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free of duty. But this advantage, which they enjoy over China and the East, is accidental, and may be transient; it is not an advantage which they hold by any obligations on our part, nor can they depend upon its continuance, or make it serve as a basis of any settled policy of their own, in reference to an unconditional modification of their systems of financial economy. It is my belief that, in order to secure the advantages she now enjoys of a free importation of her silks into our ports for any considerable length of time, say ten years, that France would be induced, at once, to relinquish entirely the cultivation of tobacco. The immensely powerful commercial and manufacturing interests of Lyons, Paris, and Havre, could be brought to bear directly, and favorably, upon the discussion of the question; and it would not, I thiuk, be difficult for the advocates of this policy in the Chambers (of which there would be numbers, as well as out of it) to convince that body that the revenues of the kingdom would be permanently secured by acceding to such a proposition, without sacrificing any other than excep. tional, and even doubtful interests—the partial cultivation of the tobacco plant in six, out of eighty-six departments, especially if she should be made , to apprehend that her refusal might lead to her manufactures being put at once on a level with those from China and the East Indies. The conversations I have had with Monsieur Vivien, and information derived from other sources, have deeply impressed my mind with the belief that a convention, of the character alluded to, night be effected without great difficulty, if the subject is seasonably undertaken, and intrusted to discreet and adroit hands. It is favorable for us that our existing legislation on the subject of silks will require no modification. We stipulate for the suppression of the cultivation of tobacco in France, as an offset for the continuance of laws already in force, which no probable circumstances are likely soon to require us to modify. It is not unimportant also to keep in view that a successful negotiation of this sort with France, would justify our demanding of other silk-growing and manufacturing countries some commercial advantages as an equivalent for the gratuitous and exceptional privileges they would otherwise enjoy. In' regard to the manner of bringing about this object, if, indeed, it should be thought to be one, I would beg respectfully to observe that sending a special minister, with powers to treat conjointly with the present minister to France, would be more apt to command attention and awaken the French Government to an active sense of the danger to some of her vital manufacturing interests, by a refusal to accede to a proposition so just and reasonable, thus formally made, than if the subject matter were intrusted to a minister already on the ground.

The question as to the extension of the régie, and fixing the policy of the country, in regard to the cultivation of tobacco, for some years to come, will be brought up for discussion during the next session of the Chambers; but a final disposition of the subject may, and undoubtedly will, be put off to the following year, at the suggestion of the ministry.

I am fully of the opinion that there is not the slightest probability of the system of the régie being abandoned in France. The revenue arising from this source is too great (being about fifty-four millions of francs, net), and the patronage incident to its administration too important, to make it wise for the nation, or politic for any ministry, to abandon the régie.

I am aware, sir, that in making this communication I am wandering out of the track of the duties imposed upon me; but the subject of my ob

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servations is one of so much interest to the country and the administration, and believing, too, that the views I have the honor to suggest would not te apt to reach you from any other source, I have felt that the contents of is letter would not be otherwise than kindly received, and the motives which have dictated it approved.

With sentiments of the highest consideration, I have the honor to be, sir, your obedient and humble servant,

NATHANIEL NILES. Hon. John FORSYTH,

Secretary of State, city of Washington.

Mr. Niles to Mr. Forsyth.

Vienna, November 18, 1537. pa Sir: When I reached this city in the early part of October, Prince Melo ternich was still in Hungary. Immediately on his returp, I informed him, by note, of my being charged by the President of the United States with a special agency near the Government of his Imperial Majesty, and berred to be informed at what time I might have the honor of delivering the letter from the State Department addressed 10 him, as well as to pay my personal respects. A note from the foreign office informed me of the time when the Prince would be pleased to receive me.

At the time appointed, I waited on his Highness, and was received by him with the most satisfactory demonstrations of courtesy and cordiality. After reading the letter from the Secretary of State, which I had put into his hands, the Prince observed that he had long selt that the United States and Austria were particularly well fitted to understand each other, and to cultivate more extensive relations of commerce, which, he was persuaded, would be mutually advantageous. I did not omit to express the strong desire entertained by the President to fortify the existing friendship between Austria and the United States, by those bonds of reciprocal interest which he felt satisfied would naturally result from a more liberal and enlarged commerce between the two courtries. The Prince did not, nor did I, speak with any particular emphasis on the subject of tobacco on this occasion. We, however, run over together the catalogue of natural and manufactured products of both countries, which seemed to indicate the possibility of extensive and profitable exchange.

