as to have the right to decline any further modification of our last propositions.

I cheerfully seize this occasion to renew to you, sir, the assurance of my very distinguished consideration.

SOLAR DE LA MARGUERITE

P. S.-M. de Battet is authorized to give the fullest explanations to remove any difficulty to the conclusion of the treaty.

Mr. Niles to Mr. Forsyth.
[EXTRACTS.]

CITY OF WASHINGTON, October 25, 1839.

SIR: I have the honor to hand you, herewith, a letter in German, received from the Baron Eichoff, the Austrian minister of finances, and president of the Aulic counsel, in which he mentions the amount of American tobacco which the Austrian régie had determined to employ during the present year. It cannot, sir, be otherwise than agreeable to you to be thus of ficially informed that the increased consumption of American leaf-tobacco by the Austrian Government has been the result of my labors in Vienna under your directions. The baron's letter is marked A.

*

There was every appearance, when I left Turin on the 18th of June, that the number of arrivals would be immediately and greatly increased as a consequence of the abandonment of the quarantines and the differential tonnage and other duties.

New branches of trade have, indeed, already grown up, or rather taken a start since the ratification of the late treaty. I will mention a fact in point which very much interests the tobacco-growers of the south and west. I was informed in Paris, on my way home, by Mr. Pescatoré, the great tobacco-dealer of Europe, that he had ordered two cargoes of tobacco to be shipped on his account from New Orleans to Genoa, which he intended to be sent in transit through Sardinia, under the provisions of the 14th article of our treaty with that country.

A.

[TRANSLATION.]

VIENNA, February 1, 1839.

SIR: In compliance with the wish expressed by you, I have now the honor to inform you that it has been determined to admit into the tobacco manufacturies of the Austrian empire during the period from January 1, 1839, to the end of April, 1840, 2,350 Vienna quintals of North American tobacco, in leaf, more than was admitted during the same space of time in the preceding years; and that the directory of the finances has, in this business, made use of the valuable communications received from you. Accept, sir, the assurances of my most distinguished consideration.

Your most obedient servant,

EICHOFF.

Mr. Stevenson to Mr. Forsyth.

LEGATION OF THE UNITED STATES,
London, January 18, 1839.

SIR: I have now the honor of communicating to you the result of my efforts to carry into effect the wishes of the President, on the subject of the duties and restrictions imposed by this Government upon the tobacco-trade of the United States, and the regret I feel at its having terminated unfavorably to any immediate change in the existing system. As the subject may be regarded for the present as disposed of, I avail myself of the earliest opportunity to communicate the result, and the manner in which I have fulfilled my instructions.

In my communication on the 28th June, 1837, I informed you of the steps I had taken, in anticipations of instructions, in aid of the application which had been made by the merchants and manufacturers of Liverpool and Bristol, to Parliament, for a reduction of the duty on American tobacco. Nothing, however, grew out of that application, and the subject not having been considered or discussed, my calculation was that it would again be presented to Parliament, and that I would await the issue.

I indulged a confident hope that the first application which had been made, by the persons so largely interested in the trade, would be followed up by others from different parts of the kingdom, and a better opportunity afforded me of giving more efficient aid. I determined, therefore, to wait and ascertain whether the subject would again be brought forward, before I made any direct application to the Government. Having in the course of the session understood, from communications with the parties interested, that they did intend again to agitate the question, but that it was to be left to the action of the Government, I determined to make an effort, and ascertain whether the ministry intended to move in it. I accordingly had an interview with Lord Palmerston, for the purpose of communicating officially my instructions. I stated to him frankly the President's wish that the subject should be brought to the notice of her Majesty's Government, and my readiness to do it in the way best calculated to have it fully considered, and the most convenient to the Government. With that view, I took the liberty of suggesting, that probably personal and informal communications were better adapted for giving and receiving explanations on such a subject, than the restraint and formalities of official notes; and that, if he concurred in opinion, I would prefer communicating directly with the Chanceller of the Exchequer, or the president of the Board of Trade, or both, to whom subjects of this character were familiar, and to whom, I presume, they were in the first instance generally referred. I thought this, morever, the most eligible course, inasmuch as the subject was one of some delicacy, and not without its embarrassments; the duty of which we complained having been laid avowedly for revenue, and not protection, and therefore liable to be regarded as one for the consideration of their own Government, rather than that of foreign nations. I knew, too, that the opinions of these gentlemen on subjects connected with trade, and especially with the United States, were of a liberal character; and that the president of the Board of Trade (Mr. Thompson) had taken a prominent and leading part some years ago in Parliament, in getting the present duty on tobacco reduced, and had been the means of having the law prohibiting its culture in Great Britain extended to Ireland. With these views, the suggestion was made, and I am happy to say that

