No. 226.-1886, December 28: Letter from Marquis of Lansdowne (Governor-General of Canada) to Mr. Stanhope (British Colonial Secretary).

OTTAWA, December 28th, 1886. SIR,-I have the honour to inform you that I have received from Sir L. West a despatch dated the 22nd inst., enclosing copies of a letter from Mr. Bayard to Mr. Phelps dated 15th November, 1886, and of a memorandum in which is contained the draft of a proposal by Mr. Bayard "for the settlement of all questions in dispute in relation to the fisheries on the north-eastern coasts of British North America." These papers, of which printed copies were sent to me, have, no doubt, been transmitted to you through the Foreign Office.

2. I have referred Mr. Bayard's letter and the memorandum to my advisers, and I shall as soon as possible lay before you the formal expression of their opinion upon the subject. As, however, many members of my Government are absent from their offices at this season of the year and as some time must necessarily elapse before Mr. Bayard's proposal can be reviewed at length, it is as well that I should without further loss of time make you aware of some of the objections to which it is open, and which will, I have no doubt whatever, be made to it.

3. I would, before going further, observe that I have read with satisfaction Mr. Bayard's expression of his hope that advantage will be taken of the period of "comparative serenity" which is likely to prevail during the next few months, in order to arrive at an understanding which might put an end to any doubts which now exist with regard to the rights and privileges of United States' fishermen in Canadian waters.

4. I should however be slow to admit that the proceedings taken by the Canadian authorities during the past fishing season deserve to be characterised in the terms applied to them by Mr. Bayard. The reports which I have from time to time had the honour of sending to you have shown that the acts of interference which Mr. Bayard describes as involving the unjust and unfriendly treatment of citizens of the United States were rendered necessary in consequence of the violation by them of the laws to which all vessels resorting to Canadian waters are without exception amenable.

5. My Government does not yield to that of the United States in its desire to reduce within the narrowest limits the occasions for interference with the fishermen of the latter Power and should it prove to be the case that there is no prospect of the establishment of closer and mutually advantageous relations between the two countries either in respect of the fish trade and fishing or of commercial intercourse generally, it will certainly be desirable that steps should be taken to determine beyond dispute the precise limits which divide the waters in which Canadian fishermen have the exclusive right of fishing from those in which that right is common to fishermen of all nations. A proposal for the appointment of a mixed Commission to which this duty should, subject to the concurrence of the Governments of the Powers interested, be entrusted, was, as Mr. Bayard points out, made in the year 1866, by the American Government and formed the subject of negotiations which were eventually superseded

by those which led to the Treaty of 1871, and to the appointment of the Halifax Commission, which however did not deal with the question of the limits of the territorial waters of Canada. If Mr. Bayard had simply reverted to the Adams-Clarendon Memorandum of 1866, omitting the concluding paragraph to which objection was taken at the time by Lord Clarendon and which as Mr. Bayard at page two of his letter points out is not contained in the Memorandum which he now submits, I should have regarded more hopefully than I do at this moment the prospect of an understanding being arrived at before another fishing season commences.

6. The first Article however of the Draft Proposal now submitted by Mr. Bayard, while in other respects following closely the AdamsClarendon Memorandum differs from that memordandum, not only in the omission of the final paragraph of the latter, but also in that it adds (see Mr. Bayard's Draft, Article I, Subsection 1), the important stipulation that the bays and harbours from which American fishermen are in the future to be excluded save for the purposes for which entrance into the bays and harbours is permitted by said Act are hereby agreed to be taken to be such bays and harbours only as are ten or less than ten miles in width.

7. This reservation would involve the surrender of the exclusive right of fishing in bays which have hitherto been regarded as beyond all question within the territorial waters of Canada, such, for instance, as the right of fishing in the inner waters of the Bay of Chaleurs at points 40 or 50 miles from its mouth, which, roughly speaking, may be said to be less than 20 miles wide at its opening.

