I have the Honor to transmit a Duplicate of my Letter of the 17th., enclosing a Copy of the orders of Council lately issued by this Government relative to Neutral Trade.

When I was about to ask a Conference with Mr. Canning on the Subject of these Orders I received a Note from him requesting an Interview. Altho it was to be presumed that the purpose of this Interview would appear to be the mere Explanation of certain Ambiguities in the Details of this extraordinary Measure, it seemed to furnish the opportunity, which I was preparing to seek, of remonstrating against the Measure itself. It had occurred to me that it would not be proper that, by appearing to interest myself in its subordinate provisions, I should unnecessarily compromise with a Transaction, of which the whole Scheme & Principle were so hostile to the incontestable Rights of my Country, and of which, however modified, the Effect could not fail to be in the last Degree injurious to its Commerce. Under this Persuasion I was disposed to leave that part of the Subject, at least in the first Instance, to the Committee of Merchants trading to the United States, of whose Proceedings I was kept constantly informed, and from whose Communications with the Board of Trade more useful Results were, in this View, to be expected than from mine with the Foreign Department. It was, besides, not unnatural to hope that, while this respectable Body of Men were employed in demanding Explanations of what was supposed to be doubtful in the phraseology of the Orders, some of those, with whose opinions I was acquainted, would disclose to Government, with Advantage to the Discussion which I had in Contemplation, their Conviction of their fatal Tendency in a commercial, if not in a political, Sense. In the Hope of such a Disclosure I was not wholly disappointed; but the administration had decided irrevocably on their new System, which now appears to have been long meditated in secret. The only Effect of the Interference of the Committee will be found in their printed Report herewith transmitted. It will be seen that the Explanations which this Report contains are far from softening the harsh Spirit of the orders, or furnishing any Evidence of a Disposition on the part of Government to make them more respectful to Neutral Rights, or less inconvenient in their Execution. On the contrary, the Blockade which the orders institute against the Ports of France & her allies, and against such other Ports as the British Flag may be excluded from, is by these Explanations extended to the Ports of the Allies of Great Britain, so far as to prevent our carrying to them from the United States Colonial productions.

In some Respects too, they have put a precise Negative upon a favorable Interpretation of the orders, adopted on their first Publication by several intelligent merchants, by which much of their pernicious Character would have disappeared in Practice; and it is declared by them, contrary to all Expectation and with a wonderful Disregard of Justice, that one of the great agricultural Products of the United States, after being forcibly drawn into Great Britain as the commercial Vortex of the World, is upon re-exportation to go charged with a British Duty.

My Interview with Mr. Canning took place two Days ago. He conmerced the Conversation by saying that he had requested to see me, not with the Intention of discussing the general Propriety of the late orders of Council; for that, being already adopted, Discussion could now answer no valuable Purpose; but with the View of explaining to me such of their Provisions as had been supposed to be liable to Misconstruction, or might appear to me to be doubtful. He then read to me a Paper which was the same in Substance with the Report of the Committee of Merchants. It was not, however, stated in this paper, as he read it, that re-exported Cotton was not to be exempt from Duty, in common with our other native Commodities. And when I remarked to him that the prohibition contained in his paper, of the direct Carriage of Colonial produce from Neutral ports to the Ports of His Majesty’s allies, was not warranted by any Thing in the orders of Council, he struck it out as a Mistake, after having examined the Orders and satisfied himself that they did not comprehend the Case. The Truth is, however, that this Prohibition is supposed here to be a necessary Part of the System, and that upon that Ground, or as being justified by the Rule of the War of 1756, it is the Intention of the Government to enforce it.

As soon as Mr. Canning had finished the reading of this paper I told him that, as he had intimated a Wish to decline the present Discussion of the Principle & propriety of the Orders, I certainly would not urge it at this Time; but that, as the Explanations which he had just given, relative to their Details, had not in any Degree served to diminish the deep Concern & extreme Astonishment with which I had at first perused them, I would take the Liberty in the Course of a few Days to trouble him with a Note, in which should be given a View of the entire Subject, as it presented itself to me. He replied that there could be no objection to such a Note.

To an observation of mine, that the orders menaced with absolute Ruin the Trade of the United States in all its important Branches, and would probably exclude from the European Seas and drive back upon our own Shores even the Produce of our own Soil, Mr. Canning answered that they had not appeared to him to be at all likely to produce these Effects; and he invited me to state my Ideas upon that point. This led insensibly to a Conversation upon the whole Subject, in which I endeavoured to shew that the orders were unjust, ill-timed, and impolitic; destructive at once of all the great Maxims in which the civilized World have a common Interest (and Great Britain more than the rest) and of the Prosperity of the Nations at War as well as of those at Peace; and rested by Great Britain upon Grounds which were not correct in Fact, or sufficient if the Facts were admitted.