This first interview lasted more than an hour, during which the Prince, in general conversation on commercial subjects, gave me satisfactory evidence that he understands the principles of commerce much better than they are exemplified in the practice of the Austrian Government. I was assured, in general terms, of the best dispositions of this Government in re. gard to the objects of my mission; and that every facility should be af. forded me, and every encouragement given, consistent with the interests of Austria.

Through the medium of the Prince, I subsequently made the acquaintance of his excellency Count Kollowrat, minister of state and conference, and virtually the head of all the interior departments of the Government; of the Baron Eichoff, minister of finances and president of the Aulic coun. cil. With both of these gentlemen I have met with a degree of liberality

and enlightenment, so far as general but rather indefinite opinions go, which presage very important modifications in the system of monopoly and restriction, which peculiarly characterizes the financial and commercial sys. tem of the empire; and which has hitherto so effectually paralyzed its resources of national wealth and credit.

But this Government has great difficulties to encounter. The empire is made up of heterogeneous territorial divisions, brought under the central Government by conquest, treaty, and inheritance, with the reservation of stipulated rights and privileges. Hungary, for instance, is wholly independent of the imperial Government in regard to her own industry. The only way, indeed, by which Austria can collect a revenue from that kingdom, is by imposing a duty upon every article of produce brought from it into Austria proper, or other adjoining provinces. Hence this Government, more than most others (although a first view of its structure, with a very few individuals at its head, would justify a contrary opinion), is obliged to consult opinions and interests, real or supposed prejudices even, in regard to the constitutent parts of the empire, relying, as many of them do, on the justice of historical rights, and jealous in the extreme of any innovations by which they may be directly, or consequentially impaired. The scrupulous respect for the acquired interests of individuals, of classes, and of portions of the empire, which distinguishes this Government, gives it great moral strength in certain respects, while it renders it essentially and signally weak in others; and in no respect more so than by incapacitating the central power to adopt a uniform and rational mode of raising a revenie.

The only way, therefore, to effect any considerable change in the economical policy of Austria, in regard to the monopoly of tobacco, calculated to augment the consumption of this article of American growth, is to present some scheme, as a substitute, which shall harmonize with the interests of Hungary, where tobacco is principally grown, and invite the support of the manufacturing interests, while it insures an equal revenue to the state, and promises to enlarge the commerce of the country. It is in this aspect of the subject that I have directed my attention to the prominent branches of industry in the various parts of the empire, in the hope of being able to bring their influence to bear favorably on the policy of the Government.

The cheap rates at which many descriptions of woollen, linen, silk, and glass manufactures, as also those of iron and steel, and many other products of minor importance, can be furnished by Austria, leaves no doubt that an extensive consumption of those articles would be found in our country, and, indirectly, through our ports, in South America also, if Austria would abandon her monopolies and restrictive system of duties, and admit our tobacco, and other products of our industry and our commerce with China, the East and West Indies, and South America, on easy terms. Some other of our staple products, beside tobacco, as well as those in which we are large dealers, coming from foreign countries, are effectually prohibited here by high duties. Salted fish, for example (an article, the consumption of which, of all others, we should every where encourage), as well as teas, are virtually prohibited in this way. Salted, dried, and pickled fish pay a duty of four kreutzers the pound, and tea fisty-four kreutzers the pound, a tax fully or nearly equal to the wholesale value of those articles in our markets.

It is only thus, in my opinion, by bringing the leading minds at the head

of these several manufacturing interests, and the wine-growing interest in Hungary, to comprehend the immense advantages which they would derive from the commerce which would grow out of the abandonment of the present system, and bringing these interests to bear upon the Governmen! that any well-grounded hope can be entertained that the monopoly of 10bacco will be soon abandoned.

I will only say, at present, that I am fully occupied in obtaining information and in maturing my reflections in reference to the above considerations, and that I am not withont the hope of being able to present the subject to the Government with such views of the commercial, man utacturing agricultural and financial interests of the country, as to effect, sooner or later, the overthrow of the monopoly, and to bring about an early, unconditional, and voluntary modification of the present tariff in several important particulars, calculated greatly to favor a commerce with this empire.

