard, 146, U. S. Reports), was one where certain coffee was imported in a Portuguese vessel. It was admitted that by the laws of the United States coffee imported in vessels of nations reciprocating the privilege, or in American vessels, was exempt from any discriminating duty. It was therefore claimed that this coffee was exempt under the treaty stipulation between Portugal and the United States that goods imported into the United States should pay no higher duties, whether such importation be in Portuguese vessels or in vessels of the United States. It was held that the law of the United States exempting the produce of reciprocating nations could not he held to apply to the produce of nations with whom there was no such reciprocity.

“If these views held by the law officers of the British Crown and the judges of the United States Supreme Court are correct, it follows that the expectation of Her Majesty’s Government that exemptions and privileges accorded to American produce under the Reciprocity Treaty should be extended to British produce without compensation cannot be based upon the existing treaty, unless you are prepared to show, in the language of Lord Stanley on the claim for the privileges stipulated for in the twelfth article, that Great Britain is ‘able’ and ‘ready’ to concede the same compensation as that for which the exemption was made on the goods of the United States.

“Your note seems very properly to discriminate carefully between ‘duties levied upon British goods and ‘exemptions or privileges’ accorded to American goods; duties levied or imposed being by a voluntary legislative act without reference to the origin of goods and without limitation as to time and also subject to change in amount, while the exemption is based upon a treaty stipulation for a limited time, which cannot be changed without consent of the other party, and for a fixed consideration. Article IV stipulates in regard to such imposition of duty, but nowhere in the treaty are exemptions provided for, except specifically, as follows:

“In the second article, in regard to trading where the same exemptions enjoyed by native subjects is stipulated for; in the third article, regarding privileges and immunities of commerce and navigation; in the seventh article, where exemption from duty of goods to the value of $200 is stipulated for British whaleships; in the tenth article, exemption from compulsory military service; in the twelfth article, regarding consuls; in the thirteenth article, regarding confiscation or seizure; the fifteenth, regarding the exemption of mail-packets from certain duties; in the sixteenth, regarding goods saved from a wreck, and in the only case before this where an exemption or privilege has been asked on the ground of its having been granted to another state or nation. The law officer of the British Crown has decided that before it could be claimed it must be compensated for as fully as compensated for by the other nation; and such a decision must seem to be correct; a contrary view would seem to imply that in the opinion of Her Britannic Majesty’s Government the Government of the United States and the Government of His Hawaiian Majesty had no right to arrange for the liquidation of customs dues by mutual agreement and compensation without considering the arrangement to apply to nations who could not, in the nature of things, give a compensation of proportionate value and effect. It would imply that Her Britannic Majesty’s Government base their expectation upon certain articles of the treaty of 1851, without reference to the spirit of the whole treaty, and its own decisions under articles equally binding, and to further expect to select and enjoy the advantages of one article of a treaty made between two other powers without regard to other articles of that same treaty.

“It has never been the desire of His Hawaiian Majesty’s Government to terminate any of the articles of, or to relieve itself of any of the obligations of the Anglo-Hawaiian treaty of 1851. On the contrary it has always desired to maintain with strict integrity a treaty for which it had a strong traditional respect.

“His Majesty’s Government cannot concede that the abrogation of the fourth, fifth, and sixth articles can change the aspects of the question now under consideration, or that any necessity exists for such abrogation to justify its present position.

“His Majesty’s Government have, however, on former occasions given notice of their desire that these articles should terminate if the Government of Great Britain held to an interpretation of them which would give any validity to such a claim as is now put forward; and if that interpretation is insisted upon, it would seem to give all necessary force and effect to such conditional notice.

“This government has, however, under consideration the question of the necessity of such notice of termination, in view of your note of the 5th instant, and for the purposes provided in the seventeenth article.

