Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 2, 1878

No. 252.
Mr. Comly to Mr. Evarts.

Legation of the United States,
Honolulu, July 8, 1878. (Received July 25.)

No. 43.]

Sir: Referring to former instructions from the Secretary of State, I have the honor to report further progress in the Hawaiian negotiations with other nations arising from the reciprocity treaty with the United States.

The Hawaiian envoy, Mr. Carter, after visiting England, France, and Germany, has returned. He was successful in Germany, and without decided result as to England. No report as to France. Germany concedes that that government has no right to claim like privileges with the United States under a treaty which is based upon special reciprocal concessions for the mutual benefit of the two principals alone.

England has made no formal surrender of her claim to enjoy all the privileges of the reciprocity treaty under the parity clause of the Anglo-Hawaiian treaty, although she has made a proposition to abandon further proceedings without prejudice to existing rights, provided the Hawaiian Government will pledge itself not to lay a tariff of more than 10 per cent. ad valorem on any article of British product which is included in the free schedule of the reciprocity treaty for American goods.

This proposition, not being accepted by the Hawaiian envoy, was withdrawn. There is no doubt, however, that if legislative action can be brought to authorize it, this proposition will be renewed and accepted by the Hawaiian Government, and will end all difficulties. Whether such legislative action will happen is as difficult to predict as whether we shall have “rain o’ Wednesday.”

* * * * * * *

The legislative committee on foreign relations was finally ordered to report on the whole subject without further delay. A minority report was made first. It is the work of Charles R. Bishop, chairman. He is an American by birth, a noble of this kingdom, and has held places of the highest trust. One native member of the committee signs with him. The majority report is said to have been written by Gibson, although not a member of the committee. It is signed by two natives and one half white.

The report of Henry A. P. Carter, the envoy in charge of the treaty business, was not handed in until after these reports were made. I inclose, also, one copy of it.

The envoy reports briefly and generally, giving results about as I have stated above.

The minority of the committee take substantially the same ground with that held by the United States with reference to the treaty rights of other nations growing out of the reciprocity treaty. The majority of the committee go further than Great Britain herself in claiming for that and other powers under the treaty. They report that “the Government of Hawaii has unquestionably violated the treaty between this country and Great Britain of the year 1851, and the violation has led to a question of our public safety, and has given rise to a state of interrupted good feeling between us and a nation which has always befriended us in the past.”

The Hawaiian Government is accordingly gravely censured by the committee. Referring to the somewhat peremptory notification of Major Wodehouse, that “Her Majesty’s Government cannot allow of British goods imported into the Sandwich Islands being subjected to treatment other than that which is accorded to similar goods of American origin,” and the points of Lord Derby’s letter, the majority of the committee concede that “these grounds of objection presented to our government are perfectly plain, and are such that we cannot well avoid them.” And they ask that the Assembly approve the British claim and provide for the repayment of all tariffs “improperly” levied on British goods, thus ordering Great Britian to be placed on an equality as to favors with the United States, without any equivalent whatever. The majority also denounce the course of the Hawaiian executive chiefs as “in direct opposition to the maintaining of Hawaiian independence.” And they attempt to show that Hawaii is a loser pecuniarily and otherwise by the reciprocity treaty with the United States. The whole tone of the report is unfriendly to the United States, while conceding more, even, than is now claimed by Great Britian. Major Wodehouse, the British commissioner, has very frankly explained to me, in a private conversation to which I was invited by him, the present posture of his government in the affair, even going so far as to show me his personal instructions from Lord Derby. This he did, as he told me, by permission or direction from that minister. If I understand him correctly, the British Government will let the whole matter drop if British goods are admitted at a rate not to exceed 10 per cent. ad valorem, i.e., a differential treatment of 10 per cent., as compared with American goods, admitted free. Lord Derby’s proposition was to attach the United States free schedule to a stipulation that British goods of same should not be required to pay more than 10 per cent. ad valorem, and that the denunciation of articles 3, 4, 5, and 6 of the Anglo-Hawaiian treaty should be withdrawn. The denunciation was withdrawn as to all except the last clause of the third article, but the engagement as to the amount of tariff to be paid by British goods could be made only by legislative action.

Finding such influences at work, in and out of the Legislative Assembly, threatening the integrity of the reciprocity treaty, I addressed the Hawaiian minister of foreign affairs on that subject. A copy of my letter is made Inclosure No. 4, herewith, and I respectfully ask attention to it.

Meantime, the various assaults upon the ministry culminated in a sudden decision by the King to dismiss the whole of them.

* * * * * * *

In consequence of these changes my letter to the minister of foreign affairs passed over to the new ministry for consideration. I learned from a trustworthy source that the cabinet had already held a meeting for the discussion of the letter, when the new minister was excusing the delay in answering on the ground of occupation with other duties.

After several excuses of this sort I received the brief letter attached as Exhibit No. 5. I feel justified in claiming that this letter concedes my whole claim on behalf of the United States.

I am, &c.,

JAMES M. COMLY.

[Inclosure 1 in No. 43.]

Report of the committee on foreign affairs to the Legislative Assembly.

Legislative Assembly,
Honolulu, June 17, 1878.

Hon. Godfrey Rhodes,
President of the Legislative Assembly:

The committee on foreign affairs, to whom was referred the resolutions of the honorable representatives Nawahi and Pilipo, offer the following report by two of the committee:

Representations made to the Government of Great Britain regarding the effect that the treaty of reciprocity with the United States would have upon British trade with these islands led to the following correspondence:

“Honolulu, May 5, 1877.

“Sir: Her Majesty’s Government have had under their consideration the amount of duty levied upon British produce imported into the Sandwich Islands and the probable effect upon British trade of the differential treatment to which such produce would be subjected under the provisions of the reciprocity treaty between the United States and the Sandwich Islands of the 30th of January, 1875.

“Her Majesty’s Government find that a duty of 10 per cent. ad valorem is actually levied upon certain goods of British origin, and that, by an act of the Hawaiian legislature, dated the 27th of September, 1876, on and after the 9th of October next the duty will in some cases be raised to 25 per cent., while similar goods, the produce of the United States, will be admitted into the Sandwich Islands free of duty.

“I am now instructed by the Earl of Derby, Her Majesty’s secretary of state for foreign affairs, to give, and I hereby do give, formal notice through your excellency to the Government of His Hawaiian Majesty that so long as Articles IV, V, and VI of the Anglo-Hawaiian treaty of the 10th July, 1851, continue in force, Her Majesty’s Government cannot allow of British goods imported into the Sandwich Islands being subjected to treatment other than that which is accorded to similar goods of American origin.

“Her Majesty’s Government, I may observe, are aware that it is open to the Hawaiian Government under Article XVII of the treaty of 1851, by giving twelve months’ notice, to terminate the operation of Articles IV, V, and VI of that treaty, and thus free themselves from all treaty obligations, so far as Great Britain is concerned, in regard to the imposition of customs duties.

“Her Majesty’s Government would, it is true, experience some difficulty in reconciling the adoption of such a course by the Hawaiian Government at the present moment with the spirit of the article above quoted, which gives as a reason for allowing the abrogation of Articles IV, V, and VI, that ‘the two contracting parties may have the opportunity of treating and agreeing upon such other arrangements as may tend still further to the improvement of their mutual intercourse, and to the advancement of the interests of their respective subjects’; whereas the effect of now abrogating those articles would be to place British produce at a grave disadvantage as compared with that of the United States.

“Her Majesty’s Government would, however, as has been already pointed out, not be prepared to deny that His Majesty’s Government, in so doing, were acting within their strict treaty rights; but no notice has been given by the Hawaiian Government of their intention to terminate the articles in question, and Her Majesty’s Government must therefore expect, as they are entitled to do by treaty, that all exemptions or privileges accorded to American produce imported into the Sandwich Islands shall be extended to the produce of Great Britain.

“I renew the assurance of the high respect and distinguished consideration with which I have the honor to be,

“Your excellency’s most obedient, humble servant,

“JAMES H. WODEHOUSE.”

“Department of Foreign Affairs,
“Honolulu, May 21, 1877.

“Sir: I am instructed to reply to your note of the 5th instant, the receipt of which I had the honor to acknowledge on the 7th instant. Your note has had the careful consideration of His Majesty’s Government. In it you inform me—

• “First. That Her Majesty’s Government had had under their consideration the amount of duty levied upon ‘British produce’ into these islands, and
• “Second. The probable effect upon British trade, of the differential treatment to which such produce would be subjected under the provisions of the reciprocity treaty between the United States and this kingdom of 30th January, 1875.
• “Third. You state the amount of duty which Her Majesty’s Government find to be levied upon ‘goods of British origin’ by the tariff acts, while similar goods from the United States are admitted free of duty.
• “Fourth. You are instructed to give notice that so long as articles IV, V, VI, of the Anglo-Hawaiian treaty remain in force, Her Majesty’s Government cannot allow of British goods imported into these islands being subjected to treatment other than that accorded to similar goods of American origin.
• “Fifth. You state that Her Majesty’s Government is aware that it is open to this government, by giving twelve months’ notice, to terminate the fourth, fifth, and sixth articles of the treaty of 1851, and thus free itself of all treaty obligations so far as Great Britain is concerned, in regard to the imposition of customs duties.
• “Sixth. That Her Majesty’s Government would have some difficulty in reconciling such abrogation at this time with the spirit of that article, as the effect of such abrogation would be to place British goods at a grave disadvantage, as compared with those of the United States, but that Her Majesty’s Government would not be prepared to deny that this government, in so doing, were acting within their strict treaty rights; that, as no notice has been given of such abrogation by this government, Her Majesty’s Government must expect, as they are entitled to do by treaty, that all ‘exemptions or privileges’ accorded to American produce shall be extended to the produce of Great Britain.

“To facilitate a reply, I have taken the liberty thus to summarize your note.

“Referring to the first and third points of this summary of your note, I have to say that the duties in this kingdom are levied upon certain goods or classes of goods, and not upon ‘British produce’ or ‘goods of British origin.’ This explanation I deem necessary to avoid a misunderstanding of the manner in which your proposition is stated, because a differential duty placed by our laws upon. ‘British produce’ or ‘goods of British origin,’ as such, might be held to be a violation of existing treaty obligations.

