Mr. Herbert to Mr. Wharton.
Washington , June 24, 1892 .
Sir: I have the honor to inform you that Sir Julian Pauncefote duly forwarded to the governor-general of Canada copies of your notes of the 10th October, 1891, and of the 17th of March, 1892, inclosing memorials from the Lake Carriers’ Association of Buffalo, complaining of alleged discrimination on the part of the Canadian Government against citizens of the United States in the use of the Welland Canal, and I have now received a communication from his excellency in reply, containing the following observations which the Government of the Dominion desire to submit thereon.
The Canadian Government have carefully examined the statements made in the two memorials from Mr. Keep, the Secretary of the Lake Carriers’ Association, and they have been found to be in many respects inaccurate as to figures, as well as inconclusive in the deductions drawn from them.
His assertion that, during the season of 1891, Canadian canal tolls were levied discriminating against the port of Ogdensburg, to the aggregate amount of $53,395.67, would appear to be widely erroneous.
[Page 279]He states that, on the total freight shipped via Canadian canals in 1891 to Ogdensburg, the tolls paid were $55,037.05. By the official canal returns, it appears that the total freight passing through the Welland Canal in 1891 to Ogdensburg was really 272,947 tons, and tolls paid were $53,444.37. But, of the total canal freight so discharged at Ogdensburg, the classes of grain specified by the order in council, namely, wheat, Indian corn, pease, barley, rye, oats, flaxseed, and buckwheat amounted to only 191.607 tons, and the tolls paid on the same to $38,321.40, and these are the only articles of freight which, when shipped to Montreal, come within the purview of the order in council for rebate of toll. The difference between the amount of tolls on goods subject to rebate, and the full amount of toils, is therefore $34,489.26, instead of $53,395.67, as stated by Mr. Keep. Of the amount of grain of the character subject to rebate passed as above through the Wetland Canal to Ogdensburg, 17,817 tons were transshipped at that port to Montreal. The rebate on this quantity, if allowed, would have been $3,207, and this sum constitutes the sole difference in tolls between the two routes, and the only amount in respect of which any discrimination could be claimed to exist. The remainder of the 191,007 tons passed into the Eastern States.
On freight other than the designated products, discharged at Ogdensburg in 1891 full canal tolls were paid and would have been levied on Canadian vessels in Canadian waters, with no refund or abatement of any kind, Canadian and United States vessels being precisely on a par in that respect.
The Canadian Government can not attach any weight to the pretensions of Mr. Keep that there is inequality in the use of the canals between Canadians and Americans, on the ground that the tolls for the use of the canals going westward are 20 cents per ton, while those for the use of the canals going eastward are only 10 cents per ton.
Except as regards the grain products already discussed, he does not assert that there is any difference in respect of the amount of these tolls between Canadian and American vessels going eastward or westward respectively, nor that the destination of the cargoes eastward or westward in any way affects the tolls paid. Canadian and American vessels pay the same toll for passing through the canals in the same direction, and are entirely unrestricted in respect of such tolls by their destination or by any other extraneous circumstances.
By the order in council of April 4th last, it was provided that a refund of 18 cents per ton should be made for a portion of the canal tolls, which were fixed at 20 cents per ton upon freight of all kinds, collected on the designated products carried through the Welland Canal and the St. Lawrence Canal to Montreal, or any port east of Montreal, in all cases where these products were exported, and in such eases only. The same order stipulated that products on which the rebate could be claimed should be shown to have been originally shipped for Montreal or some port east of Montreal, and should be carried to such point and actually sent out of the country, with the proviso that the right to this rebate should not be lost by reason of intermediate transshipment, if the place of such transshipment be within the Dominion of Canada. As regards all other freights passing through the canals, there is no rebate, whatever may be its destination.
The effect of this order in council is to fix the rate of toll on all of the specified products passing through the Welland Canal and the St. Lawrence canals without distinction as to nationality. Vessels of both, countries are entitled to the rebate and also to transship, provided that [Page 280] such, transshipment be made at a Canadian port. If, however, the transshipment takes place at an American port, the vessel loses its right to the rebate. And the loss of rebate would apply equally to both Canadian and American vessels. In like manner the vessels of neither country would obtain rebate should they land at a port short of Montreal, either on the American or Canadian side.
