No. 17
3rd March 1866
I have had the honor to receive Your despatch No. 89 of the 11th November 1865, forwarding Copies of Letters from the Board of Trade and the Lords Commissioners of HerMajesty'sManuscript image Majesty's Treasury on the subject of the Customs Ordinance passed by the Legislature of this Colony during the Session of 1865. You inform me you cannot recommend the Ordinance to Her Majesty for confirmation as it is contrary to precedent and unadvisable in principle.
2. The work of the present Session is so far advanced that it is my intention toprorogueManuscript image prorogue the Legislative Council in a few days. To attempt to alter the Customs Law without due and sufficient notice would, I am informed by the Collector of Customs be a serious disaster to commercial interests and would bring Bankruptcy on the few merchants now resident in this Colony, as all their arrangements have been made for the summer supplies under the existing Tariff. I thereforeproposeManuscript image propose to leave the Ordinance in force until I have received instructions on the several points I wish to bring before you and if Her Majesty's Government are still of opinion that the principle of the enactment is undesirable I shall then have sufficient time to give due Notice of the alterations to be made.
3. The Lords Commissoners of the Treasury statethatManuscript image that the valuation of Articles subject to ad valorem duties, being reckoned according to their value at the place of shipment, is so far as their Lordships are aware without precedent in the Customs Laws of British Possessions. To tell the inhabitants of this Colony, where the Canadians form so considerable an element in our settled population, that Her Majesty's Government cannot allow the Ordinance to continueinManuscript image in force on this ground would be at once met by a reference to the Customs Law of Canada from which the principle of the present Ordinance was taken [marginal note: Consolidated Statute, Canada, 22 Vic. Cap: 17, Sec. 24].
Has this Act been referred to T-y & B. trade & is it in operation?
4. The circumstances of the Colony have altered materially since the discovery of the outlying Mines of the Kootenay District. Previous to that time little or no trade came by way of our Southern Boundary and New Westminster was the only declaredPortManuscript image Port of Entry in the Colony. Now however there are three Ports of Entry on our extensive Southern frontier—Osoyoos, in the Similkomeen Valley, Fort Shepherd on the Columbia, and St Joseph's Prairie in the Kootenay District—in each instance consisting of a log hut, inhabited by a Revenue Officer and Constable, with only an Indian Village within 80 or 100 miles.
5. Under the existing systemgoodsManuscript image goods entering the Colony by these routes are charged duties on the value of the articles at the Towns of Walla-walla and Colville, situated in Washington Territory, the starting points whence supplies from the interior of the neighbouring States are forwarded for the British Columbian Market. To carry out the suggestion conveyed in the Treasury Letter and reckon the ad valorem duties at such Ports of Entry would be difficult, if not impracticable, in thepresentManuscript image present early stage of the Colony, while to take the average prices at New Westminster as the value to be charged on the frontier would give the American Trader an undue advantage
Why undue?
over the Merchants resident in this and the neighbouring Colony.
In other words the consumer on the frontier is to pay the cost of bringing in goods from N. Westminster, when he mt get them witht that cost from the U.S.
6. It is not unnatural for the people of this Colony to look to the Laws of Canada as a guide to their own Legislation when the position of the two Colonies is so similar and their future relations in all probability so intimate. I would therefore begleaveManuscript image leave to suggest that the principle of the Ordinance should be allowed to continue but be so far amended as to give power to the Executive, as in the Canadian Act, to provide that "goods bonâ fide exported to this Province from any Country but passing in transitu through another Country, shall be valued for duty as if they were imported directly from such first mentioned Country." This alteration would, I believe meet the objections raised last spring to the enactment in Victoria, but I must add that any Change in the system now in force of collecting CustomsDutiesManuscript image Duties will be met by the unanimous opposition of the unofficial Members of the Legislative Council, and it would require distinct instructions from me to prevent the Official Members from opposing an alteration in a Law which has been found to work with advantage to the Colony.
7. Since writing the above I have received a Report from the Attorney General copy of which I beg to forward.
I have the honor to be,
Your most obedient humble Servant
Arthur N. Birch
Minutes by CO staff
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Sir F. Rogers
According to the result of Mr Macdonald's investigation it would seem that Mr Birch's statement has good foundation.
ABd 21 May
To Treasury.
FR 21/5
EC 23
Prepare draft to Treasy, but see a separate minute by me. I had not seen this paper before.
TFE 24 May
This must be sent to the Treasury. Doubtless Mr Elliot is right in supposing this Ordinance was directed ags V.I. but if we effect the Union this year it may be better not to moot the subject until after that time when there will be no motive for the United Legre to continue the anomaly.
WEF 28/5
EC 30
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Mr Blackwood
The Treasury objected to the B.C. Ordinance No 3 of 1865 on the ground that by that Act the value of articles subjected to ad valorem duties is to be reckoned according to their value at the place of shipment, instead of being estimated as usual on their value at the port of entry. They stated that they knew no other Colonial Customs Act in which this regulation exists.
Mr Birch in the present despatch refers them to the 24th Section of the Canadian Customs Act, 22 Vic: Cap 17, from whichManuscript image Act the principle of the B.C. Ordce has, he states, been adopted.
Sec: 24 of Canada, 22 Vic: Cap 17 in the Consolidated Statutes is founded on an older Customs Act 16 Vic: Cap: 85, Sec: 3 wh Act was submitted to the Board of Trade and Treasury previously to its confirmation. No objection was raised by either of those departments to the clause asserting the principle adopted by the B.C. Ordce.
That principle is, as stated by Mr Birch the same in both Ordces, but in the Canadian Act there is a further clause empowering the Government to charge by order on goods bonâ fide exportedManuscript image to the Province from one Country, but passing in transition through a second, duty on their value in the first country.
Mr Birch now proposes to adopt in B. Columbia this further clause.
RSM 19 May
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I would just record the following note in passing. The B. Columbia Govt has no doubt found a precedent in the Canadian Customs Laws, but these are not generally considered bright examples of that class of legislation. The real point is that the clause was obviously directed against Vancouver; and to say that British goods carried in a large vessel to Vancouver and introduced from thence into New Westminster were to pay duty on the enormous value they would bear at Vancouver instead of theirnaturalManuscript image natural English price, was contrary to all reason and could have no other motive than the desire to compel British Merchants to send their goods in ships sailing direct to the inferior Port of New Westminster. This ought in my opinion decidedly to be prevented. Whether it will be sufficiently prevented by a mere permission to the Governor of British Columbia to take the duties on the British instead of the Vancouver value will be a subject for consideration when the Treasury answer.
TFE 25 May
Documents enclosed with the main document (not transcribed)
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H.P.P. Crease, Attorney General, to Officer Administering the Government, 22 March 1866, responding to objections by the imperial government towards the customs ordinance.
Other documents included in the file
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Elliot to Secretary to the Treasury, 6 June 1866, forwarding copy of the despatch for consideration.