James Madison Papers
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To James Madison from Samuel Smith, 18 April 1807

Balto. 18 april 1807.

Dear Sir,

In answer to your letter of 12th. Inst. I take leave to submit the following observations on the article which you did me the honor to enclose for my consideration.

Article 11.

This article is intended to adjust the difference that exists between the parties relative to the neutral trade. It appears to me completely to admit the British claims, for it emphatically says "all articles &c &c during the present hostilities, may be freely carried from the U. S." During the present hostilities only. Do not these words clearly convey the idea that the British fully retain their claims? They grant this as a boon, a great favor ⟨conferred⟩, so great that will only agree to give it, during the present hostilities. The moment the war ceases they reclaim their assumed right, and in another war may say, "you yourselves did by the treaty actually admit this right, and can now have no just cause of complaint, even if we inforce the whole of the peace & war system. The words, "during the present hostilities " ought to be expunged; if they are not, we relinquish principles for which we have contended. The E India article reduces our commerce to British India, to insignificance. This will contribute further to its ruin, by cutting us off completely from selling the goods imported from thence, to the colonies of the Enemies of G. Britain. It effectually prevents us from supplying them, not only with the goods of B. India, but with those of China. The article which forms the great value of a cargo from China latterly, is nankeens; they are reshipped in great numbers from the U. S. to the French & Spanish Colonies, and interfere greatly with the British trade to China. The loss of this vent for that article, would greatly injure our commerce to China, and indeed would render it comparatively triffling. Bohea Tea is so little used in the U. S. that it is no longer an object of much consequence; and the quantity consumed of the other teas, requires but a small proportion of the tonnage employed in that trade. It will also affect another branch of our trade. When Spain is engaged in war, American ships are admitted into Buenos Ayres. The exportation of specie is prohibeted from thence. Returns can legally be made only in jerked-beef, tallow & hides, to any advantage. The two first articles are generally reshipped to Savannah, where they sell well & to profit. This article cuts off that trade.

An extensive trade is lately opened to Smyrna, from whence we draw soap for the W. India market: but the important article from thence is Opium, intended for the Dutch colony of Batavia. The American purchasers at Smyrna having the benefit of that trade, have drawn the British out of the market. The complaints of the Turkey Company have been heard, for the British factory spoke out; and the artful expression of "articles &c of Europe" appears as if intended by treaty to exclude us from a trade, against which they have not at this time a pretext. The trade to Turkey in Asia is increasing with a rapidity that is surprizing. Opium to the value of $2 or 300,000 is annually purchased by Americans at Smyrna & either brought to America and thence reshipped to Batavia, or goes direct from Smyrna to that Port unmolested. Very great voyages have been made in this direct trade: the "Article", would exclude this trade altogether, as well as our trade now in its infancy of oil & soap, imported from Tunis. It effectually prevents us from a very advantageous trade (now unobstructed by British Cruizers) of going from a neutral port in Europe to an East India Colony of their Enemies. This & the India article taken together compell all our present trade beyond the Cape of Good Hope (China & Mocha excepted) to go direct from, & return direct to the U. S. Those words "of Europe" may be fairly construed as another confirmation by us of the British claim, and of our renunciation of our Rights.

This article is so worded, that, it appears to me to open a wide field for the constructive powers of the British Admiralty Judges. We virtually & perhaps by fair construction relinquish our claim to trade with colonies of the enemies of G. B. except so far as the interest of G. B. or of the Minister may permit, for while we are granted (not admitted as a right) a trade to & from the Colonies of her enemies during the present war, provided, we will so encrease the expences in such Commerce, as shall place our expenditures on an equality with those to which they (while at war) are subjected, for such is the fair construction of the one & a half p. cent. Yet to that charge I would not object as a merchant, for we could still carry on the trade to great advantage, nor would it in fact operate as intended; for the trade being thereby put on a secure footing, the premium of insurance would be reduced so as to equalize the extra charge. How far it is honorable to permit a foreign nation to interfere in any way with our system of finance is a question of some delicacy. It may be considered also another admission of the British claim. In truth it appears to me that one great object of this article, is to obtain from us a construction renunciative of the claims of right which we have asserted, to trade with the Colonies of France & Spain when they will permit us.

