RC (DLC); partially dated; endorsed by TJ as received from the State Department on 10 Dec. and so recorded in SJL with notation “lre. to King on countervailg act.” Enclosure: Madison to Rufus King, 10 Dec. 1801, stating that peace between Great Britain and France will bring a “shock” to the American carrying trade because Britain’s countervailing duties “must inevitably banish American vessels from all share in the direct trade with any part of the British Dominions, as fast as British vessels can enter into competition”; that three “remedies” suggest themselves; first, the United States might impose “light duties on foreign vessels,” which would probably be considered an indirect violation of the Jay Treaty; second, the U.S. might repeal its own discriminating duties while calling on Britain to repeal its countervailing duties, which would take time and could complicate relations with other nations; and last, because Britain’s countervailing duties are calculated at rates that actually give an advantage “infinitely greater in favour” of Britain rather than bringing equality between Britain and the United States as anticipated by the treaty, the third solution would be “an immediate amendment of the British Act, adjusting the countervailing duties to a real equality with those of the U. States”; while it is not known what course Congress may choose, it is “the wish of the President that no time may be lost in stating to the British Government the light in which their countervailing Act is received here, and in endeavouring to obtain an accommodation of it to some rule that will produce a real equality to the navigation of the two countries, as intended by the parties, instead of that ruinous inequality to the navigation of one of them which must result from the rule adopted” (Madison, Papers, Sec. of State Ser., 2:299–301).