1st. That the principal cause of difference between Canada and the United States has rot been removed by the treaty, but remains a subject for anxiety.

2dly. That a cession of territorial rights of great value has been made to the United States, not only without the previous assent of Canada, but contrary to the expressed wishes of the Canadian Government.

The committee of the Privy Council will submit their views on both those points for the information of Her Majesty's Government, in the hope that by means of discussion a more satisfactory understanding between the two governments may be arrived at. The Earl of Kimberley has referred to the rules laid down in Article 6 of the Treaty of Washington, as to the international duties of neutral governments, as being of special importance to the Dominion; but the committee of the Privy Council, judging from past experience, are much more apprehensive of misunderstanding, owing to the apparent difference of opinion between Canada and the United States as to the relative duties of friendly states in a time of peace. It is unnecessary to enter into any lengthened discussion of the conduct of the United States during the last six or seven years, with reference to the organization of considerable numbers of the citizens of those States under the designation of Fenians. The views of the Canadian Government on this subject are in possession of Her Majesty's Government; and it appears from the Protocol of Conference between the High Commissioners that the British Commissioners presented the claims of the people of Canada, and were instructed to state that they were regarded by Her Majesty's Government as coming within the class of subjects indicated by Sir Edward Thornton in his letter of 26th January last, as subjects for the consideration of the Joint High Commissioners. The Earl of Kimberley states that it was with much regret that Her Majesty's Government acquiesced in the omission of these claims from the general settlement of outstanding questions between Great Britain and the United States; and the committee of the Privy Council, while fully participating in that regret, must add that the fact that this Fenian organization is still in full vigor, and that there seems no reason to hope that the United States Government will perform its duty as a friendly neigh bor any better in the future than in the past, leads them to entertain a just apprehension that the outstandin subject of difference with the United States is the one of all others which is of special importance to the Dominion. They must add that they are not aware that during the existence of this Fenian organization, which for nearly seven years has been a cause of irritation and expense to the people of Canada, Her Majesty's Government have made any vigorous effort to induce the Government of the United States to perform its duty to a neighboring people, who earnestly desire to live with them on terms of amity, and who dur ing the civil war loyally performed all the duties of neutrals to the expressed satisfaction of the Government of the United States. On the contrary, while, in the opinion of the government and the entire people of Canada, the Government of the United States neglected, until much too late, to take the necessary measures to prevent the Fenian invasion of 1870, Her Majesty's Government hastened to acknowledge, by cable telegram, the prompt action of the President, and to thank him for it. The committee of the Privy Council will only add, on this painful subject, that it is one on which the greatest unanimity exists among all classes of the people throughout the Dominion, and the failure of the High Commissioners to deal with it has been one cause of the prevailing dissatisfaction with the Treaty of Washington. The committee of the Privy Council will proceed to the consideration of the other subject of dissatisfaction in Canada, viz, the cession to citizens of the United States of the right to the use of the inshore fisheries in common with the people of Canada. The Earl of Kimberley, after observing that the Canadian Government took the initiative in suggesting that a joint British and American Commission should be appointed, with a view to settle the disputes which had arisen as to the interpretation of the Treaty of 1918, proceeds to state that the causes of the difficulty lay deeper than any question of interpretation," that "the discussion of such points as the correct definition of bays could not lead to a friendly agreement with the United States," and that "it was necessary therefore to endeavor to find an equiva lent which the United States might be willing to give in return for the fishery privileges." In the foregoing opinion of the Earl of Kimberley, the committee of the Privy Council are unable to concur, and they cannot but regret that no opportunity was afforded them of communicating to her Majesty's Government their views on a subject of so much importance to Canada, prior to the meeting of the Joint High Commission.

When the Canadian Government took the initiative of suggesting the appointment of a joint British and American Commission, they never contemplated the surrender of their territorial rights, and they had no reason to suppose that Her Majesty's Government entertained the sentiments expressed by the Earl of Kimberley in his recent dispatch. Had such sentiments been expressed to the delegate appointed by the Canadian Government to conter with his lordship a few months before the appointment of the Commission, it would at least have been in their power to have remonstrated against the cession of the inshore fisheries; and it would moreover have prevented any member of the Canadian Government from acting as a member of the Joint High Commission, unless on the clear understanding that no such cession should be embodied in the treaty without their consent. The expediency of the cession of a common right to the inshore fisheries has been defended on the ground that such a sacrifice on the part of Canada should be made in the interests of peace. The committee of the Privy Council, as they have already observed, would have been prepared to recommend

any necessary concession for so desirable an object, but they must remind the Earl of Kimberley that the original proposition of Sir Edward Thornton, as appears by his letter of 26th January, was that "a friendly and complete understanding should be come to between the two governments as to the extent of the rights which belong to the citizens of the United States and Her Majesty's subjects respectively, with reference to the fisheries on the coasts of Her Majesty's possessions in North America."

