No. 6.
Mr. Willis to Mr. Gresham.

Sir: In my dispatches of October 13 and 19 ultimo, and November 2, ultimo, I have heretofore called attention to the proposition which has been made to this Government by commissioners representing Great Britain, Canada, and Australia, involving the use of one of its uninhabited islands as a station for a transpacific cable from Canada to Australia; and in consideration of such use and of such subsidy as might be agreed upon, the connection of Honolulu to the main line by a branch cable to the island which might be selected.

[Page 1387]

This Government is of opinion that it is estopped from considering the foregoing proposition, by article 4 of the treaty of reciprocity between Hawaii and oar Government.

This matter is now, therefore, at the request of this Government submitted to the consideration of our Government, upon the question of its willingness to nullify the treaty of reciprocity by exempting Necker Island, French Frigate Shoals, or Nihoa (Bird Island) from the operation of article 4 of the treaty, which reads as follows:

It is agreed on the part of His Hawaiian Majesty that as long as this treaty shall remain in force he will not lease or otherwise dispose of or create any lien upon any port, harbor, or other territory in his dominions, or grant any special privileges or rights of use therein to any other Power, State, or Government.

In this connection I inclose copies of the note of Mr. Hatch, minister of foreign affairs, and of correspondence between him and the commissioners.

With renewed assurances, etc.,

Albert S. Willis.
[Inclosure 1.]

Mr. Hatch to Mr. Willis.

Sir The subject of connecting these islands with North America by a submarine telegraphic cable has recently been brought into prominence here by a proposition which has been made to this Government by Commissioners representing Great Britain, Canada, and Australia, involving the use of one of the uninhabited islands belonging to this Republic, viz: Necker Island, French Frigate Shoals, or Nihoa (Bird Island) as a station for a transpacific cable from Canada to Australia; and in consideration of such use and of such subsidy as might be agreed upon the connection of Honolulu to the main line by a branch cable to the island which might be selected.

The matter has excited much interest here, and it is felt by all classes that a cable is of the greatest importance to this community.

For many years strenuous attempts have been made upon our part to induce some company to undertake the enterprise of laying a cable from Sam Francisco to Honolulu. In 1875 our legislature passed an act to encourage telegraphic cable companies. In 1884 the legislature offered an annual subsidy of twenty thousand dollars for a period of fifteen years to any company which should establish telegraphic communication between Honolulu and San Francisco. In 1890 the subsidy offered was increased to twenty-five thousand dollars per year for fifteen, and the exclusive right of landing telegraphic cables on these islands for a period of fifteen years from 1891 was added as a further inducement.

Aside from the extremely accurate surveys which have been made by your Government, nothing has so far been accomplished.

The opportunity now offered is one to which this country can not be indifferent, if it can be taken up consistently with treaty obligations, and if no more desirable scheme is presented.

The proposition submitted by the commissioners above named contemplates a scheme in which the British Government will be directly or indirectly interested. This Government, therefore, considered itself estopped by article 4 of the treaty of reciprocity between the United States and Hawaii from considering any proposition until the views of your Government could be ascertained.

The portion of the treaty referred to is 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 lease or otherwise dispose of or create any lien upon any port, harbor, or other territory in his dominions, or grant any special privileges or rights of use therein to any other Power, State, or Government.”

It is desired to submit this matter to your Government in order to obtain their views upon the desirability of modifying the treaty of reciprocity by exempting Necker Island, French Frigate Shoals, or Nihoa (Bird Island) from the operation of article 4 of the treaty.

I have, etc.,

Francis M. Hatch.
[Page 1388]
[Inclosure 2.]

Messrs. Fleming and Mercer to Mr. Hatch .

Dear Mr. Hatch:

We inclose a fair copy of the “memorandum of agreement,” which is the result of our interviews with you, and which records the scheme arrived at, subject to the consent of the United States and the approval of the Legislature.

We will explain to our Governments that you feel precluded from following up our interviews with any actual step in the matter until the consent of the United States has been obtained to waive the requirements of article 4 of the reciprocity treaty. We presume that you will now take the necessary steps with the view of bringing the proposed arrangement to the notice of the United States Government, and of ascertaining whether they will give the desired consent so as to enable you to proceed with it.

