general in its terms, and applicable to the goods of any country which might treat Canadian products unfavourably. It was applied immediately in the case of Germany, and took effect on the 16th of that month, except as regards goods purchased before the 17th April. In the case of such goods it is to apply from the 1st October next. || Sir F. Lascelles, in his despatch of the 16th April last, reported that Baron von Richthofen had informed him that most-favoured-nation treatment would, he thought, certainly be continued to the United Kingdom, but that as the South African Colonies had decided to give a Tariff preference to English goods, it was now matter for consideration whether they as well as Canada should not be excepted from such treatment; and that if Australia should also give the mother country a Tariff preference, a situation would be created which would render it very difficult for the German Government to obtain the consent of the Reichstag to the conclusion of a Commercial Treaty between the United Kingdom and Germany. || During Sir F. Lascelles' conversation with Baron von Richthofen of the 21st April last, his Excellency stated that if the example of Canada in giving a Tariff preference to the United Kingdom were followed by other British Colonies so as to cover large portions of the British Empire, there would be great difficulty in obtaining the consent of the Reichstag to a continuation of most-favoured-nation treatment for this country; and he further informed His Majesty's Ambassador that the competent authorities were considering what measures should be taken in consequence of the recent action of Canada, to which I have referred. This communication has greatly increased the difficulty of the situation, and I have now to give you the following instructions as to the language which you should hold with regard to this most important question. You should, in the first place, remind the German Government that the Treaty of 1865 between the United Kingdom and Germany was terminated by His Majesty's Government, in order that this country and her Colonies might be at liberty to make such arrangements as might be considered desirable in respect of their mutual trade. To this policy His Majesty's Government adhere. || As regards Canada the action of the Dominion, as I have shown, was taken only after every effort had been made to secure fair treatment for Canadian produce in Germany. It was only after these efforts had failed, and Germany had persistently refused to accord to Canadian produce the same most-favoured-nation treatment that Canada accorded to German produce, that Canada was driven in self-defence to measures of retaliation. If Germany will restore Canadian produce to the mostfavoured-nation terms, His Majesty's Government have not the least doubt

that the increased duties which have just been imposed on German goods will be at once removed. || Should the German Government, however, persist in the attitude which they have taken up on this matter, and, further, extend to the products of other British Colonies, and even to those of the United Kingdom, whose Tariff is at the present moment based upon the most liberal principles, the discrimination which they have enforced against Canada, a very wide and serious issue must inevitably be raised involving the fiscal relations of this country and the German Empire. Lansdowne.

Nr. 13030. DEUTSCHES REICH. Der Staatssekretär des Ausw. Amts an den Botschafter in London. Antwort

auf das vorige. Ansicht der deutschen Regierung. Berlin, June 27, 1903.

(Translation.) || Mr. Buchanan, His Britannic Majesty's Chargé d'Affaires, handed in on the 23rd instant a copy of the instructions addressed by Lord Lansdowne to the British Embassy here in regard to the commercial relations between Germany and Canada I have the following observations to offer on these instructions. At the same time, I venture to hope that an explanation of the German standpoint in the matter will contribute to the removal of the erroneous ideas which, to all appearance, are very prevalent in England on the subject of the grounds and justification of the German attitude. || Up to the 30th July, 1898, the commercial relations between Germany on the one hand and Great Britain and her Colonies on the other were regulated by the AngloGerman Commercial Treaty of the 30th May, 1865. This Treaty secured to each of the two Parties most-favoured-nation treatment in the territory of the other Party, and secured, indeed, to Germany most-favoured-nation treatment in the English Colonies, even as against Great Britain, the mother country. When the Commercial Treaty had expired in consequence of its denunciation by Great Britain, she and her Colonies lost the right in virtue of which the grant had been made to them of the reduced scale of duties included by Germany in her Tariff Treaties with other States. In Germany there are, as is well known, two Tariffs: the General Customs Tariff, which, by law, is applied to all those countries with which no Agreements to the contrary are in force; and the socalled Conventional Tariff, which comes into force when Treaty arrangements on the subject are made, and which is purchased by concessions. on the part of the various Treaty States, consisting especially in the

modification of numerous items in their own autonomous Tariffs. Consequently, after the Anglo-German Commercial Treaty had ceased to be valid, the provisions of the autonomous German Customs Tariff had to be applied to Great Britain and her Colonies. It required a special Act of the German Legislature to make an exception to the rule in question, since, firstly, in virtue of the Law of the 11th May, 1898, and of subsequent Laws, and lastly, in virtue of the Law of the 29th May, 1901, Great Britain and her Colonies, with the exception of Canada and, for a time, Barbados, were accorded, up to the 31st December, 1901, the lower Customs rates. This procedure shows a special desire on the part of Germany to meet the wishes of Great Britain, for which there is no example in German legislation either before or since. It was caused by the wish of the Imperial Government to make their commercial relations with Great Britain and her Colonies as friendly as possible, even after the expiry of the Commercial Treaty; the justification for it could, however, only be found in the fact that the expiry of the Commercial Treaty brought about no alteration in Customs Tariffs affecting imports from Germany into Great Britain and her Colonies except Canada, and, temporarily, Barbados, and that it was, therefore, fair to maintain in Germany, as regards those territories, the state of things which had actually existed hitherto. The condition mentioned did not affect Canada, because, after the expiry of the Commercial Treaty, preferential duties in favour of the mother country were put in force there, from which imports from Germany were excluded, and because the latter were subsequently also denied those privileges which Canada, by the Commercial Agreement with France of the 6th February, 1893, hat granted to certain French products. Therefore, the exception made by Germany could not be extended to Canada. The application of the German General Tariff to Canada entails, therefore, no unjustifiable discrimination, still less any penalizing of that Colony, as has often been asserted; the measure is merely a consequence of the expiry of the Anglo-German Commercial Treaty, and is necessitated by German law. No penal measures or additional duties have so far, and this must be expressly emphasized, been applied by Germany to Canada.

