Sir Philip E. Wodehouse to H. A. P. Carter , His Hawaiian Majesty’s, May 5, 1877

Report of the committee on foreign relations to the legislature of 1878.

To the Hon. G. Rhodes, President of the Legislative Assembly:

The undersigned members of the committee on foreign relations respectfully beg to present the following report:

In accordance with the requirements of this house upon certain resolutions presented by the Hons. J. Nawahi, of Hilo, and G. W. Pilipo, of North Kona, the undersigned have the honor of placing before you all of the information asked for by those resolutions.

The undersigned beg leave to say that they have carefully examined all of the correspondence relating to the matters in dispute between our government and the Government of Great Britain, which have originated in the operation of atreaty of reciprocity made between the Hawaiian Government and the Government of the United States of America.

Owing to our action in this matter our government is now at issue with a power opposed to us; we may, however, be justified, or Her Britannic Majesty’s Government may have the right of the question.

In view of the preceding, your committee would respectfully ask the indulgence of this honorable assembly to refer to the civil code and read articles 4, 5, and 6 of the Anglo-Hawaiian treaty of 1851.

The steps taken by His Majesty’s several ministers of 1874, 1876, and 1878 have apparently all aimed at one object, and the ministerial policy has been to indorse the action which has led us into these difficulties, so as to cause Hawaii to be threatened with coercion, and our relations with a friendly power to be disturbed.

It is very evident to be seen that the supreme judges have also indorsed the action taken by the ministry in this matter, as, in all difficulties arising out of any question, His Majesty with his ministers would, without a doubt, consult the judicial authorities of the country as to their opinion concerning such difficulty.

In order that we may all see the true bearing of this matter, your committee beg to present several important letters which they have selected, and which they consider necessary for this assembly to understand in order that we may avoid the difficulties that beset us in being placed between two fires.

The first is a letter from Commissioner and Consul-General Major Wodehouse, addressed to our minister of foreign affairs, and secondly, the answer of our minister of foreign affairs, H. A. P. Carter, to Major Wodehouse.

Exhibit A.

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 of 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 XVI 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 Hawaiian 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,

Exhibit B.

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 reciprocal 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, 1867, 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 Oldfield 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 be 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 exemption 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 whale-ships. 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 has 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 operations 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 you 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 conduce 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 magnanimity 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.

Renewing the assurances of the highest respect and most distinguished consideration,

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

Exhibit C.

To His Majesty Kalakaua:

Sire: I am constantly regretting the delays in my mission here, which are partly owing to the season, as every one who can get away are out of town; but a good deal of delay arises out of inherent difficulties of the question between the two governments. We thought we had reached a ready solution in the withdrawal of the fourth article of the British treaty, by mutual consent on my agreement not to raise duties on certain articles above ten per cent., but when we came to discuss the wording I insisted on the expression that the article should not be invoked in favor of any drawbacks or free entry of British goods in the past, and told them that we did not propose to pay back any of the duties which had been paid under protest, and that if that point could not be covered I would make no promises for the future, as if we were ever to be asked to refund we should refuse, and if compelled so to do, we should use our undoubted right after the expiration of the year’s notice to put such a tariff on British goods as would make them repay us tenfold. They said they would make no claims, but they could not tell but that British importers might make such claims. I told them if they agreed to my wording we would take care of the British importer; but then the question came up as to whether if they made any agreement whereby the importer was barred in our courts, he would not have a right to come upon them and said it would be ex.post facto; so that matter had to go to the law officers, and they have not yet answered. I fear you may think I have not pushed matters fast enough, but as they feel we have done wrong, but some of them are willing to try and condone it, I should by too much haste only strengthen those who would like to say that we must carry out their view of the treaty or they would make us, and if we denounced the articles they would break off diplomatic intercourse with us. As to other nations, I am confident it is useless for me to try and do anything till the question is finally settled here, but as soon as I am sure of a settlement I shall push matters with them.

I wrote before that similar questions were under discussion with other governments, and I inclose some extracts from a speech of Sir Stafford Northcote, the chancellor of the exchequer, which will show you how important they deem these questions.

I can do nothing at the India office until the foreign office decide these matters. I have not given an order for a picture of Cook, hoping really when I get things settled to get the British Government to give us one.

The weather is getting cold, and I fear I shall be in Germany at a very unpleasant time of the year; but I hope to be able to push matters faster there after settling here. Trusting Your Majesty and the Queen and all the royal family are well and happy,

I am, sire, your humble servant,

Exhibit D.

Sir: Your official dispatch of October 18 has arrived, as also one to His Majesty of October 13, receipt of which he commands me to acknowledge.

That delay and procrastination in reaching a conclusion to your negotiations should happen is, of course, unavoidable; and as this state of affairs arises not out of your freewill, I can only counsel you to patience, and assure you that we confidently rely upon your judgment and discretion.

