Mr. Adee to Sir Julian Pauncefote.

My Dear Sir Julian: I had the honor to receive your personal note of the 24th instant in which you express the apprehension of Her Majesty’s Government lest one of the results of the annexation of the Hawaiian Islands to the United States may be to interfere with the carrying trade between those islands and the United States, no inconsiderable portion of which is now done in British bottoms.” You state your understanding that there is at present nothing to preclude foreign vessels from trading betwen the United States and the Hawaiian Islands and that no legislation is contemplated which would interfere with the trade, and request information on these points.

As the question is one properly for the consideration of the Treasury Department, I referred your inquiries to the Secretary of the Treasury and am now in receipt of a letter from Acting Secretary Spaulding in reply.

Your understanding that there is at present no regulation to preclude foreign vessels from such trade, coincides with the view of the Treasury Department, based on an opinion of the Attorney-General, set forth in the appended circulars.

The Acting Secretary of the Treasury is, however, unable to concur in your further understanding that no legislation is contemplated which would interfere with this carrying trade. While he does not undertake to forecast the form which legislation by Congress may take, the general policy of this country to reserve to American vessels trade between American ports is so firmly established that its reaffirmation by Congress in the legislation providing for the extension of American laws to the Hawaiian Islands does not appear to him to be doubtful. He thinks it possible that this policy may be not put into effect until there has been an adjustment of American tonnage to meet the situation created by annexation, but he thinks it probable that at an early date trade between the United States and the Hawaiian Islands will be confined to American vessels.

It may be noted that, in obedience to traditional policy, trade between the United States and Porto Rico has already by regulation been confined to American vessels.

There would seem to be no occasion to apprehend serious interference with the carrying trade between the United States and the Hawaiian Islands as a result of such legislation as Congress may enact. The total combined entries and clearances of vessels from and [Page 384] to Hawaiian ports and ports of the United States during the fiscal year ended June 30, 1897, were 461 vessels of 361,173 net tons, of which 394 vessels of 283,211 net tons were American, and only 13 vessels of 19,040 tons were British. These figures do not include steamers which merely touch at Honolulu to leave or take on mail and a few cabin passengers and their baggage to and from Asiatic and Australian ports. With regard to these the American consul-general at Honolulu, under date of January 24, 1898, reported:

The majority of these steamers are British, and as they carry very little freight to and from these islands it is misleading to include them in any report of the nationality of vessels employed by the Hawaiians in their commerce with the world.

I trust the foregoing observations meet your inquiries on the subject, and am, etc.,

Alvey A. Adee,
Acting Secretary.