Sir,

No. 30.

The Earl of Elgin to Governor Sir W. MacGregor.

Downing Street, September 20, 1906. I HAVE the honour to acknowledge the receipt of your telegram of the 15th instant, in which your Ministers complain of the action of His Majesty's Government in the matter of the proposed fishery modus vivendi with the United States' Government.

2. Your Ministers submit that any arrangement involving the suspension of "The Foreign Fishing Vessels Act, 1906," is an interference with the internal affairs of the Colony, which violates the pledge given by the late Lord Salisbury in the House of Lords in 1891, to the effect that the Colony had been given unlimited power with respect to its internal affairs.

3. In the speech referred to Lord Salisbury drew a clear and precise distinction between the internal affairs of the Colony and matters of international and outside interest, and insisted strongly on the right of the Imperial Government to intervene in questions touching the relations of the Empire with foreign States. I am compelled therefore to infer that your Ministers regard the enforcement of the provisions of "The Foreign Fishing-Vessels Act, 1906," on United States' fishermen as a matter of purely local concern.

4. I am at a loss to discover the grounds on which they hold that view, and I regret that I am unable to record my assent to it. It will be within your recollection that when you informed me in February last of the intention of your Ministers to propose to the Colonial Legislature additional legislation to prevent British subjects resident in the Colony from fishing for American vessels, and suggested that such legislation would be regarded by His Majesty's Government as a matter of local concern, I replied that I held the contrary view and that His Majesty's Government, as responsible for the proper carrying out of the provisions of Article I of the Convention of 1818, were closely and directly interested in any legislation intended to define the conditions on which the rights of the inhabitants of the United States under that Article were to be exercised.

5. Your Ministers state that the Act of 1906 was passed after consultation with His Majesty's Government. This remark appears to me to require qualification. The only provisions of the Act with which His Majesty's Government have identified themselves are those which exempt vessels exercising Treaty rights of fishery from the application of section 3 and the first part of section 1 of the Act of 1905. It is true that all the other amendments of the Act of 1905 drawn up by your Ministers were submitted to His Majesty's Government, and that in order to remove certain obvious objections to your Ministers' proposals, His Majesty's Government suggested some alterations which were eventually embodied in the Act of 1906. But His Majesty's Government were careful at the same time to explain that their action in suggesting these alterations was not to be understood as in any way prejudicing the consideration of the Act when passed, or as in any way identifying His Majesty's Government with the policy of your Ministers, which they did not approve and which they did not believe to be in the interests even of the Colony itself.

6. The Act as passed provided that it should not be brought into operation until approved and confirmed by His Majesty in Council. In the circumstances which I have described it was at least uncertain whether His Majesty's Government would be prepared to take upon themselves the responsibility of bringing the Act into operation, and when the reply of the United States' Government to the British Memorandum was received and it became necessary, owing to the great divergence of view between the two Governments which it disclosed, to arrange a modus vivendi, it was clearly out of the question to complicate the situation, which it was the object of the modus vivendi to relieve, by imposing on United States' fishermen the additional restrictions contemplated by the Act.

7. It would be a source of great regret to me if in this or any other matter His Majesty's Government should fail either in respect for the constitutional rights of the Colony or in courtesy towards your Ministers. As to the right of His Majesty's Government to allow the Act to remain in suspense there can, I submit, be no doubt, and the decision to do so was communicated to you at the same time as to the United States' Ambassador.

8. I asked in my telegram of the 8th August whether your Ministers had any suggestions to make as to the nature of the proposed modus vivendi. By your telegram

of the 19th August your Ministers informed me that they could not consent to any relaxation of the laws of the Colony in favour of United States' fishermen, and that they strongly deprecated any provisional arrangement with the United States' Government, and urged that the Act of 1906 should be brought into force at once. In your telegram of the 22nd August your Ministers again urged that the Act of 1906 should be brought into force, and again deprecated any provisional arrangement. The question of the payment of light dues, they added, might remain in abeyance, but they could not acquiesce in any evasion of the customs and fishery laws. His Majesty's Government were thus left to their own unaided devices to discover and arrange, in the very short time remaining before the commencement of the fishery, a basis for a modus vivendi with the United States' Government, but the proposals which they made to the United States' Government on the 3rd instant included no concessions which your Ministers were not prepared to make, apart from the suspension of the Act of 1906, and that, as I have already pointed out, was entirely within the discretion of His Majesty's Government. It was not until some days after these proposals had been submitted to the United States' Government that your Ministers evinced any readiness to consider a modus vivendi. They then informed me that provided the Act of 1906 was brought into force, they were prepared to give way on practically all the questions in dispute. This intimation unfortunately came too late, and while I regret that the proposals made to the United States' Government do not commend themselves to your Ministers, I cannot but feel that in the circumstances no blame can fairly be imputed to His Majesty's Government.

(Telegraphic.)

Governor Sir W. MacGregor to the Earl of Elgin.

