an den Minister des Ausw. Antwort auf das vorige.

Berlin, March 27, 1903. (March 29.)

My Lord, With reference to your despatch of the 18th instant, I have the honour to report that I called upon Baron von Richthofen on the 24th instant, and informed him that I had received Lordship's instructions to ascertain what steps were being taken by the German Government with regard to the Law empowering them to give most-favoured-nation treatment to England after the 31th December next. I added that I had requested Mr. Gastrell to see Dr. von Koerner, the Head of the Commercial Department in the Ministry for Foreign Affairs, and to ask him how the matter stood. || Dr. von Koerner had replied that he doubted whether the question could be submitted to the Reichstag during the present Session, which was now drawing to a close, as it might lead to a discussion on the subject of the Commercial Treaties in general, which it would be advisable to postpone until the new Reichstag should have assembled, but he would make inquiries, and let Mr. Gastrell know the result. I told Baron von Richthofen that personally I did not feel any great apprehension, for it appeared to me that the withdrawal of the most-favoured-nation treatment would be very detrimental to the commercial interests of Germany, but that in order to avoid the inconvenience to commerce which uncertainty might cause, it might be advisable to obtain the sanction of the Reichstag at once to its prolongation. Baron von Richthofen said that a discussion on the question of Commercial Treaties would certainly not be desirable at present. The elections were to take place in June, and the new Reichstag would perhaps meet in October. The question of the Commercial Treaties would then be discussed by them, and that might be the best opportunity for obtaining the prolongation of most-favoured-nation treatment to England. || On my return to the Embassy after this conversation, Mr. Gastrell informed me that Dr. von Koerner had asked him to call upon him in the course of the afternoon, and had expressed the wish to be furnished with an official application for the information which your Lordship had instructed me to obtain. | I, therefore, addressed to Baron von Richthofen the note of which I have the honour to inclose a copy, and later in the evening I took the opportunity of his Excellency's presence at a party at the Embassy to inform him that I had done so.

Frank C. Lascelles.

Anlage.

Sir F. Lascelles to Baron von Richthofen.

Berlin, March 25, 1903.

Your Excellency, || I have received a despatch from the Marquess of Lansdowne, in which his Lordship instructs me to endeavour to ascertain what steps, if any, are being taken by the Imperial Government with regard to the Law empowering them to give most-favoured-nation treatment to Great Britain and Ireland, her Colonies and foreign possessions (with the exception of Canada) after the 31st December next, on which date, as your Excellency is aware, the arrangements made under the Law of the 29th May, 1901, come to an end. || I shall be much obliged if your Excellency will be good enough to supply me with any available information as to the intentions of the Imperial Government in regard to Anglo-German commercial arrangements after the expiration of this year. Frank C. Lascelles.

Nr. 13028. GROSSBRITANNIEN. Der Botschafter in Berlin an den Minister des Ausw. Unterredung mit Richthofen über die Behandlung Kanadas.

Berlin, April 23, 1903. (April 25.) My Lord, With reference to my despatch of the 18th instant, I have the honour to report that in an interview with Baron von Richthofen on the 21st instant I told his Excellency that I had communicated to your Lordship by telegraph the substance of his note of the 15th instant, stating that the German Government proposed in due course to propose to the Reichstag the prolongation of the Law empowering the Bundesrath to extend to Great Britain and her Colonies most-favoured-nation treatment after the end of 1903, but expressing a doubt whether this would be possible in view of the opposition which might be expected in the Reichstag in consequence of the recent action of the Canadian Government in penalizing German goods, and the reported intention of the South African Colonies to treat the produce of the mother-country more favourably than the produce of other countries. || Baron von Richthofen said that it was the action of Canada in giving preverential treatment to Great Britain that had brought about the denunciation of the Treaty of Commerce, and if other British Colonies followed her example, and large portions of the British Empire were to give preferential treatment to Great Britain, it would be very difficult to obtain the consent of the Reichstag to the prolongation of most-favoured-nation treatment to Great

Britain herself. His Excellency added that the competent authorities were now considering whas measures should be taken in consequence of the action of the Canadian Government. || I said that the commercial relations of our two countries were so large that anything in the nature of a Customs war would do incalculable harm to both, an opinion fully shared by his Excellency, but that I fully believed that if any serious damage were done to British trade by the non-prolongation of mostfavoured-nation treatment, the outcry in England would be so great that His Majesty's Government would be forced, however unwillingly, to take retaliatory measures. Frank C. Lascelles.

Nr. 13029. GROSSBRITANNIEN.

Der Minister des Ausw. an

die Botschaft in Berlin. Rekapituliert die Verhandlungen über Kanada. Anschauungen der englischen Regierung.

Foreign Office, June 20, 1903.