Moreover, there is in the German procedure for we wish also to correct this supposition, which has been often repeated no interference in the relations between mother country and Colony. After the expiry of the Anglo-German Commercial Treaty, Germany could only choose whether she would apply her General Tariff to Great Britain and all her Colonies, as according to German law would have been necessary in

the ordinary course, or whether she would limit the application of the General Tariff to those parts of the British Empire in which there had been an alteration of the status quo affecting imports from Germany. The choice of the latter alternative, which is much more favourable to Great Britain and her Colonies, is considered by Germany to be requisite in the interests of mutual commercial policy, and to be practically justified because Great Britain had declared on the most diverse occasions that her Colonies formed independent territories for customs purposes, and were independent as regards their decisions respecting the regulation of their relations with foreign countries. The wish to realize this idea was not only the reason and object of the denunciation of the Anglo-German Commercial Treaty, but also came several times to the fore during the consequent negotiations for the renewal of that Treaty, and latterly, at the Brussels Sugar Conference, found very notable expression in the independent attitude as regards the Convention which England strove to reserve for her autonomous Colonies, by making their accession of nonaccession to it perfectly free, and thus establishing for the other States parties to it the possibility of differential treatment for the various parts of the British Empire. The same idea is apparent in the instructions communicated to us, for the reason there given for the denunciation of the Anglo-German Commercial Treaty is that this country and her Colonies might be at liberty to make such arrangements as might be considered desirable in respect of their mutual trade". | If the English Colonies are to be in a position to follow out their own customs policy, other countries must be allowed to treat them as separate customs territories. The cicumstances which led in Germany to the special treatment of Canada have repeatedly been stated by Germany, and have also been appreciated by the Canadian Government. The Canadian Minister of Finance, Mr. Fielding, expressed himself last year in the Budget debate, according to the shorthand report, as follows: ||,,As I have pointed one for the

out on a previous occasion, Germany has two Tariffs world generally, the other, known as the Conventional Tariff, for those countries which have Commercial Treaties with Germany. I suppose many honourable gentlemen will say that this is sound policy. Germany had a Treaty with Canada, or Canada participated in an Imperial Treaty with Germany; and under that Treaty Canada had the advantage from what is called the Conventional Tariff as respects Canadian products. Canada put an end to that Treaty for her own purposes for good and sufficient reasons. Not one party in Canada, but all of Canada, reached the conclusion that this Treaty was not in the best interest of Canada,

or of the Empire, and it should come to an end. Our sister Colonies took the same view on the subject; but it was admittedly the action of Canada above all others which brought about the denunciation of the German and Belgian Treaties. When we ceased to have that Treaty with Germany, when we ceased to extend to Germany many certain privileges which she had enjoyed, Germany withdrew from us the privileges of its Conventional Tariff. Canada thus came into the class of non-Treaty countries, the products of which were subject to the higher Tariff. Let us not deny that from one point of view there was some colour of excuse for the German action." || The Imperial Government were naturally all the more surprised when the same Canadian Minister of Finance, in this year's Budget debate, after Canadian products had been liable in Germany for nearly five years to the provisions of the autonomous Tariff, notified the imposition of extra duties on those imports from Germany into Canada which were liable to duty.

to

If one examines what has been done by England and Canada who were responsible for the denunciation of the Anglo-German Commercial Treaty, for the differential treatment of German imports into Canada, and, lately, for the imposition of extra duties on German goods remove the existing cause of dispute, the position, from the German point. of view, is as follows: - The only official correspondence in writing which has passed on the subject between the Imperial and British Governments consists of the notes of the 28th June and the 5th August, 1899, mentioned in the instructions. In the former note the English Government inquired why Germany treated Canada differently to the French, Spanish, and Portuguese Colonies. In reply, the German Government explained, in the latter note, that Germany was bound, as regards the French Colonies, by Article 11 of the Peace of Frankfurt, while they had only accorded most-favoured-nation treatment in Germany to the Spanish and Portuguese Colonies, so long as to that effect Treaties existed with Spain and Portugal. Further, the note stated in detail the grounds which governed the German attitude. England never refuted or even replied to these arguments. In November 1901 the Canadian Premier, Minister of Finance, and Minister of Customs invited the Imperial Consul at Montreal to a confidential discussion at Ottawa as to the possible preparation of an Agreement with Germany. In the course of this discussion, the Canadian Government demanded the grant of all the modifications of the German Conventional Tariff, and were only willing to give in return the few modifications of duties agreed on in the FrancoCanadian Commercial Treaty, which are of trifling importance for Germany,