“The fourth point of your note contains the notice alluded to, which, doubtless, is occasioned by the conclusion of Her Britannic Majesty’s Government, as stated in the second point, viz, the differential treatment to which British produce would be subjected under the Reciprocity Treaty with the United States.

“His Majesty’s Government are glad to be assured by you that this notice is not intended in any way as a menace or threat against this government in regard to the enforcement of its revenue laws. It is, however, a matter of regret to His Majesty’s Government that you have not more clearly set forth the grounds upon which, under the Anglo-Hawaiian treaty of 1851, this notice is given, which, in the opinion of this government, is not warranted by the interpretation it gives that treaty.

“The Anglo-Hawaiian treaty of 1851 is a compact between the two governments, entirely reciprocal in its nature. The first article stipulates for perpetual friendship; the second, that ‘there shall be between all the dominions of Her Britannic Majesty and the Hawaiian Islands a reciprocal freedom of commerce.’ Article III, that any favor or immunity whatever in matters of commerce and navigation which either party may grant to citizens of any other state shall be extended gratuitously if the other concession shall have been gratuitous, or in return for a compensation as nearly as possible of proportionate value and effect, to be adjusted by mutual agreement, if the concession was conditional.

“This article clearly acknowledges the right of either party to make riciprocal conventions, and clearly lays down the doctrine of compensation, and the liability of either party to be held to compensate if they claim like privileges.

“Article IV stipulates: No other or higher duty shall be imposed on the importation into the dominions of either country of any article the growth, produce, or manufacture of the other, than are or shall be payable on the same article being the growth, &c., of any other country.

“This clearly shows the intention of both parties that their goods were to be admitted by each other on the same terms and for the same compensation as those of any other foreign country, or for considerations of proportionate value and effect. Though the fourth, fifth, and sixth articles treat of specific questions of import and export duties and charges, they are to be construed in connection with the spirit of the whole treaty, which nowhere enunciates the doctrine that Great Britain is to enjoy or claim any rights under it which other nations have stipulated for and purchased without herself giving equal compensation. Such a doctrine would be subversive of the principle of reciprocal freedom of commerce, announced in the second article as one of the leading principles of the treaty.

“The twelfth article declares that the diplomatic agents and consuls of her Britannic Majesty on the Hawaiian Islands shall enjoy whatever privileges, exemptions, and immunities are or may be granted there to the diplomatic agents and consuls of the same rank belonging to the most favored nation.

“No other article in the treaty claims for Great Britain equal privileges with other powers with the force and distinctness of this. The fourth article only alludes to duties imposed, no mention being made of exemptions given for consideration; but this article stipulates for ‘whatever privileges, exemptions, and immunities are or may be granted,’ &c.

“If any article could be construed to do violence to what this government has always held to be the spirit of this treaty, and claim such privileges or exemptions free of the obligation to give the same compensation as other nations, this could; and yet, when the question arose as to your rights as her Britannic Majesty’s commissioner and consul-general under that article to enjoy the privileges enjoyed by the consul of France, you were informed in a dispatch of June 11, 1887, that Lord Stanley (present Earl Derby) had had under his consideration, and consulted the proper law officer of the Crown, and that Her Majesty’s Government were not entitled to claim the peculiar privileges granted to the French consul by the twenty-first article of the French treaty. You were further advised that as that article was one of reciprocity, that unless Her Majesty’s Government were able and ready to concede the same privileges they could not claim them.

“This accords with the Parliamentary utterances of that eminent statesman, especially when, in reply to a question regarding the admission of French goods to the disadvantage of British trade under the reciprocity treaty between Portugal and France, he said that inasmuch as that had been done in return for special concessions granted by the Government of France, &c., the Government of Great Britain had no right to protest or complain. It cannot be supposed that Her Britannic Majesty’s Government intend at its convenience to attach one meaning to an article of the treaty on consular privileges, and a different meaning to a similar article on duties imposed, or that it makes a distinction between duties exempted for special concessions by Portugal to France, and similar exemptions for similar concessions by Hawaii to the United States of America.

“A case decided by the Supreme Court of the United States in the matter of Old-field vs. Marriott (10 Howard, 146, U. S. Reports), was one where certain coffee was imported in a Portuguese vessel. It was admitted that by the laws of the United States coffee imported in vessels of nations reciprocating the privilege, or in American vessels, was exempt from any discriminating duty. It was therefore claimed that this coffee was exempt under the treaty stipulation between Portugal and the United States that goods imported into the United States should pay no higher duties, whether such importation be in Portuguese vessels or in vessels of the United States. It was held that the law of the United States exempting the produce of reciprocating nations could not he held to apply to the produce of nations with whom there was no such reciprocity.

“If these views held by the law officers of the British Crown and the judges of the United States Supreme Court are correct, it follows that the expectation of Her Majesty’s Government that exemptions and privileges accorded to American produce under the Reciprocity Treaty should be extended to British produce without compensation cannot be based upon the existing treaty, unless you are prepared to show, in the language of Lord Stanley on the claim for the privileges stipulated for in the twelfth article, that Great Britain is ‘able’ and ‘ready’ to concede the same compensation as that for which the exemption was made on the goods of the United States.

“Your note seems very properly to discriminate carefully between ‘duties levied upon British goods and ‘exemptions or privileges’ accorded to American goods; duties levied or imposed being by a voluntary legislative act without reference to the origin of goods and without limitation as to time and also subject to change in amount, while the exemption is based upon a treaty stipulation for a limited time, which cannot be changed without consent of the other party, and for a fixed consideration. Article IV stipulates in regard to such imposition of duty, but nowhere in the treaty are exemptions provided for, except specifically, as follows:

“In the second article, in regard to trading where the same exemptions enjoyed by native subjects is stipulated for; in the third article, regarding privileges and immunities of commerce and navigation; in the seventh article, where exemption from duty of goods to the value of $200 is stipulated for British whaleships; in the tenth article, exemption from compulsory military service; in the twelfth article, regarding consuls; in the thirteenth article, regarding confiscation or seizure; the fifteenth, regarding the exemption of mail-packets from certain duties; in the sixteenth, regarding goods saved from a wreck, and in the only case before this where an exemption or privilege has been asked on the ground of its having been granted to another state or nation. The law officer of the British Crown has decided that before it could be claimed it must be compensated for as fully as compensated for by the other nation; and such a decision must seem to be correct; a contrary view would seem to imply that in the opinion of Her Britannic Majesty’s Government the Government of the United States and the Government of His Hawaiian Majesty had no right to arrange for the liquidation of customs dues by mutual agreement and compensation without considering the arrangement to apply to nations who could not, in the nature of things, give a compensation of proportionate value and effect. It would imply that Her Britannic Majesty’s Government base their expectation upon certain articles of the treaty of 1851, without reference to the spirit of the whole treaty, and its own decisions under articles equally binding, and to further expect to select and enjoy the advantages of one article of a treaty made between two other powers without regard to other articles of that same treaty.

“It has never been the desire of His Hawaiian Majesty’s Government to terminate any of the articles of, or to relieve itself of any of the obligations of the Anglo-Hawaiian treaty of 1851. On the contrary it has always desired to maintain with strict integrity a treaty for which it had a strong traditional respect.

“His Majesty’s Government cannot concede that the abrogation of the fourth, fifth, and sixth articles can change the aspects of the question now under consideration, or that any necessity exists for such abrogation to justify its present position.

“His Majesty’s Government have, however, on former occasions given notice of their desire that these articles should terminate if the Government of Great Britain held to an interpretation of them which would give any validity to such a claim as is now put forward; and if that interpretation is insisted upon, it would seem to give all necessary force and effect to such conditional notice.

“This government has, however, under consideration the question of the necessity of such notice of termination, in view of your note of the 5th instant, and for the purposes provided in the seventeenth article.

“I desire to express the hope that Her Britannic Majesty’s Government will carefully consider, in connection with the differential treatment of goods other than those of the United States under the reciprocity treaty, the great advantages which, under the operation of that treaty, will insure to British subjects and British trade in these islands, the importance of which advantages to these interests you, Mr. Commissioner, are fully aware. That its advantages, by stimulating importations of British goods and adding to the value of the trade and property of British subjects, will far more than compensate for any differential effects upon British trade under its provisions, I think will be admitted.

“His Majesty, in seeking to negotiate that treaty, as yon are aware, sought the advantage of all classes and nationalities in his kingdom; and in laying before your government the benefits shared by your countrymen, I cannot entertain a doubt that you will assure your government, as I am now instructed to assure you, that it is not the wish or policy of His Majesty’s Government, either by legislation or by treaty stipulation, to discriminate against the interests of British trade or British subjects.

“In seeking the prosperity of the kingdom by means of a reciprocal convention with the United States, His Majesty’s Government cannot consider that any British interests within the kingdom have been made to suffer.

“Remembering with pleasure the different occasions when you have labored to prevent any misunderstanding on the part of your government of the real desires and purposes of this government, I with the more confidence rely on your good offices in removing any wrong impression which Her Majesty’s Government may have received of the effect of any action of His Majesty’s Government upon the British interests in your charge, and that you may become more fully aware of the good intents and purposes of this government, and also that His Majesty’s Government may more clearly understand the causes which led to your note, and the treaty obligations to which you refer, I am instructed to ask you, if consonant with your instructions, to confer with me on these points.

“It is the desire of His Majesty’s Government, in all its relations with the great powers and their representatives at this court, to conduct those relations with frankness and impartiality, and on all subjects, where differences have or may arise, to arrive as soon as practicable at a clear understanding, confident that the honesty of its motives and sincerity of its desire to conform justly to all its obligations will become apparent under explanation, and confident also in the justice and magnaminity of the great powers, and in the sincerity of their desire to refrain from any act or demand encroaching in the slightest degree upon the independent sovereignty of His Majesty, in which all powers, especially the maritime powers, must be interested. Of that interest your government has given many proofs. Therefore, considering the long continuance of the kindly relations which have subsisted between the two governments, and the important effect of such relations upon the progress of this kingdom, the earnest desire of His Majesty to perpetuate them, and the undoubted reciprocation of Her Britannic Majesty’s Government in such desire, I trust that Her Majesty’s Government will reconsider the notice contained in your dispatch, and remove any necessity for the abrogation of any part of the subsisting treaty.

