that the increased duties which have just been imposed on German goods will be at once removed. | Should the German Government, however, persist in the attitude which they have taken up on this matter, and, further, extend to the products of other British Colonies, and even to those of the United Kingdom, whose Tariff is at the present moment based upon the most liberal principles, the discrimination which they have enforced against Canada, a very wide and serious issue must inevitably be raised involving the fiscal relations of this country and the German Empire. Lansdowne.

Nr. 13030. DEUTSCHES REICH. Der Staatssekretär des Ausw. Amts an den Botschafter in London. Antwort auf das vorige. Ansicht der deutschen Regierung.

Berlin, June 27, 1903.

(Translation.) | Mr. Buchanan, His Britannic Majesty's Chargé d'Affaires, handed in on the 23rd instant a copy of the instructions addressed by Lord Lansdowne to the British Embassy here in regard to the commercial relations between Germany and Canada I have the following observations to offer on these instructions. At the same time, I venture to hope that an explanation of the German standpoint in the matter will contribute to the removal of the erroneous ideas which, to all appearance, are very prevalent in England on the subject of the grounds and justification of the German attitude. || Up to the 30th July, 1898, the commercial relations between Germany on the one hand and Great Britain and her Colonies on the other were regulated by the AngloGerman Commercial Treaty of the 30th May, 1865. This Treaty secured to each of the two Parties most-favoured-nation treatment in the territory of the other Party, and secured, indeed, to Germany most-favoured-nation treatment in the English Colonies, even as against Great Britain, the mother country. When the Commercial Treaty had expired in consequence of its denunciation by Great Britain, she and her Colonies lost the right in virtue of which the grant had been made to them of the reduced scale of duties included by Germany in her Tariff Treaties with other States. In Germany there are, as is well known, two Tariffs: the General Customs Tariff, which, by law, is applied to all those countries with which no Agreements to the contrary are in force; and the socalled Conventional Tariff, which comes into force when Treaty arrangements on the subject are made, and which is purchased by concessions on the part of the various Treaty States, consisting especially in the

modification of numerous items in their own autonomous Tariffs. Consequently, after the Anglo-German Commercial Treaty had ceased to be valid, the provisions of the autonomous German Customs Tariff had to be applied to Great Britain and her Colonies. It required a special Act of the German Legislature to make an exception to the rule in question, since, firstly, in virtue of the Law of the 11th May, 1898, and of subsequent Laws, and lastly, in virtue of the Law of the 29th May, 1901, Great Britain and her Colonies, with the exception of Canada and, for a time, Barbados, were accorded, up to the 31st December, 1901, the lower Customs rates. This procedure shows a special desire on the part of Germany to meet the wishes of Great Britain, for which there is no example in German legislation either before or since. It was caused by the wish of the Imperial Government to make their commercial relations with Great Britain and her Colonies as friendly as possible, even after the expiry of the Commercial Treaty; the justification for it could, however, only be found in the fact that the expiry of the Commercial Treaty brought about no alteration in Customs Tariffs affecting imports from Germany into Great Britain and her Colonies except Canada, and, temporarily, Barbados, and that it was, therefore, fair to maintain in Germany, as regards those territories, the state of things which had actually existed hitherto. The condition mentioned did not affect Canada, because, after the expiry of the Commercial Treaty, preferential duties in favour of the mother country were put in force there, from which imports from Germany were excluded, and because the latter were subsequently also denied those privileges which Canada, by the Commercial Agreement with France of the 6th February, 1893, hat granted to certain French products. Therefore, the exception made by Germany could not be extended to Canada. The application of the German General Tariff to Canada entails, therefore, no unjustifiable discrimination, still less any penalizing of that Colony, as has often been asserted; the measure is merely a consequence of the expiry of the Anglo-German Commercial Treaty, and is necessitated by German law. No penal measures or additional duties have so far, and this must be expressly emphasized, been applied by Germany to Canada.

for we wish also to

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no interference After the expiry

Moreover, there is in the German procedure correct this supposition, which has been often repeated in the relations between mother country and Colony. of the Anglo-German Commercial Treaty, Germany could only choose whether she would apply her General Tariff to Great Britain and all her Colonies, as according to German law would have been necessary in

the ordinary course, or whether she would limit the application of the General Tariff to those parts of the British Empire in which there had been an alteration of the status quo affecting imports from Germany. The choice of the latter alternative, which is much more favourable to Great Britain and her Colonies, is considered by Germany to be requisite in the interests of mutual commercial policy, and to be practically justified because Great Britain had declared on the most diverse occasions that her Colonies formed independent territories for customs purposes, and were independent as regards their decisions respecting the regulation of their relations with foreign countries. The wish to realize this idea was not only the reason and object of the denunciation of the Anglo-German Commercial Treaty, but also came several times to the fore during the consequent negotiations for the renewal of that Treaty, and latterly, at the Brussels Sugar Conference, found very notable expression in the independent attitude as regards the Convention which England strove to reserve for her autonomous Colonies, by making their accession of nonaccession to it perfectly free, and thus establishing for the other States parties to it the possibility of differential treatment for the various parts of the British Empire. The same idea is apparent in the instructions communicated to us, for the reason there given for the denunciation of the Anglo-German Commercial Treaty is 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". | If the English Colonies are to be in a position to follow out their own customs policy, other countries must be allowed to treat them as separate customs territories. The cicumstances which led in Germany to the special treatment of Canada have repeatedly been stated by Germany, and have also been appreciated by the Canadian Government. The Canadian Minister of Finance, Mr. Fielding, expressed himself last year in the Budget debate, according to the shorthand report, as follows: - ,,As I have pointed out on a previous occasion, Germany has two Tariffs one for the world generally, the other, known as the Conventional Tariff, for those countries which have Commercial Treaties with Germany. I suppose many honourable gentlemen will say that this is sound policy. Germany had a Treaty with Canada, or Canada participated in an Imperial Treaty with Germany; and under that Treaty Canada had the advantage from what is called the Conventional Tariff as respects Canadian products. Canada put an end to that Treaty for her own purposes for good and sufficient reasons. Not one party in Canada, but all of Canada, reached the conclusion that this Treaty was not in the best interest of Canada,

