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The Premier's remarks had reference only to the determination of the Government of this Colony to terminate that privilege and to confine American fishermen to such rights as they possessed under the Convention of 1818.

It is observed that the closing paragraph of Mr. Ruot's communication aforesaid has reference to the Foreiyn Fishing Vessels Act of 1905.

At the instance of His Majesty's Government that Act was amended during the present year, and in order that there shall be no misunderstanding as regards the intention of the Legislature of the Colony, and to prevent such a complaint as that contained in Mr. Phelps' despatch to Lord Rosebery of date 2nd June, 1886, that restrictions were about to be enforced without notice, the Committee of Council would advise that a Proclamation do issue bringing into operation the Foreign Fishing Vessels Act of 1906.

They believe that its early issue will operate as a deterrent, and prevent the necessity for that interference by officials of this Government that the United States' Government evidently anticipate.

The Committee of Council advise that your Excellency be moved to transmit a copy of this Minute to the Right Honourable the Secretary of State for the Colonies.

(Signed) R. BOND, Colonial Secretary. August 15, 1906.

No. 17.

Governor Sir W. MacGregor to the Earl of Elgin.—(Received August 31.)

Government House, St. John's, Newfoundland, My Lord,

August 20, 1906. WITH reference to your telegram of yesterday, I have the honour to inclose herewith copy of a letter I have written to my Prime Minister, covering a transcript of the telegram referred to above.

I have adopted that course because it does not seem to me that in the Minute of Council of the 15th August, a résumé of which was sent you by telegram last night, my Miristers have offered any suggestions that would facilitate the preparation of the proposals that His Majesty's Government desire to submit to the Government of the United States to establish temporarily a modus vivendi.

In my letter, copy of which is inclosed, I have called the attention of Ministers to this fact, and have invited them to submit such suggestions as they desire to receive consideration in the framing of the proposals. As my Prime Minister will not arrive in town till some time to-morrow, I may not receive an answer to either my letter or the telegram it covers for a day or two.

I have, &c. (Signed) WM. MACGREGOR.

Inclosure in No. 17.

Governor Sir W. MacGregor to Sir R. Bond.

Dear Sir Robert Bond,

August 20, 1906. I HAVE the honour to transmit herewith a transcript of a telegram received on Sunday afternoon from the Secretary of State. *

2. I would point out to Ministers that it would appear from the telegram of the 8th August that His Majesty's Government were at that date informing the Government of the United States that, pending discussion of the questions at issue, they were prepared to negotiate a provisional arrangement, and would shortly submit proposals for that purpose. This decision apparently had not been arrived at when the Secretary of State wrote his despatch of the 6th August, covering copy of Mr. Root's letter of the 30th June.

3. It is clear from the telegram received yesterday that the position and views of His Majesty's Government remain unchanged. They find it necessary that they, to avoid a position that, in their opinion, might become undesirable and even dangerous, should make proposals to the United States' Government that would enable the discussion to be carried on in a friendly manner, and the ensuing autumn fishery to be carried out without any untoward incident. It is clear enough that His Majesty's Government fear the occurrence of such incidents if this Government should proceed to put into effect as against American vessels thosc Regulations to which the United States' Government take exception.

* Not printed.

4. In the telegram of the 8th August, His Majesty's Government show a manifest desire to prepare the proposals to be submitted by them to the United States' Government as far as possible in conformity with the wishes of this Government.

The Secretary of State has therefore invited an expression of opinion from this Government as to what proposals could be made in order to relax the political tension now existing. I now desire to direct the earnest attention of Ministers to this point, at the same time reminding them that this question seriously concerns the foreign relations of the Empire, and that His Majesty's Government clearly regard it as of weighty importance.

I should therefore be glad to receive from Ministers such suggestions as they may be prepared to offer to the Secretary of State with a view to relieving the present political tension and to procuring time for an amicable consideration of the points as to which divergent views are at present entertained by the two Governments.

I have, &c. (Signed) WM. MACGREGOR.

No. 18.

The Earl of Elgin to Governor Sir W. MacGregor.

course.

(Telegraphic.)

Downing Street, September 3, 1906. His Majesty's Government have received with much disappointment your telegram of the 19th August. They cannot but feel that your Ministers have failed to appreciate serious difficulty in which their policy has placed both them and His Majesty's Government. I will return a full reply to your Ministers' statement by mail in due

In the meantime, please remind them of Lord Kimberley's speech in the House or Lords in 1891, in which, when discussing the course taken by Lord Salisbury's Government, he said, “While the negotiations are proceeding with France, it is plainly necessary tkat there should be a truce until the respective rights are specifically ascertained. The modus vivendi does not in any way infringe the assurance given by Mr. Labouchere to the Colony, for the modus vivendi is not for the purpose of making new Treaty arrangements, but for the purpose of ascertaining what the existing Treaty engagements are.'