“I have the honor to be, sir, your most obedient servant,

“HENRY A. P. CARTER.

“Maj. James H. Wodehouse,
“Her Britannic Majesty’s Commissioner aud Consul-General.”

It would seem that at the moment Mr. Carter, who had but recently taken office, had not had his attention drawn to that most important letter, dated March 28, 1856, from William Miller, one of the negotiators of the Anglo-Hawaiian treaty of 1851, to R. C. Wyllie, the other negotiator of that treaty, the first and second paragraphs of which read as follows:

“Her Britannic Majesty’s Government having received a copy of a convention, concluded on the 20th of July, 1855, between the Sandwich Islands and the United States, by which each party engages to admit into its territories, duty free, certain articles of produce of the territories of the other, I have been instructed by the Earl of Clarendon, Her Majesty’s secretary of state for foreign affairs, to address myself to the Hawaiian Government, and to urge on them the following considerations, with a view to obtain for British commerce the same advantages which have been conceded to the United States by the before-mentioned convention.

“The fourth article of the treaty between Great Britain and the Sandwich Islands of the 10th of July, 1851, stipulates that no other or higher duties shall be charged on the importation into the Sandwich Islands of any article the growth, produce, or manufacture of the British dominions than are or shall be payable on the like articles the growth, produce, or manufacture of any other foreign country. If this were the only stipulation in the treaty bearing upon the subject, the claim of Great Britain to participate in the advantages conceded to the United States by the convention in question would be clear; but as the next preceding article of the treaty of 1851 contains a stipulation that any favor which either party may grant to a third country shall be extended to the other party on corresponding terms; that is, either gratuitously or for an equivalent compensation, as the case may be, and as the advantages conceded to the United States by the Sandwich Islands are expressly stated to be given in consideration of, and as an equivalent for, certain reciprocal concessions on the part of the United States, Great Britain cannot as a matter of right claim the same advantages for her trade under the strict letter of the treaty of 1851.”

The conferences and correspondence between Mr. Wodehouse and Mr. Carter subsequent to the letter of May 21 were without any definite result, so far as the main question was concerned.

His Majesty, being anxious to maintain a perfect understanding between his government and that of Great Britain on all matters, and especially with regard to the interpretation of the existing treaty between them, and that the motives which influenced him in making the reciprocity treaty with the United States should not be misunderstood, appointed the Hon. H. A. P. Carter as his envoy extraordinary and minister plenipotentiary to proceed to London to confer with Her Majesty’s Government, and, if possible, to agree upon such an interpretation or modification of Article IV of the treaty of 1851 as would satisfy both parties. He was also to assure Her Majesty’s Government of the high respect and strong friendship of His Majesty and his people for the sovereign and people of Great Britain. Mr. Carter was further charged with the negotiation of a convention providing for the immigration of families of British East Indians into this country, to form a part of the permanent population of these islands.

His Majesty having confidence in the friendly disposition and fairmindedness of Maj. J. H. Wodehouse, Her Britannic Majesty’s commissioner and consul-general—who had resided here a number of years, and was well aware of the importance to this country of the reciprocity treaty with the United States, and that in making it His Majesty’s Government was not influenced by any unfriendly feeling toward Great Britain or any other country—invited him to accompany Mr. Carter to London, to which he assented, provided his government would give consent.

To guard against the effect of failure to agree in the interpretation of Article IV of the treaty of 1851, His Majesty’s Government gave formal notice of the termination of Articles IV, V, and VI, as provided in Article XVII, and receipt of that notice was acknowledged on the 3d of July, 1877, by Lord Derby. It will be seen from Mr. Wodehouse’s letter of May 5 that this course was anticipated.

His Majesty’s envoy was kindly received by Her Majesty the Queen and by the government, but all of his efforts—which have been earnest and repeated—have been unsuccessful in persuading Her Majesty’s secretary of state to accept the construction held by His Majesty’s Government, and clearly set forth in the Miller-Wyllie letter of March 28, 1856, written by authority of Lord Clarendon, then secretary of state for foreign affairs.

Lord Derby appreciated the position of His Majesty’s Government with regard to the treaty of reciprocity with the United States, and was satisfied that no unfriendly feeling existed toward Great Britain, but he declined to give any guaranty or promise that no claim would be made for return of duties on British goods imported previous to July 3, 1878.

Her Majesty’s secretary of state represented to Mr. Carter that to terminate Articles V and VI and the latter part of Article IV was quite unnecessary, as they had no bearing upon the question, and requested the withdrawal of the notice so far as Articles V and VI were concerned; but at the time Mr. Carter declined to do so, because Article XVII does not say that one or two of those articles might be terminated without including the third, and he feared that by excepting either V or VI the notice might be defective as to Article IV, Mr. Wodehouse’s letter of May 5 having also mentioned all three.

Mr. Carter declined, also, to promise that the tariff act of 1876, by which the duties on certain articles were raised to 25 per cent. ad valorem should be repealed, for the reason that the right and power to change the revenue laws rests with the legislative assembly; and after July 3, 1878, Great Britain will not question that legal right.

Mr. Carter could not admit that the Hawaiian Government had not the right to levy such duties on imports as might seem to be necessary.

When articles VIII, IX, X, XI, XII, XIII, and XIV, and XXIV of the treaty of 1857 with France were denounced in 1872 and terminated in 1873, the last of the treaty restrictions upon the authority of His Majesty’s Government to regulate its own tariff were removed. They were the only articles in that treaty intended to apply to duties on imports.

Article VIII of the Franco-Hawaiian treaty of 1857 was substantially the same as article IV of the Anglo-Hawaiian treaty of 1851.

To admit free of duty the goods of Great Britain or any other country would be to violate the conditions of the treaty of reciprocity with the United States, under which the United States gives a valuable and adequate consideration as compensation for the exemptions agreed upon, and stipulates at the same time that “so long as this treaty remains in force” His Majesty’s Government would not “make any treaty by which any other nation shall obtain the same privileges relative to the admission of any article free of duty hereby secured to the United States.”

On the 2d of April last Mr. Wodehouse delivered to the minister of foreign affairs a “memorandum” in the following terms:

“Her Majesty’s commissioner and consul-general has been instructed to state to his excellency H. A. Peirce, his Hawaiian Majesty’s minister of foreign affairs,

• “1. That Her Majesty’s Government cannot admit the right of the Hawaiian Government to terminate the operations of the provisions of Article IV of the Anglo-Hawaiian treaty of 1851 until the expiration of the twelve months’ notice which they have given. While it remains in force, Her Majesty’s Government must require that it shall he faithfully observed, and consequently that duties improperly levied shall be repaid.
• “2. Without further explanation to justify such a course, Her Majesty’s Government must regard the abrogation of Articles V and VI of the treaty of 1851, when the only point in discussion is the first paragraph of Article IV, as an unnecessary and unfriendly act.
• “3. Her Majesty’s Government must regard as a specially unfriendly act the levying, when the treaty stipulation for most favored nation treatment in matters of tariff shall terminate, of any such differential rate of duty as 25 per cent. on British goods imported into the Hawaiian Islands.”

To remove, as far as is consistent with national rights and independence, all cause of complaint and difference between the British and Hawaiian Governments, the latter has consented to the withdrawal of the notice to abrogate Articles V and VI of the treaty of 1851, with the understanding that Article IV is to terminate as before stated, as is shown by the following reply to the foregoing “memorandum,” under date of April 3:

“In reply, I have the honor to say that on being informed by Mr. Carter that the Earl of Derby had suggested that it was unnecessary to terminate Articles V and VI, Mr. Carter was instructed that in case he had not finally withdrawn from his mission to England, he might agree that the notice of termination of Articles IV, V, and VI might be limited to Article IV, with the express condition and agreement that no claim should arise in respect of duties by reason of Articles V and VI. This modification of the notice to terminate Articles IV, V, and VI of the Anglo-Hawaiian treaty of July 10, 1851, may be regarded by you as now made by authority of this communication in case Mr. Carter may not already have so arranged.

“In reply to your statement contained in the first section of your dispatch, I beg to refer you to the letter of my predecessor, Mr. Carter, to yourself, of May 7, 1877, and also to the views of the Earl of Clarendon, conveyed by your predecessor, General Miller, in a note to this government of date March 26, 1856, as expressing the views of His Majesty’s Government.

“In regard to the statement in the third section of your dispatch, I have the honor to state that His Majesty’s Government enact revenue laws with no unfriendly intent, but solely with reference to the interests of the Hawaiian Islands, and also that it is the desire of His Majesty’s Government to levy no higher duties than seem to be essential to such interests.

“I am not as yet informed of the completion of Mr. Carter’s mission to England, undertaken by him with the earnest hope that he might succeed in coming to a harmonious view with Her Majesty’s Government concerning the interpretation of Article IV of the Anglo-Hawaiian Treaty.

“Until receipt of such information I presume that all matters included within his mission will receive attention in London, and, therefore, with the exception of the above-mentioned withdrawal of notice to terminate Articles V and VI of said treaty, I will, if you please, defer further discussion of such matters.

“With the highest respect, &c.,

“HENRY A. PEIRCE.”

The annual statements published by the collector-general of customs for the years 1874, 1875, 1876, and 1877, showing the value of “goods paying duty,” and of “spirits bonded” from Great Britain, Australia, and New Zealand, and British Columbia (from which your committee have made the following tables), prove that there has been an increase in the trade of Great Britain and her colonies with this country since the reciprocity treaty went into effect; and there is no doubt that, with a continuance of prosperity in these islands, trade, not alone with the United States, but with Great Britain, France, Germany, and other countries also, will increase in the future.

Goods paying duty.

	1874.	1875.	1876.	1877.
From Great Britain	$82,776	$132,538	$60,550	$249,880
From Australia and New Zealand	27,623	21,353	37,930	54,046
From British Columbia	7,066		14,926	4,872
Total	117,465	153,891	113,406	308,798

Spirits bonded.