To prove that the Effect of the orders upon American Commerce would be such as I had suggested, it was only necessary to compare their Provisions with the known Law of France, which had been adopted by her Allies, and extended to the Countries subject to her Arms. The Decrees of France, and of the States in alliance with her, exclude from their respective Ports all Vessels coming from a British Port; and the British orders declare that no Neutral Vessel shall go to an Enemy Port, unless from a Port of the United Kingdom, from Gibraltar or Malta, or from a Port of His Majesty’s Allies, under such Regulations, too, as His Majesty shall think fit to prescribe.

As the Communication with Enemy Ports, thro the "Ports of His Majesty’s Allies, under British Licenses, can be little more than nominal, and, if it were not so would probably soon be prohibited by the other Parties to the War. It is difficult to imagine, even if there were nothing more in the orders of Council, in what Way, consistently with them, an American Vessel with whatsoever Cargo she should be freighted, could, to any other Effect than that of Confiscation, find her Way to a Port of any of the Enemies of Great Britain.

Before these Orders were issued it was possible that a Neutral, going from a British Port, might evade the Laws of some of the opposite Belligerents, at the Hazard of Seizure and Forfeiture, by fictitious Papers & Declarations as to the Port of her Departure; but, if such an Evasion was difficult, as undoubtedly it was, before the issuing of these orders, it is now become impossible. The obligation now attempted to be imposed upon all Neutral Vessels to take their Departure for a belligerent Port upon the Continent from a British port (with the single unavailing Exception above mentioned) coupled with the known Power of the British Navy to render that Obligation effectual, will make Deception upon this Point no longer practicable, if it were even to be desired; and, thus, such of the Staple Commodities of the United States as have heretofore had all Europe for their Market, will by the operation of this new Article in the Law of Prize be made to depend almost wholly on British Consumption.

The Trade of American Citizens in the Surplus of Colonial Productions, imported from the Colonies of the parties to the War, will be yet more completely discouraged. To bring them here for Consumption would be absurd, if indeed it should be allowed; and, once brought here, they could only go elsewhere in Search of Seizure and Confiscation.

But even if it should be admitted that the Laws of one or more of the opposite Belligerents may be eluded, so far as respects the touching at or coming from a British Port; or that the Ports of his Majesty’s Allies may in that View afford some Facility to the Transportation of American Commodities to France or the Countries connected with her; the Orders of Council meet this ill-fated Trade with another Obstacle, for which it is not easy to find a Motive, but which cannot be surmounted. "Certificates of origin" are necessary to the Admission & Safety of Neutral Cargoes in the Ports of France, and it is believed, in those of her allies, and in the Ports of the Countries, which, not being the Allies of France, she controuls by her Arms. The British Orders subject to Capture & Condemnation as Prize of War any neutral Vessel carrying such a Document and the Cargo to which it applies. How is this to be evaded, unless by a most hazardous Concealment by the Neutral of the interdicted Document, of which the Consequence would frequently be the Loss of Vessel & Cargo by the Sentence of a British Court of Admiralty; while, if the Concealment should be successful and the British Regulations, hereafter to be made, should not counteract its Effect (as they easily may, & probably will, either wholly or partially) the Introduction of the Cargo into the Enemy Port would still have to contend with the Impediment already mentioned?

With Difficulties so formidable and so multiplied no Trade can struggle with Success. The Consequence must be that our Merchants can have no Inducement to send to this Country Cargoes of any Description much beyond the internal Demand, which for some of our Productions exists but in a slight Degree, for others to an inadequate Extent, and for Colonial productions not at all. And even with a View to British Consumption the Obstacles & Discouragements to American Commerce will be great & destructive. The new System cannot fail to produce the necessary Consequence of all such Invasions of the Rights & Interests of Mankind, a Disposition to evade it. The attempts which will arise out of that Disposition will be encountered by intolerable Inquisitions, by Seizures Detentions and Confiscations upon arbitrary Presumptions, involving the innocent with the guilty. And if these alarming Hazards should not be sufficient to beat down the enterprizing Spirit of our people, so as to banish from this Commerce, thus limited in its Range, the usual Competition, it will follow that it must be over done, to the Ruin of those who embark in it, and finally of the Commerce itself.

In this Work of Destruction Great Britain will not only act, but suffer. The Wound which she inflicts upon a Power, hitherto her best Customer, will be deeply felt by herself, without the prospect of a single Advantage, within the Reach of Imagination to suggest, to attone for it.