[Received September 21, 1906.] MY responsible advisers request me to transmit following message:

"With reference to your telegram of the 19th instant. For the reasons that have been fully set forth in previous Minutes, Ministers regret they are unable to become consenting parties to modus vivendi with the United States' Government. They entirely dissent from the views expressed by United States' Government in respect to usage of purse seines and their effect upon the herring fishery, but as stated in despatch from his Excellency the Governor to the Secretary of State for Colonies of date 7th instant, in which Ministers fully concurred, if His Majesty's Government consent to their use by American fishermen, then, while fully recognizing the evils likely to result, this Government will be obliged, in justice to the people of this Colony, to pass a Regulation removing the prohibition of the usage of purse seines so that competition with Americans may be possible for local fishermen.'

No. 32.

Memorandum communicated to Mr. Whitelaw Reid, September 25, 1906."

HIS Majesty's Government have considered, after consultation with the Government of Newfoundland, the proposals put forward in the Memorandum communicated by the United States' Ambassador on the 12th instant respecting the suggested modus vivendi in regard to the Newfoundland fishery question.

They are glad to be able to state that they accept the arrangement set out in the above Memorandum, and consent accordingly to the use of purse-seines by United States' fishermen during the ensuing season, subject, of course, to due regard being paid, in the use of such implements, to other modes of fishery.

His Majesty's Government trust that the United States' Government will raise no objection to such a stipulation, which is only intended to secure that there shall be the same spirit of give and take and of respect for common rights between the users of purse-seines and the users of stationary nets, as would be expected to exist if both sets of fishermen employed the same gear.

They further hope that, in view of this temporary authorization of the purse-seine, the United States' Government will see their way to arranging that the practice of engaging Newfoundland fishermen just outside the 3-mile limit, which to some extent prevailed last year, should not be resorted to this year.

An arrangement to this effect would save both His Majesty's Government and the Newfoundland Government from embarrassment, which it is conceived, having regard to the circumstances in which the modus vivendi is being settled, the United States' Government would not willingly impose upon them. Moreover, it is not in itself unreasonable, seeing that the unwillingness of the United States' Government to forego the use of purse-seines appears to be largely based upon the inability of their fishermen to engage local men to work the form of net recognized by the Colonial fishery regulations.

The United States' Government assured His Majesty's late Government in November last that they would not countenance a specified evasion of "The Newfoundland Foreign Fishing-vessels Act, 1905," and the proposed arrangement would appear to be in accordance with the spirit which prompted that assurance.

Foreign Office, September 25, 1906.

Sir,

No. 33.

Sir Edward Grey to Sir M. Durand.

Foreign Office, September 26, 1906. YOUR Excellency is already aware that I had communicated to the American Ambassador a Memorandum containing the views of His Majesty's Government on the proposed modus vivendi on the subject of the Newfoundland fisheries.

On receipt of this communication, of which a copy was inclosed in my despatch of the 14th September, Mr. Whitelaw Reid called yesterday and said he had every reason to hope that the terms therein proposed would be accepted by his Government. He was not, however, quite sure as to what was meant by interference of purse seines with other modes of fishing.

As to that part of the Memorandum dealing with the enlistment of Newfoundlanders outside the 3-mile limit, he expressed his personal conviction that his Government would do all that lay in their power to prevent the exasperation and irritation which is naturally caused by such proceedings just outside the limit; but he wished to throw out a suggestion, that the best way to avoid such irritation would be to waive temporarily that clause in the Act of 1905 which makes it illegal to enlist men within the 3-mile limit.

He pointed out that nothing could prevent the American captains from enlisting men outside the territorial waters of Newfoundland, and that to waive the application of the latter part of the first section of the Act would prevent disputes cropping up, and would promote peace and harmony on the coast of Newfoundland.

No. 34.

I am, &c. (Signed)

EDWARD GREY.

(Telegraphic.)

The Earl of Elgin to Governor Sir W. MacGregor.

Downing Street, September 29, 1906. HIS Majesty's Government were much disappointed by your telegram of 21st September, but felt that, under the circumstances, there was no alternative to course indicated in my telegram of 19th September. United States' Ambassador was informed accordingly on 25th September that His Majesty's Government consent to use of purse seines on the condition stated, and at same time His Majesty's Government expressed hope that recruiting just outside territorial waters will not be resorted to this year. Copy of communication will be sent by next mail.

No. 35.

Governor Sir William MacGregor to the Earl of Elgin.

(Telegraphic.) [Received, September 29, 1906.] MY responsible advisers request me to transmit following message:--

"Minister of Finance has received information to-day by telegraph from the SubCollector of Customs at Bonne Bay, stating that an American schooner has arrived equipped with purse seines and declines to pay light dues, and desiring to be advised whether the laws are to be enforced. Ministers are placed in a most embarrassing position, not knowing whether agreement has been arrived at between His Majesty's Government and that of the United States by which Americans may use such seines and are exempt from payment of light dues. They desire to be advised promptly as to the exact position of affairs, and whether they are free to enforce the customs and fisheries laws of this Colony against American fishermen."