“I desire to express the hope that Her Britannic Majesty’s Government will carefully consider, in connection with the differential treatment of goods other than those of the United States under the reciprocity treaty, the great advantages which, under the operation of that treaty, will insure to British subjects and British trade in these islands, the importance of which advantages to these interests you, Mr. Commissioner, are fully aware. That its advantages, by stimulating importations of British goods and adding to the value of the trade and property of British subjects, will far more than compensate for any differential effects upon British trade under its provisions, I think will be admitted.

“His Majesty, in seeking to negotiate that treaty, as yon are aware, sought the advantage of all classes and nationalities in his kingdom; and in laying before your government the benefits shared by your countrymen, I cannot entertain a doubt that you will assure your government, as I am now instructed to assure you, that it is not the wish or policy of His Majesty’s Government, either by legislation or by treaty stipulation, to discriminate against the interests of British trade or British subjects.

“In seeking the prosperity of the kingdom by means of a reciprocal convention with the United States, His Majesty’s Government cannot consider that any British interests within the kingdom have been made to suffer.

“Remembering with pleasure the different occasions when you have labored to prevent any misunderstanding on the part of your government of the real desires and purposes of this government, I with the more confidence rely on your good offices in removing any wrong impression which Her Majesty’s Government may have received of the effect of any action of His Majesty’s Government upon the British interests in your charge, and that you may become more fully aware of the good intents and purposes of this government, and also that His Majesty’s Government may more clearly understand the causes which led to your note, and the treaty obligations to which you refer, I am instructed to ask you, if consonant with your instructions, to confer with me on these points.

“It is the desire of His Majesty’s Government, in all its relations with the great powers and their representatives at this court, to conduct those relations with frankness and impartiality, and on all subjects, where differences have or may arise, to arrive as soon as practicable at a clear understanding, confident that the honesty of its motives and sincerity of its desire to conform justly to all its obligations will become apparent under explanation, and confident also in the justice and magnaminity of the great powers, and in the sincerity of their desire to refrain from any act or demand encroaching in the slightest degree upon the independent sovereignty of His Majesty, in which all powers, especially the maritime powers, must be interested. Of that interest your government has given many proofs. Therefore, considering the long continuance of the kindly relations which have subsisted between the two governments, and the important effect of such relations upon the progress of this kingdom, the earnest desire of His Majesty to perpetuate them, and the undoubted reciprocation of Her Britannic Majesty’s Government in such desire, I trust that Her Majesty’s Government will reconsider the notice contained in your dispatch, and remove any necessity for the abrogation of any part of the subsisting treaty.

“I have the honor to be, sir, your most obedient servant,

“HENRY A. P. CARTER.

“Maj. James H. Wodehouse, “Her Britannic Majesty’s Commissioner aud Consul-General.”

It would seem that at the moment Mr. Carter, who had but recently taken office, had not had his attention drawn to that most important letter, dated March 28, 1856, from William Miller, one of the negotiators of the Anglo-Hawaiian treaty of 1851, to R. C. Wyllie, the other negotiator of that treaty, the first and second paragraphs of which read as follows:

“Her Britannic Majesty’s Government having received a copy of a convention, concluded on the 20th of July, 1855, between the Sandwich Islands and the United States, by which each party engages to admit into its territories, duty free, certain articles of produce of the territories of the other, I have been instructed by the Earl of Clarendon, Her Majesty’s secretary of state for foreign affairs, to address myself to the Hawaiian Government, and to urge on them the following considerations, with a view to obtain for British commerce the same advantages which have been conceded to the United States by the before-mentioned convention.

“The fourth article of the treaty between Great Britain and the Sandwich Islands of the 10th of July, 1851, stipulates that no other or higher duties shall be charged on the importation into the Sandwich Islands of any article the growth, produce, or manufacture of the British dominions than are or shall be payable on the like articles the growth, produce, or manufacture of any other foreign country. If this were the only stipulation in the treaty bearing upon the subject, the claim of Great Britain to participate in the advantages conceded to the United States by the convention in question would be clear; but as the next preceding article of the treaty of 1851 contains a stipulation that any favor which either party may grant to a third country shall be extended to the other party on corresponding terms; that is, either gratuitously or for an equivalent compensation, as the case may be, and as the advantages conceded to the United States by the Sandwich Islands are expressly stated to be given in consideration of, and as an equivalent for, certain reciprocal concessions on the part of the United States, Great Britain cannot as a matter of right claim the same advantages for her trade under the strict letter of the treaty of 1851.”