Sir, His Majesty's Government have had under their careful consideration Sir F. Lascelles' despatches of the 18th and 23rd April last relating to commercial relations with the German Government, and more especially to commercial relations between the German Empire and Canada. It will be as well before informing you of the views of His Majesty's Government on the subject, that I should briefly recapitulate the circumstances which have brought about the present position of affairs. || Under „The Customs Tariff of 1897", Canada offered preferential Tariff advantages to any country fulfilling certain conditions of reciprocity, and as the United Kingdom already fulfilled these conditions British goods received the benefit of the reduced Tariff. But by the Treaty of 1865 between Great Britain and the German Zollverein, German goods were entitled to the same treatment in British Colonies as British goods, and the German Government having made a claim to this effect, the Canadian Government asked that they might be freed from these stipulations. The Treaty was accordingly denounced by His Majesty's Government on the 30th July, 1897, and expired on the 30th July, 1898. || Early in 1898 „The Canadian Tariff Act" was amended, and after the 1st August of that year preferential treatment in Canada was expressly confined to Great Britain and to certain British Colonies, the ordinary Canadian Tariff being applied impartially to all foreign countries. || On the 11th June, 1898, the German Federal Council sanctioned the proposal to continue most-favoured-nation treatment to Great Britain and her

Colonies and Posssessions -- Canada alone excepted. || The Canadian Government, upon this, called the attention of His Majesty's Government to the action of the Federal Council, and a letter was addressed by Lord Strathcona, High Commissioner for Canada, to the Colonial Office, protesting against the treatment to which the Dominion was subjected. It was pointed out that Canada was extending to Germany the same privileges as those accorded by the Dominion to other foreign Powers, and would on her part be gratified to continue this policy. In these circumstances, the Dominion Government expressed the hope that the German Government would find it possible to alter their decision. || This letter was forwarded to Sir F. Lascelles, who made a verbal communication to the German Government as to the manner in which their action was viewed by the Canadian Government. On the 28th June, 1899, the attention of the German Government was recalled to the matter by Viscount Gough. In accordance with instructions, his Lordship asked for a statement of the grounds upon which the German Government desired to distinguish the case of Canada from the case of the French Colonies, which were in the habit of discriminating in their Tariffs in favour of imports from the mother country, and also from that of the Portuguese and Spanish Colonies which, under the Treaties of 1872 and 1883, exercised a similar power. Lord Gough stated that the fact that Canada had a larger share of independence than these Colonies did not appear to have any bearing on the matter. || Baron von Richthofen replied, in a note dated the 5th August, 1899, that the action of the German Government was based on grounds of fairness, inasmuch as Canada had deprived Germany of a valuable right which she had enjoyed for more than thirty years. || In the autumn of 1901, the Canadian Government came to the conclusion that as the diplomatic negotiations which had been conducted through this Office hat not proved successful, it would be well to discuss the subject with M. Bopp, the German Consul at Montreal. These efforts to bring about a better understanding with Germany unfortunately also failed.

After having patiently waited for five years in the hope of coming to an arrangement with Germany, the Canadian Government decided, in April, 1903, that they could no longer allow the matter to remain on a footing so detrimental to Canadian interests. A clause was accordingly inserted in the Canadian Tariff to the effect that when any foreign country treated imports from Canada on less favourable terms than imports from other countries, a surtax amounting to one-third of the duty according to the general Tariff might be imposed. This clause was

general in its terms, and applicable to the goods of any country which might treat Canadian products unfavourably. It was applied immediately in the case of Germany, and took effect on the 16th of that month, except as regards goods purchased before the 17th April. In the case of such goods it is to apply from the 1st October next. || Sir F. Lascelles, in his despatch of the 16th April last, reported that Baron von Richthofen had informed him that most-favoured-nation treatment would, he thought, certainly be continued to the United Kingdom, but that as the South African Colonies had decided to give a Tariff preference to English goods, it was now matter for consideration whether they as well as Canada should not be excepted from such treatment; and that if Australia should also give the mother country a Tariff preference, a situation would be created which would render it very difficult for the German Government to obtain the consent of the Reichstag to the conclusion of a Commercial Treaty between the United Kingdom and Germany. || During Sir F. Lascelles' conversation with Baron von Richthofen of the 21st April last, his Excellency stated that if the example of Canada in giving a Tariff preference to the United Kingdom were followed by other British Colonies so as to cover large portions of the British Empire, there would be great difficulty in obtaining the consent of the Reichstag to a continuation of most-favoured-nation treatment for this country; and he further informed His Majesty's Ambassador that the competent authorities were considering what measures should be taken in consequence of the recent action of Canada, to which I have referred. This communication has greatly increased the difficulty of the situation, and I have now to give you the following instructions as to the language which you should hold with regard to this most important question. You should, in the first place, remind the German Government that the Treaty of 1865 between the United Kingdom and Germany was terminated by His Majesty's Government, in order that this country and her Colonies might be at liberty to make such arrangements as might be considered desirable in respect of their mutual trade. To this policy His Majesty's Government adhere. || As regards Canada the action of the Dominion, as I have shown, was taken only after every effort had been made to secure fair treatment for Canadian produce in Germany. It was only after these efforts had failed, and Germany had persistently refused to accord to Canadian produce the same most-favoured-nation treatment that Canada accorded to German produce, that Canada was driven in self-defence to measures of retaliation. If Germany will restore Canadian produce to the mostfavoured-nation terms, His Majesty's Government have not the least doubt