I have examined with attention the note of Mr. Merry of the 7. of January & the accompanying papers, which I had the honor to receive from you.1

With respect to the 1st. point “the mode of calculating the duties collected in the northern districts of the U. States upon goods carried across the boundary line,” I can discover no other admissible construction of the 3. art. of the treaty with Great Britain of 1794, than that adopted & practised on by the Govt. of this country. Under that construction & practice, goods & merchandize carried from any place in the territories of his Britanick Majesty on the Continent of America, by the subjects of G. Britain, by land, or by inland navigation into any of the northern districts of the U. States, shall pay the same amount of duties, which would be payable by our citizens on the same Goods & merchandizes imported from the same place in American ships into the Atlantic ports of the U. States. The object of that part of the Treaty being to exempt the Subjects & citizens of each party within inland navigation with each other from the duty imposed on goods imported in foreign vessels, that object is certainly effected, when no higher duties are collected from British Subjects, than are Collected from American citizens on the same goods, & imported from the same place in American vessels. This construction is deducible not only from the letter, but also from the Spirit of the instrument: A different construction would give to British subjects a priviledge not claimed by, nor permitted to, our own citizens, which certainly never could have entered into the Mind of those who made the Treaty.

2nd. point. “The imposition of tonnage duties on British vessels navigating the Lakes.”

I am unable to discern in the 3. article of the treaty with G.Britain any thing which can support the construction insisted on by Mr. Merry. Nothing like it is deducible from the letter of the Article. The provisions relating to the duties on goods & merchandize cannot by the natural import of the Words, or by any rule of sound construction be extended to tonnage duties. They are distinct subjects of municipal regulation; if not in all commercial countries, certainly in those of the contracting parties; & are governed by distinct & separate provisions. To have exempted British ships therefore from foreign tonnage duty, it would have been necessary to have declared so in the treaty in terms as explicit as those which exempted goods & merchandize from foreign import duties. Duties on both existed by law, at the formation of the Treaty. To have exempted one & not the other, would, under such circumstances, be conclusive to shew, that such exemption was not intended.

Such I conceive would be the fair & legal construction admitting the Treaty was equivocal. If this Construction be right as to tonnage, it will be also correct as to Light Mony.

3. point “The compelling of British subjects to take out licences for the Indian trade in the same manner as citizens of the U. States.”

I am not certain that I fully comprehend the extent of Mr. Merrys observations on this head. If they only extend to question the right which he states to be claimed by our agents there, of exacting a fee of six dollars from each British subject for a license to trade with the Indians within our boundaries, I agree with him, that the practise is improper, because it is not warranted by any law of the U. States, & will doubtless be forbidden. But if his observations are considered as claiming for the subjects of his Britanic Majesty any dispensation from the Laws of the U. States, which regulate the trade & intercourse of our citizens with the Indian tribes I have no difficulty in saying, that they are not in my opinion founded upon the treaty, nor the explanatory article thereof, nor so far as I am informed, on any principle or usage applicable to cases of a similar nature. Permission to the citizens & subjects of each nation, and also to the Indians, “freely to pass & repass, by land or inland Navigation into the respective territories & countries of the two parties on the continent of America, & to navigate all the lakes, Rivers & waters thereof, & freely to carry on trade & commerce with each other,” could not possibly by the contracting parties be intended, nor, by the treaty can be construed, to give permission to the citizens and subjects of each, to carry on a trade within the territories of the other, unshackled, & unrestrained by the municipal laws of the respective Countries. Had a provision of a kind so novel & extraordinary, been contemplated by the contracting parties, an express stipulation would have been necessary, & that too couched in terms so irresistibly clear, as to have permitted no doubt. But this trade I conceive, like all internal commerce of the country, is subject to the regulation of Congress: And if the subjects of G. Britain are allowed to participate in it upon the same principles & under the same regulations which are prescribed by law for our own citizens, it is granting them every thing which could have been contemplated by the parties, & every thing which can be extracted from the most liberal construction of the treaty. I have the honor to be very respectfully Your Obt. sert.