We had the honor to inform you in our letter of the 22d. instant that, the British Commissioners having proposed to us to endeavour to ajust the terms of a supplemental convention relative to boundary, to a trade by sea between the United States and the British northern colonies, and to the subjects reserved for future explanation by the 2d. article of our treaty, we had resumed our conferences with them, and had made considerable progress in digesting the plan of such a convention, when the business was interrupted by an entire change of the King’s ministers. It is the purpose of this dispatch concisely to explain that negotiation and its objects.

After many interviews and much discussion the British Commissioners at length presented to us the project of which a copy is now transmitted, differing in many essential particulars from that which had been originally offered on our part.

The first article in our plan which like the first article in their project defined the connecting line between the mouth of the St. Croix, as heretofore settled by Commissioners, and the bay of Fundy, was copied from the convention of Mr. King and Lord Hawkesbury, and adopting the ship channel between Deer Island and Campo Bello Island, first included and then excepted the latter. The British Commissioners alleged that the article in that shape accomplished it’s object by an useless inconsistency; that it gave a line of property and jurisdiction, beyond it’s own views, merely to furnish occasion for an exception of almost equal importance with the whole residue of the subject; and that, the navigation of the east passage being secured to the United States by a precise provision, the whole effect of the first article of the convention of 1803, would be produced at once by running the line along the middle of the west passage. They therefore proposed an article framed upon that principle, to which no objection of any weight has occurred to us. We do not perceive that in substance this article is different from the other, while it is more simple and intelligible in its plan. Even if the commencement of one of the parallel east lines, within which by the treaty of peace the United States are entitled to all islands within 20 leagues of any part of our shores (not within the limits of Nova Scotia) should be admitted to depend upon the channel through which our line from the St. Croix is conducted to the bay of Fundy, it would probably be indifferent to the United States whether the east or the west channel were adopted. Grand Manan seems to be considerably southward of an east line drawn even from West Quady Head; and we know of no other island, taking into consideration the exception in the treaty of peace, to the title of which the commencement of that line can now be important.

To the 5th. article, regulating our boundary in the northwest, which has encountered much zealous opposition here, even in the form suggested by the British Commissioners, from the prejudices, supposed interests, and mistaken views of many persons, an explanation of some of which will be found in an idle paper written by Lord Selkirk (of which a copy is enclosed) we finally objected, that the division line between our respective territories in that quarter ought to be drawn from the most northwestern point of the lake of the Woods due north or south until it shall intersect the parallel of 49: and from the point of such intersection due west along and with that parallel. This was agreed to by the British Commissioners.

We objected also to the terms defining the extension of the west line viz. "as far as the territories of the United States extend in that quarter". It appeared to us that by these words a great portion of the subject was in danger of being set at large; that the provision would perhaps do no more than establish between the parties the commencement of the line; and might of course leave it open to Great Britain to found a claim hereafter to any part of the tract of country to the westward of that commencement upon the notions of occupancy or conquest, which you will find stated by Lord Selkirk in the paper above mentioned, or upon some future purchase from Spain, as indicated by others. We therefore proposed to omit the words in question altogether, which the concluding proviso appeared to render wholly unnecessary even upon the ideas of the British Commissioners. This was not agreed to; but it was said there would be no objection to give to this part of the description a character of reciprocity so as to make it read "as far as their said respective territories extend in that quarter". A copy is enclosed of our plan of a 5th. article, as also of the same article with the description above quoted merely made reciprocal.

It is proper to observe in this place that the project of the British Commissioners contemplates, what of course had not entered into our plan, a permanent concession on our part of access, through our territories in the northwestern quarter, to the river Mississippi, for the purpose of enabling British subjects to enjoy the ⟨ please⟩, and of course to authorise a continuance of the customary British trade to which this article relates, and, if not absolutely to authorise it, at least to give to Great Britain a claim upon the United States for a recognition of it (especially in connection with the treaty of 1794) upon fair terms and equivalents. We resisted this proposal by every consideration which has been stated by you or has occurred to ourselves. We dwelt particularly upon the high motives of duty and the urgent views of policy, connected with the public tranquility, as suggested by recent facts or by the state and peculiar population, as far as they were known, of the country westward of the Mississippi, as well as by the nature and character of the traffic itself, which were likely to influence our government against any plan which should admit British or any other foreign traders into it. We were not able however to produce any disposition to dispense with this demand, and had abundant reason to apprehend that a rejection of it by the United States would be considered here as an unfriendly act without an adequate motive, and might prevent the completion of any satisfactory arrangement of the other points embraced by the proposed convention. Still, if the consideration of this subject should be resumed, we shall not fail to renew our efforts, whatever may be the prospect of success, to reconcile this government to the failure of this favorite object, unless the instructions we may receive from you should appear to point to a different course.