The conferences and correspondence between Mr. Wodehouse and Mr. Carter subsequent to the letter of May 21 were without any definite result, so far as the main question was concerned.

His Majesty, being anxious to maintain a perfect understanding between his government and that of Great Britain on all matters, and especially with regard to the interpretation of the existing treaty between them, and that the motives which influenced him in making the reciprocity treaty with the United States should not be misunderstood, appointed the Hon. H. A. P. Carter as his envoy extraordinary and minister plenipotentiary to proceed to London to confer with Her Majesty’s Government, and, if possible, to agree upon such an interpretation or modification of Article IV of the treaty of 1851 as would satisfy both parties. He was also to assure Her Majesty’s Government of the high respect and strong friendship of His Majesty and his people for the sovereign and people of Great Britain. Mr. Carter was further charged with the negotiation of a convention providing for the immigration of families of British East Indians into this country, to form a part of the permanent population of these islands.

His Majesty having confidence in the friendly disposition and fairmindedness of Maj. J. H. Wodehouse, Her Britannic Majesty’s commissioner and consul-general—who had resided here a number of years, and was well aware of the importance to this country of the reciprocity treaty with the United States, and that in making it His Majesty’s Government was not influenced by any unfriendly feeling toward Great Britain or any other country—invited him to accompany Mr. Carter to London, to which he assented, provided his government would give consent.

To guard against the effect of failure to agree in the interpretation of Article IV of the treaty of 1851, His Majesty’s Government gave formal notice of the termination of Articles IV, V, and VI, as provided in Article XVII, and receipt of that notice was acknowledged on the 3d of July, 1877, by Lord Derby. It will be seen from Mr. Wodehouse’s letter of May 5 that this course was anticipated.

His Majesty’s envoy was kindly received by Her Majesty the Queen and by the government, but all of his efforts—which have been earnest and repeated—have been unsuccessful in persuading Her Majesty’s secretary of state to accept the construction held by His Majesty’s Government, and clearly set forth in the Miller-Wyllie letter of March 28, 1856, written by authority of Lord Clarendon, then secretary of state for foreign affairs.

Lord Derby appreciated the position of His Majesty’s Government with regard to the treaty of reciprocity with the United States, and was satisfied that no unfriendly feeling existed toward Great Britain, but he declined to give any guaranty or promise that no claim would be made for return of duties on British goods imported previous to July 3, 1878.

Her Majesty’s secretary of state represented to Mr. Carter that to terminate Articles V and VI and the latter part of Article IV was quite unnecessary, as they had no bearing upon the question, and requested the withdrawal of the notice so far as Articles V and VI were concerned; but at the time Mr. Carter declined to do so, because Article XVII does not say that one or two of those articles might be terminated without including the third, and he feared that by excepting either V or VI the notice might be defective as to Article IV, Mr. Wodehouse’s letter of May 5 having also mentioned all three.

Mr. Carter declined, also, to promise that the tariff act of 1876, by which the duties on certain articles were raised to 25 per cent. ad valorem should be repealed, for the reason that the right and power to change the revenue laws rests with the legislative assembly; and after July 3, 1878, Great Britain will not question that legal right.

Mr. Carter could not admit that the Hawaiian Government had not the right to levy such duties on imports as might seem to be necessary.

When articles VIII, IX, X, XI, XII, XIII, and XIV, and XXIV of the treaty of 1857 with France were denounced in 1872 and terminated in 1873, the last of the treaty restrictions upon the authority of His Majesty’s Government to regulate its own tariff were removed. They were the only articles in that treaty intended to apply to duties on imports.