	1874.	1875.	1876.	1877.
From Great Britain	$10,403	$48,384	$22,800	$41,825
From Australia and New Zealand	17,020	17,299	5,589	22,591
From British Columbia	2,770		861
Total	30,193	65,683	29,250	64,416

The amount collected from October 11, 1877, to March 31, 1878, under the 25 per cent. import duty act, is stated in the report of the minister of finance at $20,033, to wit:

On goods from the United States	$9,627 28
On goods from Great Britain	4,897 48
On goods from Germany	3,041 44
On goods from China	2,276 29
On goods from France	190 51
Total	20,033 00

In the first instance, duties are paid by merchants or other individuals, and not by or for account of any government; and as in trade the duty is added to the cost of the goods, the duties are finally paid, to a very large extent, by the consumer of the goods.

The British Government has presented no claim, made no demand or threat, and, being a law-respecting government, your committee feel warranted in saying that, should any claim be presented for return of duties paid, it will have to be done by individuals, and such claims will be adjudicated by the courts of the country according to law.

The advantages of the treaty of reciprocity with the United States are not confined to the citizens of that country; but Her Britannic Majesty’s subjects, and the subjects of His Majesty the King who are of British origin, living in this country or doing business here, all share in those advantages just as completely as do Americans or Hawaiians; and any interruption of the present political or commercial relations of this country with other countries, and especially with the United States, would be damaging to British trade with these islands, as well as to the interests of British subjects residing here.

Great Britain is a great commercial nation, having treaties with many countries, and no doubt her officials carefully avoid, in their transactions with the small powers as well as with the great powers, acts or concessions which might form inconvenient precedents in more important cases.

Between Her Britannic Majesty’s officials and His Majesty’s Government there is a difference of opinion upon the construction of Article IV of the treaty of 1851, and, since the former adhere to their opinion, the latter could not do less than to denounce that article, as they had a perfect right to do, and, by so doing, there is no interruption of friendly relations or sentiments between the two countries.

Regarding the immigration of East Indians, your committee have nothing very encouraging to report.

The British Government are favorably disposed toward the plans of His Majesty’s Government, as explained by Mr. Carter to Lord Salisbury, and would aid im making arrangements in India; but it would first be necessary to go to India to make a convention with the authorities there; and Mr. Carter was given to understand that there would be many difficulties to overcome.

Mr. Carter had interviews with gentlemen who have had experience in India and with Indian emigration, and was informed that the magistrates and other local authorities in India insist very strongly upon the observance of technicalities, so strictly that the agents of the French and Dutch colonies (which have treaties with the Indian Government) have been very much discouraged. Frequent and often causeless investigations on behalf of the immigrants in foreign countries, to which they have gone, by agents of the Indian Government, are great annoyances, and the same might be insisted upon here.

Agents for the colonies mentioned have found it difficult to get the proportion of females desired. It is usually required that the return of the people shall be provided for, though they may not, and many of them do not, avail themselves of the right to return. In some contracts they have had their choice between a return passage and a sum of money about equal to the cost of such a passage.

India being distant from these islands, the expense of bringing passengers so far would be heavy; and it is stated that on long voyages the percentage of mortality of Indians is much larger than with Chinese.

There seems to be but little doubt but that a persistent effort and large expenditure of money would secure the introduction of male and female East Indians into this country, a part of whom would remain permanently from choice; but whether or not the expense and difficulties attendant upon such an immigration would not more than counterbalance the gain, is a question which your committee cannot answer.

The letter from which the foregoing is mainly gathered is addressed to the president of the board of immigration, and dated September 11, 1877.

In a private letter, dated December 19, Mr. Carter wrote: “Since I have learned what I did in regard to India, I have practically abandoned that.”

It is known to some members of your committee that Mr. Carter was very hopeful of securing the emigration of a considerable number of East Indians to these islands, and was quite sanguine of success; and they now infer that the information acquired by him in London must have been of a very discouraging nature.

His Majesty’s envoy was not instructed to go to India, and has not had time to go there if he had proposed doing so.

Respectfully submitted.

• CHARLES R. BISHOP.
• J. KUPAU.

[Inclosure 2 in No. 43.]

Report of the committee on foreign relations to the legislature of 1878.

To the Hon. G. Rhodes,
President of the Legislative Assembly:

The undersigned members of the committee on foreign relations respectfully beg to present the following report:

In accordance with the requirements of this house upon certain resolutions presented by the Hons. J. Nawahi, of Hilo, and G. W. Pilipo, of North Kona, the undersigned have the honor of placing before you all of the information asked for by those resolutions.

The undersigned beg leave to say that they have carefully examined all of the correspondence relating to the matters in dispute between our government and the Government of Great Britain, which have originated in the operation of atreaty of reciprocity made between the Hawaiian Government and the Government of the United States of America.

Owing to our action in this matter our government is now at issue with a power opposed to us; we may, however, be justified, or Her Britannic Majesty’s Government may have the right of the question.

In view of the preceding, your committee would respectfully ask the indulgence of this honorable assembly to refer to the civil code and read articles 4, 5, and 6 of the Anglo-Hawaiian treaty of 1851.

The steps taken by His Majesty’s several ministers of 1874, 1876, and 1878 have apparently all aimed at one object, and the ministerial policy has been to indorse the action which has led us into these difficulties, so as to cause Hawaii to be threatened with coercion, and our relations with a friendly power to be disturbed.

It is very evident to be seen that the supreme judges have also indorsed the action taken by the ministry in this matter, as, in all difficulties arising out of any question, His Majesty with his ministers would, without a doubt, consult the judicial authorities of the country as to their opinion concerning such difficulty.

In order that we may all see the true bearing of this matter, your committee beg to present several important letters which they have selected, and which they consider necessary for this assembly to understand in order that we may avoid the difficulties that beset us in being placed between two fires.

The first is a letter from Commissioner and Consul-General Major Wodehouse, addressed to our minister of foreign affairs, and secondly, the answer of our minister of foreign affairs, H. A. P. Carter, to Major Wodehouse.

Exhibit A.

Honolulu, May 5, 1877.

Sir: Her Majesty’s Government have had under their consideration the amount of duty levied upon British produce imported into the Sandwich Islands, and the probable effect upon British trade of the differential treatment to which such produce would be subjected under the provisions of the reciprocity treaty between the United States and the Sandwich Islands, of the 30th of January, 1875.

Her Majesty’s Government find that a duty of 10 per cent. ad valorem is actually levied upon certain goods of British origin, and that by an act of the Hawaiian legislature dated the 27th of September, 1876, on and after the 9th of October next the duty will in some cases be raised to 25 per cent., while similar goods, the produce of the United States, will be admitted into the Sandwich Islands free of duty.

I am now instructed by the Earl of Derby, Her Majesty’s secretary of state for foreign affairs, to give, and I hereby do give, formal notice, through your excellency, to the Government of His Hawaiian Majesty that so long as Articles IV, V, and VI of the Anglo-Hawaiian treaty of the 10th of July, 1851, continue in force Her Majesty’s Government cannot allow of British goods imported into the Sandwich Islands being subjected to treatment other than that which is accorded to similar goods of American origin.

Her Majesty’s Government, I may observe, are aware that it is open to the Hawaiian Government, under Article XVI of the treaty of 1851, by giving twelve months’ notice, to terminate the operation of Articles IV, V, and VI of that treaty, and thus free themselves from all treaty obligations, so far as Great Britain is concerned, in regard to the imposition of customs duties.

Her Majesty’s Government would, it is true, experience some difficulty in reconciling the adoption of such a course by the Hawaiian Government, at the present moment, with the spirit of the article above quoted, which gives as a reason for allowing the abrogation of Articles IV, V, and VI, that “the two contracting parties may have the opportunity of treating and agreeing upon such other arrangements as may tend still further to the improvement of their mutual intercourse, and to the advancement of the interests of their respective subjects;” whereas the effect of now abrogating those articles would be to place British produce at a grave disadvantage as compared with that of the United States.

Her Majesty’s Government would, however, as has been already pointed out, not be prepared to deny that His Hawaiian Majesty’s Government, in so doing, were acting within their strict treaty rights; but no notice has been given by the Hawaiian Government of their intention to terminate the articles in question; and Her Majesty’s government must therefore expect, as they are entitled to do by treaty, that all exemptions or privileges accorded to American produce imported into the Sandwich Islands shall be extended to the produce of Great Britain.

I renew the assurance of the high respect and distinguished consideration with which I have the honor to be,

Your excellency’s most obedient, humble servant,

JAMES H. WODEHOUSE.

His Excellency H. A. P. Carter,
His Hawaiian Majesty’s Minister for Foreign Affairs, Foreign Office.

Exhibit B.

Department of Foreign Affairs,
Honolulu, May 21, 1877.

Sir: I am instructed to reply to your note of the 5th instant, the receipt of which I had the honor to acknowledge on the 7th instant. Your note has had the careful consideration of His Majesty’s Government. In it you inform me—

• First. That Her Majesty’s Government had had under their consideration the amount of duty levied upon “British produce” into these islands, and—
• Second. The probable effect upon British trade of the differential treatment to which such produce would be subjected under the provisions of the reciprocity treaty between the United States and this Kingdom, of 30th January, 1875.
• Third. You state the amount of duty which Her Majesty’s Government find to be levied upon “goods of British origin” by the tariff acts, while similar goods from the United States are admitted free of duty.
• Fourth. You are instructed to give notice that so long as Articles IV, V, VI of the Anglo-Hawaiian treaty remain in force, Her Majesty’s Government cannot allow of British goods imported into these islands being subjected to treatment other than that accorded to similar goods of American origin.
• Fifth. You state that Her Majesty’s Government is aware that it is open to this government, by giving twelve months’ notice, to terminate the fourth, fifth, and sixth articles of the treaty of 1851, and thus free itself of all treaty obligations, so far as Great Britain is concerned, in regard to the imposition of customs duties.
• Sixth. That Her Majesty’s Government would have some difficulty in reconciling such abrogation at this time with the spirit of that article, as the effect of such abrogation would be to place British goods at a grave disadvantage as compared with those of the United States, but that Her Majesty’s Government would not be prepared to deny that this government in so doing were acting within their strict treaty rights; that, as no notice has been given of such abrogation by this government, Her Majesty’s Government must expect, as they are entitled to do by treaty, that all “exemptions or privileges” accorded to American produce shall be extended to the produce of Great Britain.

To facilitate a reply, I have taken the liberty thus to summarize your note.