Under the provisions of the order in council it is evident that the Canadian government allow the use of their canals both to their own vessels and to those of the United States upon such conditions as to influence a certain class of the traffic to pass down the St. Lawrence to Montreal; but in the inducement thus held out there is no distinction made as respects the payment for the use of their canals between the vessels of the United States and their own. In favoring their national route the Canadian government do so on precisely the same conditions with regard to both nations, and they contend therefore that they have acted in accordance with the obligations which Great Britain has requested them to take under article 27 of the Treaty of Washington. The stipulation in that article is that United States citizens shall use the Canadian canals on terms of equality with the people of the Dominion; and this equality is, in the opinion of the Canadian government, preserved by the imposition of the same conditions, and the granting of the same privileges, with the same restrictions to vessels of both nationalities.
By the thirtieth article of the Treaty of Washington it was agreed that British subjects might carry in British vessels without payment of duty goods, wares, or merchandise, from one port or place within the territory of the United States upon the St. Lawrence, the Great Lakes, and the rivers connecting the same, to another port or place within the aforesaid territory of the United States; provided that a portion of such transshipment should be made through Canada by land carriage and in bond; and a privilege exactly corresponding, mutatis mutandis, was by the same article granted to the citizens of the United States with respect to goods, wares, or merchandise carried from one point in Canada across the territory of the United States to another point in Canada. By the same article it was agreed that the United States might suspend the right of carrying, so granted to British subjects, in case the Dominion of Canada should at any time deprive the citizens of the United States of the use of the canals in the Dominion on terms of equality with the Canadians. In the authorized protocol to the conference between the British and United States high commissioners with regard to the thirtieth article of the Treaty of Washington it is stated as follows:
That they desired and it was agreed that the transshipment arrangement should be made dependent upon the nonexistence of discriminating tolls or regulations of the Canadian canals, and also upon the abolition of the New Brunswick export duty on American lumber intended for the United States.
The Canadian government immediately took means to relieve American lumber from export duty in New Brunswick at a cost of $150,000 per annum, thus completing the conditions required to retain article 30 in force. It is accordingly evident that from the language of the thirtieth article of the treaty, supplemented by the protocol of the conference on that article, the remedy which the United States reserved to themselves in the event of Canada depriving the citizens of the United States of the use of the canals on terms of equality with her own people, was provided for by that article and was long ago resorted to by the United States.
[Page 281]By joint resolution of the Senate and House of Representatives, passed on the 3d of March, 1883, it was determined to give notice to Canada of the termination of the thirtieth article of the Treaty of Washington at the end of two years.
On the 2d and 24th of July, 1885, under orders issued by Secretary Manning, based upon the notice given, the privilege of carrying traffic duty free from one point in the United States to another point in the same territory across an intervening portion of Canadian territory was finally withdrawn from Canadian vessels, thus exacting from Canada the penalty for discrimination in the use of the canals, although no inequality really existed. This privilege has not been enjoyed by Canada since the 2d of July, 1885, though hitherto the Canadian government have abstained from taking any steps towards preventing the continuance to the United States of the corresponding privilege provided for by the thirtieth article of the treaty.
While therefore the Canadian government are unable to admit that any discrimination in the use of the Canadian canals is made against United States vessels by the terms of the order in council, they maintain that even if the fact that transshipment is confined to a Canadian port could be construed as constituting, such discrimination, the penalty agreed upon between the United States and Great Britain, in such an event, has already been exacted by the United States.
The government of the Dominion are nevertheless, as heretofore, desirous of maintaining friendly relations with the United States, and are willing to meet their views so far as is consistent with their position and with the interests of their people. They believe that the conditions of the Treaty of Washington in respect of international trade were eminently calculated to preserve such amicable relations between the countries, and in their opinion the most satisfactory way of meeting the present difficulty would be to revert in some degree to the terms of that treaty, in so far as they relate to the question under discussion. With a view to the furtherance of a good understanding on these points, they would be disposed to enter into an arrangement such as the following:
That, as regards the navigation of the Welland and St. Lawrence canals, the imposition of tolls, and the granting of rebates thereon, the same treatment will be accorded to citizens of the United States as is given to the subjects of Her Britannic Majesty without regard to ports of transshipment or export, and that the United States will continue to deal in like manner with the subjects of Her Britannic Majesty in the use of the existing Sault Ste. Marie Canal. That the provisions of article 30 of the Treaty of Washington granting carrying powers to vessels belonging to the subjects of Her Britannic Majesty, as described in that article, be restored.
In conclusion, I venture to express the hope that this proposal, which I am instructed by the Marquis of Salisbury to submit to your Government, will be received by them in the same friendly spirit in which it is made, and that it will be found to provide an amicable and satisfactory solution of the question at issue between the two countries.
I have the honor to be, with the highest consideration, sir, your most obedient humble servant.