In the Course of my Remarks upon this Branch of the Subject I had called those parts of the French Decrees, which require Certificates of origin, and refuse Admission into the Ports of France to such Neutral Vessels as come from Great Britain, mere Municipal Regulations. Mr. Canning observed upon this Phraze that it was inapplicable to the Provision which prescribes Certificates of Origin; erroneously supposing that the Want of that Document subjected a Neutral Vessel & Cargo to French Capture on the high Seas. I assured him that this was a Misapprehension; and, finding that he was not unwilling to attend to an Explanation of the whole of the French System, as I understood it, and of its Bearing upon the British Orders of Council in the Light of a Justification of those Orders, I went at some Length into such an Explanation. Mr. Canning received it in a very friendly Manner; but did not give me any Reason to believe that it was likely to produce an Effect upon the Measure against which it was directed. It may not, Perhaps, be improper to trouble you with a hasty Sketch of what I thought it my Duty to urge on this Topic. I am conscious that I have not done Justice to the Subject; but it will be recollected that it is an extremely delicate one, and that the Necessity for discussing it was sudden and unforeseen.

I introduced my Explanations with a brief Analysis of the British Measure.

Its great Feature is the Establishment, by the sole operation of an Order of Council, an unexampled Blockade, not existing, or pretended to, exist in Fact, of all the Ports & Places of France & her Allies and all other Countries at War with His Majesty; of all other Ports & Places in Europe from which the British Flag is excluded; and of all Ports and Places in the Colonies belonging to His Majesty’s Enemies. It does more than this however. The first order declares "that all Trade in articles of the produce or Manufacture of the said Countries or Colonies shall be deemed unlawful &c".

Upon those two Provisions, connected with that which relates to Certificates of origin, the Measure relies for its whole Efficacy. The rest is but gratuitous Exception & Qualification, which may at any Time be withdrawn.

In the Preamble to the first order we are in Substance referred, for the Inducements to this Measure, to the French Decree of November 1806, coupled with an imputed Acquiescence in that Decree by the Nations at Peace. That Decree contains Provisions, which seem at first Sight to be of different Characters. The British Orders point to the first Article, which declares the British Islands in a State of Blockade, and to the fifth, which prohibits all trading in English Merchandize &c, as trenching upon Neutral Rights by setting up new Rules of Maritime Capture.

The remaining Articles seem to be admitted to be, and undoubtedly are, Municipal Laws, resting upon the Foundation of territorial Sovereignty.

If the first article be considered in an abstract State, it would be difficult to avoid the Conclusion, that it was intended to affect the Rights of Neutrals upon the Ocean. It is not in that State, however, that it ought to be considered; since it is found in Fact in a State of Connection with other Provisions. So connected it appears to be susceptible of an Interpretation consistent with Neutral Rights.

Without going into an Argument upon this point, it may be allowable to infer that it was not meant to give to the Declaration contained in this article, unaccompanied by the Shadow of an actual Blockade, the Incidents which only belong to such a Blockade, from the single Consideration that some of the subsequent Articles are not to be reconciled with that Intention. The seventh and eighth Articles are particularly important in this View, and are fortified by the municipal Scope and Tendency of the whole Decree.

The fifth Article is yet more evidently than the first a municipal Rule. Its Terms can be completely satisfied by such a Construction; while, without it, no Office can be assigned to the seventh & eighth.

It is to be admitted, however, that the phraseology of the Decree, especially of the first Article, was such as very naturally to excite the Attention of the Nations at Peace, as being liable to an Exposition hostile to their just Neutral Claims. The Minister of the United States at Paris was accordingly among the first to demand of the Minister of Marine (who was charged in what concerned his Department with the Execution of it) "the official Explanation which may have been given to this Decree so far as it involves the Rights of neutral Nations." The answer was prompt & explicit.

Here I read General Armstrong’s Letter of the 10th. of December last to the French Minister of Marine, and the Reply of that Minister of the 24th. of the same Month, as communicated by the President to Congress in February 1807. I relied particularly on the following Passages in that Reply.

"I consider the Imperial Decree of the 21st. of November last as thus far conveying no Modification of the Regulations at present observed in France with regard to Neutral Navigators, nor consequently &c"

"That the Declaration expressed by the first Article not at all changing the present French Laws concerning Maritime Capture &c"

"That an American Vessel cannot be taken at Sea for the mere Reason that she is going to a Port of England, or is returning from one; because conformably with the 7th. Article we are limited &c"

"That the Provisions of Articles 2d. & 5h. naturally apply to Foreign Citizens domiciliated in France &c."