Referring to the first and third points of this summary of your note, I have to say that the duties in this kingdom are levied upon certain goods or classes of goods, and not upon “British produce” or “goods of British origin.” This explanation I deem necessary to avoid a misunderstanding of the manner in which your proposition is stated, because a differential duty placed by our laws upon “British produce” or “goods of British origin,” as such, might be held to be a violation of existing treaty obligations.

The fourth point of your note contains the notice alluded to, which doubtless is occasioned by the conclusion of Her Britannic Majesty’s Government, as stated in the second point, viz, the differential treatment to which British produce would be subjected under the reciprocity treaty with the United States.

His Majesty’s Government are glad to be assured by you that this notice is not intended in any way as a menace or threat against this government in regard to the enforcement of its revenue laws. It is, however, a matter of regret to His Majesty’s Government that you have not more clearly set forth the grounds upon which, under the Anglo-Hawaiian treaty of 1851, this notice is given, which, in the opinion of this government, is not warranted by the interpretation it gives that treaty.

The Anglo-Hawaiian treaty of 1851 is a compact between the two governments, entirely reciprocal in its nature. The first article stipulates for perpetual friendship. The second, that “there shall be between all the dominions of her Britannic Majesty and the Hawaiian Islands a reciprocal freedom of commerce.” Article III, that any favor or immunity whatever in matters of commerce and navigation which either party may grant to citizens of any other state shall be extended gratuitously if the other concession shall have been gratuitous, or in return for a compensation as nearly as possible of proportionate value and effect, to be adjusted by mutual agreement if the concession was conditional.

This article clearly acknowledges the right of either party to make reciprocal conventions, and clearly lays down the doctrine of compensation and the liability of either party to be held to compensate if they claim like privileges.

Article IV stipulates: “No other or higher duty shall be imposed on the importation into the dominions of either country of any article the growth, produce, or manufacture of the other, than are or shall be payable on the same article being the growth, &c., of any other country.”

This clearly shows the intention of both parties that their goods were to be admitted by each other on the same terms and for the same compensation as those of any other foreign country, or for considerations of proportionate value and effect. Though the fourth, fifth, and sixth articles treat of specific questions of import and export duties and charges, they are to be construed in connection with the spirit of the whole treaty, which nowhere enunciates the doctrine that Great Britain is to enjoy or claim any rights under it which other nations have stipulated for and purchased without herself giving equal compensation. Such a doctrine would be subversive of the principle of reciprocal freedom of commerce, announced in the second article as one of the leading principles of the treaty.

The twelfth article declares that the diplomatic agents and consuls of Her Britannic Majesty on the Hawaiian Islands shall enjoy whatever privileges, exemptions, and immunities are or may be granted there to the diplomatic agents and consuls of the same rank belonging to the most favored nation.

No other article in the treaty claims for Great Britain equal privileges with other powers with the force and distinctness of this. The fourth article only alludes to duties imposed, no mention being made of exemptions given for consideration; but this article stipulates for “whatever privileges, exemptions, and immunities are or may be granted,” &c.

If any article could be construed to do violence to what this government has always held to be the spirit of this treaty, and claim such privileges or exemptions free of the obligation to give the same compensation as other nations, this could; and yet, when the question arose as to your rights as Her Britannic Majesty’s commissioner and consul-general under that article to enjoy the privileges enjoyed by the consul of France, you were informed, in a dispatch of June 11, 1867, that Lord Stanley (present Earl Derby) had had under his consideration and consulted the proper law officer of the Crown, and that Her Majesty’s Government were not entitled to claim the peculiar privileges granted to the French consul by the twenty-first article of the French treaty. You were further advised that, as that article was one of reciprocity, that unless Her Majesty’s Government were able and ready to concede the same privileges, they could not claim them.

This accords with the parliamentary utterances of that eminent statesman, especially when, in reply to a question regarding the admission of French goods to the disadvantage of British trade under the reciprocity treaty between Portugal and France, he said that inasmuch as that had been done in return for special concessions granted by the Government of France, &c., the Government of Great Britain had no right to protest or complain. It cannot be supposed that Her Britannic Majesty’s Government intend at its convenience to attach one meaning to an article of the treaty on consular privileges, and a different meaning to a similar article on duties imposed, or that it makes a distinction between duties exempted for special concessions by Portugal to France and similar exemptions for similar concessions by Hawaii to the United States of America.

A case decided by the Supreme Court of the United States in the matter of Oldfield vs. Marriott (10 Howard, 146 U. S. Reports) was one where certain coffee was imported in a Portuguese vessel. It was admitted that, by the laws of the United States, coffee imported in vessels of nations reciprocating the privilege, or in American vessels, was exempt from any discriminating duty. It was therefore claimed that this coffee was exempt under the treaty stipulation between Portugal and the United States, that goods imported into the United States should pay no higher duties, whether such importation be in Portuguese vessels or in vessels of the United States. It was held that the law of the United States exempting the produce of reciprocating nations could not be held to apply to the produce of nations with whom there was no such reciprocity.

If these views held by the law officers of the British Crown and the judges of the United States Supreme Court are correct, it follows that the expectation of Her Majesty’s Government that exemptions and privileges accorded to American produce under the reciprocity treaty should be extended to British produce without compensation cannot be based upon the existing treaty, unless you are prepared to show, in the language of Lord Stanley on the claim for the privileges stipulated for in the twelfth article, that Great Britain is “able” and “ready” to concede the same compensation as that for which the exemption was made on the goods of the United States.

Your note seems very properly to discriminate carefully between “duties levied” upon British goods and “exemptions or privileges” accorded to American goods.

Duties levied or imposed being by a voluntary legislative act, without reference to the origin of goods, and without limitation as to time, and also subject to change in amount, while the exemption is based upon a treaty stipulation for a limited time, which cannot be changed without consent of the other party, and for a fixed consideration. Article IV stipulates in regard to such imposition of duty, but nowhere in the treaty are exemptions provided for, except specifically as follows:

In the second article, in regard to trading, where the same exemption enjoyed by native subjects is stipulated for.

In the third article, regarding privileges and immunities of commerce and navigation. In the seventh article, where exemption from duty of goods to the value of $200 is stipulated for British whale-ships. In the tenth article, exemption from compulsory military service. In the twelfth article, regarding consuls. In the thirteenth article, regarding confiscation or seizure. The fifteenth, regarding the exemption of mail packets from certain duties. In the sixteenth, regarding goods saved from a wreck, and in the only case before this where an exemption or privilege has been asked on the ground of its having been granted to another state or nation. The law officer of the British Crown has decided that before it could be claimed it must be compensated for as fully as compensated for by the other nation, and such a decision must seem to be correct; a contrary view would seem to imply that, in the opinion of Her Britannic Majesty’s Government, the Government of the United States and the Government of His Hawaiian Majesty had no right to arrange for the liquidation of customs-dues by mutual agreement and compensation without considering the arrangement to apply to nations who could not, in the nature of things, give a compensation of proportionate value and effect. It would imply that Her Britannic Majesty’s Government base their expectation upon certain articles of the treaty of 1851, without reference to the spirit of the whole treaty and its own decisions under articles equally binding, and to further expect to select and enjoy the advantages of one article of a treaty made between two other powers without regard to other articles of that same treaty.

It has never been the desire of His Hawaiian Majesty’s Government to terminate any of the articles of, or to relieve itself of any of the obligations of the Anglo-Hawaiian treaty of 1851. On the contrary, it has always desired to maintain with strict integrity a treaty for which it has had a strong traditional respect.

His Majesty’s Government cannot concede that the abrogation of the fourth, fifth, and sixth articles can change the aspects of the question now under consideration, or that any necessity exists for such abrogation to justify its present position.

His Majesty’s Government have, however, on former occasions given notice of their desire that these articles should terminate if the Government of Great Britain held to an interpretation of them which would give any validity to such a claim as is now put forward; and if that interpretation is insisted upon, it would seem to give all necessary force and effect to such conditional notice.

This government has, however, under consideration the question of the necessity of such notice of termination, in view of your note of the 5th instant, and for the purposes provided in the seventeenth article.

I desire to express the hope that Her Britannic Majesty’s Government will carefully consider, in connection with the differential treatment of goods other than those of the United States under the reciprocity treaty, the great advantages which, under the operations of that treaty, will insure to British subjects and British trade in these islands; the importance of which advantages to these interests you, Mr. Commissioner, are fully aware. That its advantages, by stimulating importations of British goods and adding to the value of the trade and property of British subjects, will far more than compensate for any differential effects upon British trade under its provisions, I think will be admitted.

His Majesty, in seeking to negotiate that treaty, as you are aware, sought the advantage of all classes and nationalities in his kingdom; and in laying before your government the benefits shared by your countrymen, I cannot entertain a doubt that you will assure your government, as I am now instructed to assure you, that it is not the wish or policy of His Majesty’s Government, either by legislation or by treaty stipulation, to discriminate against the interests of British trade or British subjects.

In seeking the prosperity of the kingdom by means of a reciprocal convention with the United States, His Majesty’s Government cannot consider that any British interests within the kingdom have been made to suffer.

Remembering with pleasure the different occasions when you have labored to prevent any misunderstanding on the part of your government of the real desires and purposes of this government, I with the more confidence rely on your good offices in removing any wrong impression which Her Majesty’s Government may have received of the effect of any action of His Majesty’s Government upon the British interests in your charge, and that you may become more fully aware of the good intents and purposes of this government, and also that His Majesty’s Government may more clearly understand the causes which led to your note, and the treaty obligations to which you refer, I am instructed to ask you, if consonant with your instructions, to confer with me on these points.

It is the desire of His Majesty’s Government, in all its relations with the great powers and their representatives at this court, to conduce those relations with frankness and impartiality, and on all subjects where differences have or may arise, to arrive as soon as practicable at a clear understanding, confident that the honesty of its motives and sincerity of its desire to conform justly to all its obligations will become apparent under explanation, and confident also in the justice and magnanimity of the great powers and in the sincerity of their desire to refrain from any act or demand encroaching in the slightest degree upon the independent sovereignty of His Majesty, in which all powers, especially the maritime powers, must be interested. Of that interest, your government has given many proofs. Therefore, considering the long continuance of the kindly relations which have subsisted between the two governments, and the important effect of such relations upon the progress of this kingdom, the earnest desire of His Majesty to perpetuate them, and the undoubted reciprocation of Her Britannic Majesty’s Government in such desire, I trust that Her Majesty’s Government will reconsider the notice contained in your dispatch, and remove any necessity for the abrogation of any part of the subsisting treaty.

