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 Leg
re
to pass a new Tariff, the Imperial Parl
t 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 Ord
ce under present cons
n.
Par: 2 of this Letter requires attention.
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 a
d valorem duties is the established mode
of levying them—& probably on the whole the best that can be
adopted. Hence the
Gambia Ord
ce wh adopts this method is not
to be objected to.
I think in acknowledging the Treas
y letter on the
Gambia
Ord
e we
shd add, that under the circumstances
Ld C. does not
propose to send out the Circular suggested by the concluding parag of
the Trea
y letter of
20 June (6015
B. Cola).
The Ordinance N
o 3 of
1865 was received here on the
29th June 1865. By the 12
th 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 N
o 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 to
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 governm
t 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
justify
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 Governm
t 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 Governm
t 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.
This objection is now removed by the Union of
Vancouvers Island
&
B. Columbia in
1866.
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.
It will be for the Duke to
decide 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—1
st 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. 2
nd 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.
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 decision
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.