2d. That The United States consent to waive the demand which they have heretofore made, of the admission of their productions into British Colonies at the same, and no higher, rate of duty, as similar productions are chargeable with when imported from one into another British Colony, with the exception of our produce descending the St. Lawrence and the Sorrel. It will not be necessary, however, to insert the general waiver in the Convention, but only to provide for the exception, if that should be agreed to as herein before mentioned; and

3d. That the Government of The United States will not insist upon a participation in the direct trade between The United Kingdom of Great Britain and Ireland and the British American Colonies. But they do expect and require, that their Vessels shall be allowed to trade between those Colonies and any Foreign Country with which the British Vessels are allowed to trade. In agreeing to leave Great Britain in the exclusive possession of the direct trade with her Colonies, the President is sensible that our Navigation may be exposed to some disadvantage in its competition with the British. The latter may make double voyages, charged with mixed cargoes from the Parent Country, or from The United States and the Colony. But the disadvantage would be so great as to render it impracticable that we could maintain any thing like a fair competition, if British Vessels, at the pleasure of their Owners, were, and ours were not, permitted to share in the trade between the British Colonies, Foreign Countries, and The United States. Perhaps Great Britain may ask, if we trade between British Colonies and Foreign Countries, that British Vessels should be allowed to export the produce of The United States to those Countries, or to import Foreign produce from them into these States. There would be some plausibility in such a demand, if it were confined to Colonial Vessels, and if there could be devised any adequate security against fraudulent denominations of British European Vessels, bestowed to qualify them to enjoy the privilege of trading between The United States and Foreign Countries, through British Colonies. It is evident that, without such a limitation, efficaciously enforced, (which is believed to be altogether impracticable,) there would be no equivalent, for a privilege to all British Vessels, European and Colonial, of sharing in our trade with all Foreign Countries, in the limited privilege to American Vessels, of sharing the trade between those Countries and British Colonies. Your discussions on this subject may take such a direction as to present a favorable occasion, for testing the extent to which the British Government is disposed to carry the modern liberal Commercial doctrines, which it professes, and has proclaimed to the World. With that view, and for settling at once all difficulties on the question, whether the Vessels of The United States shall be permitted to engage in the trade between The British American Colonies and Foreign Countries, you are hereby authorized to propose, as a general

regulation, applicable to the British Dominions in Europe as well as in this Hemisphere, or wherever situated, that whatever can be lawfully imported into one Country, in its own Vessels, may be also imported into it, in the Vessels of the other Country, the Vessel and the cargo paying, in both instances, the same and no higher or other duties. This will leave the capital and industry of the two Nations concerned in Navigation, to a free competition, upon equal terms; and that is understood to be the policy which the British Government has recently announced. On this broad and extensive principle, a Treaty with the Republick of the Centre of America was concluded on the 6th of December last, and was subsequently ratified by the President, with the advice and consent of the Senate, it is believed given unanimously. We have not heard of its ratification by the other Party, and of course its promulgation at present would be premature, but a Copy of it is now placed in your possession. A Treaty with Denmark, embracing the same principle, under some modifications and limitations, was signed at Washington on the 26th day of April of the present year, to the ratification of which the Senate has also consented and advised with equal unanimity. Sufficient time has not yet elapsed to receive the Danish ratification, but a Copy of this Treaty is also confided to you. If Great Britain will assent to neither principle; if she insist upon engrossing the whole trade, not only between her Colonies and her European Dominions, but also between those Colonies and Foreign Countries, to the exclusion from both of the Navigation of The United States, it will then be necessary to insert a clause in the Convention expressly reserving to each Party the right, by existing or other laws, to restrict the trade between The United States and the British Colonies to the direct intercourse between them.

You will observe that the instructions now given, respecting the Colonial Trade, amount to an authority on the part of this Government to you, to agree in substance to the modification of Mr. Rush's proposal, which was required by the British Plenipotentiaries. You will endeavor to make a lively impression on the British Government of the conciliatory spirit of that of The United States, which has dictated the present liberal offer; and of their expectation to meet, in the progress of your Negotiations, with a corresponding friendly disposition. The object of this part of your instructions may be accomplished, either by inserting the Articles respecting the Colonial Trade in the general Convention for regulating the commerce between the two Countries, which would be their most fit position, or in a separate Convention. Whether the two Articles proposed by Mr. Rush, or the two first, proposed by the British Plenipotentiaries, or others differently constructed, should be inserted in the Convention which you are empowered to conclude, will depend upon the footing on which you may ultimately agree, under your instructions, to place the Colonial trade.

If you should not be likely to bring your Negotiations, on the entire subject of the Commerce between the two Countries and their respective Territories to a conclusion, in time to present the Convention, in which it is expected they will issue, to Congress during its next Session, it will be desirable, and you are accordingly directed to endeavour to make a separate arrangement of the Colonial Question, so as to enable the President at least to present that, before the adjournment. As to the duration of any general or particular Commercial Convention to which you may agree, it may be limited to a period of about 10 years; to which it is advisable to add an Article similar to the 11th Article of our Danish Treaty, stipulating that the Convention shall continue in force beyond the particular period agreed upon, until one Party notifies the other, in writing, of his desire to put an end to it. Albert Gallatin, Esq.

HENRY CLAY.

(17.)—Mr. Gallatin to Mr. Secretary Canning.

62, Upper Seymour Street, 26th August, 1826. [See Page 462.]

(18.)-Mr. Secretary Canning to Mr. Gallatin.