Renewing the assurances of the highest respect and most distinguished consideration,

I have the honor to be, sir, your most obedient servant,

• HENRY A. P. CARTER.
• Maj. James H. Wodehouse,
  Her Britannic Majesty’s Commissioner and Consul-General.

Exhibit C.

London, October 13, 1877.

To His Majesty Kalakaua:

Sire: I am constantly regretting the delays in my mission here, which are partly owing to the season, as every one who can get away are out of town; but a good deal of delay arises out of inherent difficulties of the question between the two governments. We thought we had reached a ready solution in the withdrawal of the fourth article of the British treaty, by mutual consent on my agreement not to raise duties on certain articles above ten per cent., but when we came to discuss the wording I insisted on the expression that the article should not be invoked in favor of any drawbacks or free entry of British goods in the past, and told them that we did not propose to pay back any of the duties which had been paid under protest, and that if that point could not be covered I would make no promises for the future, as if we were ever to be asked to refund we should refuse, and if compelled so to do, we should use our undoubted right after the expiration of the year’s notice to put such a tariff on British goods as would make them repay us tenfold. They said they would make no claims, but they could not tell but that British importers might make such claims. I told them if they agreed to my wording we would take care of the British importer; but then the question came up as to whether if they made any agreement whereby the importer was barred in our courts, he would not have a right to come upon them and said it would be ex.post facto; so that matter had to go to the law officers, and they have not yet answered. I fear you may think I have not pushed matters fast enough, but as they feel we have done wrong, but some of them are willing to try and condone it, I should by too much haste only strengthen those who would like to say that we must carry out their view of the treaty or they would make us, and if we denounced the articles they would break off diplomatic intercourse with us. As to other nations, I am confident it is useless for me to try and do anything till the question is finally settled here, but as soon as I am sure of a settlement I shall push matters with them.

I wrote before that similar questions were under discussion with other governments, and I inclose some extracts from a speech of Sir Stafford Northcote, the chancellor of the exchequer, which will show you how important they deem these questions.

I can do nothing at the India office until the foreign office decide these matters. I have not given an order for a picture of Cook, hoping really when I get things settled to get the British Government to give us one.

The weather is getting cold, and I fear I shall be in Germany at a very unpleasant time of the year; but I hope to be able to push matters faster there after settling here. Trusting Your Majesty and the Queen and all the royal family are well and happy,

I am, sire, your humble servant,

H. A. P. CARTER.

Exhibit D.

Honolulu, November 30, 1877.

Sir: Your official dispatch of October 18 has arrived, as also one to His Majesty of October 13, receipt of which he commands me to acknowledge.

That delay and procrastination in reaching a conclusion to your negotiations should happen is, of course, unavoidable; and as this state of affairs arises not out of your freewill, I can only counsel you to patience, and assure you that we confidently rely upon your judgment and discretion.

Mr. Lester, you say, a day or two since, handed you, unofficially, a draught of a proposed declaration which was not worded to your satisfaction, but that Mr. Kennedy had afterward intimated that a declaration worded to your satisfaction would be accepted, your wording to be, “That so long as we do not raise the duties on the schedule, as arranged at Honolulu with Mr. Wodehouse, over 10 per cent., Article IV shall be inoperative, and not invoked in favor of British goods.” You also say, “That if this wording be accepted, you will sign the declaration and withdraw our denunciation of July 3, 1877, of the article.”

This statement does not include the idea that no reclamations for the past shall be pressed upon us; but your statement in His Majesty’s letter that “The article should not be invoked in favor of any drawbacks or free entries of British goods in the past” covers the point, and assures me that you are not overlooking an important feature of our case.

You say further on that the British secretaries have raised the objection that if they agree to your wording of the declaration, which will bar out from our courts the claims of British merchants for drawbacks, the British Government will make itself thereby liable for these drawback claims, and that this question has been referred to the law officers of the Crown, who had not at the date of your letter given in their opinion.

It is not necessary here for me to enlarge upon the views forwarded to you by my last dispatch; you will be in possession of it before this reaches you; and I am glad by your letter, public and private, received by last mail, to find that your views as to the management of your mission are in accord with that dispatch.

It appears to me almost certain that you will fail of obtaining a satisfactory declaration, and will be obliged to withdraw, letting our denunciation run to its termination. Without advising you to hurry, or to abruptly close your negotiation, it will be advisable for you to withdraw so soon as sufficient time has been allowed to dispose of our matters deliberately, after the return of Lord Derby.

In the matter of interpretation of the fourth article, in which the British foreign office appears now to differ so widely from our interpretation, I beg to call your attention to inclosure herewith marked H. It contains letter of General Miller, under date of Honolulu, March 28, 1856, to Mr. Wyllie, our foreign minister, communicating the instructions of the Earl of Clarendon to General Miller upon the subject of a reciprocity treaty and its relation to the favored-nation clause of the treaty of 1851.

* * * * * * * * *

“The fourth article of the treaty between Great Britain and the Sandwich Islands, of the 10th of July, 1851, stipulates that no other or higher duties shall be charged on the importation into the Sandwich Islands of any article the growth, produce, or manufacture of the British dominions than are or shall be payable on the like articles the growth, produce, or manufacture of any other foreign country. If this were the only stipulation in the treaty bearing upon the subject, the claim of Great Britain to participate in the advantages conceded to the Uhited States by the convention in question would be clear; but as the next preceding article of the treaty of 1851 contains a stipulation that any favor which either party may grant to a third country shall be extended to the other party on corresponding terms; that is, either gratu-tously or for an equivalent compensation, as the case may be; and as the advantages conceded to the United States by the Sandwich Islands are expressly stated to be given in consideration of and as an equivalent for certain reciprocal concessions on the part of the United States, Great Britain cannot, as a matter of right, claim the same advantages for her trade under the strict letter of the treaty of 1851.”

You will observe in the extract that Lord Clarendon admits our interpretation fully, and that England, under the fourth article, cannot claim similar treatment.

Judge Allen writes to me that he has forwarded to you this letter of General Miller; but lest he may have failed to do so, I have sent copy forward.

This declaration of the British foreign office ought to be conclusive as to the interpretation of the fourth article; but if not so viewed now, ought to be conclusive upon allowing your “declaration,” with complete bar to past damages.

Your further efforts must be determined by the opinion of the law officers of the Crown. If they shall give their opinion that the legal rights of Great Britain under the fourth article cannot be waived without rendering their government liable to suits for recovery by their own subjects, you will have to depend upon our denunciation as our only ground of solution.

Mr. Allen has been instructed to go on with the Portuguese treaty. At last report he advised me that as soon as the Portuguese minister returned to Washington, negotiations would at once be commenced.

Your information regarding withdrawal from postal union has been noted with interest.

With highest respect and consideration, I have the honor to be, sir, your most obedient servant,

• J. MOTT SMITH,
  Minister of Foreign Affairs ad interim.
• Hon. Henry A. P. Carter.

Exhibit E.

[Extract of letter from Lord Derby to Major J. H. Wodehouse.]

I will proceed to make known to you the views of Her Majesty’s Government in the present position of the question.

I have to observe in the first place that in dealing with it, Her Majesty’s Government have to consider it not merely as regards the relations between Great Britain and the Hawaiian Islands. The arrangements which may be arrived at for its settlement will also have a bearing upon the commercial relations and engagements of this country with foreign states generally.

Her Majesty’s Government cannot therefore be parties to any arrangement which would be opposed to their general commercial policy. They are willing to accept fully the explanation given by you and by Mr. Carter in regard to the reciprocity treaty between Hawaii and the United States, and they have no wish that that treaty should impair their friendly sentiments towards Hawaii. But at the same time, as a necessary condition to this friendly understanding, Her Majesty’s Government expect that the Hawaiian Government will remove just causes of complaint, and the draught of declaration proposed in my note to Mr. Carter of the 25th of October last, not having been accepted, you must not give any pledge that the offers then made will be repeated. In consideration of the peculiar circumstances of the commercial relations of the Hawaiian Islands, as explained by Mr. Carter, and the statements made by you after communication with British merchants interested in the trade with those islands, Her Majesty’s Government proposed this method of settlement of the points in discussion between the two governments.

But it was only as a temporary arrangement, the reciprocity treaty of 1875 being limited in duration, and only under the peculiar circumstances of the case, that Her Majesty’s Government could agree to any sort of differential treatment of British goods, and a formal agreement to the reduction of the 25 per cent. duties to 10 per cent. as a maximum was a necessary condition of any such arrangement. Without reverting to questions of the interpretation of Article IV of the treaty of 1851, for the termination of which notice has been formally given by the Hawaiian Government, I have to instruct you on your return to Honolulu to make the following statements to the King and to the Government of Hawaii.

• First. Her Majesty’s Government cannot admit the right of the Hawaiian Government to terminate the operation of the provisions of that article until the expiration of the twelve months’ notice which they have given. While it remains in force, Her Majesty’s Government must require that it shall be faithfully observed, and consequently duties improperly levied must be repaid.
• Second. Without further explanation to justify such a course, Her Majesty’s Government must regard the abrogation of Articles V and VI, in the treaty of 1851, when the only point in discussion is the first paragraph of Article IV, as an unnecessary and unfriendly act.
• Third. Her Majesty’s Government must regard as a specially unfriendly act the levying, when the treaty stipulations for “most favored nation” treatment in matters of tariff shall terminate, of any such differential rate of duty as 25 per cent. on British goods imported into the Hawaiian Islands.

You will give a memorandum embodying these three statements to the Hawaiian minister with whom you may be in communication on your return to Honolulu; and if you think fit you may read this dispatch to him and supply him with a copy of it.

I am, sir, your most obedient, humble servant,

DERBY.

Upon the careful consideration of your committee, they have been able to see clearly the views taken by each of the contesting parties, as also the ground assumed by Hawaii in giving the notice herein mentioned of denouncing Articles IV, V, and VI of the Anglo-Hawaiian treaty of the 10th of July, 1851.

And on this ground the two governments are now at issue with each other. Prior to the 5th of May, 1877, the Government of Hawaii was not aware that she was standing in antagonism to the interests and friendly relations of the Government of Great Britain, neither had it occurred to the minds of the authorities of our government that a controversy between the two countries should arise out of this treaty of 1851.