Mr. Lester, you say, a day or two since, handed you, unofficially, a draught of a proposed declaration which was not worded to your satisfaction, but that Mr. Kennedy had afterward intimated that a declaration worded to your satisfaction would be accepted, your wording to be, “That so long as we do not raise the duties on the schedule, as arranged at Honolulu with Mr. Wodehouse, over 10 per cent., Article IV shall be inoperative, and not invoked in favor of British goods.” You also say, “That if this wording be accepted, you will sign the declaration and withdraw our denunciation of July 3, 1877, of the article.”

This statement does not include the idea that no reclamations for the past shall be pressed upon us; but your statement in His Majesty’s letter that “The article should not be invoked in favor of any drawbacks or free entries of British goods in the past” covers the point, and assures me that you are not overlooking an important feature of our case.

You say further on that the British secretaries have raised the objection that if they agree to your wording of the declaration, which will bar out from our courts the claims of British merchants for drawbacks, the British Government will make itself thereby liable for these drawback claims, and that this question has been referred to the law officers of the Crown, who had not at the date of your letter given in their opinion.

It is not necessary here for me to enlarge upon the views forwarded to you by my last dispatch; you will be in possession of it before this reaches you; and I am glad by your letter, public and private, received by last mail, to find that your views as to the management of your mission are in accord with that dispatch.

It appears to me almost certain that you will fail of obtaining a satisfactory declaration, and will be obliged to withdraw, letting our denunciation run to its termination. Without advising you to hurry, or to abruptly close your negotiation, it will be advisable for you to withdraw so soon as sufficient time has been allowed to dispose of our matters deliberately, after the return of Lord Derby.

In the matter of interpretation of the fourth article, in which the British foreign office appears now to differ so widely from our interpretation, I beg to call your attention to inclosure herewith marked H. It contains letter of General Miller, under date of Honolulu, March 28, 1856, to Mr. Wyllie, our foreign minister, communicating the instructions of the Earl of Clarendon to General Miller upon the subject of a reciprocity treaty and its relation to the favored-nation clause of the treaty of 1851.

* * * * * * * * *

“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 Uhited 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 gratu-tously 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.”

You will observe in the extract that Lord Clarendon admits our interpretation fully, and that England, under the fourth article, cannot claim similar treatment.

Judge Allen writes to me that he has forwarded to you this letter of General Miller; but lest he may have failed to do so, I have sent copy forward.

This declaration of the British foreign office ought to be conclusive as to the interpretation of the fourth article; but if not so viewed now, ought to be conclusive upon allowing your “declaration,” with complete bar to past damages.

Your further efforts must be determined by the opinion of the law officers of the Crown. If they shall give their opinion that the legal rights of Great Britain under the fourth article cannot be waived without rendering their government liable to suits for recovery by their own subjects, you will have to depend upon our denunciation as our only ground of solution.

Mr. Allen has been instructed to go on with the Portuguese treaty. At last report he advised me that as soon as the Portuguese minister returned to Washington, negotiations would at once be commenced.

Your information regarding withdrawal from postal union has been noted with interest.

With highest respect and consideration, I have the honor to be, sir, your most obedient servant,

Exhibit E.

I will proceed to make known to you the views of Her Majesty’s Government in the present position of the question.

I have to observe in the first place that in dealing with it, Her Majesty’s Government have to consider it not merely as regards the relations between Great Britain and the Hawaiian Islands. The arrangements which may be arrived at for its settlement will also have a bearing upon the commercial relations and engagements of this country with foreign states generally.

Her Majesty’s Government cannot therefore be parties to any arrangement which would be opposed to their general commercial policy. They are willing to accept fully the explanation given by you and by Mr. Carter in regard to the reciprocity treaty between Hawaii and the United States, and they have no wish that that treaty should impair their friendly sentiments towards Hawaii. But at the same time, as a necessary condition to this friendly understanding, Her Majesty’s Government expect that the Hawaiian Government will remove just causes of complaint, and the draught of declaration proposed in my note to Mr. Carter of the 25th of October last, not having been accepted, you must not give any pledge that the offers then made will be repeated. In consideration of the peculiar circumstances of the commercial relations of the Hawaiian Islands, as explained by Mr. Carter, and the statements made by you after communication with British merchants interested in the trade with those islands, Her Majesty’s Government proposed this method of settlement of the points in discussion between the two governments.

But it was only as a temporary arrangement, the reciprocity treaty of 1875 being limited in duration, and only under the peculiar circumstances of the case, that Her Majesty’s Government could agree to any sort of differential treatment of British goods, and a formal agreement to the reduction of the 25 per cent. duties to 10 per cent. as a maximum was a necessary condition of any such arrangement. Without reverting to questions of the interpretation of Article IV of the treaty of 1851, for the termination of which notice has been formally given by the Hawaiian Government, I have to instruct you on your return to Honolulu to make the following statements to the King and to the Government of Hawaii.

