Colonial Despatches

I am directed by the Lords of the Committee of Privy Council for Trade to acknowledge the receipt of your letter of the 9th Instant 1 transmitting for their information, by direction of Secretary Sir E.B. Lytton, a copy of a correspondence between the Colonial and Foreign Departments with reference to the questions submitted in my letter to you of the 18th September last 2 on the subject of the disadvantageousposition position of British Ships in the trade of British Columbia.

In commenting on the views of this Board conveyed in the above letter My Lords observe that Sir E. Lytton states that he is not prepared to recommend the surrender of the Coasting Trade of British Columbia as a basis for renewed negotiations with the United States for a relaxation of their prohibitory system, such a measure demanding, as he conceives, "careful consideration not only in its relation to the interests of British Commerce but especially as to its effects upon the future progress and welfare of the Colony." But they observe thatin in a subsequent part of Mr Elliot's letter to Mr Hammond, 3 Sir E. Lytton objects to the policy of excluding Americans from the trade between Vancouver's Island and British Columbia by rendering that trade a Coasting Trade on the ground that "such a policy would be a return to the old system of encouraging the British Shipowner by throwing difficulties in the way of the Americans and would injure the Colonists by depriving them of the advantages in the purchase of their commodities which they would derive from the employment of American Shipping."

My Lords would only observe on this apparently conflicting opinion that considering that not only are UnitedStates States Ships already in practical possession of this trade but that British Ships are, for the reasons pointed out in my letter of the 18th September, unable to enter upon it under equal conditions. My Lords are at a loss to perceive in what respects either British or Colonial interests could suffer by a measure which would obtain for British Shipping access to a valuable trade from which it is now excluded in return for the legal admission of United States' Ships to a trade of which by license they already absorb the principal share.

Sir E.B. Lytton appears to have misapprehended the views of this Board with regard to the measures of retaliation to which I adverted in myletter letter of the 18th September. My Lords in that letter did not recommend, as is implied in Mr Elliot's letter to Mr Hammond, that in the event of the Government of the United States refusing to relax their present system, United States' Ships should be excluded from the trade between Frazer's River and British Columbia; but they expressed the opinion that it would be desirable that the Government of the United States should be made aware of the provisions of British Law, which render such an exclusion possible under certain contingencies. The probability to which Sir E. Lytton adverts of the future union of the two Provinces on grounds of general policy, appears to them to afford additional reasons for the course which they indicated—as such ameasure measure would ipso facto occasion the exclusion of United States' Ships from this trade and consequently afford to Her Majesty's Government a legitimate argument in urging on the Government of the United States the wisdom of securing themselves now against the possibility of such a future result.

In conclusion I am to request that you will state to Sir E.B. Lytton that the answer of the United States' Government in 1852 to a representation from Her Majesty's Minister at Washington on the subject of a proposed partial relaxation of their laws in regard to the Coasting Trade, which is referred to in Mr Hammond's letter to Mr Merivale 4 does not appear to My Lords to afford adequate grounds for abstaining from a renewal of similar proposals.Supposing Supposing that the article of the Federal Constitution referred to upon that occasion is inconsistent with the partial measure of reciprocity suggested in my letter of the 18th September, it is competent for Congress, under Article V of the Constitution, to make any modification of that article which is agreed upon by two thirds of both Houses.

If the Government of the United States were to find Congress indisposed to resort to this measure, it seems not improbable that the discussion of the question might lead to a general relaxation of the Coasting Trade Laws of the Union as a safer and more convenient alternative.