Therefore, owing to the information derived from the careful perusal of the above correspondence, your committee have arrived at the following conclusions, and beg to state to this honorable assembly that the Government of Hawaii has unquestionably violated the treaty between this country and the Government of Great Britain of the year 1851, and the violation has led to a question of our public safety, and has given rise to a state of interrupted good feeling between us and a nation which has always befriended us in the past.

The weight of this matter has fallen on us through the action of our government from the year 1874 up to the present time. By an act of the legislature of 1874 we commenced this work of alienation. Now this was the proper time to have considered the purpose of the 17th article of the Anglo-Hawaiian treaty of 1851, and which article reads thus: “In order that the two contracting parties may have the opportunity of hereafter treating and agreeing upon such other arrangements as may tend still further to the improvement of their mutual intercourse and to the advancement of the interest of their respective subjects, it is agreed that at any time after the expiration of seven years from the date of the exchange of the ratifications of the present treaty either of the contracting parties shall have the right of giving to the other party notice of its intention to terminate Articles IV, V, and VI of the present treaty; and that at the expiration of twelve months after such notice shall have been received by either party from the other,” &c., then these articles would be terminated, and the several conditions of those articles would not be held to bind either of the contracting parties.

But during a long period after the operation of the treaty of reciprocity with the United States of America, the Hawaiian Government never did comply with the purpose of this article, but were remiss in their duty to obviate the difficulty that would be sure to arise in the future. They were decidedly wrong in this matter.

All the preliminary negotiation by the ministers, in concurrence with the supreme judicial authority, prior to the final passage of this said treaty of the 30th of January, 1875, was generally approved of; and had those negotiations been conducted with a strict observance of the aforesaid article of the British treaty, then there would not have been any disturbance of harmony; but the chief officers of the government urged. King Kalakaua to take in hand the negotiations, and he proceeded to do so—went abroad on this errand, in accordance with their wishes.

In consequence of this supposed advantageous procedure, we have only succeeded in affecting our national status, and have given cause for serious protests on the part of governments with whom we have treaty stipulations.

Your committee here beg to express their very grave censure of the action of the chief executive officers of the government.

But this is not the only instance wherein Hawaii has acted in opposition to her own interests. Our country was again led into an unfriendly course which was as follows: The ministry, in the Assembly of 1876, and others who were opposed to the peace and prosperity of our nation, supported with great vehemence, and, by the distribution of offices to the representatives of the people at that session, passed an act relative to the amendment of our revenue laws. The first was an act increasing the tariff, and the next was an act to exempt and allow certain articles of American origin to be admitted free of duty. Owing to these enactments we are now liable to pursuit in the courts of law. In this predicament we have endeavored to offer a defense such as contained in the letter of H. A. P. Carter, in which he makes answer as a sort of excuse; but his explanation appears to be insufficient to obtain the desired result of what could have all been settled here.

Our government, however, thought it would better our case to appoint an envoy, and clothe him with full powers to settle the controversy in England; but in reviewing the correspondence relative to his mission we cannot entertain hopes of a satisfactory issue.

With deep regret, on account of the puerile course of our envoy, your committee beg to show that Hawaii has not derived any benefit whatever from his mission; it having rather tended to his own personal advantage. His proceedings do not appear very praiseworthy, and are accompanied with evidence of a vindictive and mischievous spirit. He says in his letter to the King, “If we were ever asked to refund we should refuse, and if compelled so to do, we should use our undoubted right after the year’s notice to put such a tariff on English goods as would repay us tenfold.”

Your committee are well convinced as to his intentions, and the intentions of the present cabinet—they do not cordially seek an adjustment.

It is also very evident to your committee that they are inclined to embroil the friendly relations between us and Great Britain, as is apparent from their efforts to terminate Article IV of the treaty of 1851, and hence their holding on to the fourth article of the reciprocity treaty with the United States.

The truth of these remarks may be seen from extracts of his letter to the King, in which he says, “I should by too much haste only strengthen those who would like to say that we must carry out their view of the treaty or they would make us, and if we denounced the articles they would break off diplomatic intercourse with us.”

Your committee therefore appeal to this Legislative Assembly in the strongest language against a course which is in direct opposition to the maintaining of Hawaiian independence.

It is also necessary for this assembly to observe the answer of the acting minister of foreign relations, who is our present minister of the interior, to the dispatch of H. A. P. Carter, in which he thoroughly supports the views of our envoy while acting in the foreign office as minister of foreign relations.

All of the acts of our envoy are exactly in unison with his instructions, as will be seen by his letter to our envoy, and appended to this report, and marked Exhibit D.

The apparent grounds of the protests of the government of Great Britain to the government of Hawaii may be seen by referring to the dispatch of J. H. Wodehouse of the 5th May, 1877, and marked. Exhibit A, and certain extracts taken from the letter of Lord Derby, the British secretary of foreign affairs, of the 25th of January, 1878, and marked Exhibit E. These grounds of objections presented to our government are perfectly plain, and are such that we cannot well avoid them. Your committee therefore recommend that these letters be carefully considered, and that the three particular points asked for by the British Government and specified in the letter of Lord Derby be approved of by this assembly.

If these are matters which can be avoided, we should do so; and if there are possibilities of making some amendments, we should by all means justify ourselves; and should there be sufficient grounds for a positive, refusal, we should do so. But your committee, in considering the demand of Great Britain, believe the same to be very reasonable and just, and recommend this assembly to authorize the minister of finance to pay out of the government treasury all of the claims made by the British importers on goods imported from Great Britain, whereon duties of 25 per cent. have been improperly levied; and they would further recommend to this honorable assembly the repeal of the tariff act, approved the 27th day of September, A. D. 1876, as the said act is not in violation alone of our treaty rights with Great Britain, but is burdensome to the consumer. And they would further recommend to this assembly not to favor the approval of any acts of reprisal as proposed by H. A. P. Carter to the King, as such a course would only tend to irritate and increase unfriendly feelings.

Thus we are liable to damages from our unwise course, and our government treasury may sustain a loss from the malfeasance of our authorities. Could your committee ascertain correctly the deficiency from the time the negotiations of the reciprocity treaty first took place up to the present, it would be seen that our government has suffered serious loss.

This is not all. Mr. Carter has not accomplished anything by his negotiation. His action was not calculated to produce harmony; he has stood in the way of an adjustment, and he has aggravated rather than quieted.

Another matter he was deputized to do on this expedition was relative to the immigration of the people of India, and he never made any application on the part of our government in this matter, if his language to the King in his letter is to be of any value, where he says, “I can do nothing at the India office until the foreign office decides these matters.” He has assumed a haughty tone toward the powers of Europe, and by his neglect of duties confided to his charge, your committee believe that he trenches on the dignity and honor of the Hawaiian Government. All of his actions before the English court dishonor his government.

Your committee who have signed this report appeal in the spirit of patriotism in behalf of our government, our throne, and our people.

• First. That we stand firm on our soil to guard and maintain intact the independence of Hawaii.
• Second. That we declare our intentions to perpetuate cordial relations of friendship between Great Britain, France, and all other treaty powers.
• Third. To observe carefully the action of our government in leading the Hawaiian people.

To object decidedly to all measures leading to annexation with any government.

We annex to this report certain tables relating thereto and numbered.

Respectfully submitted.

• G. W. PILIPO.
• J. W. MOANAULI, Jr.
• WM. H. HALSTEAD.

Table I.—Expenses of the Commissioners E. H. Allen and H. A. P. Carter in negotiating the treaty of reciprocity.

1874—1875.
E. H. Allen and H. A. P. Carter		$1,000 00
Do	do	1,100 00
Do	do	900 00
Do	do	250 00
Do	do	500 00
Do	do	686 50
Do	do	1,106 27
Do	do	97 98
Do	do	810 65
Do	do	1,000 00
Do	do	47 75
Do	do	500 00
		7,999 15
Expenses of His Majesty King Kalakaua on the same business		20,000,00
Total		27,999 15

Table II.—Expenses of our envoy to settle the difficulties between Her Majesty’s Government and His Hawaiian Majesty’s Government relative to the violation of the Anglo-Hawaiian treaty of 1851.

1877.
For H. A. P. Carter		$1,015 00
Do		524 75
Do		526 00
Do		346 94
Do		687 96
Do		2,799 60
		5,900 25
Sundry other expenses while in England	$2,875 00
Do	1,125 00
		4,000 00
E. H. Allen. expenses	500 00
Do	1,398 87
Do	331 70
		2,230 57
Total		12,130 82

Table III.—Loss to the treasury in paying back the amount collected of the twenty-five per cent. duty that was levied on British goods, under the act of 1876 (which the ministers now wish to repeal), and which Great Britain has demanded of us.

Amount levied and collected up to March 31 of the year 1878

$4,897 47

Table IV.—Actual loss and damage of the government treasury from the date of the final passage of the reciprocity treaty up to the 31st day of March, 1878.

Amount of goods admitted into this country free of duty	$1,731,468 73
Loss to the treasury on the above amount of goods, being admitted free of duty at 10 per cent	173,146 87
Owing to the same treaty, we have levied and collected on the same sort of goods from Great Britain to the amount of $522,523.24, at the rate of 10 per cent	52,252 32

[Inclosure 3 in No. 43.]

Report of the Hon. H. A. P. Carter.

Nuuanu, June 25, 1878.

Sir: In response to your excellency’s request for a brief résumé of my late mission to Europe, I beg leave to report that I was received with courtesy and respect by the Governments of Her Britannic Majesty, and of His Imperial and Royal Majesty the Emperor of Germany and King of Prussia, to whom I presented the credentials with which I was intrusted by His Majesty the King.

With the former government it was hoped that I should be enabled to conclude an arrangement on the basis of a protocol, signed here by Her Majesty’s representative, Major Wodehouse, and His Majesty’s minister for foreign affairs, which should harmonize some differences growing out of the interpretation of the Anglo-Hawaiian treaty of 1851; and, further, if it seemed practicable to enter into a scheme of East Indian immigration, I was instructed to negotiate, if possible, a convention with Her Majesty’s Government defining the conditions of such immigration from the East Indian possession of Her Majesty the Queen of Great Britain and Empress of India.