(Telegraphic.)

No. 36.

The Earl of Elgin to Governor Sir William MacGregor.

Downing Street, October 1, 1906. WILL answer your telegram of 29th September as soon as possible. In meantime, please inform your Ministers that United States' Ambassador has suggested privately, but not as on behalf of his Government, that in order to minimize inconveniences and discontent arising from use of purse seines by United States' fishermen and the shipping of Newfoundland fishermen outside 3-mile limit, following arrangement might be adopted--viz., Newfoundland Government to suspend for this season prohibition to engage crews in territorial waters, in return for which United States' vessels would stop using purse seines after 1st November, by which time they would have engaged enough men to work with nets only. Would your Ministers be prepared to entertain such an arrangement?

Sir,

No. 37.

Sir Edward Grey to Sir M. Durand.

Foreign Office, October 1, 1906. I TOLD Mr. Carter to-day that the suggestion contained in Mr. Whitelaw Reid's private letter, to suspend the clause in Section 1 of the Act of 1905 which prevented American vessels from recruiting fishermen in Newfoundland waters, if the Americans in return would stop using purse seines after the 1st November, had been telegraphed to the Colony by the Colonial Office. If the Colonial Government accepted the suggestion at once, there would be no difficulty about including it in the modus viven li, but in view of the fact that the legislation of 1906 in the Colony had been suspended, and that this had been done with very great reluctance, I assumed that the point now raised would have to depend entirely on the opinion of the Colony with regard to it.

Mr. Carter asked me whether he was to understand that we wished the modus vivendi to be absolutely concluded and put in force at once, without waiting for the new point to be settled.

I said I should like not to answer this question until I had consulted the Colonial Office as to whether they desired to wait for the reply of the Colony on the new point now raised or not, but I would send a reply in a day or two.

I am, &c.

No. 38.

Governor Sir W. MacGregor to the Earl of Elgin.

(Telegraphic.) [Received October 4, 1906.] I HAVE been asked by my responsible advisers to transmit following Minute:

"Referring to your telegram of 1st October, my responsible advisers anxiously await a reply to their Minute of the 28th ultimo, in which they desired to be advised promptly as to the exact position of affairs, and whether they are free to enforce the Customs and Fisheries Laws of this Colony against American fishermen. They would most strongly deprecate any arrangement consenting to the use of purse-seines by American fishermen and to shipping of Newfoundland fishermen, and they are not prepared to consent to local fishermen being engaged to work for Americans in the conduct of fisheries of this Colony. By such a concession the policy of this Government in respect to herring fishery, which received such marked indorsement at the polls in 1904, and is rightly considered by mercantile body as of vital interest to the trade of the Colony, would be completely thwarted. A telegram received from the Sub-Collector of Customs at Port Saunders to-day states that American schooners Norma' and 'Annie M. Parker' from Gloucester arrived that morning and were preparing to seine and net herring for export, and had refused to pay light dues. In another communication from the Sub-Collector of Customs at Bay of Islands, it is stated that Captain Bonia of Gloucester, special agent for Gloucester firms, arrived there by railway on the 28th ultimo, and is engaging men and hiring boats for the full fishery. My responsible advisers again earnestly pray that His Majesty's Government will permit the proclaiming of sections 6 and 7 of "The Foreign Fishing-Vessels Act, 1906,' so as to enable them to deal with local fisheries, for it is entirely evident that disorder cannot be avoided and the peaceable conduct of the fisheries maintained in any other way."

I have asked my responsible advisers [to] tell me, for your information, from what quarter, at what places, and under what circumstances disorder is expected, and what measures to preserve peace are being taken.

No. 39.

Memorandum communicated to Mr. Carter, October 4, 1906.

THE proposals contained in Mr. Whitelaw Reid's private letter for the suspension of the recruiting clause in section 1 of the Act of 1905, if United States' fishermen would refrain from using purse seines after the 1st November, have been considered by the Newfoundland Government, but they find themselves quite unable to accept them.

In these circumstances His Majesty's Government would be glad to be favoured, at the earliest possible moment, with the views of the United States' Government on the modus vivendi proposals contained in Sir E. Grey's Memorandum of the 25th September in order that, if they are accepted, the Colonial Government and United States' fishermen may both be made acquainted at once with the terms of the arrangement proposed, and the necessary instructions given for its observation.

Foreign Office, October 4, 1906.

No. 40.

(Telegraphic.)

Governor Sir W. MacGregor to the Earl of Elgin.

[Received October 5, 1906.] WITH reference to the last part of my telegram of the 3rd instant, my responsible advisers inform me that they have been apprized that the people of Bay St. George and Bay of Islands regard the usage of purse seines with great disfavour and alarm, and as destructive to their means of livelihood, and threats to destroy them have been expressed. They hold that if number of Newfoundland fishermen engage (to)