PUBLIC RECORD OFFICE
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17 PUBLIC RECORD OFFICE, LONDON
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4. My Ministers recognise fully the propriety of not allowing any trade preference to the United States, or to any other foreign country, to the exclusion of the United Kingdom or of other British possessions. They have given assurances in that respect that no doubt you have accepted as entirely satisfactory. The United States representative does not seem to have asked for preferential treatment for his country, but only that American imports into this Colony should enjoy the most favourable tariff rates that are given to the same class of goods if imported from elsewhere. The principle on which the Convention has been framed is that of equal treatment and no preference. And this was all that was asked of the Government of this Colony by Mr. Chamberlain up to the time when the Convention was signed.
My Ministers are now of opinion that, if Clause V. of the Convention is to be so altered, or so interpreted, as to retain to Newfoundland the power of granting preferential tariff rates to imports from the United Kingdom or from British possessions, to the exclusion of American goods from such preference, the Senate will not entertain the Convention, which would thus be lost, probably for many years to come, & result that would mean grave and serious loss to this Colony. On the other hand it appears that my Ministers have of late had some reason to believe that the Convention as it was signed by the British Ambassador and by the Secretary of State of the United States would be sanctioned by the Senate, if its clauses as they now stand are left to a fair interpretation of the text.
In other words my Ministers firmly believe that the Senate will not accept the Convention if this Colony reserves to itself the power of granting exclusive preferential tariff rates to British goods during the time the Convention would
be in force.
5. In this connection I would respectfully invite your special attention to the fact that, as explained by Sir Robert Bond at the 1902 Conference, this Colony is not in a position to grant trade preference to the United Kingdom. On this it appears that there is unanimity of opinion in the Colony. Although, therefore, it would seem that in actual practice it would make but little difference to the trade of the countries directly concerned in this Convention whether the restrictive meaning suggested in paragraph 6 of your secret despatch of the 5th instant for the word "elsewhere' were imposed or not, yet on the other hand it seems not improbable that the diplomatic effect of the proposed restrictive definition would be to wreck the Convention.
Under these circumstances it is sincerely to be hoped that you may find some means of averting such a misfortune to this Colony. Neither my Ministers nor myself wish to minimise the value of the principle or practice of preferential trade within the Empire wherever it may be possible or expedient to establish it. But at the same time it is earnestly hoped that it may not be found necessary to call upon this Colony to pay so dearly for the abstract principle of preferential trade as would be the case were ratification by His Majesty's Government refused to the Convention as it now stands, the major terins of which were negotiated before preferential trade had been adopted as a policy.
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It may not be beyond the power of diplomacy to induce the United States to accept the Convention with the limitation to the meaning of the word elsewhere" proposed by you. If that could be done, it would give great satisfaction to this country, as it would save both the principle of preference and the Convention.
6. I should fail in my duty did I not make in clear that the loss of the Convention would be to my Ministers and to the whole Colony a keen and bitter disappointment, all the more so as they regarded success as all but secured. That can be readily seen and understood from the persistent efforts that this country has made during the last 14 years to obtain the trade advantages promised by the Convention. The Government of this Colony have had to meet two main obstacles that were put in the way of the Con- vention; it was feared that preferential trade would be given to the United States; and it was deemed desirable that the Convention should be delayed for a reasonable time to allow Canada to establish a Commercial Convention with the United States at the same time as this Colony.
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7. The former objection is met and disposed of by the terms of the Convention, and by the pledges of equal treatment that have been given by this Government. The latter hindrance to the consummation of the Conven- tion will not, it is to be hoped, be any longer held to be tenable, for it could hardly be contended that reasonable time has not been already allowed to Canada to treat with the United States, while, so far as can be seen here, actual progress whatever has been made in that direction by the Dominion.
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The Government and people of this country regarded these obstacles as virtually overcome, and it was thought when the Convention was signed by the British Ambassador and by the Secretary of State of the United States that, if the approval of the Senate could be obtained to it, there would be no further difficulty in their way. I am sure you will agree with me that it is only natural that Ministers should, under present circumstances, feel very great anxiety with regard to the safety of the Convention.
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8. I have before me a resolution passed on the 17th December 1902 by the Exporters' Association, in which that hody, which seems to correspond here in some degree to the Chambers of Commerce elsewhere, "strongly approves of the provisions of the Treaty of 8th November 1902, and is "impressed with the value likely to accrue to the Colony by the passage thereof." This resolution was, for diplomatic reasons, not made public. There need be no doubt that it expresses the view of this Colony.
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9. I understand that the fear is now entertained in this Colony that further delay may intervene in ratifying this Convention in consequence of the frequently expressed desire that Canada should proceed, pari passu, with Newfoundland in a Commercial Treaty with the United States. My Ministers would desire to consider the interests and to further the aims of the Dominion in every way that may be compatible with the progress and welfare of this Colony; but they feel sure that you will not expect or require them to lose what seems to be now a favourable opportunity of serving the commercial interests of their own country, more especially as experience has shown that it is very doubtful that a Commercial Convention can in the near future be arrived at between Canada and the United States.
Canada can apparently well afford to wait for such an arrangement; but such a Convention means relatively much more to Newfoundland than to the Dominion, as may be proved by a brief glance at the trade returns of the two countries.
10. The products of Canada are very varied, and they are generally of a nature that meet with ready sale in the great markets of the world. In the year ending with June 1903 her exports were :-
Products of Mines
Fisheries
17
Forests
1)
Animals
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Agriculture Manufactures
Miscellaneous
$31,062,106
11,800,184
36,386,015
69,817,542
41,642,321
51,714,185
83,784
The annual exports from the coal mines amount to some $5,500,000, the produce of the gold mines is worth $16,500,000; copper, $3,000,000; lead, $400,000; silver, nearly a million. Canada has abundance of the best iron ore, of nickel, and of many other mineral products of which the markets never become overstocked.
Canadian exports of codfish amount to $4,197,250; mackerel, $258,785; herrings, $445,599. Lobsters and salmon were exported to the value of some $3,000,000 each. The interests of Canada and Newfoundland are not in regard to this class of exports identical. The fishery exports of Canada were, as stated above, $11,800,184 in 1902–03; while those of Newfoundland were only $7,807,971, or less than two-thirds of the Canadian export.
The vast stores of forest produce of the Dominion are daily becoming more valuable as the world's stock of timber fast becomes less.
Her enormous exports in animals have much more than doubled in ten years, and are now worth fourteen millions sterling a year.