Tennent to Merivale (Permanent Under-Secretary)

The Lords of The Committee of Privy Council for Trade desire me to
call the attention of the Secretary of State for the Colonies to certain
circumstances in connexion with the New Settlements of Her Majesty on the
Western Coast of North America, which as they threaten to retard the
commercial prosperity of New Columbia, and to place British interests
in a disadvantageous position in the important Department of shipping;
point to the expediency of a renewed attempt to induce the Government of
the United States to relax the existing policy in relation to her
coasting trade.

The sudden impulse which has directed a current of immigration to
the Frazer River and to Vancouvers Island necessitates a large resort of
shipping, not alone for the Conveyance of passengers, but for the import
of the manufactured necessaries of life, and the transport of the
products of New Columbia. The present probabilities point to an
increased demand of this nature, and the future prosperity of the Colony
will mainly depend on the prompt and continuous supply of means of
communication with Europe, and the great Sea-bordes of the Pacific and
Atlantic.

The maritime policy of the United Kingdom, whilst in 1854 it threw
open unreservedly the Coasting Trade of Great Britain to the flags of all
Nations, observed a due consideration for the independent action of the
Colonies, by reserving to their respective legislatures, the power of
retaining their own coasting trade exclusively for the British Flag, or
of throwing it open when they should deem it expedient to the shipping of
all nations. The latter course has been taken, by some of our Colonies
east of the Cape of Good Hope; but generally speaking, the Colonial
Coasting trade; including that of Vancouver's Island and New Columbia, is
still to be regarded as closed against all but British Vessels.

On the recent development of enterprize in these settlements, and
the unexpected influx of Colonists to which it gave rise; neither British
nor Colonial Shipping was to be found in their Ports, adequate to meet
the emergency. Hence, as My Lords are informed, the Officer
administering the Government has adopted the expedient of permitting
American Ships to take part in the Coasting Trade on condition of
their seeking a licence from the Colonial Authorities.

In the propriety of this course their Lordships entirely concur; as
tending at once to assist the independent rights of the Colonists, and at
the same time to provide for the commercial requirements of the period,
by facilitating the temporary access of foreign shipping upon ascertained
conditions.

But although this state of affairs cannot be regarded as permanent,
and it is naturally to be hoped and expected, that British enterprise
will exhibit its wonted energy in the new British Colonies; and that
within a reasonable time the British flag will make its appearance in
these waters; it has been forcibly represented by the Shipowners
Association of
Liverpool,

and My Lords cannot but concur in the apprehension expressed by them,
that for some time to come the Shipping interest of Great Britain will
take up its position under circumstances so disadvantageous as compared
with their American rivals, as seriously to discourage the resort of our
own flag to the Frazer River.

The grounds of this apprehension are connected with the geographical
position of California, the nearest organized State on the route between
Europe and New Columbia. American shipping on the Californian Coast can
with ease and profit extend its operation as far north as Vancouvers
Island; and should it on this line encounter opposition from British
Ships, it will exhibit the preponderating advantage of being privileged
to supplement its trade, by touching on its northward voyage at every
American Port in succession from San Francisco to the Frazer
River—whilst a British Ship on the same track would be confined to a
single departure, and excluded by American
Law

from all trading operations at intermediate stations. A Competition,
carried on under circumstances so unequal, presents few attractions to
British Shipowners, and it is to be feared that without some concessions
on the part of the United States, the shipping of that Country may for
some time to come enjoy a practical monopoly of the carrying Trade in
Goods to and from one of the most promising British Colonies.

My Lords direct me in further elucidation of this case to call to
the attention of Sir Edward Bulwer Lytton an aggravation of the
difficulty arising from the severance of New Columbia, and its erection
into a distinct Colony apart from Vancouvers Island. By the existing
laws of the United Kingdom, a voyage from one British Colony to another,
however contiguous, is not held to be "coasting", so that at present
there is nothing in the legislation of the two Colonies, to impose any
restriction on American Ships trading between the Island and the main
land, a voyage which is at this moment the most important in that region.
But it is important to remember that by the 328th Section of the
16th & 17th Victoria
C107

it seems to be competent for Her Majesty by Order in Council on joint
addresses from the Legislatures of any two or more neighbouring
possessions, to place the trade between them on the footing of a Coasting
trade.

