Confidential

I have given my careful attention to Your Lordship's
Confidential Despatches of the 24th and 25th August respecting
arrangements for participation by British Columbia in the
advantages of any Treaty affecting the Commerce between the
British North American Possessions and the United States.

2. In the first of these Despatches Your Lordship acquaints me
that Her Majesty's Government wish to receive from me
confidentially such a statement as I may think best for securing
that the interests of British Columbia should meet with just
consideration. As my acquaintance with the affairs of this
Colony is yet so recent I have requested Mr Hamley the
Collector of Customs and a Member of the Executive Council to
prepare a Minute upon the subject of which I enclose a Copy for
Your Lordship's information. From my own observations and such
other material for forming an opinion as I have been enabled to
collect I concur in the conclusion at which Mr Hamley has
arrived that such a Treaty as is sketched in the Memorandum
prepared by Mr Rose will be upon the whole substantially
beneficial to British Columbia. But I am aware that this
opinion is by no means unanimously entertained, and I am
informed that on some confidential discussion of the advantage
of a Treaty of Reciprocal Trade, in the Legislative Council
during last Session, it was agreed almost without dissent that
such a Treaty would not be advantageous. It is thought by the
opponents of the Measure that the Agricultural interests of this
Colony would be entirely sacrificed by the free admission of
farm produce from the adjacent American Territories, while they
regard the free interchange of the products of our forests and
mines as of less importance in as much as this Colony possesses
as they think natural advantages in these respects sufficient to
ensure ready Markets for our Coal and lumber notwithstanding the
existing duties on these articles imposed by the United States.

In the presence of such a feeling it is not certain that the
Council would desire to adopt such a Treaty, more especially as
its effects would be to diminish our present import duties to
the extent of about seventeen per cent, creating a deficiency
of Revenue which it might be difficult to supply from other sources.

5. Your Lordship's will therefore see that, with those who
doubt the value of the Treaty in question, the facility for
obtaining it which would be afforded by this Colony being
treated as a part of Canada in the negociations on the subject
is not likely to be regarded as of great importance. In fact
the advocates of Reciprocity are those who are in favor of
Confederation and the opponents of Union see no advantage in
Reciprocity.

6. It is not of course reasonable to expect that any special
modification of the Treaty could be made in favor of this Colony
when no valuable equivalent can be offered, and until the
question shall assume a shape in which it might be submitted to
the local Legislature it appears most desirable in any
arrangement which may be possible simply to stipulate that
British Columbia should be included on the assent of her
Legislature, leaving it to that body to decide the question. If
the arrangement should thus be presented to them as one at their
option to accept or reject I have little doubt that the
Community will then see that the operation of the Treaty would
upon the whole be very much to their advantage.