In his reply, dated 30th January last, Mr. Secretary Fish informs Sir Edward Thornton that the President instructs him to say that "he shares with Her Majesty's Government the appreciation of the importance of a friendly and complete understanding between the two governments with reference to the subjects specially suggested for the consideration of the proposed Joint High Commission."

In accordance with the expiicit understanding thus arrived at between the two governments, Earl Granville issued instructions to Her Majesty's High Commission, which, in the opinion of the committee of the Privy Council, covered the whole ground of controversy. The United States had never pretended to claim a right on the part of their citizens to fish within three marine miles of the coasts and bays, according to their limited definition of the latter term; and although the right to enjoy the use of the inshore fisheries might fairly have been made the subject of negotiation, with the view of ascertaining whether any proper equivalents could be found for such a concession, the United States was precluded by the original correspondence for insisting on it as a condition of the treaty. The abandonment of the exclusive right to the inshore fisheries, without adequate compensation, was not, therefore, necessary in order to come to a satisfactory understanding on the points really at issue. The committee of the Privy Council forbear from entering into a controversial discussion as to the expediency of trying to influence the United States to adopt a more liberal commercial policy. They must, however, disclaim most emphatically the imputation of desiring to imperil the peace of the whole empire in order to force the American Government to change its commercial policy. They have for a considerable time back ceased to urge the United States to alter their commercial policy, but they are of opinion that when Canada is asked to surrender her inshore fisheries to foreigners, she is fairly entitled to name the proper equivalent. The committee of the Privy Council may observe that the opposition of the Government of the United States to reciprocal free trade in the products of the two countries was just as strong for some years prior to 1854 as it has been since the termination of the Reciprocity Treaty, and that the Treaty of 1854 was obtained chiefly by the vigorous protection of the fisheries which preceded it; and that but for the conciliatory policy on the subject of the fisheries, which Her Majesty's Government induced Canada to adopt after the abrogation of the Treaty of 1854 by the United States, it is not improbable that there would have been no difficulty in obtaining its renewal. The committee of the Privy Council have adverted to the policy of Her Majesty's Government because the Earl of Kimberley has stated that there is no difference in principle between a money payment and "the system of licenses calculated at so many dollars a ton, which was adopted by the colonial government for several years after the termination of the Reciprocity Treaty." Reference to the correspondence will prove that the license system was reluctantly adopted by the Canadian Government as a substitute for the still more objectionable policy pressed upon it by Her Majesty's Government, it having been clearly understood that the arrangement was of a temporary character. In his dispatch of the 3d March, 1866, Mr. Secretary Cardwell observed: "Her Majesty's Government do not feel disinclined to allow the United States for the season of 1866 the freedom of fishing granted to them in 1854, on the distinct understanding that unless some satisfactory arrangements between the two countries be made during the course of the year this privilege will cease, and all concessions made in the Treaty of 1854 will be liable to be withdrawn.

The principle of a money payment for the concession of territorial rights has ever been most repugnant to the feelings of the Canadian people, and has only been entertained in deference to the wishes of the Imperial Government. What the Canadians were willing under the circumstances to accept as an equivalent was the concession of certain commercial advantages, and it has therefore been most unsatisfactory to them that Her Majesty's Government should have consented to cede the use of the inshore fisheries to foreigners for considerations which are deemed wholly inadequate. The committee of the Privy Council need not enlarge further on the objectionable features of the treaty as it bears on Canadian interests. These are admitted by many who think that Canada should make sacrifices for the general interests of the empire. The people of Canada, on the other hand, seem to be unable to comprehend that there is any existing necessity for the cession of the right to use their inshore fisheries without adequate compensation. They have failed to discover that in the settlement of the so called Alabama claims, which was the most important question in dispute between the two nations, England gained such advantages as to be required to make further concessions at the expense of Canada, nor is there anything in the Earl of Kimberley's dispatch to support such a view of the question. The other parts of the treaty are equally, if not more, advantageous to the United States than to Canada, and the fishery question must, consequently, be considered on its own merits; and if so considered, no reason has yet been advanced to induce Canada to cede her inshore fisheries for what Her Majesty's Government have admitted to be an inadequate consideration. Having thus stated their

