no further considerable purchase or coinage of silver takes place. The facts of the situation and the experience of other countries with a considerable amount of silver coins plainly show that the suspension of free coinage and the receipt of the silver coins without discrimination for public dues are in themselves sufficient to maintain parity.

But I think Prof. Laughlin is mistaken in his criticism that no means whatever have been provided for maintaining the parity between gold and silver. He admits that the first section of the Act declares that "All forms of money issued or coined by the United States shall be maintained at a parity of value with this standard, and it shall be the duty of the Secretary of the Treasury to maintain such parity." He criticises this provision upon the ground that it gives absolutely nothing. with which to maintain parity. . . .

It is to be regretted that the provision on this subject is not put in plainer language. I understand that it was urged upon the Conference Committee that this clause should read, "it shall be the duty of the Secretary of the Treasury to use all appropriate means to maintain such parity." This would have conveyed sweeping and complete authority to buy gold, sell bonds, or take any other steps in execution of a solemn duty imposed by Congress. But there is another provision of the bill which Prof. Laughlin seems to have disregarded. This is in section 2, providing for the gold reserve, where it is prescribed that when bonds are sold for the maintenance of the reserve the Secretary of the Treasury, after exchanging the gold for notes and depositing the latter in the general fund of the Treasury, "may, in his discretion, use said notes in exchange for gold, or to purchase or redeem any bonds of the United States, or for any other lawful purpose the public interest may require, except that they shall not be used to meet deficiencies in the current revenues." The declaration that notes may be used "for any lawful purpose," certainly includes the maintenance of parity between gold and silver, since it is distinctly made a legal obligation of the Secretary by the first section. If the Secretary of the Treasury, therefore, finds a considerable fund of redeemed notes in the general fund of the Treasury, and fears that silver will fall below parity with gold, he is able under this provision to pay for silver in United States notes which are redeemable in gold on demand. It seems to me this affords an important and almost perfect means of maintaining the parity of gold and silver. It amounts in substance to the ability of the holder of silver dollars to obtain gold notes for them, if the Secretary of the

Treasury, under the mandate laid upon him by law, finds it necessary to offer such notes in order to maintain the parity of silver.

But suppose that there were no notes in the general fund of the Treasury which could be used for this purpose?- if, in other words, there was no demand for gold by the presentation of United States notes, which had resulted in an accumulation of the latter—it is pretty plain that there would be no demand for the exchange of silver for gold. The entire body of the law on this subject is calculated for a period of distrust and demand for gold. If such a demand occurs it must fall upon the gold resources of the Government by the presentation of notes. The notes then become available for exchange for silver. If the criticism is made that this puts the notes afloat again in excessive quantities, it may be answered that the quantity of silver in circulation has been diminished, that a gold note has taken its place, and that if this note comes back for redemption in gold the Treasury is fully equipped by law for obtaining additional gold by the sale of bonds and holding the note until financial conditions have changed....

Objection is made to the new law that it does not make the bonds of the United States redeemable in gold. That is true in a narrow sense. The new law, as finally enacted, does not change the contract between the Government and the holder of the bond, which was an agreement to pay coin. . . . I think that upon many grounds the conference committee acted wisely in refusing to make this change. It establishes a dangerous precedent to enact a retroactive law. . . . For those who prefer a gold bond Congress provided the means of obtaining it by offering the new two per cent bonds upon terms of conversion approaching the market value of the old bonds. . . . Nobody doubts that these bonds will be as good as gold, and it is wholly immaterial whether some Secretary of the Treasury pursues the infantile policy of paying silver dollars upon these bonds instead of checks, when as I have shown all money of the United States is convertible into gold. These are the distinct provisions of the new law and they cannot fail to maintain the gold standard except by the deliberate violation of the duty imposed by the law upon the Secretary of the Treasury.

Lyman J. Gage, The Gold Standard Law, in Sound Currency, July, 1900 (New York), VII, 113-115 passim.

CHAPTER XXIX-FOREIGN RELATIONS

173.

Northeastern Fishery Question (1854-1887)

BY CHARLES BURKE ELLIOTT (1887)

Elliott is well known as a jurist, and as a lecturer on international law. Under the treaty of peace in 1783 the United States continued to exercise all the privileges of fishing off the Newfoundland coast which the states had possessed as colonies. The War of 1812 abrogated the right; and since 1818, except during periods covered by temporary treaties, the privileges have been such as were granted by a treaty ratified in that year, and the main controversies over the fisheries have been as to the interpretation of this treaty. After the period covered by this extract a treaty was framed, but it was rejected by the Senate in 1888; hence the international status is still based on the treaty of 1818. — Bibliography: C. B. Elliott, The United States and the Northeastern Fisheries, 135-144.

L

ORD ELDON [Elgin], Governor-General of Canada, evidently believing that the fishery controversy had now reached a point when it could with truth be called "a tender case," came to Washington in 1854 for the purpose of securing to Canadian fishermen that most desirable objecta Reciprocity Treaty. . . .