There is another feature in this article which it is proper to notice. It relates to a subject with which you are already familiar, the mode of calculating the ad valorem duties on goods imported into the United States under the 3d. article of the treaty of 1794. The calculation is understood to be made upon the value in Canada, not upon the value at the place of original exportation. The object is not perhaps of such value as to make a perseverance in this doubtful practice desirable, and it is certain that the explanation, if made at this time (and if not made now; it will probably be pressed hereafter with encreased zeal, as being demanded by good faith) will be received in this country as the effect of a just and liberal policy towards Great Britain. The remaining provisions of the article in favor of Great Britain are of no importance, and will perhaps be best explained by the enclosed copy of "an extra-official communication with regard to the Canada trade" made to us by Lord Holland and Lord Auckland some time ago.

The eigth article of the project relates to a trade by sea, between some port or ports of the British northern provinces and the United States, in the vessels of either party. The article is not such as we entirely approve; but, connected with an act of parliament which it was proposed to pass immediately, and of which the draft was shewn to us by the British Commissioners, it would perhaps go near to accomplish the object of our government. Our project contained an article upon this subject proposing an open trade in native productions, with the same system of duties as is contained in our treaty. We were told that, although well disposed towards our object, it was impossible for the government to venture at present upon a measure striking so plainly and essentially at their colonial system; that with the aid of the good understanding between the two countries, which would grow out of the ajustment of all points of difference, their plan would be found in its practical effect to be nearly if not altogether as convenient and beneficial to us as our own; and that, by taking a form as little calculated as possible to alarm the advocates of rigorous monopoly, it was the more likely to become the successful means of introducing more enlightened opinions & a more liberal practice into the whole colony-system of this country.

The Ninth article merely prescribes the duration of the commercial articles of the convention.

We ought to add that we had inserted in our project upon the subject of boundary an article relative to Grand Manan, but found it impracticable to retain it. The British Commissioners had been induced to believe that Great Britain had been in possession of that island for a great number of years, and that, although this possession might not amount to a title, it was a reasonable ground upon which to presume everything which constituted title, so far as to make it improper for them to bring it into question. We argued in vain that the title to Grand Manan must depend upon two plain questions of fact, whether, being within twenty leagues of our shores, it was included within the parallel east lines described in the treaty of peace as comprehending the islands which should belong to the United States; and whether, if that should be so, it was at the making of that treaty or at any time before within the limits of Nova Scotia: that it was impossible to pretend that the last of these questions could be answered in favor of Great Britain, and that there was strong reason to believe that the answer to the last would be in favor of the United States: that their possessions, such as it was (although its precise nature did not appear and ought not to be taken for granted) commenced after the treaty of peace, and could neither give them a title nor in any fair reasoning, applicable to the claims of sovereign States, justify a presumption of those facts upon which their title must rest; facts which were so easily capable of ascertainment, and which it was the immediate object of our article to ascertain in the same manner as other disputed facts relative to boundary had already been, and again were by this convention proposed to be, ascertained. It was retorted that our title to Moose island, Frederick island and Dudley-island in the bay of Passamaquody was, under the treaty of peace, of a very questionable kind, and that, even if it should be admitted that their title to Grand Manan was also doubtful, it was but a fair and equitable compromise that, as we were suffered to hold, principally upon the score of possession, three islands to which Great Britain might make out a claim of considerable strength, she should on her part be suffered to retain, upon the same score of long possession, the only island, not given up to the United States, to which they seemed to think they had any shadow of pretension. We replied by denying that it was at all doubtful that these islands belonged to the United States; but, as it was evident that there was no disposition to yield upon the main point, we finally thought it most adviseable to forbear to press the subject for the present, and to leave the case of Grand Manan for future ajustment, as an independent case freed from the disadvantage of this idea of compromise.

We have only to repeat, what is stated in our last, that we do not mean in any event to act conclusively upon the project in question, until the views of the President, relative to such parts of it as were not embraced by our original instructions, shall have been communicated to us. The intimations thrown out towards the end of our dispatch of the 3d. of January may perhaps produce such a communication. We have the honor to be, with the highest respect & consideration Sir your most obedient humble Servants