His Majesty's Government have decided to act on the principles indicated in those remarks, which not only had been adopted by the then British Government, but also represented the consensus of opinion of both political parties at the time, and are accordingly proposing to United States' Government modus vivendi under which, on the one part, Foreign Fishing Vessels Act, 1906, will remain in abeyance, first part of section 1 of Act of 1905 and whole of section 3 will be held not to apply to United States' fishing-vessels, and light dues will be waived; and, on the other, United States' vessels will report at custom-house on entry and on clearance, and United States' fishermen will comply with colonial fishery regulations.

As regards call at custom-house, your Ministers are of course aware that the negotiations which led up to the Convention of 1818 virtually bind His Majesty not to exact customs duties in respect of goods on board United States' vessels necessary for prosecution of fishery, and support of fishermen during fishery, and during voyages to and from fishing grounds.

His Majesty's Government hope that United States' Government will accept proposal outlined above, but wish to warn your Ministers that some further concessions may be necessary if a modus vivendi is to be arranged. In that event they trust that your Ministers will assist the efforts of His Majesty's Government to reach some settlement which will obviate the grave difficulties and dangers to be apprehended in the course of the ensuing fishery.

No. 19,

The Earl of Elgin to Governor Sir W. MacGregor. (Telegraphic.)

Douning Street, September 3, 1906. REFERRING to my telegram of even date, please state whether your Ministers, in the event of the negotiations for a modus vivendi breaking down, are prepared to indemnify His Majesty's Government against any claims for compensation which may be preferred by United States' Government, and which it may not be possible consistently with a fair interpretation of Treaty rights to refuse ; also whether, in the event of a reference to arbitration becoming in the opinion of His Majesty's Government necessary or desirable, your Ministers will agree to such reference, and undertake to meet expenses of arbitration and pay the award, if any.

No. 20.

Sir Edward Grey to Mr. Whitelaw Reid.

Your Excellency,

Foreign Office, September 3, 1906. IN my note of the 14th August I stated that His Majesty's Government hoped shortly to be able to submit to the Government of the United States proposals for a provisional Arrangement, which would secure the peaceable and orderly conduct of the forthcoming herring fishery on the coast of Newfoundland. I have now the honour, on the understanding mentioned in my note, viz., that the Arrangement would be in the nature of a modus virendi to be applicable only to the ensuing season, and not in any way to affect the rights and claims of either party to the Convention of 1818, to submit the following proposals, viz. :--

(1.) His Majesty's Government will not bring into force “The Newfoundland Foreign Fishing Vessels Act, 1906,” which imposes on United States' fishing-vessels certain restrictions in addition to those imposed by the Act of 1905.

(2.) The provisions of the first part of section 1 of the Act of 1905 as to boarding and bringing into port, and the whole of section 3 of the same Act will not be regarded as applying to the United States' fishing-vessels.

(3.) The United States' Government will in return direct their fishermen to comply with the Colonial Fishery Regulations, as was in fact done last year, with the exception of certain breaches of the prohibition of Sunday fishing.

(4.) The demand for payment of light dues will be waived by His Majesty's Government.

(5.) The United States' Government will direct the masters of United States' fishing-vessels to comply with the provisions of the Colonial Customs Law as to reporting at a customs-house, on arrival in and departure from colonial waters.

2. As regards head (3) of this Arrangement, I would point out that of the three restrictions which the Colonial Fishery Regulations impose on the herring fishery in the waters open to United States' fishermen, the first, viz., the prohibition of “purse seines, is in force in all the waters of the Colony. It is also in force in all the waters of Canada. The second, the prohibition of herring traps, is also in force in Placentia, St. Mary's and Fortunes Bays, and in the district of Twillingate. The third, the prohibition of “herring” seines, is in force also subject to some reservations as to baiting purposes in the inner waters of Placentia Bay, and in certain waters on the north-east coast. The application of these three restrictions to the herring bays of the west coast is, of course, prior to and not in any way connected with the present policy of the Colonial Government, and His Majesty's Government have the testimony of the naval officers who have been employed on the Treaty Coast as to the destructive results of the use of seines. His Majesty's Government therefore hope that the United States' Government will recognize that His Majesty's Government are, apart from any question of right, acting in the interests of the continuation of the common fishery in proposing as a part of the provisional Arrangement compliance with the three restrictions mentioned.

The fourth restriction, viz., the prohibition of Sunday fishing, is of general application throughout the Colony, and is also in force in Canada. Having regard to the duration of the fishing season and to other circumstances, His Majesty's Government do not feel that compliance with this prohibition involves any material inconvenience to United States' fishermen. On the other hand, in view of the strong feeling against Sunday fishing which prevails in the Colony, the disregard of it is fraught with possibilities of serious disorder. It is therefore hoped that the United States Government will assist His Majesty's Government in the maintenance of peaceable relations between the two sets of fishermen by not countenancing any breach of the prohibition during the ensuing season.

3. As regards head (6), as explained in the Meinorandum communicated to your Excellency on the 2nd February, a call at a customs-house, whether on entering or on leaving the waters of the Colony, need involve no interference with a vessel's fishing operations, and is in itself a requirement which may be reasonably made in the interests not only wf the colonial revenue but of the United States' fishermen.

4. I trust that you will be able to inforın me at an early date that the Arrangement outlined above is agreed to by your Government.

