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apply equally to both Canadian and American vessels,” thus narrowing the contention to the equal treatment of vessels and ignoring the engagement of the treaty as to the equal treatment of citizens. The reply fails to meet the complaint. Moreover, it is at variance with the allegation elsewhere put forth that the purpose of the order is to encourage the passage of grain cargoes through the canals, for in fact it directly discourages a large traffic which would pass through the Wel. land Canal if the superior facilities for transshipments afforded by the elevators at Ogdensburg and Oswego were an inducement to send grain cargoes by the Welland route. The order is in this regard a naked discrimination against the American citizen, for the enforcement of which the canal tolls are employed as a convenient instrument.

Third. As to the traffic passing through the St. Lawrence River canals, a third discrimination exists which is in absolute and open violation of the intent of the treaty, for if the starting point of the grain cargo for export be a Canadian Lake Ontario port the toll is but 2 cents per ton, while the 20-cept rate is exacted on grain for the same destination froin the American Lake Ontario ports. This is a new discrimination, appearing for the first time in the Canadian order of April 4, 1892, and imposes a differential treatment against American ports and American citizens not existing, or even contemplated as a probability, when the Lake Carriers' Association presented its memorial of September 18, 1891, to which the present note of the British chargé purports to reply. The Canadian argument is, therefore, silent as to this perhaps the most intentionally vexatious discrimination against the stipulated privilege of citizens of the United States to use the Canadian canals “on terms of equality with the inhabitants of the Dominion."

Fourth. A fourth discrimination as regards the system of tolls adopted in the Welland Canal was applied by a Dominion order of April 11, 1890, regulating the tolls on coal. By that order the toll on coal passing down the canal, eastward bound, was reduced from 20 cents to 10 cents per ton, but the full toll of 20 cents per ton was left on coal bound up the canal, westward. The memorial fully exhibits the discriminatory effect of this difference between eastward and westward rates, showing that the down-rate of 10 cents applied in 1890 to 22,781 tons of coal carried in Canadian vessels to Canadian ports, and to only 615 tons carried in an American vessel to an American port. Of the coal carried up the canal and compelled to pay a toll of 20 cents, 116,616 tons were carried between ports of the United States, 17,280 from a United States to a Canadian port, and 80 tons only between Canadian ports. This adroit manipulation of the tolls operates to tax the commerce of American citizens much more heavily than that of Canadians, and goes far to explain the statement that of the total cargo tonnage of the Welland Canal during the year 1890, 57 per cent destined for American ports paid more than 72 per cent of the tolls; and 43 per cent destined for Canadian ports paid less than 28 per cent of the tolls."

This statement, supported as it is by Canadian official statistics, is dismissed by the Canadian reply as follows:

The Canadian Government can not attach any weight to the pretensions of Mr. Keep that there is inequality in the use of the canals between Canadians and Americans on the ground that the tolls for the use of the canals going westward “are 20 cents per ton, while those for the use of the canal going eastward are only 10 cents per ton. Except as regards the grain products already discussed, ho does not assert that there is any difference in respect of the amount of these tolls between Canadian and American vessels going eastward or westward, respectively, nor that the destination of the cargoes eastward or westward in any way affects the tolls paid. Canadian and American vessels pay the same toll for passing throngh tlie canal in the same direction, and are entirely unrestricted in respect of such tolls by their destination or by any other extraneous circumstances."

Here again, as throughout the note, the language of the treaty as to the equal treatment of the citizens of the two countries in their enjoyment of the facility of coastwise transit is lost sight of and a defensive argument is based on the circumstances that no differential toll is imposed on the vessels of either party.

Of the four classes of discrimination existing under the differential system of tolls and the differential regulations as to points of origin and transshipment, the Canadian reply deals with three, and with those only, by denying that any differential rules are applied to the disfavor of American vessels.

The Canadian reply disputes the accuracy of the figures given in the memorial of the Lake Carriers' Association respecting the levy of tolls to the aggregate amount of $53,395.67 in discrimination against the freight shipped by Canadian canals in 1891 to Ogdensburg. By confining the examination to the grain stuffs actually transshipped at Ogdensburg to Montreal after having come through the Welland Canal, which in 1891 amounted to 17,817 tons, the Canadian reply con. cludes that,

The rebate on this quantity, if allowed, would have been $3,207, and this sum constitutes the sole difference in tolls between the two routes, and the only amount in respect of which any discrimination could be claimed to exist.

There is no suggestion that the reduction of the Montreal-bound transshipments at Ogdensburg to the paltry figure of 17,817 tons may not have been the direct result of the discrimination complained of; and had the result of the order been altogether prohibitory and no transshipments of grain for Montreal been effected at Ogdensburg, it may be inferred that the Canadian government would have found therein evidence that no 6 difference” whatever exists in tolls between the two routes."

