Mr. Hay to Lord Pauncefote.
Washington, March 20, 1901.
Excellency: Referring to your recent conversation, and to the confidential memorandum you left with me prepared by the premier of New Zealand, touching the injurious effect on the trade relations of New Zealand of excluding British owned vessels from carrying on trade between the Hawaiian Islands and the United States; I have the honor to say that I have fully conferred with the Secretary of the Treasury on the subject.
A remedy for the difficulties complained of is not within the discretionary control of the Executive, the matter being regulated by legislation now in force. The act of April 30, 1900, sections 75, 98, etc., relating to the Hawaiian Islands, requires that the transportation of cargo from the United States to Hawaii, or vice versa, shall be subject to the laws governing the coasting trade of the United States. These laws practically exclude foreign vessels. British vessels may, however, carry merchandise from the coast of the United States to any foreign country via Hawaii, or may bring merchandise to the United States from any foreign country via Hawaii. General subsidies, mail compensation, etc., are given to British vessels plying between Canada and Hongkong, India, Ceylon, etc., under the conditions shown in the report of the Commissioner of Navigation for the year 1900, page 149, et seq.
The regulation of the trade between the United States and the Hawaiian Islands, in conformity with the act above referred to, seems to be in accordance with the practice of other nations under analogous circumstances.
I have, etc.,