In regard to the first object, although I had the valued assistance of Major Wodehouse, it was found, upon discussing the protocol and declarations based thereon, that even with the best desires on both sides to attain the object by such means, any declaration which could be accepted by the British Government in view of their relations with other countries could not be signed by myself without exceeding the limits of my instructions and infringing the constitutional rights of the legislative assembly.

I had, however, the pleasure of receiving the assurances of Lord Derby, Her Majesty’s principal secretary of state for foreign affairs, that my explanations of the peculiar circumstances of the commercial position of the Hawaiian Islands led Her Majesty’s Government, as an especial mark of friendship and good will, to propose a mode of settlement, which he submitted to me. This proposition involved a modification of our tariff laws, which could only be made with the sanction of the legislative assembly, and I was obliged to point out that objection to it. Owing to these limitations on both sides, it became obvious that we could not meet the wishes of the British Government without legislative action.

On the 9th of November, I had an interview with Lord Derby, in which, after pointing out some of the reasons which had led the Hawaiian Government to adopt the interpretation of the treaty of 1851 which it holds, and explaining the constitutional and other objections to the proposed form of declarations, I suggested that so much of Article IV of the treaty of 1851 as formed a subject of difference between the two governments be declared inoperative by mutual consent, thus saving as much as we could of a treaty for which, I assured his lordship, we had a traditional regard, and had never knowingly violated.

His lordship expressed himself satisfied with the intentions of the Hawaiian Government, saying that Her Majesty’s Government did not accuse the Hawaiian Government of any wilful neglect of its treaty obligations, and promising to give my suggestions careful consideration.

I subsequently had conferences with Lord Tenterden and other gentlemen of the foreign office, in the hope that some form of declaration might be arrived at which would meet our mutual wishes, but with the same result.

Lord Tenterden, in a “private” note to myself, dated December 28, stated that my propositions had been carfully considered, but that Her Majesty’s Government regretted that they could not entertain them, as they were obliged to consider them not only as regarded their relations with the Hawaiian Islands, but also their bearing upon the relations and engagements of Great Britain with other foreign states. Lord Tenterden courteously assured me that it was on general grounds, therefore, that they were unable to accept them. He again repeated Lord Derby’s assurances of the friendly sentiments of Her Majesty’s Government toward Hawaii, and that they fully accepted the statements I had made in regard to the reciprocity treaty with the United States, and stating that Her Majesty’s Government had no wish that the friendly relations now subsisting between the two nations should be affected by that treaty.

Lord Tenterden further stated that, apart from the treaty, there were two subjects with regard to which Her Majesty’s Government might have ground for complaint. First, the maintenance of the recent augmentation of duties upon British goods, and, secondly, the unnecessary denunciation of Articles V and VI of the treaty of 1851.

With regard to the second matter, I pointed out to Lord Tenterden that the withdrawal of the notice of termination of those articles could not be accomplished, except by a mutual arrangement, without prejudging the notice as regarded Article IV, and that I had already, on November 9, proposed such mutual action to Lord Derby without eliciting any response. This matter, you inform me, has been arranged upon the assurance of Major Wodehouse that it should not affect the notice regarding Article IV.

With regard to the first matter, it depends partially upon the action of the Legislative Assembly whether the tariff of 1876 shall be maintained or not. It was clearly beyond the scope of my powers to make any promises regarding it.

One of the happy results of my mission was the acceptance by the British Government of our explanations regarding the reciprocity treaty with the United States, and the assurance of that government of its desire that the operation of that treaty should not in any way affect our friendly relations.

I am quite convinced that so long as our legislation and the execution of our laws shall continue to be just and equitable towards that great power those friendly relations can be maintained, and that legislation which can be shown to be for the best interest of this country will meet with no unfriendly interpretation.

Through my mission a clearer understanding has been arrived at with the British Government upon all points, and it shows every disposition to respect our views, and there has been no diminution of that friendship and good-will which it was my constant desire to promote. Lord Salisbury, at present Her Majesty’s principal secretary of state for foreign affairs, in a dispatch as late as the 4th of May of the present year, while expressing his regret at the termination of my mission, informs me that Her Majesty’s Government fully share in my hope that the termination of any part of the treaty of 1851 may not in any way interfere with the relations of friendship which now happily subsist between Great Britain and the Hawaiian Islands.

This dispatch closed my official intercourse with the Government of Her Britannic Majesty.

On my arrival in Berlin, on the 8th of January of the present year, I communicated with the minister of state for foreign affairs, and was in due course of time received, as I advised the department, by His Imperial and Royal Majesty the Emperor of Germany and King of Prussia, by Her Imperial Majesty the Empress, by their Imperial and Royal Highnesses the Crown Prince and Princess, and all the members of the royal family, after which my official intercourse with the imperial government began.

My negotiations with that government were retarded by its reluctance to make a commercial treaty without providing for the fullest equality in respect to import duties. They, however, finally acknowledged that the peculiar circumstances of our position justified them in so doing, and an article was framed by which it was agreed that the special advantages granted to the Government of the United States in consideration of equivalent advantages should not in any case be invoked in favor of Germany.

Certain considerations which I have explained to your excellency led me to desire that the articles of a projected treaty framed should not take the form of a definite treaty until fully approved by His Majesty’s Government, and consequently a protocol was framed, of which they formed a part, providing for a formal treaty, of which they should be the basis.

This protocol was duly signed by the German plenipotentiaries and myself on the 23d day of April last past.

By command of His Majesty, I had the honor of tendering to His Imperial and Royal Majesty the Grand Cross of the Royal Order of Kamehameha I, which he graciously received, and consented to allow His Imperial and Royal Highness the Crown Prince to receive the same. I was then informed by his excellency the minister of state for foreign affairs that it was His Imperial Majesty’s intention to send the Grand Cross of the First Class of the Royal Order of the Red Eagle to His Majesty as a mark of high regard and esteem.

In conclusion, I beg to give expression to my grateful sense of the many courtesies which, as His Majesty’s envoy, I received at the courts of St. James and Berlin, and the many kindly sentiments of regard and esteem which were expressed for the Hawaiian nation. I am deeply imbued with the conviction that, by the judicious and dignified exercise of the functions of government, Hawaii may maintain an honored place among the nations of the world, which shall make it no slight honor to be known as a Hawaiian subject.

With sentiments of high consideration, I am your excellency’s humble obedient servant,

HENRY A. P. CARTER.

His Excellency Henry A. Peierce,
Minister Foreign Affairs, Honolulu.

[Inclosure 4 in No. 43.]

Mr. Comly to the minister of foreign affairs.

Legation of the United States,
Honolulu, July 1, 1878.

No. 140.]

Sir: I have the honor to submit to His Majesty’s Government, through your excellency, my opinion that the integrity of the treaty of reciprocity between the United States and the Hawaiian Island is threatened.

Allow me to call your attention to a clause of Article IV of the treaty, as follows:

“It is agreed on the part of His Hawaiian Majesty that so long as this treaty shall remain in force he will not * * * make any treaty by which any other nation shall obtain the same privileges relative to the admission of any articles free of duty hereby secured to the United States.”

This stipulation is in the nature of a valuable consideration to be paid by one party to the other, as one of the causes which move the contracting parties to enter into an agreement. The failure to pay it would be a breach which would endanger, if not destroy, the whole compact.

No treaty in existence at the time this compact was entered into secured to any other nation the privileges as to the admission of certain articles free of duty, which have been guaranteed to the United States by this treaty. These privileges were secured, not through any general treaty rights or stipulations, but by giving certain valuable considerations in a special treaty of reciprocal covenants. The concession of these privileges to the United States cannot therefore form any just basis for a claim to like privileges by any other nation, under the parity clause of the ordinary form of treaty. The uttermost that might be conceded under such parity clause would be the claim to purchase the same immunities through special treaty, upon like terms with those agreed upon between the United States and the Hawaiian Islands. But this is in the nature of the case impossible. Those concessions by the United States which are of the greatest value to the islands under this treaty would be of no value whatever from other powers, whose great distance from the best markets for island products would be as effectual a bar to the enjoyment of reciprocity as a prohibitory edict. The effect of such an arrangement would be, if attempted with other powers on the same basis, that the United States would remit some millions of duty on island products during the seven years, in order that other nations might not pay duty to His Hawaiian Majesty on goods brought here to compete with American products.

This is the precise thing the treaty does not intend. Its intentions is to secure exclusive benefits to both contracting parties through special privileges granted by each to the other. To admit the claim of a third party to come in and enjoy all the benefits conceded by both principals, without any payment in equivalent special privileges to either, would be an unprecedented thing.

It would be strange if the Hawaiian Government and people should fail to take in the advantages secured to them by the treaty, and should suffer its integrity to be impaired. While I cannot believe that there is real danger of such a result, yet there are circumstances, not necessary to detail particularly, which may excuse this friendly and cautionary mention of some of the rights and privileges of the United States under the treaty.

With the most distinguished consideration and respect, I am, sir, your excellency’s very obedient servant,

JAMES M. COMLY.

His Excellency Henry A. Peirce,
Minister of Foreign Affairs.

[Inclosure 5 in No. 43.]

Mr. Kapena to Mr. Comly.

Department of Foreign Affairs,
Honolulu, July 6, 1878.

Sir: Your dispatch of the 1st instant was handed to me by my predecessor, Mr. Peirce, and I hasten to thank you for the kindly considerations towards this government of which it gives evidence.

You state in your dispatch that, in your opinion, “the integrity of the treaty of reciprocity between the United States and the Hawaiian Islands is threatened,” and again, at the close of your remarks, that while you cannot believe that there is real danger of such a result, yet there are circumstances, not necessary to detail particularly, which may excuse the friendly and cautionary mention of the rights and privileges of the United States under the reciprocity treaty

Be assured, Mr. Minister, that His Majesty’s Government will take care that the integrity of the treaty shall not be impaired in any respect whatsoever, and will always thank you for any communication like that which I now have the honor to reply to, whenever you may think that we may be about to fall, through inadvertence, into any course which may appear likely to impair the value of the treaty to the United States.

With the highest respect and most distinguished consideration, I have the honor to be, sir, your excellency’s most obedient servant,

JOHN M. KAPENA.

His Excellency James M. Comly,
United States Minister Resident.