Quitting the defensive argument in support of the contention that no discriminating treatment results from the system of tolls adopted in the Canadian canals, the reply of the Dominion goes on to propose a compromise agreement, as follows:

That, as regards the navigation of the Welland and St. Lawrence canals, the imposition of tolls, and the granting of rebate thereon, the same treatment will be accorded to citizens of the United States as is given to the subjects of Her Britannic Majesty without regard to ports of transshipment or export, and that the United States will continue to deal in like manner with the subjects of Her Britannic Majesty in the use of the existing Sault Ste. Marie Canal. That the provisions of article 30 of the Treaty of Washington, granting carrying powers to vessels belonging to subjects of Her Britannic Majesty, as described in that article, be restored.

The thirtieth article of the treaty of Washington reads as follows: ARTICLE XXX. It is agreed that for the terms of years mentioned in Article XXXIII of this treaty, subjects of Hor Britannic Majesty may carry in British vessels, with. out payment of duty, goods, wares, or merchandise, from one port or place within the territory of the United States upon the St. Lawrence, the Great Lakes, and the rivers connecting the same, to another port or placo within the territory of the United States as aforesaid: Prorided, That a portion of such transportation is made through the Dominion of Canada by land carriage and in bond, under such rules and regulations as may be agreed upon between the Government of Her Britanuio Majesty and the Government of the United States.

Citizens of the United States may for the like period carry in United States vessels, without payment of duty, goods, wares, or merchandise, from one port or place within the possessions of Her Britannic Majesty in North America, to another port or place within the said possessions: Prorided, That a portion of such transportation is made through the territory of the United States by land carriage and in bond, under such rules and regulations as may be agreed upon between the Government of the United States and tlie Government of Her Britannic Majesty.

The Government of the United States further engages not to impose any export duties on goods, wares, or merchandise carried under this article through the territory of the United States; and Her Majesty's Government engages to urge the Parliament of the Dominion of Canada and the legislatures of the other colonies not to impose any export duties on goods, wares, or merchandise carried under this article; and the Government of the United States may, in case such export duties are imposed by the Dominion of Canada, suspend during the period that snch duties are imposed the right of carrying granted under this article in favor of the subjeets of Her Britannic Majesty.

The Government of the United States may suspend the right of carrying granted in favor of the subjects of Her Britannic Majesty under this article, in case the Dominion of Canada should at any time deprive the citizens of the United States of the use of the canals in the said Dominion on terms of equality with the inhabitants of the Dominion, as provided in Article XXVII.

With regard to the last clause of this article, giving to the United States the power to suspend the carrying rights of Canadians in the United States in the event of Canada's denying equal treatment to American citizens in the use of the Dominion canals, the Canadian reply quotes from the authorized protocol of the high commissioners

That they desired and it was agreed that the transshipment arrangement should be made dependent upon the nonexistence of discriminating tolls or regulations of the Canadian canals and also upon the abolition of the New Brunswick export duty on American lumber intended for the United States. (For. Rels., 1871, p. 514.)

And proceeds to argue thatIt is accordingly evident that from the language of the thirtieth article of the treaty, supplemented by the protocol of the conference on that article, the remedy which the United States reserved to themselves in the event of Canada depriving the citizens of the United States of the use of the canals on terms of equality with her own people, was provided for by that article and was long ago resorted to by the United States (through the termination of the article in question in July, 1885, by two years' notice given by the United States in 1883], thus exacting from Canada the penalty for discrimination in the use of the canals, although no inequality really existed.

While, therefore, the Canadian government are unable to admit that any discrimination in the use of the Canadian canals is made against United States vessels by the terms of the order in council, they maintain that, even if the fact that transshipment is confined to a Canadian port could be construed as constituting such a discrimination, the penalty agreed upon between the United States and Great Britain, in such an event, has already been exacted by the United States.

Article XXX was one of several regulating the fishing privileges and certain phases of the intercourse of the United States and Canada which were incorporated into the treaty of Washington, and to which a duration was assigned of ten years certain and thereafter until two years' notice of their termination should be given by either party, as provided in the thirty-third article of the treaty, as follows:

ARTICLE XXXIII. The foregoing Articles XVIII to XXV inclusive, and Article XXX of this treaty shall take effect as soon as the laws required to carry them into operation shall have been passed by the Imperial Parliament of Great Britain, by the Parliament of Canada, and by the legislature of Prince Edward Island, on the one hand, and by the Congress of the United States on the other. Such assent having been given, the said articles shall remain in force for the period of ten years from the date at which they may come into operation; and further until the expiration of two years after either of the high contracting parties shall have given notice to the other of its wish to terminate the same, each of the high contracting parties being at liberty to give such notice to the other at the end of the said period of ten years or at any time afterward.