This treaty was signed by Secretary Marcy on the part of the United States and by Lord Eldon [Elgin] acting as Minister Plenipotentiary on the part of Great Britain.

By the First Article, "It is agreed by the high contracting parties, that, in addition to the liberty secured to the United States fishermen by the above mentioned Convention of October 20, 1818, of taking, curing, and drying fish on certain coasts of the British North American colonies therein defined, the inhabitants of the United States shall have, in common with the subjects of Her Britannic Majesty, the liberty to take fish of every kind, except shell fish, on the sea coasts and shores, and in the bays, harbors and creeks of Canada, New Brunswick, Nova Scotia, Prince Edward Island, and of the several islands thereunto adjacent, without being restricted to any distance from the shore; with permission to land upon the coasts and shores of those colonies and the islands thereof, and also upon the Magdalen Islands, for the purpose of

drying their nets and curing their fish; provided, that, in so doing, they do not interfere with the rights of private property, or with British fishermen in the peaceable use of any part of the said coast in their occupancy for the same purpose."

By this treaty the American fishermen gained fishing rights analogous to those enjoyed under the treaty of 1783, while the Canadians obtained a market for their natural products free of duty.

Now commenced a period of unexampled prosperity for the Canadian fishery interests. The trade quadrupled and American fishermen were now received on the former inhospitable coasts with open arms. . . .

But the American fishermen were not satisfied with thus contributing so materially towards building up the business of their competitors at the expense of their own interests.

It soon became evident that the loss of revenue from the remission of duty on Canadian importations far exceeded the value of the fishing rights conceded to American fishermen. The Canadian fishermen by reason of their proximity to the fishing ground and the cheapness of labor and material for building boats were enabled to compete with the Americans to such an extent as to render their business unprofitable. The result was that in March, 1865, the treaty was terminated in pursuance of notice given by the United States one year before. . . .

On the 8th of January, 1870, the Governor-General of Canada issued an order" that henceforth all foreign fishermen shall be prevented from fishing in the waters of Canada." This was such a gross and palpable violation of the treaty [of 1818] then in force that, on May 31st, 1870, the Secretary of State called the attention of the British Minister to the illegal order and requested its modification. The negotiations thus commenced resulted in the fishery articles of the treaty of 1871, known as the treaty of Washington. By Article XVIII of this treaty, Article I of the Reciprocity Treaty of 1854 was revived with the stipulation that it should exist for a term of ten years and for two years after notice of its termination by either party. . . . By Article XXI it was agreed that for the term of years stated, "Fish oil and fish of all kinds (except fish of the inland lakes and of the rivers falling into them, and except fish preserved in oil,) being the produce of the fisheries of the United States or of the Dominion of Canada, or of Prince Edward's Island, shall be admitted into each country, respectively, free of duty."

During the negotiations that led to the Treaty of Washington, the United States offered one million of dollars for the inshore fisheries in

perpetuity, not because they were of that value but in order to avoid future inconvenience and annoyance.

The British Government asserting that the privileges accorded to the citizens of the United States were of greater value than those accorded to the citizens of Great Britain, it was provided by Article XXII of the Treaty of Washington that a commission should be appointed to determine the value of these additional privileges,—"having regard to the privileges accorded by the United States to the subjects of Her Britannic Majesty." . . .

The award was not made until the 23rd of November, 1887 [1877], when, by a vote of two to one, the Commissioners decided that the United States was to pay five million five hundred thousand dollars for the use of the fishing privileges for twelve years. The decision produced profound astonishment in the United States. . . .

The customs receipts for the four full years from 1873 to 1877 showed that the United States had remitted duties on fish amounting to three hundred fifty thousand dollars a year, and that adding this to the award it was equivalent to almost ten million dollars for the use of the inshore fisheries for twelve years, while they were not worth more than twentyfive thousand dollars a year. Notwithstanding these facts the Committee recommended the payment of the award if Great Britain was willing to accept it.

On a motion to approve the report of the Committee, Senator Edmunds offered an amendment declaring that "Article XVIII and XXI of the Treaty between the United States and Great Britain concluded on the 8th of May, 1871, ought to be terminated at the earliest period consistent with the provisions of Article XXXIII of the same treaty." This was adopted and the money necessary to pay the award was appropriated. . . .

In pursuance of instructions from Congress the President gave the required notice of the desire of the United States to terminate the Fishery Articles of the Treaty of Washington, which consequently came to an end the 1st of July, 1885. . . .

During the season of 1886 the Canadian authorities pursued a course little adapted to lead to the end they so much desired, - a new reciprocity treaty. Notwithstanding the fact that the Government of the United States emphatically denied the applicability of local customs regulations to the case of the fishermen pursuing their occupation under the protection of the treaty of 1818, the Canadians persisted in enforc