Lord Palmerston readily assented to the course, as favorable to full and free discussion. I accordingly embraced it, and during the session of Parliament, and after its adjournment, had repeated interviews with the Chancellor of the Exchequer and the president of the Board of Trade (more frequently with the latter), in which the whole subject was freely discussed. Indeed, every opportunity was afforded me of expressing fully and freely my own opinions, as well as those which I knew our Government entertained on the subject, and no opportunity was lost of pressing its consideration, and enforcing the injurious operation of the present exorbitant duty, as well upon American as British interests. This I felt myself at liberty to do under my instructions.

My efforts, however, I regret to say, have proved unavailing, and the result has been a determination, recently communicated, to make no recommendation to Parliament on the subject, or lend the sanction of the Government to any alteration of the present system.

In communicating this result, it may be proper that I should accompany it with a general statement of the grounds which I deemed it my duty to take against the justice and policy of this whole system.

My first object was to explain the importance of our tobacco-trade, and the injury which it sustained under the restrictions and duties of foreign nations, and especially those of Great Britain. I stated the fact, that although the cultivation of tobacco in the United States had increased within late years, it would have done so to a much larger extent, but for the heavy and unequal burdens which it had to bear; that although the consumption of duty-paid tobacco in Great Britain had increased from eight to sixteen millions af pounds yearly, there was every reason for believing that the consumption would have been fnlly one fourth part greater, if the duty had been less. I took occasion, also, to refer to the late proceedings in Congress, and to the report of a select committee of the House of Representatives, to show that the subject was attracting the attention of the Government and people of the United States, and that efforts were making to relieve this important branch of their national industry from the burdens imposed on it by foreign Governments; that the benefits to be derived from the reduc tion of the present duty was not, as had been supposed, in the enhanced price of the article, but in its increased consumption, thereby enlarging the means of production, and giving employment to more cultivators of the soil, in regions peculiarly calculated for the growth of the plant. That, beside the planter, it was of importance to the shipping and navigating interests of the United States that the consumption of tobacco should be augmented in Europe, inasmuch as, of all the American staples, tobacco was the one which united in a peculiar degree (from its heaviness and bulk) the greatest advantages to the freight shipping interests; the exportation of the article increasing, of course, with increased consumption. That, moreover, as nearly the whole of the tobacco brought into Great Britain was the growth of the United States, in selecting it for exclusive taxation, and putting on so high a duty, it operated in fact not only as a duty, but as a prohibition upon all tobaccoes except those of a finer quality.

With these explanations, I proceed to state the objections to the system, upon the general principles of commercial policy and free trade; that in the first place, nothing tended more to counteract commercial hostility and bind nations together, than the adoption of a liberal and enlightened policy; that a duty of three shillings a pound, on an article of four pence or siz

pence value, was not only a departure from the general principles of free trade and commercial reciprocity, but was in direct hostility to the just and liberal principles which characterized the commercial relations of the two countries. That such a duty was contrary to the principles of commercial policy upon which Great Britain herself professed to act, viz: that of lowering the duties of customs upon the importation of the products of those countries who consented to receive British goods upon like liberal terms, and only taxing heavily or prohibiting the productions of those States who laid burdens on British products and industry. By way of illustration, I contrasted such a system with that adopted by the United States, in its intercourse with foreign nations. In all their treaties with Great Britain, from their independence to the present time, a desire had been manifested to place the commerce of both countries on the most liberal footing. That at the moment when the United States were admitting British manufactures almost free of duty, she was taxing one of the important staples of American industry with a duty of the most injurious and indefensible char

I next proceeded to consider the subject, as it affected British interests; and here the first inquiry naturally was, whether the benefits intended by the measure, as one of revenue, had been secured. If official statements and the opinions of enlightened statesmen and political economists were to be relied on, the answer would be that they had not. Indeed, so far from it, that the better opinion seemed to be that the whole system had operated not only injuriously as a fiscal scheme, but fatally to the interests of the British trader and manufacturer.