It is obvious that these Explanations, which cannot be evaded by the Suggestion that they are not sufficiently precise, or that the Minister of Marine, who undertook to give them, was not the regular organ of such a Communication, impress upon all the obnoxious parts of this Decree the Character of domestic Rules, operating, not on the Seas, but in the Interior of France, against which, however inconvenient, Neutral Nations could offer neither Resistance nor Remonstrance as Infringements of their Neutral Rights.

Nor in that Light could Great Britain be justified in complaining of them. In Peace, as well as in War, she has her Navigation and other Laws, modifying the Intercourse of other Nations with her Ports, with an exclusive View to her own Advantage; and it was not to be expected that, in the Contest in which she is engaged, her Enemy would, if he could do without them, encourage her Manufactures by consuming them, or her Colonies by purchasing their productions.

As domestic Regulations, then, it is impossible to maintain that the Articles of the French Decree form any Apology for the British Orders, upon any intelligible Notion of the Right of Retaliation.

The British orders annihilate the whole public Law of Europe relative to maritime Prize, and substitute a sweeping System of Condemnation and penalty in its place. The French Decree produced no change at all in that Law.

The last was no more than a legitimate, tho’ possibly an ungracious, Exercise of the Rights of local Sovereignty; while the former can be referred only to Force, and look for the Scene of their Operation to the Ocean.

But the Decree of France has been explained, not only by the French Minister of Marine, but by the Practice under it, ⟨to⟩ which, more than to those Explanations, or even to the Decree itself, the States at Peace were to look for its real Importance to their Rights & their Prosperity. And here I read an Extract from a Letter to Mr. Monroe & myself from General Armstrong, of the 8th. of February last, confirmed by all subsequent Information, in which he states that the Practice under this Decree "is entirely that of the old Regulations. Its operation is accordingly confined to neutral Ships passing from British Ports to those of France or her Allies."

Now, let the mere Theory of the Decree be what it may, if in Effect it does not violate the Rights of neutral Nations, it furnishes no Foundation for a real, extensive, Practical measure on the part of Great Britain, which sweeps from the Seas every thing to which those Rights can apply.

But the Orders of Council rely (as they ought to do) not merely on the provisions of the French Decree, but on the Forbearance of neutral Nations "to interpose with Effect to obtain their Revocation."

So far as respects the United States (who could only be bound to take Care of their own Rights) it has been seen that their Minister lost no Time in doing what only he could properly do. He required official Explanations of those Parts of the Decree, upon which Great Britain founds her retaliating System at the Expence of the United States and the answer to his Demand removed all real Ground of Complaint, an Answer with which he had the more Reason to be satisfied, as the contemporaneous and subsequent Practice corresponded with it. This he communicated to his Government; and it cannot be imagined that, without even the Pretext of an actual Grievance, the United States were called upon to "interpose" against a mere Form of Words, by which none were injured, lest Great Britain should construe their Forbearance into a Surrender of the Rights of their Neutrality, and build upon that imputed Surrender the Ruin of their lawful Commerce.

It is suggested in the Orders that the parts of the French Decree which it recites "have recently been enforced with encreased Rigour”. To this I might reply that I have no Knowledge of any such Fact as respects the Provisions in Question. But, be the Fact as it may, it is obvious that the United States cannot be said to acquiesce in that of which they have not yet been apprized. They have met the Transaction as it presented itself to them with Effect; and, if it has lately taken a new Shape, they cannot be made responsible for it by Great Britain, even upon her own principles, until they shall have had an Opportunity of being informed of this recent Change, and of dealing with it as their Honour and Interests may require.

It appeared that Mr. Canning had supposed it to be understood by me that the French Decree had always operated, according to the British Construction of it, against all Neutral Nations, with an Exception in Favour of the United States. Upon this Supposition he intimated that such a peculiar Exemption might (altho he was far from saying or intending to imply that it was so) have been purchased by Sacrifices, when it was Perhaps incumbent on the Nation enjoying it, instead of thus withdrawing itself from the common Cause of Neutrals, to insist upon its Rights as identified with theirs, and to obtain the Recantation of what was hostile to them. To this I replied that the Answer of the French Minister of Marine did not turn upon any such peculiar Exemption; nor did the French Practice rest upon it; nor did the View which I had taken of the Decree itself suppose it. But, if it were otherwise, it would be recollected that any peculiar Immunity which American Commerce might enjoy from the Effect of this Decree must stand, not upon subsequent Compromise, but upon an antecedent Treaty, with which the Decree, as understood here, was certainly inconsistent, and which, so far as they conflicted, might well be allowed to create Exceptions not expressed in the Decree itself.