My Lords have brought these circumstances to the notice of the
Secretary of State for the Colonies, with a view of suggesting to Sir Edward Bulwer Lytton the propriety of considering in conjuction with the
Secretary of State for Foreign Affairs, the best mode of renewing with
the United States, the communications opened in 1854, with a view to some
relaxation in their laws regarding Coasting. In March in that year the
Earl of Clarendon, on the occasion of the passing of the law by which the
Coasting trade of Great Britain was thrown open to Foreign flags,
addressed a Circular
Despatch

to Her Majesty's Ministers abroad, calling their attention to the fact,
and directing them to invite the various Governments to which they were
severally accredited, to reciprocate the advantages yielded on our part
unconditionally. Sir J. Crampton in his approaches to the Ministry at
Washington, was met by Mr Marcy who was their Secretary to the
Treasury, in a spirit, which although unfavourable as to the prospect of
immediate action, was not without encouragement as regarded the hope of
future results. Mr Marcy stated that so far as his "own individual
opinion went, he concurred in thinking that the reciprocal throwing open
of the Coasting Trade in both Countries would be mutually beneficial,"
but he added that "he would be misleading Sir J. Crampton were he to say
that there was any reasonable chance of the measure being adopted by
Congress at this time. We shall come to it (said Mr Marcy) I have no
doubt, and perhaps sooner than is generally expected; but not now, as
there would be a great majority in both houses against such a measure."

Some months later in September 1854 Sir John Crampton acquainted
Lord Clarendon that during the negociation of the Reciprocity Treaty, a
Member of the Senate was strongly in favour of embracing that opportunity
to throw open the Coasting trade of the United States to the British
flag; and was only deterred from proposing it formally, from the fear of
checking, by premature defeat, a feeling which was gaining ground in
America, and especially in the Southern States in favour of such a
measure.

From that time to the present My Lords have received no further
communications on this subject in relation to the United States, but it
will be for Her Majestys Government to decide on the propriety of
resuming the negociation, provided any reasonable grounds exist, for
believing that the progress of opinion predicted by Mr Marcy has not
been impeded by any subsequent events.

My Lords would suggest, that however averse the American Government
might be found to entertain the proposal in its entirety, of removing
every impediment from the Coasting Trade of the States universally,
motives might possibly be applied that would induce them, even partially
to relax, the stringency of their present legislation.

The immediate object of solicitude is the Coasting Trade of the
Pacific, and it is not beyond the bounds of possibility, that the
legislature of the United States, finding that by

law *

they are excluded from the rising trade of New Columbia, and are admitted
to it pro tempore only on sufferance, might be disposed in return for a
free participation in it, so far to relax their own prohibitory system as
to admit the British flag to the Coasting trade of California. It would
also be well that the Government of the United States were made aware
of the existing law to which I have before adverted, by which it would be
competent for Her Majesty, on addresses from New Columbia, and Vancouvers
Island, to place the trade between these two possessions on the footing
of a Coasting trade; and thereby to exclude the Americans from
the voyage from the Island to Frazer River.

Should the Government now or hereafter evince a disposition to yield
in this matter, the Coasting trade of the States, on the Atlantic would
be no disproportionate equivalent for that of Canada, the St. Lawrence,
and the Lakes.

I am further directed by their Lordships to call to the attention of
Sir Edward Bulwer Lytton, a point, which in the absence of official
information, is involved in some uncertainty—namely; how far the
carriage of passengers coastwise is comprised in the Statute Law of the
United States, which prohibits the Coasting trade in
Goods.

**
By the Constitution of the States, the Supreme Government at Washington
exercises the right of framing laws, "to regulate commerce with foreign
nations and amongst the several States." But it appears to have
been held that Persons, not being subjects of commerce, and not
being imported Goods; they do not fall within the meaning founded upon
the constitution of a power given to Congress, "to regulate commerce."
(See
Peters Public Statutes at large of the U.S. of America. Vol 1 p.
13.
w.)

Hence the question arises, although by the Navigation
Act of the United States, (Ibid Vol. III p
351)

it is enacted "That no goods wares or merchandize shall be imported
under penalty of forfeiture thereof from one Port of the United States to
another Port of the United States in a Vessel belonging wholly or in part
to a subject of any foreign power" whether this prohibition extends to
the carriage of passengers or whether there is any other law of the
States for so extending or construing it.

The importance of this enquiry, in connexion with the Stream of New
immigration now flowing in the direction of New
Columbia,

***

will be apparent to the Secretary of State for the Colonies; and in
bringing the subject under the consideration of the Foreign Department,
specific information on this point should be solicited through Her
Majestys Minister at Washington.