Article VIII of the Franco-Hawaiian treaty of 1857 was substantially the same as article IV of the Anglo-Hawaiian treaty of 1851.

To admit free of duty the goods of Great Britain or any other country would be to violate the conditions of the treaty of reciprocity with the United States, under which the United States gives a valuable and adequate consideration as compensation for the exemptions agreed upon, and stipulates at the same time that “so long as this treaty remains in force” His Majesty’s Government would not “make any treaty by which any other nation shall obtain the same privileges relative to the admission of any article free of duty hereby secured to the United States.”

On the 2d of April last Mr. Wodehouse delivered to the minister of foreign affairs a “memorandum” in the following terms:

“Her Majesty’s commissioner and consul-general has been instructed to state to his excellency H. A. Peirce, his Hawaiian Majesty’s minister of foreign affairs,

• “1. That Her Majesty’s Government cannot admit the right of the Hawaiian Government to terminate the operations of the provisions of Article IV of the Anglo-Hawaiian treaty of 1851 until the expiration of the twelve months’ notice which they have given. While it remains in force, Her Majesty’s Government must require that it shall he faithfully observed, and consequently that duties improperly levied shall be repaid.
• “2. Without further explanation to justify such a course, Her Majesty’s Government must regard the abrogation of Articles V and VI of the treaty of 1851, when the only point in discussion is the first paragraph of Article IV, as an unnecessary and unfriendly act.
• “3. Her Majesty’s Government must regard as a specially unfriendly act the levying, when the treaty stipulation for most favored nation treatment in matters of tariff shall terminate, of any such differential rate of duty as 25 per cent. on British goods imported into the Hawaiian Islands.”

To remove, as far as is consistent with national rights and independence, all cause of complaint and difference between the British and Hawaiian Governments, the latter has consented to the withdrawal of the notice to abrogate Articles V and VI of the treaty of 1851, with the understanding that Article IV is to terminate as before stated, as is shown by the following reply to the foregoing “memorandum,” under date of April 3:

“In reply, I have the honor to say that on being informed by Mr. Carter that the Earl of Derby had suggested that it was unnecessary to terminate Articles V and VI, Mr. Carter was instructed that in case he had not finally withdrawn from his mission to England, he might agree that the notice of termination of Articles IV, V, and VI might be limited to Article IV, with the express condition and agreement that no claim should arise in respect of duties by reason of Articles V and VI. This modification of the notice to terminate Articles IV, V, and VI of the Anglo-Hawaiian treaty of July 10, 1851, may be regarded by you as now made by authority of this communication in case Mr. Carter may not already have so arranged.

“In reply to your statement contained in the first section of your dispatch, I beg to refer you to the letter of my predecessor, Mr. Carter, to yourself, of May 7, 1877, and also to the views of the Earl of Clarendon, conveyed by your predecessor, General Miller, in a note to this government of date March 26, 1856, as expressing the views of His Majesty’s Government.

“In regard to the statement in the third section of your dispatch, I have the honor to state that His Majesty’s Government enact revenue laws with no unfriendly intent, but solely with reference to the interests of the Hawaiian Islands, and also that it is the desire of His Majesty’s Government to levy no higher duties than seem to be essential to such interests.

“I am not as yet informed of the completion of Mr. Carter’s mission to England, undertaken by him with the earnest hope that he might succeed in coming to a harmonious view with Her Majesty’s Government concerning the interpretation of Article IV of the Anglo-Hawaiian Treaty.

“Until receipt of such information I presume that all matters included within his mission will receive attention in London, and, therefore, with the exception of the above-mentioned withdrawal of notice to terminate Articles V and VI of said treaty, I will, if you please, defer further discussion of such matters.

“With the highest respect, &c.,

“HENRY A. PEIRCE.”

