MS (DLC: Albert Gallatin Papers); torn; in Gallatin’s hand, with directions by TJ at foot of text; addressed: “The President of the United States.”

The Treasury secretary’s QUESTION concerned the interpretation of Article 3 of the Jay Treaty, which dealt with commerce between the United States and Canada and stipulated that duties were not owed on goods that were merely “carried over any of the Portages, or carrying Places on either side, for the purpose of being immediately reimbarked” for further transport. The exemption from duties extended only to goods “carried in the usual and direct Road across the Portage,” with no attempt to sell or exchange them. The article granted the right to establish regulations to prevent fraud (Miller, Treaties description begins Hunter Miller, ed., Treaties and Other International Acts of the United States of America, Washington, D.C., 1931–48, 8 vols. description ends , 2:246–8).

MUST BE DECIDED AT DETROIT: on 1 Aug. 1801, Matthew Ernest, the customs collector at that port, informed Comptroller John Steele that British traders wanted to designate as a portage a route from Detroit to the Mississippi River, which led from “the Lake to Fort Wayne and from thence across land into the Wabash river, and down that into the Ohio.” On 15 Sep., Steele informed the collector that he agreed that the traders had a right to carry their goods free of duty on the route. By the time Steele presented this issue to Gallatin in December 1801, he had revised his position, noting that only those near the U.S.-Canadian border could have been contemplated by the treaty. He thought it desirable to exclude from duty-free status several routes, including “the two which led from Fort Wayne by different branches of the Wabash into the Ohio (as being too nearly connected with our settlements).” He advocated the change, however, only if it could be accomplished “without affording reasonable cause of complaint to British subjects whose interests and convenience may be affected by the regulation” (Terr. Papers description begins Clarence E. Carter and John Porter Bloom, eds., The Territorial Papers of the United States, Washington, D.C., 1934–75, 28 vols. description ends , 7:31, 33, 35–6).

MICHILLIMAKINAC: the collection district on the straits connecting Lake Huron and Lake Michigan. OUISCONSING: that is, Wisconsin.

THE ANNEXED SKETCH has not been found, but it may have been a draft of the letter Gallatin sent to the comptroller on 7 July. Gallatin noted that the exemption from duty did not extend to goods transported by residents of one country, “through rivers which are exclusively within the territory of the other country.” Exemptions could not be claimed for goods transported on one river and then carried to another. The only goods exempt from duties were those coming from Canada “to land portages, similar to that at Niagara, extending from a landing place on the navigable waters, which form the common Boundary” to a place of embarkation on the same waters. The claims of British merchants at Detroit to carry goods, “without paying duties, through the Miami of the lakes, or other waters emptying into lakes Erie or Michigan, and thence across by land to the Wabash or other rivers, emptying in the Ohio” could not be supported under any construction of the Treaty and was “too dangerous to be tolerated.” Those goods were “exclusively intended for the consumption of the Indians living within the Territory of the United States” and for American settlements on the Ohio and were therefore subject to duties. Although the same circumstances existed at Michilimakinac, Gallatin deemed it impractical to enforce the collection of duties in the district at that time (Terr. Papers description begins Clarence E. Carter and John Porter Bloom, eds., The Territorial Papers of the United States, Washington, D.C., 1934–75, 28 vols. description ends , 7:58–60).

DEVOLVE ON THE SECRETARY OF STATE: on 8 July, Daniel Sheldon, at the Treasury Department, forwarded to Madison both Gallatin’s “observations” to the president and his 7 July letter to the comptroller. In correspondence with Rufus King on 20 July, Madison enclosed a copy of Gallatin’s 7 July letter, noting that it conveyed “the sentiments of the President on that subject.” Madison wrote King that the meaning of portages or carrying places should be limited to cases where the waters forming a boundary between the two countries became unnavigable and a transit by land was necessary to re-enter common waters where they were again navigable. Any other interpretation meant a loss of revenue for the United States and gave an advantage to Canadian traders who did not have to pay duties in conveying goods “to the Indians beyond the Mississippi”; the goods of the American traders using the same channels were “loaded with american duties.” Madison expected King to correct any misrepresentations communicated to the British government by Canadian traders and to prepare the government for regulations on portages to produce “a conformity with the true meaning of the Treaty” (Madison, Papers, Sec. of State Ser. description begins William T. Hutchinson, Robert A. Rutland, J. C. A. Stagg, and others, eds., The Papers of James Madison, Chicago and Charlottesville, 1962–, 33 vols. Sec. of State Ser., 1986–, 9 vols.; Pres. Ser., 1984–, 6 vols.; Ret. Ser., 2009–, 1 vol. description ends , 3:389–90, 404–5).