On this branch of the subject, reference was made to the body of evidence and official statements before committees of Parliament, which established conclusively the following results: That the amount of tobacco consumed at the present time in Ireland alone was not less than 20,000,000 pounds. That the duty paid on tobacco in 1836 was on less than 5,000,000 of pounds, producing only about £700,000 of revenue; so that, under the operation of the present duty of three shillings, the smuggler extracted from the laboring classes of Ireland about £2,400,000 sterling per annum. Hence the Government (as Mr. McCulloch shows) collected its exorbitant duty upon one fourth part only of the tobacco actually consumed in Ireland; the other three-fourths being supplied by the smuggler, the duty of three shillings being at once an incentive to his energies and a premium to indemnify him for the risk; a fourth, also, of the demand in Great Britain being supplied in the same way. That the consumption in the United Kingdom was not less than 50,000,000 of pounds; of this quantity, duty was only paid on twenty-two millions of pounds. Upon the difference (amounting to thirty millions) the smuggler and those associated with him receive the whole duty, amounting to more than £4,000,000 sterling per annum. The cost of the tobacco, then, to the smuggler, being less than sixpence a pound, he is, under this protection of the three shilling duty, enabled to realize a profit of two shillings, and still undersell the fair trader by one shilling a pounda sufficient inducement both to the smuggler and buyer to extend the trade to the utmost. Of the extent of smuggling, a single example would be sufficient: it appeared from the evidence of the revenue officers of the Government, given before a committee of the House of Commons, that a long onehalf only of the Irish coast 7,600,000 pounds of tobacco was smuggled in one year; making it almost certain that on the remainder of the coast, and in cases unknown to the revenue officers, from 15,000,000, to 18,000,000 of

pounds, or three times the quantity upon which the duty was paid, was smuggled in one year. That the coast guard which was established at cost of £750,000 per annum, to put down smuggling, had wholly failed in doing so; and, notwithstanding the increasing wealth, commerce, and population, of the United Kingdom, it was clearly ascertained that the quantity of tobacco upon which the duty was paid, for ten years subsequent to the establishment of the guard, was less, by upward of sixteen millions of pounds weight, than for the ten preceding years. Hence it was that the commissioners of the revenue, in their recent report to the Government, declared "that the suppression of smuggling tobacco cannot be effectually provided against, except by removing the cause, viz: the excessive rate of duty." So, too, in 1830-31, the present president of the Board of Trade declared, in Parliament, "that, from all the evidence before the House on the subject of smuggling, that of tobacco was carried to the greatest possible extent, and the only remedy of meeting the system was by fairly reducing the duty; and his opinion was, that were it reduced to one shilling, or one shilling and sixpence per pound, the public interests would be served, and smuggling effectually put down." It was with this view, as well as for the purpose of increasing the revenue, that Lord Althorp (the then Chancellor of the Exchequer) proposed to reduce the duty to one shilling and sixpence.

That distinguished statesman, doubtless, acted upon the principles that, by reducing the duty of three shillings to one shilling and sixpence-say one shilling-the price to the consumer would be so reduced as to bring both article and price within the reach of a new and numerous class of subjects, who could not, at the present high price, afford to smoke, chew, or snuff, tobacco of even tolerable good quality; that, by this means, the consumption would increase in the same or even greater proportion with the reduction of the duty; consequently, increase the revenue, put down the illicit trade, and deliver the manufacturer from the mercy of the smuggler. This movement on the part of Lord Althorp was regarded at the time as not only stamping the duty on tobacco with his avowed disapprobation, but as a solemn renunciation by the then Government of the whole system of high duties. That the result would have been such as was anticipated, if the duty on tobacco had been reduced, was, I maintained, clearly shown by the present duty on tea and coffee. In proof of this, and as an illustration of how increased population and consumption, accompanied by diminished duties, would augment instead of diminish revenue, I referred to the operation of the duty on tea and coffee, compared with tobacco. In 1820, when the duty was at the rate of 96 per cent. (at or under two shillings a pound, and 100 per cent. above) the quantity of tea consumed was twenty-two millions four hundred and fifty-two thousand pounds. In 1835, when the duty was at the rate of one shilling and sixpence per pound for bohea, two shillings and twopence for congou, and three shillings for souchong and flowery pekoe, the quantity was thirty-six millions five hundred and seventyfour thousand pounds. That on coffee in 1820, when the amount of duty was one shilling per pound, the quantity was seven millions of pounds. In 1835, when it was reduced to sixpence, it mounted up to nearly twentyfour millions of pounds. So, too, with cigars-the amount upon which duty was paid in 1828, at eighteen shillings per pound, was only eight thousand six hundred. In 1836, when the duty was reduced to nine shillings (one half the former), the amount was one hundred and forty-one