• First. Her Majesty’s Government cannot admit the right of the Hawaiian Government to terminate the operation of the provisions of that article 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 be faithfully observed, and consequently duties improperly levied must be repaid.
• Second. Without further explanation to justify such a course, Her Majesty’s Government must regard the abrogation of Articles V and VI, in the treaty of 1851, when the only point in discussion is the first paragraph of Article IV, as an unnecessary and unfriendly act.
• Third. Her Majesty’s Government must regard as a specially unfriendly act the levying, when the treaty stipulations 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.

You will give a memorandum embodying these three statements to the Hawaiian minister with whom you may be in communication on your return to Honolulu; and if you think fit you may read this dispatch to him and supply him with a copy of it.

I am, sir, your most obedient, humble servant,

Upon the careful consideration of your committee, they have been able to see clearly the views taken by each of the contesting parties, as also the ground assumed by Hawaii in giving the notice herein mentioned of denouncing Articles IV, V, and VI of the Anglo-Hawaiian treaty of the 10th of July, 1851.

And on this ground the two governments are now at issue with each other. Prior to the 5th of May, 1877, the Government of Hawaii was not aware that she was standing in antagonism to the interests and friendly relations of the Government of Great Britain, neither had it occurred to the minds of the authorities of our government that a controversy between the two countries should arise out of this treaty of 1851.

Therefore, owing to the information derived from the careful perusal of the above correspondence, your committee have arrived at the following conclusions, and beg to state to this honorable assembly that the Government of Hawaii has unquestionably violated the treaty between this country and the Government of Great Britain of the year 1851, and the violation has led to a question of our public safety, and has given rise to a state of interrupted good feeling between us and a nation which has always befriended us in the past.

The weight of this matter has fallen on us through the action of our government from the year 1874 up to the present time. By an act of the legislature of 1874 we commenced this work of alienation. Now this was the proper time to have considered the purpose of the 17th article of the Anglo-Hawaiian treaty of 1851, and which article reads thus: “In order that the two contracting parties may have the opportunity of hereafter 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 interest of their respective subjects, it is agreed that at any time after the expiration of seven years from the date of the exchange of the ratifications of the present treaty either of the contracting parties shall have the right of giving to the other party notice of its intention to terminate Articles IV, V, and VI of the present treaty; and that at the expiration of twelve months after such notice shall have been received by either party from the other,” &c., then these articles would be terminated, and the several conditions of those articles would not be held to bind either of the contracting parties.

But during a long period after the operation of the treaty of reciprocity with the United States of America, the Hawaiian Government never did comply with the purpose of this article, but were remiss in their duty to obviate the difficulty that would be sure to arise in the future. They were decidedly wrong in this matter.

All the preliminary negotiation by the ministers, in concurrence with the supreme judicial authority, prior to the final passage of this said treaty of the 30th of January, 1875, was generally approved of; and had those negotiations been conducted with a strict observance of the aforesaid article of the British treaty, then there would not have been any disturbance of harmony; but the chief officers of the government urged. King Kalakaua to take in hand the negotiations, and he proceeded to do so—went abroad on this errand, in accordance with their wishes.

In consequence of this supposed advantageous procedure, we have only succeeded in affecting our national status, and have given cause for serious protests on the part of governments with whom we have treaty stipulations.

Your committee here beg to express their very grave censure of the action of the chief executive officers of the government.

But this is not the only instance wherein Hawaii has acted in opposition to her own interests. Our country was again led into an unfriendly course which was as follows: The ministry, in the Assembly of 1876, and others who were opposed to the peace and prosperity of our nation, supported with great vehemence, and, by the distribution of offices to the representatives of the people at that session, passed an act relative to the amendment of our revenue laws. The first was an act increasing the tariff, and the next was an act to exempt and allow certain articles of American origin to be admitted free of duty. Owing to these enactments we are now liable to pursuit in the courts of law. In this predicament we have endeavored to offer a defense such as contained in the letter of H. A. P. Carter, in which he makes answer as a sort of excuse; but his explanation appears to be insufficient to obtain the desired result of what could have all been settled here.

Our government, however, thought it would better our case to appoint an envoy, and clothe him with full powers to settle the controversy in England; but in reviewing the correspondence relative to his mission we cannot entertain hopes of a satisfactory issue.