Foreign Office, 11th September, 1826. [See Page 465.]

(19.)—Mr. Gallatin to the Secretary of State. (No. 13,)

(Extract.)

London, 22nd September, 1826. I HAVE the honour to inclose the Copy of my Answer to Mr. Canning's Note of the 11th instant, relating to the Order in Council of 27th of July last.

The Hon. J. Q. Adams.

SIR,

ALBERT GALLATIN.

(Inclosure.)-Mr. Gallatin to Mr. Canning.

Upper Seymour Street, 22nd September, 1826. [See Page 473.]

(20.)—Mr. Vaughan to Mr. Clay.

Washington, 28th September, 1826. I HAVE the honour to communicate to you the substance of a Despatch which I have this day received from His Majesty's Secretary of State for Foreign Affairs, in which I am directed to announce to you the determination of His Majesty's Government to allow the provisions of the Act of 1825, which regulates the Commerce with British Colonies, to have their course.

In resorting to this determination, the conduct of His Majesty's Government is open to the imputation of tardiness, rather than to that of precipitation.

A hope has been entertained that the late Session of Congress would not have been suffered to pass by, without the adoption of some measure, on the recommendation of the President, for the abolition of

the discriminating duties, which, for three years past, have been levied in the Ports of The United States, on British Vessels trading between The United States and the British Colonies in North America and the West Indies.

A proposition made by His Majesty's Government to The United States, through the British Plenipotentiaries, in the late Negotiations carried on in London--a proposition, having for its object the reciprocal abolition of all discriminating duties levied on Colonial Intercourse, has been, since the Summer of 1824, under the consideration of the American Government.

An Act of Parliament passed in July, 1825, which, while it offered the liberty of trading with the British Colonies to all Nations, limited that liberty" to the Ships of those Countries which, having Colonial Possessions, should grant the like privileges of trading with those Possessions to British Ships, or which, not having Colonial Possessions, should place the Commerce and Navigation of this Country and of its Possessions abroad, upon the footing of the most favoured Nations."

The United States have no Colonial Possessions, but they might have placed the Trade of His Majesty's Colonies in America, in British Vessels, upon the footing of the most favoured Nation in the Ports of The United States, and they have not done so.

It would have been infinitely more agreeable to His Majesty's Government, that the liberal disposition manifested by England towards The United States, should have produced a corresponding disposition on the part of the American Government.

But, finding themselves disappointed in their long cherished hope that such would be the course of the Government of The United States, it remains for them only to let the provisions of the Act of 1825 take their course.

I seize this opportunity to renew, &c. The Hon. Henry Clay.

SIR,

CHAS. R. VAUGHAN.

(21.)-Mr. Clay to Mr. Vaughan.

Department of State, Washington, 11th October, 1826.

I HAVE received and submitted to the President of The United States, the Note which you did me the honour, on the 28th ult. to address to me, communicating the substance of a Despatch which you had received from the British Secretary of State for Foreign Affairs, in which you were directed to announce the determination of His Britannick Majesty's Government, to allow the provisions of the Act of Parliament of 1825, regulating the Commerce with British Colonies, to have their course.

The Government of The United States have ever been anxious that the Trade between them and The British Colonies should be placed upon a liberal and equitable basis. There has not been a moment, since

the adoption of the present Constitution, when they were not willing to apply to it the principle of fair reciprocity and equal competition. There has not been a time, during the same period, when they have understood the British Government to be prepared to adopt that principle. When the Convention, in 1815, was concluded, the American Government was desirous of extending its principles to the British Possessions in the West Indies, and on the Continent of North America; but, at the instance of the British Governmeut, those Possessions were expressly excepted from the operation of the Convention. Upon the Agreement in 1818 between the two Powers, to prolong the operation of that Convention, the British Government had not made up their mind to extend its principles to those Possessions. It would be as painful as unnecessary to enter into a detail of all the countervailing Acts of Legislation which, subsequent to that period, were resorted to by the Parties, in which the struggle on the side of Great Britain was to maintain her monopoly, and on that of The United States, to secure an equal participation in the Trade and Intercourse between them and the British Colonies. In 1824, a Negotiation was again opened between them on this and other subjects, through Mr. Rush, and Messrs. Huskisson and S. Canning, at London, and a gleam of hope broke out of the reconciliation of the two Parties on that long contested matter: but, as there were one or two points in relation to it on which they could not agree, the Negotiation was suspended, with an understanding that it should be again renewed at some early day, after the two Governments had fully deliberated on the question which prevented an agreement. Mr. King was sent to Great Britain by The United States, as their Plenipotentiary, in the Spring of 1825, and, but for the state of his health, which compelled his return, and rendered necessary the appointment of a successor, would have entered upon the Negotiation. In the meantime, in July, 1825, the British Parliament passed the Act referred to in your Note; but no Copy of that Act has ever, at London or at Washington, been officially communicated to the Government of The United States by the British Government; nor has there been communicated to this Government any expectation of His Britannick Majesty's Government that the regulation of the Intercourse with the British Colonies should be effected by mutual Acts of Legislation. The Government of The United States, on the contrary, has reposed in full confidence that it was the view and wish of both Parties, that, on the resumption of the suspended Negotiation, that subject should be again taken up and provided for; and, accordingly, Mr. Gallatin has carried with him instructions, which we had every reason to hope and believe would enable him to concur with the British Government in an adjustment of it on terms which would be entirely satisfactory to both Parties.

Judge then, Sir, of the surprise and regret which the President must have felt on receiving the information conveyed in your Note. If the