The prohibition to export the produce of the colonies to any place not in Europe, would greatly affect our commerce both in peace & war. It would prevent a very beneficial trade to that part of Asia & Africa which is within the Mediterranean, the trade to which has not been commenced more than three years, and has already become a most important & most increasing branch of commerce. That to Smyrna deserves particular notice. The American commerce to that port having kept up a constant supply has created there a common mart, to which the Greeks from all the Islands of the Archipelago and the Main, and the Russians from the Cherson, resort for supplies; the exports from the U. S. are chiefly coffee, cocoa, sugar & Dye woods (from the French & Spanish colonies) sugar, pepper, & other spices, (from B. India) Nankeens from China, loaf sugars some of our own manufacture, which have heretofore yielded handsom profit In return we draw opium for the Batavia market, barr-iron, brought there from Cherson for same, soap for the W India market and fruit, Turkey carpets & other goods for our own consumption. The commerce to that port & the Levant generally, has for centuries been a monopoly in the hands of the Turkey or Levant company. I think I forwarded to you some time since, letters from Smyrna showing the jealousy of that Company & its hostility to the American commerce there; this has not decreased & it is reasonable to presume that a representation has been made by that company to the Minister. Whether it have or not, He has certainly attended well to their interest, without any display of intention, by completely excluding our commerce from thence. For unless we can carry there the produce of the colonies as well East as West, and re-export the opium Iron & soap we bring from thence to those colonies the trade is not worth the pursuit.

The commerce to Egypt, Tunis, Tripoli & Algiers, is carried on by similar exports from the U. S. The imports from thence are unimportant. Indeed little has been done to either owing to our unsettled state with some of those powers & to the long credit they require, but it wlll increase if not suppressed by treaty.

The export from the U. S. to the Spanish Islands & to their possessions on the Pacific & Atlantic, of E. India goods is important, the loss of which would be felt.

The Article may and probably will be considered as our relinquishment of all trade with enemies colonies, except the direct to or from trade. Of course American vessels would be liable to seizure for carrying the produce of such colonies to a Neutral port thus, an American could not carry coffee from Guadaloupe to St Thomas’ (a Danish Port) or sugar, coffee &c from Batavia to the Persian Port of Muscat. There has been a very important trade carried on from Batavia to Muscat in sugar, where we procured in return the coffee of Mocha & Salt Petre of Sind. This trade has ceased. If the Article can also be construed as prohibiting the carrying of goods from a Neutral Port in India to an Enemy colony, the a considerable branch of trade will be lost, to wit, the carrying from Danish colonies to Manilla Batavia & the Isle of France.

Altho the exportation of silver could not have been intented to be restricted, yet nothing ought to be left to construction. A Tortola or Halifax Judge would certainly favor any construction that would ennable him to condemn.

The words "and shall have paid the ordinary duties on such articles so imported for home consumption" will have a construction already given by Tortola Judge, to wit, "that it must be proved that the wines were imported for home consumption & having become a surplus were exported." Would he not be warranted by those words, in demanding such proof? Again,’ a distinction has been set up in the B Courts, to wit, between duties paid & duties secured to be paid. Under these words shall have paid, would not such a Judge condemn & quote the letter of treaty, unless the duty had actually been paid? Those words "shall have paid" having been put in a treaty at a time when the distinctions made in the B Courts were of public notoriety, seems to bind us to the actual payment. Again I repeat, that this article is so open to construction that I should be at a loss to act under it in such manner as would afford security to my property. I must be permitted to observe that this article in my opinion completely prostrates our commerce at the feet of G. B. that at no time have the British enforced a system so completely injurious to the U. S. as the articles that have been submitted to my consideration would warrant. In candor I am compelled to say that I could not give my assent to those articles & yet I see the delicate situation in which we are placed by the signatures of our Ministers, having admitted principles on which the British may build much, in case of a rupture, which I hope may not happen, but which will require much management & address to avoid.

I omitted to observe that there are many colonial & some European Articles on which no duty is payable, such as mahogany, hides, Log wood, fustic, lignum vitae, [  ] wood, redwood Brazilletto, coppearss, sheet copper, salt, furrs of all kinds &c &c As they pay no duty the 2. %p% or 1. %p% could only be obtainable by a duty on exportation, which the constitution actually forbids. These are important objects of freight for our ships, and would I presume readily be excepted by the British; if not excepted they would give trouble.

If the construction I have given to this article should not be within the intention of the British then they may consent, so as to avoid such construction. If however it should be their understanding of the instrument (of which I have no doubt) and do persist in its present form, then we ought to risque every consequence that can possibly result to us, even war, rather than commit the honor & interest of the nation, by binding ourselves to such an instrument. I have the honor to be with high consideration Your obedt. Svt.

S. Smith

DNA: Samuel Smith Papers.

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