We, all of course, hope that the Washington Government, on full explanations and proper representations being made to them, will be able to do this. By so enabling the scheme to be carried out they would obtain for the United States people the advantage of telegraphic connection with Honolulu, and, further, of exceedingly low telegraphic rates both to that place and to Australasia. These advantages would be secured without contributing to the capital required for the cable or to the necessarily heavy subsidies or guarantees which will have to be paid by all the countries to which the cable runs. All considerations of this kind will no doubt be satisfactorily explained by your representative, but we may add that the United States Government have been for some time aware that the Governments of Great Britain and her colonies have been discussing the project of a cable across the Pacific from Vancouver to Australasia, with a connecting line from an unoccupied island in the Hawaiian Archipelago to Honolulu, and there can be little doubt that they will quite recognize the commercial advantages which in no small measure would accrue to the United States from the accomplishment of this undertaking.

It is by no means settled that the undertaking will, if it is determined upon, be carried out as a Government enterprise. It may be committed to a company with a subsidy or guarantee from the Government interested. In that case the lease might be to the company and not to the British or any other Government, and the case would not then come literally within the terms of your engagement in the treaty not to dispose of your lands to foreign governments. But having regard to the circumstance that “foreign governments” would have a substantial interest in the lease, we are quite in accord with your view that it is proper, whatever formthe lease might take, to obtain the consent of the United States to the arrangement.

It is understood between us that if the negotiations at Washington are successful, the memorandum of agreement will be submitted to your legislature, and will be subject to their approval. We are of course sensible that you can not guarantee that the legislature will consent to the annual subsidy of 7,000 pounds.

The explanations which will have to be made to the legislature on this and all other points will be in very good hands, and we need not be at pains to say more here than that the scheme would imply on our part the maintenance of two telegraph stations within your territory, one at Honolulu and the other on the island leased, at a computed annual local expenditure of about 10,000 pounds; that the laying of so expensive a cable through the Hawaiian Islands would cause a considerable expenditure there out of the capital, and that this benefit would not cease with the construction of the cable; for it is considered that it would be necessary to keep at least two cable-repairing ships on the route for the purpose of maintaining the efficiency of the cable, one of which ships would generally be stationed at Honolulu. It need hardly be observed that the subsidy is asked for not merely in consideration of the low tariff, but on the general ground that a heavy yearly deficit will have to be made up, for a greater or less period, by the parties interested. Your legislature will no doubt take this consideration into account in considering the question of the subsidy. We do not conceal from you that another feasible route for the Canada-Australia cable is under consideration, and that the adoption of the Hawaiian route must be justified on financial and commercial grounds.

We propose to inform the British Government of your inquiry whether they would accept the sovereignty of Necker Island, or some other uninhabited island, on condition that no subsidy is required from you. As we explained, we have not felt at liberty to entertain that question ourselves, as we were definitely instructed not to ask for the sovereignty of any island, but only for a lease simply for the purpose of the cable.

We are prepared to recommend to our Governments the acceptance of the terms stated in the memorandum of agreement, but we can not undertake to say that the arrangement would be adopted if any material alteration were made in it.

[Page 1389]

We Lave of course treated our negotiations with you on this subject as strictly confidential. It is not, however, necessary, so far as we are concerned, to attach any character of secrecy to the proposals. We have been at great pains to make these proposals as moderate and as acceptable to you as possible, and we do not ourselves see any objection to public criticism upon them being invited. You are quite at liberty to make any use which you may think proper of this letter.

We have only to express, in conclusion, our appreciation of the great courtesy and kindness which we have received personally at the hands of yourself and your colleagues.

We remain, etc.,

  • Sandford Fleming.
  • W. Hepworth Mercer.
[Inclosure 3.]

Mr. Hatch to Messrs. Fleming and Mercer.

Dear Sirs: In acknowledging the receipt of your letter of this date, inclosing a fair copy of the agreement proposed by you in the hope that it would prove mutually satisfactory, I beg to again express my regret that this Government, by the provisions of our treaty of reciprocity with the United States as we read it, is at this time precluded from the consideration of the terms proposed.

Our position is fully stated in the memorandum heretofore submitted to you, a copy of which is inclosed as a part of this note.

I desire to repeat the assurance that this Government is fully alive to the importance to this country of telegraphic communication with North America, and hope that the speedy settlement of all difficulties of a diplomatic nature may lead to the early consummation of this so long-desired project.

Availing myself, etc.,

Francis M. Hatch.
[Inclosure 1 to Inclosure 3.]

Statement of the altitude of the Hawaiian cabinet in regard to the scheme for laying a Pacific cable from Canada to Australia as submitted by Messrs. Mercer and Fleming, representing the British, Canadian, and Australasian Governments.