I have, &c. (Signed) EDWARD GREY.

No. 21.

The Earl of Elgin to Governor Sir W. MacGregor.

Sir,

Downing Street, September 7, 1906. I HAVE the honour to acknowledge the receipt of your despatch of the 20th ultimo, forwarding copy of a letter which you addressed on the same date to your Prime Minister on the subject of the United States' fishery question.

2. I am obliged to you for the action which you have taken, and I approve the terms of your letter.

I have, &c. (Signed) ELGIN,

No. 22.

Governor Sir W. MacGregor to the Earl of Elgin.

(Telegraphic.)

[Received September 8, 1906.] REFERRING to your telegrams of the 3rd September, chief desire of my responsible advisers is to prevent our fishermen from selling fish to or working for Americans. They earnestly urge proclamation of Act No. 1 of 1906, and undertake to apply it only to our own people and to leave in abeyance questions of the lighthouse dues, customs entrance, nationality of American crews, purse seines, and undertake preservation of peace, and without your sanction to enter into no case against Americans. I am sending by next mail Minutes and despatch.

No. 23.

Memorandum communicated by Mr. Whitelaw Reid, September 12, 1906.

MY Government hears with the greatest concern and regret that in the opinion of His Majesty's Government there is so wide a divergence of views with regard to the Newfoundland Fisheries that an immediate settlement is hopeless.

But it is much gratified with His Majesty's Government's desire to reach a modus vivendi for this season, and appreciates the readiness to waive the Foreign Fishing Vessels Act of 1906. This and other restrictive legislation had compelled our fishermen to use purse seines or abandon their Treaty rights.

My Government sees in the offer not to apply Section 3, Act of 1905, and that part of Section 1 relating to boarding fishing-vessels and bringing them into port fresh proof of a cordial disposition not to press unduly this kind of regulation.

Our fishermen will also gladly pay light dues, if not hindered in their right to fish. They are not unwilling either to comply with the regulation to report at Customhouses when possible. It is sometimes physically impossible, however, to break through the ice for that purpose.

We are

Most unfortunately the remaining proposals, those as to purse-seining and Sunday fishing, present very grave difficulties.

We appreciate perfectly the desire of His Majesty's Government to prevent Sunday fishing. But if both this and purse-seine fishing are taken away, as things stand there might be no opportunity for profitable fishing left under our Treaty rights. convinced that purse seines are no more injurious to the common fishery than the gill nets commonly used-are not, in fact, so destructive and do not tend to change the migratory course of the herring as gill nets do, through the death of a large percentage of the catch and consequent pollution of the water.

The small amount of purse-seining this season could not of course materially affect the common fishery anyway. Besides, many of our fishermen have already sailed, with purse seines as usual, and the others are already provided with them. This use of the purse seine was not the free choice of our fishermen. They have been driven to it by local Regulations, and the continued use of it at this late date this year seems vital.

But we will renounce Sunday fishing for this season if His Majesty's Government will consent to the use of purse seines, and we cannot too strongly urge an acceptance of this solution.

No. 24.

The Earl of Elgin to Governor Sir W. MacGregor.

(Telegraphic.)

Downing Street, September 13, 1906. REFERRING to your telegram of the 8th September, proposals for nodus vivendi, including suspension of Act No. 1 of this year, made to United States' Ambassador the 3rd September. Copies of correspondence went by last mail.

No. 25.

Governor Sir W. MacGregor to the Earl of Elgin.

(Telegraphic.)

[Received September 15, 1906.] I AM desired by my Ministers to state that they lave learned with profound regret that His Majesty's Government has, without reference to this Colony, proposed to the United States' Ambassador, as one of the terms of a modus vivendi, the suspension of the Foreign Fishing Vessels Act this year, which was only adopted after consultation with His Majesty's Government and mainly with a view to enable the Government of this Colony to deal with the local fisheries and thus secure during the coming autumn peaceable conduct of the fisheries.

They respectfully submit that any arrangement embracing the suspension of that Act interferes with the internal affairs of the Colony and is in violation of the pledge furnished by Lord Salisbury through the British Parliament of the 5th May, 18:1, during the debate on Newfoundland Fisheries Bill, “that the Government of this Colony is given unlimited power with respect to its internal affairs." They had hoped and expected that before a modus vivendi was proposed to the United States' Government a full text of the same would have been submitted to this Government and thus have afforded an opportunity for suggestion or remonstrance. They also submit that the reasonableness of this expectation was warranted by the statement of Lord Salisbury in the debate on the Newfoundland Fisheries Bill of the 28th April, 1891. The suspension of the Act under reference renders them entirely powerless to carry out their fisheries policy and to secure that peaceable conduct of the fisheries during the coming season for which so much anxiety has been expressed by His Majesty's Government.

No. 26.

The Earl of Elgin to Governor Sir W. MacGregor.

(Telegraphic.)

Downing Street, September 19, 1906. UNITED STATES' Ambassador has presented Memorandum on subject of mod, vivendi, of which following is substance: First, it expresses appreciation of readin

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