Mr. Hill to Mr. Choate.

No. 527.]

Sir: Referring to your No. 424, of November 10 last, I now inclose for your information a copy of a letter from the Secretary of the Treasury, giving at length the reasons why the request of the London agent-general of New South Wales for such a relaxation of the navigation laws of the United States as would permit the conveyance of passengers and merchandise between American ports and Honolulu in Australian-owned shipping can not be granted.

I am, etc.,

David J. Hill,
Acting Secretary.
[Page 203]
[Inclosure.]

Mr. Gage to Mr. Hay.

Sir: I have the honor to acknowledge the receipt of your letter of November 22, 1900, inclosing a communication, forwarded confidentially by our ambassador to Great Britain, from Mr. Henry Copeland, general agent for New South Wales at London, in which he requests of the United States “such relaxation being made in the application of their navigation laws as will permit of passengers and goods being conveyed, as formerly, by Australasian-owned shipping between American ports and Honolulu, at least for some years to come.” You request an expression of my views.

In reply thereto I have the honor to state that the act to which Mr. Copeland refers was passed in pursuance to the traditional policy of this Government which reserves trade between American ports to American vessels. The enactment of this legislation was probable from the date of the annexation of Hawaii, but the interval of nearly two years was allowed to elapse before that policy was carried into effect by act of Congress. It was assumed that this interval would be sufficient for such readjustment of shipping relations as the policy of the United States would require. The desire of the United States to promote friendly commercial relations with the British Australasian governments has been shown by the liberal appropriations of the Congress for the maintenance of an ocean mail service, which has lately been improved, for the mutual benefit of citizens of the United States and British Australasian subjects. In the judgment of this Department it is not feasible to reopen the question as Mr. Copeland suggests.

Respectfully,

L. J. Gage, Secretary.
[Private and confidential.]

Memorandum prepared by the premier of New Zealand. Left by Lord Pauncefote at the Department of State March 1, 1901.

The annexation of Hawaii by the United States and the bringing of that group of islands under the provision of their navigation laws, thus preventing British owned vessels from carrying on trade between these islands and the United States, is calculated to have a serious effect upon the trade of the colony of New Zealand. For thirty-one years the mails between England and New Zealand have been carried by steamers subsidized heavily by the Government of this colony, and until the 24th of October last one steamer owned by a British company trading here has regularly taken part in this mail service. The service has now, however, been transferred to an American owned line of steamers—that of Spreckels Brothers—the United States Government giving a direct subsidy of £52,000 per annum for ten years. With this subsidy, added to the fact that none of the steamers of this colony can trade between Hawaii and the United States, it follows that the colony is completely excluded from conveying either its own mails or passengers or cargo to that country; and in addition to this the steamers, which are being run to the prejudice and exclusion of its own vessels, operate against British owned steamers trading between Australia and New Zealand, as upon their trips here they will necessarily carry passengers across intercolonially, and this will result most prejudicially against the development of trade by its own steamers, even in its own waters.

Another way in which the altered service will operate against the possible introduction of an alternate service in this country is this: [Page 204]Prior to the annexation of Hawaii by the United States, Honolulu was made a coal depot for steamers trading under the British flag, via Vancouver to these colonies, and it was the practice of the Canadian mail-ships to land some 500 tons of coal at a time, which they were allowed to do without port charges at Honolulu. Since the annexation of the islands, however, this has not been allowed, and an impost of 3 shillings per ton is levied upon the coal required for steamers not trading within the prescribed territory at all.

The premier, therefore, begs respectfully to request that his excellency will refer the matter to the secretary of state for the colonies in order that representations may be made to the United States Government upon this important subject, with a view to establishing a modus vivendi with the United States of a more equitable character than that now existing.

As the matter is one of great importance to this colony, the premier can only strongly impress upon his excellency’s attention its great urgency. The subject is at present the basis of a considerable amount of friction, and it is very difficult to tell how far such feeling as now exists may grow.