England is endeavoring to make a commercial treaty with this gorernment, and is pressing a reduction of the duties on many of her manufactured articles, and is likely to succeed. And now that the tariff is under consideration, I feel myself bound to take advantage of the professed dispo. sition to encourage commerce with the United States, and to urge by my personal, as well as all the official influence this government is willing to accord to me, a reduction of duties on the products of American industry, as well as on tea, coffee, sugar, and other foreign articles, in which we deal, to the greatest possible extent. If the duty on salted fish can be re. duced to one kreutzer, or less, a pound, and that on tea or coffee to len or twelve kreutzers the pound, an important step will have been taken toward the establishment of a regular commerce with our large commercial cities, which will insure to Austria a steady outlet for her manufactures, which will be enlarged as she may follow up a liberal policy. At the instance of the minister of finance, I am preparing a list of articles on which the duty should be reduced in order to make them available in alimenting a regular and direct commerce between our country and this. I have also been invited, by Prince Metternich, to prepare a memoir, embracing such views as I may have to suggest, à propos of the monopoly of tobacco, and also my views of what is possible to be done toward enlarging the commerce between the two countries, and the means of effecting the object. I have the most sanguine hope of being able to render the country important services by my instrumentality in obtaining the admission to consumption, on more favorable terms, of some of the most important articles of our commerce, even if I should fail in my efforts to break up the monopoly of tobacco.

This year, for the first time, the Austrian régie has contracted for the purchase and delivery at Trieste of a certain quantity of American tobacco. One hundred and fifty hogsheads is the amount stipulated for. This is certainly a small quantity, but it may serve to increase the taste for the American plant, and impose upon the Government the necessity hereafter of drawing an annually increasing quantity of its supplies of leaf-tobacco from our country, even if the regie should be maintained.

It may, therefore, be safely affirmed that the consumption of American tobacco will go on augmenting in Austria. If I should hereafter foresee the total impossibility of inducing the government to give up the monopoly, I shall then endeavor to persuade them into the policy of employing, in their own manufactures of tobacco, a large proportion of the American plant, as a means not only of improving the quality, but also of increasing the revenues by a greater consumption, and tending to favor their own in

dustry by the encouragement it will give to the commerce between the United States and Austria.

I have the honor to be, with sentiments of great respect, your very obedient humble servant,

NATHANIEL NILES. Hon. John FORSYTH,

Secretary of State.

Mr. Niles to Mr. Forsyth.
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VIENNA, December 15, 1837.' Sir : Since the date of my despatch of the 18th ultimo, I have communicated to Prince Metternich, the memoir of which a copy (No. 1) is herewith transmitted, cmbracing, in a succinct manner, the leading considerations which should induce Austria, in her own interest, to modify her system of monopoly and high duties. These considerations had previously been the subjects of repeated conversations between myself and Prince Metternich, Count Kollowrat, and the president of the Aulic council. It was at the express request of the first-named of these gentlenien, that I imbodied my proposition for the substitution of an import-tax on tobacco for the existing monopoly of that article, and condensed the general collateral considerations bearing on the subject into the form in which you now receive them. The avowed, and, undoubtedly, the real object of the Prince in asking for a written memoir, comprising my plan for the abandonment of the monopoly of tobacco, and substituting an import duty in its stead, as well as the general views I had expressed in relation to the means of enlarging the commerce between the two countries, was to bring the whole subject into the Conference or Imperial Council, where all important modifications of policy originate, and where this matter is now undergoing examination.'

I am happy to inform you that the Prince has expressed to me, verbally, and to other persons, also, his approbation of the substitute suggested, and his wish at once to relinquish the government régie of tobacco. The Prince, however, although possessing great influence, is but one of the tri. umvirate in the Conference, who are said to direct all imperial decisions.

Soon after making the acquaintance of the last-named gentleman (Baron Eichoff), through his immediate official superior, Count Kollowrat, I informed him that it would be desirable for me, preparatory to proposing any modification of the monopoly of tobacco, to possess myself with all the statistical facts which might serve as elements for a just comparison between the advantages of the present system, and any scheme I might have to sig. gest. He then expressed the greatest possible readiness to give me any information which I might desire on the subject. I took advantage of this very cordial offer to submit, in an informal manner, in German, the questions of which I send a copy (No. 3). Some time after, I received the answers, such as they are, of which you have also a translated copy (No. 4). You will perceive that these answers, though sufficiently full and satisfactory in some respects, entirely evade the inquiries of most interest—those concerning the financial operations and results of the régie. * * * * As far, however, as information is communicated in these replies to my inquiries, it may, I take it, be considered as authentic, and may be relied on.

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