The annual statements published by the collector-general of customs for the years 1874, 1875, 1876, and 1877, showing the value of “goods paying duty,” and of “spirits bonded” from Great Britain, Australia, and New Zealand, and British Columbia (from which your committee have made the following tables), prove that there has been an increase in the trade of Great Britain and her colonies with this country since the reciprocity treaty went into effect; and there is no doubt that, with a continuance of prosperity in these islands, trade, not alone with the United States, but with Great Britain, France, Germany, and other countries also, will increase in the future.

Goods paying duty.

Spirits bonded.

The amount collected from October 11, 1877, to March 31, 1878, under the 25 per cent. import duty act, is stated in the report of the minister of finance at $20,033, to wit:

In the first instance, duties are paid by merchants or other individuals, and not by or for account of any government; and as in trade the duty is added to the cost of the goods, the duties are finally paid, to a very large extent, by the consumer of the goods.

The British Government has presented no claim, made no demand or threat, and, being a law-respecting government, your committee feel warranted in saying that, should any claim be presented for return of duties paid, it will have to be done by individuals, and such claims will be adjudicated by the courts of the country according to law.

The advantages of the treaty of reciprocity with the United States are not confined to the citizens of that country; but Her Britannic Majesty’s subjects, and the subjects of His Majesty the King who are of British origin, living in this country or doing business here, all share in those advantages just as completely as do Americans or Hawaiians; and any interruption of the present political or commercial relations of this country with other countries, and especially with the United States, would be damaging to British trade with these islands, as well as to the interests of British subjects residing here.

Great Britain is a great commercial nation, having treaties with many countries, and no doubt her officials carefully avoid, in their transactions with the small powers as well as with the great powers, acts or concessions which might form inconvenient precedents in more important cases.

Between Her Britannic Majesty’s officials and His Majesty’s Government there is a difference of opinion upon the construction of Article IV of the treaty of 1851, and, since the former adhere to their opinion, the latter could not do less than to denounce that article, as they had a perfect right to do, and, by so doing, there is no interruption of friendly relations or sentiments between the two countries.

Regarding the immigration of East Indians, your committee have nothing very encouraging to report.

The British Government are favorably disposed toward the plans of His Majesty’s Government, as explained by Mr. Carter to Lord Salisbury, and would aid im making arrangements in India; but it would first be necessary to go to India to make a convention with the authorities there; and Mr. Carter was given to understand that there would be many difficulties to overcome.

Mr. Carter had interviews with gentlemen who have had experience in India and with Indian emigration, and was informed that the magistrates and other local authorities in India insist very strongly upon the observance of technicalities, so strictly that the agents of the French and Dutch colonies (which have treaties with the Indian Government) have been very much discouraged. Frequent and often causeless investigations on behalf of the immigrants in foreign countries, to which they have gone, by agents of the Indian Government, are great annoyances, and the same might be insisted upon here.

Agents for the colonies mentioned have found it difficult to get the proportion of females desired. It is usually required that the return of the people shall be provided for, though they may not, and many of them do not, avail themselves of the right to return. In some contracts they have had their choice between a return passage and a sum of money about equal to the cost of such a passage.

India being distant from these islands, the expense of bringing passengers so far would be heavy; and it is stated that on long voyages the percentage of mortality of Indians is much larger than with Chinese.

There seems to be but little doubt but that a persistent effort and large expenditure of money would secure the introduction of male and female East Indians into this country, a part of whom would remain permanently from choice; but whether or not the expense and difficulties attendant upon such an immigration would not more than counterbalance the gain, is a question which your committee cannot answer.

The letter from which the foregoing is mainly gathered is addressed to the president of the board of immigration, and dated September 11, 1877.

In a private letter, dated December 19, Mr. Carter wrote: “Since I have learned what I did in regard to India, I have practically abandoned that.”

It is known to some members of your committee that Mr. Carter was very hopeful of securing the emigration of a considerable number of East Indians to these islands, and was quite sanguine of success; and they now infer that the information acquired by him in London must have been of a very discouraging nature.

His Majesty’s envoy was not instructed to go to India, and has not had time to go there if he had proposed doing so.

Respectfully submitted.