The language of the protocol of the conference, quoted in the Canadian reply, may be rightly taken as representing the judgment of the high commission that an engagement binding the United States to grant a privilege to Canada for a term of years was not equitably correlative with the reciprocal qualified privilege granted by Canada in

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respect of the Dominion canals, which in terms was dependent upon the pleasure of Canada, and liable to be terminated at any time by adverse legislation or regulation. The meaning of the concluding proviso of Article XXX is clearly that in the event of the privileges of equal enjoyment of the Dominion canals by citizens of the United States being withdrawn or curtailed, the United States might retaliate by forth with suspending the reciprocal transit privilege under Article XXX, even though the period fixed for the duration thereof should not have elapsed. Thus, had discriminating measures been adopted in respect to the Canadian canals at any time during the ten years' life of the article, or during the two years succeeding notice given of its termination, the United States could have at once suspended the transit privileges granted to Canadians within the territory of the United States.

This right of suspension was a mere incident of the peculiar relations of transit and intercourse created by Articles XXVII and XXX of the treaty of Washington, and is wholly different, both in intent and in effect, from the right of termination given in regard to those and sundry other articles by the thirty-third article of the treaty. The right of suspension could be exercised for cause by the United States alone, the case arising. The right of abrogation was common to both governments, to be exercised by either at its pleasure after a defined term should have elapsed, if in its judgment the continuance of the relations created by those articles should be found inexpedient. Like all engagements of intercourse and reciprocity, the articles in question were tentative, and their continuance, after a certain time, was to be dependent on their continuing to work in a manner satisfactory to each of the contracting parties. The United States, for considerations of domestic convenience, saw fit to exercise the right of abrogation at the earliest possible date permitting by the terms of the treaty. It is irrelevant to associate this exercise of an ordinary right of termina. tion common to all treaties of commercial intercourse with the idea of a penalty for a shortcoming as yet nonexistent on the part of the other contracting party.

The Canadian argument appears to regard the authorized and normal termination of Article xxx as operating indefinitely and for all future time to exhaust the power of penalty and retaliation for any failure of Canada to fulfill the intended engagement of equality in the use of her canals. The mere statement of this proposition suffices to demonstrate its untevableness.

The proposition to secure, for Canadian citizens and products, some additional privilege of transit within the United States, as an offset or pretended equivalent for the enjoyment by Americans of the facilities of the Dominion canals on an identical footing of equality with Canadians, is not new. It was incidentally suggested in the conferences held on the 3rd and 4th of June, 1892, between the Secretary of Stato and the Canadian Commissioners, but was dismissed without consideration. It came up also in the same conference in the form of a proposal that the free navigation of the New York State canals and the Hudson River should be granted to Canadians in return for the removal of the discriminating canal tolls of the Dominion, and was again dismissed. It is now presented anew in its original form.

Regarded as a whole, the Canadian reply fails to ineet the just complaints of the United States. It narrows the issue to the treatment of American and Canadian vessels in respect to tolls in the Weiland and St. Lawrence canals, ind to the denial of relate to cargoes of grain stuff's actually transshipped in an American port for export from Mon

treal, or a port east of that city. It ignores the adroitly devised system by which the traffic of the citizens of the United States is made to contribute a much larger percentage of tolls in the Welland Canal than the traffic of Canadians. And it is altogether silent touching the discrimination introduced into this season's Order in Council withholding the export rebate from cargoes coming from any port on the United States shore of Lake Ontario. Respectfully submitted.

ALVEY A. ADEE.

Mr. Foster to Mr. Hcrbert.

DEPARTMENT OF STATE,

Washington, June 30, 1892. SIR: I have the honor to acknowledge the receipt of your note of the 24th instant, in regard to the discriminating tolls in the Welland and St. Lawrence canals, and to say that the subject is receiving the Department's consideration. I have, etc.,

JOHN W. FOSTER.

Afr. Foster to Mr. Herbert,

DEPARTMENT OF STATE,

Washington, July 2, 1892. SIR: Referring to your note of the 24th ultimo, relative to the complaint of this Government as to the discrimination on the part of the Canadian Government against American citizens in the use of the Welland Canal, and to the Department's reply thereto, of the 30th ultimo, I have the honor to inform you that the papers relating to the subject have been laid before the President, and have been communicated by him to Congress for its consideration. I have, etc.,

JOIN W. FOSTFR.

Mr. Herbert to Mr. Foster,

BRITISH LEGATION,

Washington, July 4, 1892. Sir: In the year 1884 the governments of the United States of America, France, Italy, Germany, Austria, Hungary, Russia, and subsequently Hawaii, were invited by Her Majesty's Government to join in concluding an international agreement with a view to prevent the supply of arms, ammunition, intoxicating liquors, and explosive substances to the natives of the Pacific islands.

A general assent was given to the proposal, but in some quarters a desire was expressed for more complete information as to the scope and forin of the proposed agreement.

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