8. I observe that Mr. Bayard in that part of his letter which refers to this suggestion has cited Conventions entered into by France and Great Britain in 1839 and subsequently by other European Powers in support of his contention that there should be no exclusive rights

of fishing in bays measuring more than ten miles at their open366 ing. It is, I think, obvious that local arrangements of this

kind must be made with reference to the geographical peculiarities of the coast which they affect, and to the local conditions. under which the fishing industry is pursued in different parts of the world, and that it does not by any means follow that because the tenmile limit is applicable upon portions of the coast of the continent of Europe, it is therefore applicable under the peculiar circumstances, geographical and political, which are present in the case of the North American continent. A reference to the action of the United States' Government, and the admissions made by their statesmen in regard to bays on the American coasts will, I think, strengthen this view of the case. The award in regard to the Bay of Fundy, upon which Mr. Bayard also relies in this part of his argument, was, I believe, justified mainly upon the ground that one of the headlands which formed this bay was in the Territory of the United States, and that it could not therefore be regarded as a Canadian bay.

9. The ad interim arrangement embodied in Article II, of the memorandum prejudges in favour of the United States one of the most important of the points which have been in dispute by deciding adversely to Canada the construction which is to be placed upon Imperial and Canadian Statutes, the proper interpretation of which is at this moment the subject of litigation before the Canadian

Courts. It is to be observed that this article might, in the event of the failure of the two Governments to arrive at a definite arrangement, a contingency which, considering the relations of the United States' Senate and the President, cannot be dismissed from our contemplation, remain in the operation for an indefinite time, greatly to the disadvantage of the people of this country.

10. The procedure suggested in Article III, for the investigation on the spot of all cases of trespass by United States' fishing vessels, appears to be open to criticism as capable of being used for the purpose of frustrating the ends of justice. I would submit that no case has yet been made out for depriving of their jurisdiction particularly in those cases where the offence must ex hypothesi have been committed within the territorial waters of the Dominion, the properly constituted and trustworthy tribunals of this country, and substituting for them an irregularly composed Court of First Instance, such as that which would come into existence if this article were to be adopted.

11. Article IV prejudges in favour of the United States the important question which has arisen as to the commercial privileges to which United States' fishing vessels are entitled while in Canadian waters. My Government will, I have no doubt, insist upon the necessity of maintaining the distinction made by the Convention of 1818 between fishing vessels endeavouring to use Canadian bays and harbours as a basis of operation from which to prosecute their industry in competition with Canadian fishermen, and trading vessels resorting to such bays and harbours in the ordinary course of business.

12. The history of the negotiations which preceded the Convention of 1818 makes it perfectly clear that the purchase of bait was not one of the purposes for which it was intended that United States' fishing vessels should have a right of entering Canadian waters. It is, I observe, proposed by Mr. Bayard in the Article under consideration, that this point also should be decided in anticipation against the Dominion without further discussion.

13. Under Article V it is assumed that the seizures and detentions which have taken place during the past season in consequence of noncompliance by United States' fishermen with the Customs Laws of Canada have in all cases involved the violation of the Treaty of 1818 by the Canadian authorities, and we are accordingly invited before submitting our case to examination by the proposed mixed Commission, to release all United States' fishing vessels now under seizure for a breach of our Customs Laws, and to refund all fines exacted for such illegality. We are, in other words, before going into Court, to plead guilty to all the counts contained in this part of the indictment against us.

14. Indeed, if Mr. Bayard's proposal be considered as a whole it amounts to this-that the Government of the Dominion is to submit. its conduct in the past and its rights in the future to the arbitrament of a Commission, without any assurance whatever that the recommendations of that Commission are likely to be accepted by Congress and that before the enquiry commences it is to place upon record the admission that it has been in the wrong upon all the most important points in the controversy. Such an admission would involve the public renunciation of substantial and valuable rights and privileges for

all time without any sort of equivalent or compensation. Mr. Bayard can, I venture to think, scarcely expect that my Government should agree to so one-sided a proposal or should make without any return, concessions so damaging to the interests of this country or so injurious to its self respect.

15. I trust that Her Majesty's Government will, to the utmost of its ability, discourage that of the United States from pressing the proposals in their present shape, and will avoid any action which might induce the belief that the offer embodied in them is one which deserved a favourable reception at the hands of the Government of the Dominion.

I have, &c.,

The Right Hon. EDWARD STANHOPE,

(Sd)

LANSDOWNE.

&c. &c. &c.