This undertaking being of such magnitude that it is apparent that to insure success it must be conducted by or under the auspices of the British Government, the proposition that the Hawaiian Government should grant a lease of Necker Island, or some other uninhabited island of this group, as a cable station at once raises the question of the power of the Hawaiian Government to act in the premises without first obtaining the sanction of the United States. The treaty of reciprocity between the United States of America and Hawaii has the following provision:

“It is agreed on the part of His Hawaiian Majesty that so long as this treaty shall remain in force he will not lease or otherwise dispose of, or create any lien upon any port, harbor, or other territory in his dominions, or grant any special privilege or rights of use therein to any other power, state, or government, nor make any treaty by which any other nation shall obtain the same privilege relative to the admission of any articles free of duty hereby secured to the United States.”

The Hawaiian cabinet do not feel disposed to enter upon any considerations of a verbal nature touching the extent of and scope of the above-quoted article. Its intent is so clear that they feel it would be improper for them to enter into any engagement in regard to the suggested lease of an island until the consent of the United States has been obtained.

The matter will be at once submitted to the United States Government. Upon obtaining the approval of the United States, and a waiver in this instance of the article above quoted, reference will be made to the Hawaiian Legislature of the propositions submitted by Messrs. Mercer and Fleming, which are embodied in the draft memorandum hereto annexed.

With such approval no possible objection by the Legislature is anticipated to a lease of Necker Island, or any other uninhabited island of this group, upon condition that Honolulu is put into telegraphic connection with the main line, and that fair rates, not out of proportion with the general tariff determined upon, be given. The question of financial aid is exclusively within the province of the Legislature. Upon this point it need only be said that the cabinet feel confident that the Legislature will meet the matter in a spirit of liberality which its great and unquestioned importance to the country at large demands.

Francis M. Hatch.
[Page 1390]
[Inclosure 2 to Inclosure 3.]

Memorandum of agreement between the Hawaiian Government and representatives of Great Britain and the British Colonies, made in Honolulu in October, 1894, with regard to the proposal to lay a submarine cable between Canada and Australasia connected by a branch line with Honolulu.

Subject to the conditions and stipulations hereinafter set out, the Hawaiian Government agrees, if and when the laying of a submarine cable between Canada and Australasia shall be determined upon, to lease to the British Government and its assignees, hereinafter called the lessees, either Necker Island or French Frigate Shoal or Bird Island, or other uninhabited island, whichever of them the British Government may select.

It is noted that the Hawaiian Government are debarred by their reciprocity treaty with the United States from leasing or otherwise disposing of any of their lands, or from granting any special privileges, to any foreign government, and it is therefore incumbent upon the Hawaiian Government to obtain the sanction of the United States Government as a condition precedent to the grant of the proposed lease.

The Hawaiian Government further agrees, for the consideration and stipulations hereinafter expressed, to insert in the lease the following covenants:

(1)
That the lease shall commence and take effect when a contract has been entered into for the laying of a cable from Canada to the island intended to be leased, and shall enure and continue until the cable and the connecting line to Honolulu are finally and permanently abandoned.
(2)
That exclusive possession free from disturbance shall be given, with exemption from all kinds of taxation.
(3)
That a convenient landing station and space for the accommodation of the telegraph office staff shall be provided at or near Honolulu for the purpose of laying and working a connecting cable between the island leased and Honolulu.
(4)
That an annual subsidy of 7,000 pounds shall be paid by the Hawaiian Government to the lessees for the period of fifteen years, payable half yearly in two installments, on the 30th of June and the 30th of December (or such other fixed dates as may be determined upon by the British Government), the first payment to be made on the first of such dates as shall occur after cable communication has been established between Honolulu and Canada.

In consideration for the lease and the covenants given by the Hawaiian Government, the following covenants will be required from the lessees:

(1)
That a cable shall be laid from the island leased to Honolulu, so as to connect that place telegraphically with all points on the main cable.
(2)
That telegraphic messages shall be sent from Honolulu to the first landing station on the Canadian coast at the following rates per word, viz: 1s. in the case of private messages; 9d. in the case of Government messages; 6d. in the case of press messages, provided always that no less charge shall be made than 10s. ($2.50) for any one message, And further, that persons telegraphing at Honolulu shall be given he full benefit of such rates as may be established by agreement with other countries or companies to all points beyond.
(3)
That the island leased shall not be fortified or used as a naval station, or for any purpose whatever not connected with the working and maintenance of the cable.
(4)
That the island leased shall be surrendered and vacated by the lessee or lessees if and when the cable and the connecting line to Honolulu are finally and permanently abandoned, and if and when any of the above covenants on the part of the lessees is broken.