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strong opposition was to be given the Convention in the Senate, he wrote the Prime Minister suggesting that further concessions might be given the United States by Newfoundland, so as to insure the passing of the Convention by the United States Senate. The correspondence, which continued up to date the 15th of January 1903, all indicates that His Majesty's Ambassador at Washington, believed that, in signing the Convention, and subsequently suggesting to the Colony further means to secure its adoption by the Senate of the United States, he was acting with the full approval of His Majesty's Government and in the interest of the Colony.

It may not be amiss to state that, on the 21st of November 1902, Sir John Anderson, then Under Secretary of State for the Colonies, wrote the Prime Minister congratulating him on the result of his mission to Washington and intimating that the Convention appeared to him "to be a distinct improve- ment on the 1890 draft."

5. Passing to paragraph 4 of the despatch under reference this Govern- ment would only observe that the Colony's position as regards a preferential tariff with the United Kingdom was clearly and accurately set forth by the Prime Minister at the Colonial Conference in 1902. That if His Majesty's Government had adopted a preferential tariff to the Colonies; if it had pledged itself to such a policy and there was unmistakable evidence that the people of the United Kingdom would endorse and assist such, then there might be some warrant for the position assumed in that paragraph. But His Majesty's Government has not adopted such a policy, neither is it pledged to it, and, so far as can be gathered from the press of Great Britain, there is no indication that the British public will endorse or assist such a policy. At the present moment the produce of the United States as well as of all other foreign countries enters the markets of Great Britain upon an equal footing as those of the British Colonies; therefore, until a preferential tariff to the Colonies has been adopted by His Majesty's Government, it does not appear unreasonable to expect that the Colonies of the Empire shall be left free to carry out such fiscal policies as their respective local conditions render necessary, provided such policies in no way discriminate against Great Britain, British Colonies, or countries entitled by Treaty to most-favoured-nation treatment.

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6. The fifth paragraph of the despatch is noted with profound regret and astonishment, inasmuch as it sets forth that, "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," this Colony was to be permitted to rest firmly in the belief that the measure, which it has laboured so patiently and untiringly to consummate during the past 14 years, and which holds out so much promise and hope to its people, would receive ratification at the hands of His Majesty's Government, but, now that it is no longer safe to assume that the Senate will not proceed to the discussion of the Convention," the faith and expectations of this people are to be destroyed by the immediate action of His Majesty's Government.

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This Government feel compelled to record their non-acquiescence in a course of procedure and judgment, neither the justice nor the policy of which they can fathom.

It is with no desire to strain an interpretation of the words used by His Majesty's Government that the foregoing observation is made. This Executive do not fail to appreciate that His Majesty's Government may regard their interpretation as a strained one, but it has to be remembered that this is the very first intimation that the Colony has had of the intention of His Majesty's Government to interfere with the progress of the Convention. In paragraph 2, His Majesty's Government refers to a despatch forwarded to His Excellency the Governor of this Colony, bearing date the 9th of January 1903, in which the Secretary of State said, "I observe that in its final form the Convention differs from the draft in one point of importance the addition to Article V.

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of the words 'and that no heavier duty shall be imposed on articles coming

from the United States than is imposed on such articles coming from elsewhere,' and that if this provision had been in the draft which was

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"before His Majesty's Government when the Ambassador at Washington was authorised to sign the Convention, they would have felt great difficulty in accepting it.'"

These words did not convey the impression that His Majesty's Government proposed at this stage to interfere with the completed Convention. They were regarded as simply an intimation that some steps might have been taken to alter the form of the paragraph had His Majesty's Government observed in time what they considered to be an objectionable feature, but the Convention, having been signed, sealed, and delivered, this Government could not have anticipated the present proposed action.

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7. In respect to the sixth and concluding paragraph of the despatch under reference, which declares it to be the intention of His Majesty's Government to inform the United States Government that His Majesty's Government can only be advised to ratify the Convention on the distinct and formally "recorded understanding that the word in question (elsewhere) refers only to foreign countries and not to the United Kingdom and the British possessions," this Government can but emphatically state that such inter- pretation was not, and is not, the construction that this Colony desired and intended should be placed upon the word. It meant, and it is the intention of this Government that it shall be understood by all parties concerned to mean, that so long as the United States gives the exports of this Colony free entry to its markets, so long shall imports from the United States receive the same tariff treatment as the British Empire and all other countries.

It is submitted that the policy thus determined in no way violates the letter, nor does it run counter to the spirit of Imperial policy. But the action proposed to be taken by His Majesty's Government would inflict an injury upon Colonial without benefiting British industry, and be destructive of that principle of "willing voluntary preferential treatment to the United Kingdom that Mr. Chamberlain, in his address to the Colonial Prime Ministers in 1902, so eloquently and cautiously advocated. Under a system of responsibility by which this Colony is left to manage its domestic affairs, this Government claims that it is its privilege to levy duties within the limits of its jurisdiction and to determine the rate of same, provided that it does not contravene any British statute necessary for the protection of the trade of the Empire, or violate the fraternal comity by which British subjects everywhere are bound to protect and encourage each other.

There is no such contravention or violation in the instance under consideration.

In the year 1891 the Houses of Parliament of the Dominion of Canada unanimously adopted an address, which was forwarded by the Governor- General to Her Majesty on the powers of self-governing Colonies in respect to the making of commercial Treaties. The essence of that address was contained in the following paragraph, namely, "The Canadian Houses of "Parliament consider these provisions of foreign Treaties tend to produce complication and embarrassment in such an Empire as that under the "rule of Your Majesty, in which self-governing Colonies are recognised as possessing the right to define their respective fiscal relations to all other countries, the Mother Country and each other."

Newfoundland is a self-governing Colony, and it is therefore difficult to conceive how His Majesty's Government, who assented to that proposition, can deny to her that right, or how Canada, or any other of the self-governing Colonies, could regard with indifference the violation of such a vital principle.

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This Government has only to add that the commercial arrangement between this Colony and the United States of America has been concluded by His Majesty's Government through the agency of the British Ambassador at Washington, who signed the Convention on the 8th of November 1902, and by the Government of the United States through its Secretary of State, who also signed the document on the date aforesaid. They, therefore, look to His Majesty's Government, as no doubt the Government of the United States will, for the fulfilment of the obligation and perfecting of that good faith implied by the signatures of the high contracting parties.

R. BOND,

Colonial Secretary.