Childers to Rogers (Permanent Under-Secretary)
Treasury Chambers
20th June 1866
With reference to Mr Elliot's letter of the 6th instant, transmitting a copy of a despatch from the Acting Governor of British Columbia, respecting the Ordinance No 3 of 1865, "To amend the Duties of Customs," I am directed by the Lords Commissoners of Her Majesty's Treasury to acquaint you, for the information of Mr Secretary Cardwell, that My Lords see no reason to modify the opinion expressed in Their letter of the 31st of October last, that a regulation under which "ad valorem" duties are calculated according to the value of the article attheManuscript image the place of shipment, instead of at the place of entry, in effect, if not in words, establishes a system of differential duties; inasmuch as the result must be to subject articles identical in all respects and of the same price to the consumer to different rates of duty, according as they may have been shipped from different countries. They regret to find that there is a precedent for this legislation in the fiscal system of the Canadian Provinces; and since Their letter of the 31st of October last, They have called attention to similar provisions in Colonial Acts transmitted for Their opinion beforeconfirmationManuscript image confirmation by Her Majesty.
My Lords have only to suggest that the principle of this regulation should receive full consideration by the Secretary of State, and that the views at which Her Majesty's Government may finally arrive should be communicated to the Governments of all British Possessions in which "ad valorem" duties of Customs are collected.
I am,
Your obedient servant
Hugh C.E. Childers
Minutes by CO staff
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Mr Elliot
Send copy to the Acting Governor for his information. Tell him that in consequence of the objections of the Treasury the Ordinance cannot be confirmed, but that as H.M.G. hope that before the time arrives for the Legre to pass a new Tariff, the Imperial Parlt will have passed an Act for the Union of the two Colonies, under the Authority of which there will be only one set of Commercial Laws, HM Govt will not proceed to actual disallowance of the Ordce under present consn. Par: 2 of this Letter requires attention.
ABd 21 June
Sir F. Rogers
There is a flavour of discontent in this letter from the Treasury, but so far as I know, we have all agreed with them, and have so expressed our official letters, in objecting to the Clause under discussion in the British Columbia Ordinance.
Write to British Columbia to tell the Acting Governor that we adhere to our objections and do not consider the precedent which he quotes from Canada a sufficient reason for an exceptionable practice?
As to Colonies in general you will best know whether we ought to write a Circular as the Treasury seem to wish.
TFE 22 June
When the particular case is disposed of a circular can be written to other Colonies. It must be carefully framed. (I will take it in hand.)
The B.C. Ordce must be disallowed (if at all) within 2 years of its receipt. And any intimation of a possibility of disallowce shd be worded with refce to this.
FR 22/6
CBA 23/6
EC 25
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The proposed desp. to B. Columbia may go. But I sd be glad if Sir F. Rogers wd refer to the last paragraph in the Treasury letter 20 June recommending a circular to various Colonies.
If there are many instances of Acts levying ad valorem duties according to the value of the articles at the place of shipment, such a circular will probably be useful: if the Canadian Act is the only instance I think it is questionable whether it is worth taking any notice of the fact.
C 14 July
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Circular to depts. I must ask the departments to look up the most recent Customs Act, in order to see whether they contain this objectionable provision.
Meantime proceed with the dph to B.C.
FR 16 July
The only Colonies in my Division which impose ad valorem duties are the Gambia, Gold Coast & Lagos. At the G. Coast the duty is calculated on the value of the Articles at the place of shipment—at Lagos at the value stated in the Invoice. I cannot find what the practice is at the Gambia.
GB 20 July
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Mr Blackwood
There is a Treasury letter come in 5517 Gambia wh supplies a conclusive reason agst our writing out to B. Columbia & other Colonies in the manner proposed by the Treasury in respect to the mode of fixing ad valorem duties. I thinkManuscript image you had better arrest any dph or dphes wh are going out upon this subject. Possibly the papers are travelling thro' the departments with a view to a proposed circular.
FR 31/7
Mr Blackwood
The despatch to the Govr of B.C. went by the last mail. See desp of 16/6. Papers annexed.
RSM 1 Aug
Sir F. Rogers
Now that B.C. and V.C.I. are united their tariff policy will be the same. So that it has become very immaterial, except as aManuscript image principle, whether this B. Columbia Ordinance—directed exclusively against the Victorians—be disallowed or not.
ABd 1 Augt
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Mr Wedgewood
When 5517 Treas. Gambia (diffl duties) returns from circn, let me have it. I have the previous papers.
RSM 3 Aug
Not in Dept.
EHW 8 Aug
6015 B Columbia confer 5517 Gambia
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This is a question whether we should send a circular to various Colonies telling them (what is true) that to levy ad valorem duties calculated on the cost of production in the country of production is in effect to levy a differential duty in favour of countries where production is cheap—wh is a thing not to be done.
This the Treasury wish us to announce generally. Vide 6015 B.C.
But contra (vide 5517 Gambia) the Custom H. Authorities declare that this mode of levying aManuscript imaged valorem duties is the established mode of levying them—& probably on the whole the best that can be adopted. Hence the Gambia Ordce wh adopts this method is not to be objected to.
I think in acknowledging the Treasy letter on the Gambia Orde we shd add, that under the circumstances Ld C. does not propose to send out the Circular suggested by the concluding parag of the Treay letter of 20 June (6015 B. Cola).
Let this lie by till 5517 Gambia returns from circulation. Then let me see 5517 Gambia and 6015 B.C. again.
4650 & 6015 British Columbia
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The Ordinance No 3 of 1865 was received here on the 29th June 1865. By the 12th clause of the Order in Council of the 11 June 1863 H.M. may by Order in Council or through a Secretary of State disallow any Law in British Columbia at any time within 2 years after such Law has been received by the Secy of State.