With deep regret, on account of the puerile course of our envoy, your committee beg to show that Hawaii has not derived any benefit whatever from his mission; it having rather tended to his own personal advantage. His proceedings do not appear very praiseworthy, and are accompanied with evidence of a vindictive and mischievous spirit. He says in his letter to the King, “If we were ever asked to refund we should refuse, and if compelled so to do, we should use our undoubted right after the year’s notice to put such a tariff on English goods as would repay us tenfold.”

Your committee are well convinced as to his intentions, and the intentions of the present cabinet—they do not cordially seek an adjustment.

It is also very evident to your committee that they are inclined to embroil the friendly relations between us and Great Britain, as is apparent from their efforts to terminate Article IV of the treaty of 1851, and hence their holding on to the fourth article of the reciprocity treaty with the United States.

The truth of these remarks may be seen from extracts of his letter to the King, in which he says, “I should by too much haste only strengthen those who would like to say that we must carry out their view of the treaty or they would make us, and if we denounced the articles they would break off diplomatic intercourse with us.”

Your committee therefore appeal to this Legislative Assembly in the strongest language against a course which is in direct opposition to the maintaining of Hawaiian independence.

It is also necessary for this assembly to observe the answer of the acting minister of foreign relations, who is our present minister of the interior, to the dispatch of H. A. P. Carter, in which he thoroughly supports the views of our envoy while acting in the foreign office as minister of foreign relations.

All of the acts of our envoy are exactly in unison with his instructions, as will be seen by his letter to our envoy, and appended to this report, and marked Exhibit D.

The apparent grounds of the protests of the government of Great Britain to the government of Hawaii may be seen by referring to the dispatch of J. H. Wodehouse of the 5th May, 1877, and marked. Exhibit A, and certain extracts taken from the letter of Lord Derby, the British secretary of foreign affairs, of the 25th of January, 1878, and marked Exhibit E. These grounds of objections presented to our government are perfectly plain, and are such that we cannot well avoid them. Your committee therefore recommend that these letters be carefully considered, and that the three particular points asked for by the British Government and specified in the letter of Lord Derby be approved of by this assembly.

If these are matters which can be avoided, we should do so; and if there are possibilities of making some amendments, we should by all means justify ourselves; and should there be sufficient grounds for a positive, refusal, we should do so. But your committee, in considering the demand of Great Britain, believe the same to be very reasonable and just, and recommend this assembly to authorize the minister of finance to pay out of the government treasury all of the claims made by the British importers on goods imported from Great Britain, whereon duties of 25 per cent. have been improperly levied; and they would further recommend to this honorable assembly the repeal of the tariff act, approved the 27th day of September, A. D. 1876, as the said act is not in violation alone of our treaty rights with Great Britain, but is burdensome to the consumer. And they would further recommend to this assembly not to favor the approval of any acts of reprisal as proposed by H. A. P. Carter to the King, as such a course would only tend to irritate and increase unfriendly feelings.

Thus we are liable to damages from our unwise course, and our government treasury may sustain a loss from the malfeasance of our authorities. Could your committee ascertain correctly the deficiency from the time the negotiations of the reciprocity treaty first took place up to the present, it would be seen that our government has suffered serious loss.

This is not all. Mr. Carter has not accomplished anything by his negotiation. His action was not calculated to produce harmony; he has stood in the way of an adjustment, and he has aggravated rather than quieted.

Another matter he was deputized to do on this expedition was relative to the immigration of the people of India, and he never made any application on the part of our government in this matter, if his language to the King in his letter is to be of any value, where he says, “I can do nothing at the India office until the foreign office decides these matters.” He has assumed a haughty tone toward the powers of Europe, and by his neglect of duties confided to his charge, your committee believe that he trenches on the dignity and honor of the Hawaiian Government. All of his actions before the English court dishonor his government.

Your committee who have signed this report appeal in the spirit of patriotism in behalf of our government, our throne, and our people.

• First. That we stand firm on our soil to guard and maintain intact the independence of Hawaii.
• Second. That we declare our intentions to perpetuate cordial relations of friendship between Great Britain, France, and all other treaty powers.
• Third. To observe carefully the action of our government in leading the Hawaiian people.

To object decidedly to all measures leading to annexation with any government.

We annex to this report certain tables relating thereto and numbered.

Respectfully submitted.

Table I.—Expenses of the Commissioners E. H. Allen and H. A. P. Carter in negotiating the treaty of reciprocity.

Table II.—Expenses of our envoy to settle the difficulties between Her Majesty’s Government and His Hawaiian Majesty’s Government relative to the violation of the Anglo-Hawaiian treaty of 1851.

Table III.—Loss to the treasury in paying back the amount collected of the twenty-five per cent. duty that was levied on British goods, under the act of 1876 (which the ministers now wish to repeal), and which Great Britain has demanded of us.

Table IV.—Actual loss and damage of the government treasury from the date of the final passage of the reciprocity treaty up to the 31st day of March, 1878.