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No. 227.-1887, January 10: Report by Mr. Daniel Manning, United States Secretary of the Treasury, to the Speaker of the United States House of Representatives.

[49th Congress, 2nd Session. House of Representatives. Ex. Doc. No. 78.]

AMERICAN FISHERIES.

Reply of the Secretary of the Treasury.

TREASURY DEPARTMENT, January 10, 1887.

SIR, I have the honour to receive the resolution of the House of the 14th ultimo, making enquiry in regard to the "interpretation now given by the Treasury Department to the tariff law of 1883, which in one section declares that 'fish, fresh for immediate consumption,' shall be free of tax on arrivel at our sea ports or lake ports, and in another section declares that foreign caught fish, imported fresh,' shall be taxed at the rate of fifty cents for each hundred pounds," and also requesting me "to transmit to the House copies of all official correspondence, opinions and decisions bearing on the subject, together with a statement of the duties collected each year, since eighteen hundred and sixty-five, on the several descriptions of fish caught on the lakes, or the Canadian tributaries thereof, and also on the several descriptions caught in the North Atlantic, or on the shores of the islands thereof."

FROZEN FISH.

A satisfactory reply to these enquiries will make necessary a preliminary statement, and an exhibition of certain details connected therewith.

By the tariff law of 1846 there was levied 20 per cent. ad valorem, on the foreign value of:

Fish, foreign, whether fresh, smoked, salted, dried, or pickled, not otherwise provided for.

The same schedule, and language, were preserved in the tariff law of 1857, but the rate was reduced to 15 per cent.

The tariff law of 2nd March, 1861, levied in the tenth section the following rates:

On mackerel, two dollars per barrel; on herrings, pickled or salted, one dollar per barrel; on pickled salmon, three dollars per barrel; on all other fish, pickled, in barrels, one dollar and fifty cents per barrel; on all other foreigncaught fish, imported otherwise than in barrels or half-barrels, or whether fresh, smoked or dried, salted or pickled, not otherwise provided for, fifty cents per one hundred pounds.

In its twenty-third section that law declared that "fish, fresh caught, for daily consumption," shall be exempt from duty.

Then began a perplexity which has embarrassed the department up to the present day. Someone at the port of entry must, under that clause, decide whether or not the fish, entered as free thereunder, is "fresh caught," and is "for daily consumption." Did the qualification "for daily consumption" refer to the "fish," or to the catching, and the purpose of the catching? Who can correctly pass judgment on the motive of the fishermen, or of the importer?

On 18th June, 1866, this department decided (see Appendix A) that the phrase included all fish imported for consumption, while fresh, and did not include fish imported fresh, but to be afterwards dried, or pickled, or cured for future use. "Daily consumption," said this department, twenty years ago, "means consumption within a short time." That view seems correct, but, nevertheless, the law was intrinsically incapable of exact execution, inasmuch as it might be difficult for a customs officer to foresee or foreknow the intentions or purposes referred to.

I believe that the fish clause quoted above from the law of the 2nd March, 1861, and which levied a tax on fish, stood till 1870, but the free clause was made in 1870 to read:

Fish fresh, for immediate consumption.

The substitution of "immediate" for "daily" did not remove the perplexity.

The Tariff Commission did not report on the subject.

The tariff law of 1883 taxes fish at our sea ports, our lake ports, and on the frontier, by these words in the schedule for "provisions": Mackerel, one cent per pound.

Herrings, pickled or salted, one-half of one cent per pound.

Salmon, pickled, one cent per pound; other fish, pickled, in barrels, one cent per pound.

Foreign-caught fish, imported otherwise than in barrels or half-barrels, whether fresh, smoked, dried, salted, or pickled, not specially enumerated or provided for in this Act, fifty cents per hundred pounds.

368

A subsequent section declared that the following articles, when imported, shall be exempt from duty:

Fish, fresh, for immediate consumption.

Fish for bait.

Oil, spermaceti, whale and other fish oils of American fisheries, and all other articles the produce of such fisheries.

Shrimps or other shell-fish.

Fish sounds or fish bladders.

The kinds of fish just described having been "specially enumerated, or provided for " in 1883, were thereby taken out of the clause levying a tax on foreign-caught fresh fish.