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of which, though not explained, are believed by Mr. Whitehead to refer to the question of whether Germany was to negotiate with His Majesty's Government for the whole Empire, or would be allowed to make separate arrangements with the self-governing Colonies.

The proposal certainly introduces a question of great importance, and Ministers think it desirable that His Majesty's Government should be in possession of the views of this Government in regard thereto. They strongly hold that negotiations on matters of Imperial concern should not be conducted otherwise than through the medium of the Imperial Government, and they deprecate any departure from the course hitherto followed, it being, of course, distinctly understood that no binding arrangement committing the Cape Colony will be concluded by the Imperial authorities without first obtaining the expressed approval of this Government.

Ministers accordingly request that His Excellency may be pleased to communicate with the Secretary of State in terms of the views herein expressed.

T. W. SMARTT.

32427.

SIR,

No. 6.

COLONIAL OFFICE to FOREIGN OFFICE.

Downing Street,

October 21, 1904. WITH reference to your letter of the 20th of July last, enclosing a copy of a despatch from His Majesty's Chargé d'Affaires in Berlin respecting the commercial relations of Germany with the British Empire, I am directed by Mr. Secretary Lyttelton to transmit to you, to be laid before the Marquess of Lansdowne, a copy of a Minute by the Ministers of the Cape of Good Hope, and to state that he concurs in their opinion as to the mode of conducting negotiations in such matters in the case of the self-governing Colonies.

38300.

No. 7.

I am, &c.,

H. BERTRAM COX.

The SECRETARY OF STATE to the GOVERNOR OF

(Secret.)

NEWFOUNDLAND.

[Answered by No. 8.]

Downing Street, December 5, 1904.

SIR,

I HAVE the honour to inform you that His Majesty's Government have again had under their consideration the situation created by the provision in Article V of the Commercial Convention, negotiated by your Prime Minister with the Secretary of State of the United States in 1902, to the effect that no heavier duty shall be imposed in Newfoundland on articles coming from the United States than is imposed on such articles coming from elsewhere.

2. It was pointed out to your Ministers, in my predecessor's confidential despatch of the 9th January 1903, that this provision was open to the construction that Newfoundland must give to all imports from the United States the same tariff treatment as goods from this country or other parts of the Empire, that it was the declared policy of His Majesty's Government that the fiscal relations of the different parts of the Empire, inter se, should not be hampered by any agreements with foreign countries requiring that such countries should receive the same treatment as may be accorded to other parts of the Empire; that this principle had been unanimously adopted by the Colonial Conference of 1897, and that it was in pursuance of it that the

+ Enclosure in No. 5. ‡ No. 6 in North American No. 194.

• No. 3.

year.

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Commercial Treaties with Belgium and Germany were denounced in that In these circumstances your Ministers were informed that if the provision in question had been in the draft, which was before His Majesty's Government when they authorised the British Ambassador to sign the Convention, they would have found great difficulty in accepting it.

•

3. In the Minute of Council forwarded in the Administrator's confidential despatch of the 18th February 1903, it was urged that His Majesty's Government must have been aware of the addition of the provision in question to the draft when they authorised the signature of the Convention, and that the despatch from which I have quoted above must, therefore, have been written under a misapprehension. This was not the case. His Majesty's Government had no knowledge of the addition of the provision until the receipt of the text of the Convention as signed, and my predecessor actually stated in the House of Commons, five days after the Convention was signed, that it did not contain any general stipulation by which Newfoundland bound itself not to accord preferential trading facilities to goods from the mother country or other portions of the British Empire.

4. In the same Minute of Council it was represented that the Prime Minister had made it clear at the Colonial Conference of 1902 that New- foundland was not in a position to give any preference to British trade. This was admitted in my predecessor's despatch of the 9th January 1903,* and His Majesty's Government have never questioned the validity of the local considerations which prevent the Colony from granting preference to British trade, but it quite another thing when they are invited to become parties to an arrangement with a foreign country which may be construed as binding the Colony not to grant such preference.

5. His Majesty's Government have from the first attached the highest importance to the principle involved, but so long as it appeared that the strength of the opposition in the United States to reciprocal commercial arrangements with foreign countries was such as to make it practically impossible for the Convention to receive active consideration at the hands of the Senate, there was no particular advantage in discussing with the United States Government the construction to be placed upon the provision in question. Your Ministers, however, seem from Sir R. Bond's Election Manifesto to have satisfied themselves that there is now a movement in the United States pointing to the ratification of the Convention. Of the nature and prospects of this movement His Majesty's Government have no precise information, but they understand that a growing tendency has been observed of late in the United States to look with favour upon reciprocal commercial arrangements, and that it is no longer safe to assume that the Senate will not proceed to the discussion of the Convention.

6. In these circumstances it has become necessary for His Majesty's Government to determine the steps to be taken to secure that the Senate, if and when it takes up the consideration of the Convention, shall be under no misapprehension as to the views held by His Majesty's Government. It is, therefore, proposed to instruct His Majesty's Ambassador at Washington, if the occasion arises, to address an official communication to the United States Government to the effect that a question having been raised as to the interpretation of the word "elsewhere "in Article V of the Convention, His Majesty's Government deem it their duty, in order to remove any doubt or inisapprehension on the point, to call the attention of the United States Government to their declared policy of not being parties to any agreement affecting a Colony, with a foreign country, which requires that such foreign country should receive the same tariff treatment as other parts of the British Empire, and to inform the United States Government that His Majesty can only be advised to ratify the Convention on the distinct and formally recorded understanding that the word in question refers only to foreign countries, and not to the United Kingdom and the British Possessions.

I have, &c.,

ALFRED LYTTELTON.

• No. 34 in North American No. 194.

D 2

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1517.

No. 8.

The GOVERNOR OF NEWFOUNDLAND to the SECRETARY

(Secret.)

OF STATE.

(Received January 16, 1905.)

[Answered by No. 9.]

Government House, St. John's,

December 31, 1904.

SIB,

I HAVE the honour to acknowledge the receipt of your despatch, marked "Secret," of the 5th December 1901,* and to enclose, herewith, a copy of a letter to myself by the Premier, and copy of a Minute of Council.

I shall have the honour to send you a despatch on the subject of the Convention in a few days.

I have, &c.,

WM, MACGREGOR.