views on the two chief objections to the late Treaty of Washington, the committee of the Privy Council will proceed to the consideration of the correspondence between Sir Edward Thornton and Mr. Fish, transmitted in the Earl of Kimberley's dispatch of the 17th of June, and of his lordship's remarks thereon. This subject has already been under the consideration of the committee of the Privy Council, and a report, dated the 7th June, embodying their views on the subject, was transmitted to the Earl of Kimberley by your excellency. In his dispatch of 26th June, acknowledging the receipt of that report, the Earl of Kimberley refers to his dispatch of the 17th of that month, and "trusts that the Canadian Government will, on mature consideration, accede to the proposal of the United States Government on this subject." The committee of the Privy Council in expressing their adherence to their report of the 7th June, must add, that the inapplicability of the precedent of 1854, under which the action of the Canadian Parliament was anticipated by the government, to the circumstances now existing appears to them manifest: The Treaty of 1854 was negotiated with the concurrence of the provincial governments represented at Washington, and met with the general approbation of the people; whereas the fishery clauses of the late treaty were adopted against the advice of the Canadian Government, and have been generally disapproved of in all parts of the Dominion.

There can hardly be a doubt that any action on the part of the Canadian Government in anticipation of the decision of Parliament would increase the discontent which now exists. The committee of the Privy Council request that your excellency will communicate to the Earl of Kimberley the views which they entertain on the subject of the Treaty of Washington in so far as it affects the interests of the Dominior.

WM. H. LEE, Clerk Privy Council, Canada.

Now, here is a statement made by the Privy Councilors, on oath as Privy Councilors to give the best advice to the governor-general; and they state that the opinion they are abut to give is in accordance with public opinion in all parts of the Dominion. There was no new election after that opinion was given, and before the debate in which the speeches were made that have been quoted. There was no change in public opinion, as evidenced by a new election, and the return of other persons to the House of Commons to represent that change. It was the same House. The same members were present, and the same Privy Councilors heard and participated in that debate; that is, those of them that were members of the House of Commons. Now, here is the authoritative declaration of the opinion of the members of the Privy Council, and that opinion is expressed, not simply as the private individual opinion of these councilors, but as a reflection of the public opinion of the whole Dominion, that this treaty did gross injustice to British North American interests. And in that opinion Sir John A. McDonald, whose speeches are quoted here against us, agreed. Mr. Trescot, in citing that minute of council, to my mind cited the best evidence that could be adduced in favor of the British claim.

I admit you have nothing to do with the question whether or not this treaty satisfies the countries interested in it, whether it satisfies the Dominion or whether it is unsatisfactory to the United States. That is not the question. That is all over and past, and you are here for the purpose of determining the difference in value between the advantages conceded to the United States and those conceded to the Dominion of Canada by the fishery articles of the Treaty of Washington. I only make these observations for the purpose of saying that it is wholly impossible for the United States to show, as they have attempted to do in their Answer, by the speeches of Canadian statesmen, that all the advantages of the treaty are in favor of the Dominion. I will, therefore, pass to another branch of the subject, but before doing so I wish to revert for a moment to the question as to the Bay of Fundy, to which I referred a few moments ago. I desire to cite a letter addressed on the 6th of July, 1853, by the then Secretary of State of the United States, Mr. Marcy,

to the Hon. Richard Rush, one of the negotiators of the Convention of 1818. It is as follows:

DEPARTMENT OF STATE,
Washington, July 6, 1853.

FIR: You are probably aware that within a few years past a question has arisen between the United States and Great Britain as to the construction to be given to the 1st Article of the Convention of 1818, relative to the fisheries on the coast of the British North American Provinces. For more than twenty years after the conclusion of that convention there was no serious attempt to exclude our fishermen from the large bays on that coast; but about ten years ago, at the instance of the provincial authorities, the home government gave a construction to the 1st Article which closes all bays, whatever be their extent, against our citizens for fishing purposes. It is true they have been permitted to fish in the Bay of Fundy. This permission is conceded to them by the British Government, as a matter of favor, but denied as a right. That government excludes them from all the other large bays.

Our construction of the convention is that American fishermen have a right to resort to any bay and take fish in it, provided they are not within a marine league of the shore. As you negotiated the convention referred to, I should be much pleased to be favored with your views on the subject.

I have the honor to be, &c.,

The Hon RICHARD RUSH,

Sydenham, near Philadelphia.

W. L. MARCY.

This clearly proves that the American Government understood the matter thoroughly. Official correspondence is the best authority on the subject.

Mr. FOSTER. That correspondence was before the decision in the case of the Washington.