I added, altho the observation could not be important to the United States, that if any Neutral State had ever obtained an Exemption from the Decree after it was promulgated, and if, moreover, this Exemption was not common to all Neutral Nations, it was not to be admitted that the Exemption (not being purchased by unneutral Means) would give to Great Britain a just Pretence for retaliating against France thro the Rights of the Nation thus exempted.

I forbore, however, from enlarging upon this Topic, as wholly inapplicable to the Case under Consideration; as I did from touching at all upon the general Right of Retaliation, as under all Circumstances unimportant to it.

Upon the Subject of Certificates of origin I made but few Remarks. The French Decree of November last does not require them. They are prescribed by a former arrêté, and are intended solely to prevent the Introduction into France of British Merchandize or Colonial Produce. The Decree requiring them is, in Form as well as Effect, a perfectly domestic Law. The British Orders, however, affect to consider it as Part of a "New System of Warfare" directed against the Trade of this Country; and Mr. Canning had imagined, as I have already stated, that it operated upon the high Seas.

It was only necessary to rectify this Error, and to shew in few Words the inadmissible Nature of a Measure, whether combined with others or not, which, founding itself upon an extravagant Claim by one Belligerent to force its Commodities upon the other, whether it will have them or not, retaliates upon neutrals with maritime Capture, if in their ordinary Trade they attempt a Compliance with such of the local Regulations of that other Belligerent as have for their object the Exclusion of those Enemy Commodities from its own Territories.

Towards the Close of our Interview I asked Mr. Canning if Mr. Rose was authorized to mention to the Government of the United States the Determination of His Majesty’s Government to adopt a Measure, which could not but be viewed by it as of the highest Moment, and for which nothing that had hitherto passed could be supposed in any Degree to prepare it. He told me that Mr. Rose had no authority to mention this Step, and was, as he believed, ignorant of the Intention of Government to take it, that his Mission had, as I knew, a special Purpose, and that it was not meant that his Functions should interfere with those of Mr. Erskine, to whom a Communication of the orders would be made, that they had delayed that Communication until the Judgment of Practical Men had been exercised upon the Orders, so as to lead to the Explanation & complete Amendment of their Ambiguities and Defects, and until he should have had an Interview with me, but that it would certainly be made with very little farther Delay, and that, instead of waiting for the Packet, he believed they should send out a Vessel for that sole object, of which he intended to apprize me as presenting the Means of forwarding my Dispatches also.

I have only to add to this very hasty Letter that, as I had more opportunity of discussing the British orders of Council with Mr. Canning than at the Commencement of our Interview was likely to be afforded, I was at present inclined not to send him a Note, as I should otherwise perhaps have thought it my Duty to do. I am not aware that such a Step can now be of any Utility. Remonstrance before the Measure was adopted might have been useful; but the studied Secresy with which it was prepared made that impracticable. I can say little in a Note which I have not already suggested in Conversation, and the Reports which reach me from the Continent render it Prudent to pause. The President may be assured, however, that if any Chance should occur of doing Good, either by Personal Representations or otherwise, I will not omit to avail myself of it.

An attempt will, I think, be made by some of the Merchants trading to the United States, to prevail upon their whole Body in the different parts of the Kingdom to urge the Government, if not to an abandonment, at least to a considerable Modification, of the Orders, so as perhaps to leave the Trade of our Country in its native productions free. I do not believe that the Attempt will succeed. The Orders in their present Shape are more popular than could have been expected. There are, indeed, many who are at a Loss to conceive the Policy which has dictated them, and are convinced that they cannot be vindicated upon Principle. But they have the Appearance of Vigour suited to the Crisis, and gratify, moreover, many Passions & peculiar Interests.

The Peril of the Moment is truly supposed to be great beyond all former Example; and it is therefore believed to require Efforts of a new & extraordinary Character, which in common Times would be admitted to threaten the Dangers which now they are intended to prevent. Experience only will teach them that Moderation and Justice would still be the best Foundations of their Power, and the surest Means of Defence.

This Measure will not probably, and indeed cannot, be long persisted in. Its injurious Consequences to their own Trade & Manufactures will soon be perceived. The Speculation is said to be that it will create a Pressure upon the Government of France, which will compel it to emancipate Neutral Commerce from the Thraldom of its late Restrictions; but it does not seem to be considered that the greater Pressure will be here, with the smaller Capacity to bear it. I have the Honor to be with the highest Respect and Consideration, Sir, your most obedient humble Servant