or of the Empire, and it should come to an end. Our sister Colonies took the same view on the subject; but it was admittedly the action of Canada above all others which brought about the denunciation of the German and Belgian Treaties. When we ceased to have that Treaty with Germany, when we ceased to extend to Germany many certain privileges which she had enjoyed, Germany withdrew from us the privileges of its Conventional Tariff. Canada thus came into the class of non-Treaty countries, the products of which were subject to the higher Tariff. Let us not deny that from one point of view there was some colour of excuse for the German action." || The Imperial Government were naturally all the more surprised when the same Canadian Minister of Finance, in this year's Budget debate, after Canadian products had been liable in Germany for nearly five years to the provisions of the autonomous Tariff, notified the imposition of extra duties on those imports from Germany into Canada which were liable to duty.

If one examines what has been done by England and Canada who were responsible for the denunciation of the Anglo-German Commercial Treaty, for the differential treatment of German imports into Canada, and, lately, for the imposition of extra duties on German goods to remove the existing cause of dispute, the position, from the German point of view, is as follows: - The only official correspondence in writing which has passed on the subject between the Imperial and British Governments consists of the notes of the 28th June and the 5th August, 1899, mentioned in the instructions. In the former note the English Government inquired why Germany treated Canada differently to the French, Spanish, and Portuguese Colonies. In reply, the German Government explained, in the latter note, that Germany was bound, as regards the French Colonies, by Article 11 of the Peace of Frankfurt, while they had only accorded most-favoured-nation treatment in Germany to the Spanish and Portuguese Colonies, so long as to that effect Treaties existed with Spain and Portugal. Further, the note stated in detail the grounds which governed the German attitude. England never refuted or even replied to these arguments. || In November 1901 the Canadian Premier, Minister of Finance, and Minister of Customs invited the Imperial Consul at Montreal to a confidential discussion at Ottawa as to the possible preparation of an Agreement with Germany. In the course of this discussion, the Canadian Government demanded the grant of all the modifications of the German Conventional Tariff, and were only willing to give in return the few modifications of duties agreed on in the FrancoCanadian Commercial Treaty, which are of trifling importance for Germany,

who only exports such goods to Canada in extremely small quantities. || Any further compromise was refused by Canada, and Germany was even denied the concession which Canada had made without hesitation in the Treaties with France and other nations, namely, general most-favourednation treatment as compared with third States, but which Canada in her relations with Germany claimed as a matter of course. Although in such an Agreement all the advantages were on the side of Canada and the sacrifices on the side of Germany, the Imperial Government did not break off the negotiations as hopeless, but, as the new German Customs Tariff was at that time under discussion in the Bundesrath and Reichstag, confined herself to pointing out that the position of affairs thus created made it impossible for Germany to proceed to the conclusion of a new Commercial Agreement, even if only intended to be provisional. The conversations with Sir Frank Lascelles in April last, mentioned in the instructions, were subsequent to the decision of the Canadian Government to make reprisals against Germany, and subsequent to the order for these reprisals. If at that time it was confidentially mentioned that the German Reichstag might, in case of further injury to imports from Germany by the British Colonies, refuse to give, after the 31th December next, to Great Britain and her Colonies, or to one or more of those Colonies, the rates of the German Conventional Tariff, the reason is that the Imperial Government, especially the last time, when the Law of the 29th May, 1901, was promulgated, had to overcome great difficulties bevore even obtaining the consent of the Reichstag. That consent, however, is, as an Imperial law is in question, absolutely necessary under the Constitution of the Empire. || These explanations show that, in our opinion, the English view of what has passed, is based in many respects on incorrect assumptions, and the responsibility for the initiation and the aggravation of the conflict, cannot properly be laid on Germany. || But even if, after this, the theoretical points of view of the parties remain opposed to each other, an attempt ought still to be made to arrive at a practical solution of the existing differences of opinion. || Guided by these views, the Imperial Government declare themselves quite ready to enter on an exchange of ideas in regard to a method of obviating the present difference, and leave it to His Majesty's Government, in case of an understanding on the point, to make suitable proposals with this object. || I request your Excellency to express yourself to the Government in London in accordance with the foregoing explanations. At the same time, your Excellency is authorized to give them a copy

of this letter.

Staatsarchiv LXIX.

Richthofen.

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