Mr. THOMSON. Lord Aberdeen wrote the dispatch containing the relaxation on March 10, 1845. The schooner had been seized in 1843, and the decision of Mr. Bates, as umpire, was given in 1854, in December. The reason why I cited the letter to Rush was to show that in 1853, in July, the United States had full knowledge of the construction which had been placed upon that relaxation. It is true, says Mr. Rush, they have been permitted to fish in the Bay of Fundy, but that is conceded as a matter of favor and not of right, and that was in 1845.

Mr. DANA. But you recollect that after we had that decision, we did not accept the concession as a favor.

Mr. THOMSON. Great Britain has expressly adhered to her opinion from the beginning to the end, as I said before. It is no use to quarrel about the terms of relaxation. Whether the terms mean a relaxation or not is behind the question. It is a practical abandonment, since Great Britain has said that as regards the Bay of Fundy she has relaxed her claim and does not purpose to enforce it again. No such claim has been made since that time, and we have given no evidence of any fishing in the Bay of Fundy, except the fishing within territorial limits around Grand Manan, Campobello, Deer Island, and the coasts of the county of Charlotte and the Province of Nova Scotia.

Mr. TRESCOT. No one objects to the view that Great Britain adheres to the construction you insist upon, so long as you admit that the United States adheres to its construction under which the waters of the Bay of Fundy are not British territorial waters.

Mr. THOMSON. I only wish to say that the United States themselves understood the position of the British Government, and that they must take the concessions in the terms and with the meaning that the British Government attached to it. A man who accepts a gift cannot quarrel with the terms of it.

Mr. DANA. Mr. Everett declined to accept it as a courtesy.

Mr. THOMSON. As a matter of fact the United States have not declined to accept it. They have acted upon it ever since. If they had

kept all their vessels out of the Bay of Fundy for fear of that construction being placed upon their use of these waters, we would have understood it. But they have entered and used it ever since.

Mr. DANA. The United States had fished there under a claim of right. England agreed not to disturb them, but still contended that we had not a right. Therefore our going in was not an acceptance of any favor from Great Britain. This subject was referred to a Commission, and the Commission decided, not on general grounds, but on the ground that one headland was on the American territory. Therefore it was a special decision, and that decision settled the question as to the Bay of Fundy, so that we have not accepted anything from Great Britain which precludes us from taking the position always that we had claimed from the first, namely, that we had a right to fish in the Bay of Fundy.

Mr. THOMSON. The two Commissioners, Mr. Hornby and Mr. Upham, were authorized to decide whether the owners of the Washington should or should not be paid for the seizure of their vessel. That was the only authority they had. They had no more authority to determine the headland question than you have, and it is conceded that you have no such power. Neither had they. A fortiori, neither had Mr. Bates, the Umpire. Mr. DANA. That was the very thing they had to determine.

Mr. THOMSON. They had to determine the legality of a seizure. Incidentally the question of the headlands might come up, just as it would have here, had evidence been given.

Mr. FOSTER. Will you not read the paragraphs from the Umpire's decision?

Mr. THOMSON. I haven't it here.

Mr. FOSTER. He puts it on two grounds. It was impossible to decide the question whether the United States could be paid without deciding whether the Washington was rightly or wrongly seized. That depended upon whether she was seized in British territorial waters. Mr. Bates, the Umpire, decided she was not, and put it on two grounds, one of which Mr. Dana has stated, viz, that one of the headlands of the Bay of Fundy was on American waters, and the other that the headland doc trine was new and had received its proper limitation in the Convention of 1839 between France and Great Britain, that it was limited to bays not exceeding ten miles in width.

Mr. THOMSON. While I do not dispute what Mr. Foster says, I go back to what I was saying when I was interrupted, that these two gentlemen, Mr. Hornby and Mr. Upham, had no authority to decide the headland question. They had undoubted power to decide whether the vessel was improperly seized, and, if so, to assess the damages; and because Mr. Bates, in giving his decision against the British Government, was pleased to base it upon the ground that one headland was in the United States and the other in British territory, according to his views of the contour of the bay, is behind the question. He had no more power to determine that important international question than, as it is conceded, have your excellency and honors in this Commission.

Mr. TRESCOT. Does not the question of damages for trespass settle the right of possession?

Mr. THOMSON. I am quite willing that when the learned counsel for the United States think I am making misstatements of law or facts I should be interrupted, but I cannot expect them to concur in my argu ments, and it is difficult to get on in the midst of interruptions. If I understand the arguments against the British case, able arguments I admit they are, and if I understand the argument which I shall have the honor to submit, I shall show that they have not one single leg to stand