If this ordinance is to be disallowed, it must therefore be disallowed before the 29th of this month.
The question is whether under the circumstances it should be disallowed or left alone. The state of the case is shortly this.
1;6174 B. Columbia
The Ordinance No 3 was passed 15th Feby 1865 & was sent here under covering Despatch 18 March/65. The ordinance was submitted to the Board of Trade & the Treasury.
1;6015 B. Columbia
The Treasury objected to it on the ground that in effect it imposed differential duties A regulation under which ad valorem duties are calculated according to the value of the article at the place of shipment, instead of at the place of entry, establishes a system of differential duties inasmuch as the result must be toManuscript image subject articles identical in all respects & of the same price to the consumer, to different rates of duty according as they may have been shipped from different countries.
1;4650 B. Columbia Letter 3d March
In answer to their objection it was pointed out by the officer administering the governmt of B. Columbia that there was a precedent for such legislation in Canada.
1;Vide 5517 Gambia & Sir F. Rogers minute on 6015 B. Columbia
It appears also that the English Custom House Authorities declare that this mode of levying ad valorem duties is the established & proper mode of levying them, and a Gambia Ordinance which adopted this mode was not objected to.
Under these circumstances it was determined not to send out a Circular against this mode of levying duties, as suggested by the Treasury.
1;4650 B. Columbia
But before this was known, & decided upon a despatch of the 16th July had been sent out to British Columbia in which it was stated that the Canadian precedent was not thought sufficient to justifyManuscript image an exceptional practice in the case of British Columbia, & that the law would be disallowed unless amendments were made to meet the views of HM's Governmt before the expiration of 2 years from the 29th June 1865.
1;5072 B. Columbia
The Governor of British Columbia now writes word (Despatch of 18 March 1867) that a bill is before the Council repealing the clause objected to; but that had it not been made a Governmt question of the withdrawal of the provision which in the opinion of the Lords of the Treasury imposed differential duties, he should be outvoted by a large majority.
I may observe here that in 1865 Vancouver's Island had not been united to B. Columbia, & there can be no doubt that the Ordinance was framed in a hostile spirit to Vancouvers Island, & objected to by Sir J. Douglas on that account.
This objection is now removed by the Union of Vancouvers Island & B. Columbia in 1866.Manuscript image Under the circumstances the question is whether to adhere to the despatch of July/66 & disallow the Ordinance, or to leave it alone.
I confess I incline to the latter course. When that despatch was sent off, the real facts were not known, viz that this was a usual & proper course adopted for levying ad valorem duties. Again, though the amending Ordinance has not yet been received & indeed may not have passed, it is probable that it has passed by this time; and according to Govr Seymours last Despatch of the 18th March the Ordinance has worked well. The union of Vancouver's Island & B. Columbia has removed the objection that it was framed in a hostile spirit to V. Island, and, in truth, that objection has not been put forward by this Department.
I have framed & send on 2 draft Despatches—one, on the assumption that His Grace will not think it necessary under the circumstances to advise a disallowance; the other on the assumption that His Grace will think it necessary to enforce the views of the Treasury, & to adhere to the tenor of the July Despatch.
HTH 17/6 [1867]
It will be for the Duke todecideManuscript image decide between the two alternative drafts. I own that my leaning is in favor of the one marked A, which disallows the law, chiefly for the two following reasons—1st whatever may be the general practise on the subject, the B. Columbia law was evidently a manoeuver against Vancouver and therefore one that deserved a mark of disapproval. 2nd the Governor and his supporters will probably have made it one of their arguments for the new Act that the previous one was sure to be disallowed by HM's Government.
TFE 17 June
I prefer leaving the matter alone to take its course wt disallowance. If so, is any Desp. necessary?
CBA 17/6
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I do not see how consistently with the decision of July/66 any other course than disallowance can be adopted. In that despatch after the arguments of the Colony had been considered and the Union of the 2 Colonies decided upon, 2 Secretaries of State in fact have written that the Act would be disallowed unless certain things were done. Those things have not been done & it seems to me that I must either disallow in accordance with that despatch or condemn the decisionManuscript image of my 2 predecessors—although I think their policy may be questioned. Yet that policy having been adopted I can not find sufficient grounds for now condemning & reversing it and therefore disallow. The disallowance shd be deferred to the last moment if there is a possibility of and the mail being received before the 29th.
B&C 17/6
Other documents included in the file
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Draft reply, Cardwell to Officer Administering the Government, No. 1, 16 July 1866.
Minutes by CO staff
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When this draft has been settled, the Papers are to go back to Sir Frederic Rogers for the preparation of a Circular instruction to the Governors of Colonies.
The Treasury also will have to be informed, after that Circular is settled, of what we have done both upon this B. Columbia case, and generally.
TFE 26/6
Shd be seen by my successor.
EC 28 June
Other documents included in the file
Draft reply,Buckingham to Seymour, marked "A", June 1867.
Minutes by CO staff
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I have altered this draft somewhat in order to leave the future policy as free as possible.
A fair draft with some further alterations has been approved by the Duke.
TFE 21 June
Other documents included in the file
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Draft reply, Buckingham to Seymour, marked "B", June 1867.
Minutes by CO staff
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Not adopted.
[TFE] 18 June
Other documents included in the file
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Draft reply, Buckingham to Seymour, No. 40, 21 June 1867.
Minutes by CO staff
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As the draft has been a good deal altered by the Duke, I circulate this fair draft for His Grace's perusal and approval.
TFE 18 June
This is the draft of the despatch that is to go.
TFE 22 June