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such strong disapproval by the Colonial Legislature that they were in both cases abandoned and were never ratified.
      On each occasion the failure of the arrangement was succeeded by a renewed assertion of the French rights in their extremest form, and instructions were issued to the French cruisers stationed off the coast which threatened to lead to a serious rupture.
      The Bait Act, which was passed by the Newfoundland Legislature in 1886, and enforced in 1887, and by which the sale of bait to French fishing vessels on all parts of the shore not affected by the Treaties was prohibited, was a fresh source of irritation, and gave rise to fresh controversies.
      The French, restricted in their supply of this essential material for the pursuit of the cod-fishery, resorted in considerable numbers to the establishment of lobster fisheries on the portion of the coast reserved to them, and contested the legality of the British lobster factories which had long been established there. The British Government, on the other hand, contended, on behalf of the Colony, that the taking and preserving of lobsters were not included in the privileges conceded to French fishermen by the Treaties.
      The negotiations which ensued on this question resulted in the establishment in 1890 of a modus vivendi, under which both parties were allowed to take part in the lobster fishery, under certain restrictions. These, however, have proved inconvenient in their practical working, and do not afford means for the necessary protection of the fishery from deterioration by excessive destruction of the lobsters.
      In 1891 an Agreement was arrived at between the two Governments for referring to arbitration the questions in dispute with regard to the lobster fishery. This, again, has never been acted upon, in consequence of the refusal of the Colonial Government and Legislature to comply with the condition made by the French Government that the necessary legislation for carrying the award into effect should first be passed.
      In 1901 a fresh attempt was made to effect a settlement, but the negotiation was again unsuccessful, as the Colony declined to make concessions in regard to the sale of bait unless the French system of bounties on the sale of fish by their citizens were abandoned or at least modified in important particulars.
      The summary which I have given is sufficient to show how constant a source of risk and anxiety this question has been.
      It was obviously our duty to find some means of terminating the condition of things which I have described. It has been fraught with inconvenience to all concerned. It has involved a constant risk of collisions between the two Governments, in consequence of disputes as to the rights of persons engaged in the fishing industry, both on shore and at sea. Such collisions have, in fact, been averted only by the tact, moderation, and good temper exhibited by the naval officers of both Powers, to whose cognizance these local disputes have in the first instance been brought.
      As for the shore, no land has, up to the present time, been leased or granted on the Treaty Shore except in terms which require the lessee or grantee to comply with the stipulations of the Treaties, and with any orders by the Crown for their enforcement; so long, therefore, as any possible doubts remained as to the security of tenure on the parts of the coast affected, capitalists could not embark freely on the development of its resources. Indeed, if the French view were correct, and had been strictly enforced, it would have been impossible to develop them at all.
      It is, therefore, no exaggeration to say that to the Colony the existence of these French rights throughout an extent representing some two-fifths of the whole coast-line of the island have meant the obstruction of all useful local developments as well as of mining and other industrial enterprises.
      Under the Convention which has been concluded it is provided that the French rights of landing on the Treaty Shore conferred by Article XIII of the Treaty of Utrecht shall be once and for all abandoned.
      For this abandonment His Majesty's Government recognize that compensation is due both to the persons actually engaged in the fishing industry and to the French nation.
      The former will be obliged to remove their property from the Treaty Shore, and to give up the premises which they have there erected. For the loss thus inflicted on them, and for any loss clearly due to the compulsory abandonment of their business, compensation will be paid to individuals. A simple and expeditious form of procedure has been adopted for determining the amount of these indemnities. But irrespectively of this question of personal compensation, the French Government claim with reason that they are required to renounce on behalf of the nation a privilege which cannot

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be estimated merely at its present pecuniary value. On grounds, therefore, of sentiment, as well as of interest, they cannot be expected to surrender it unless they are able to show that they have secured an adequate equivalent elsewhere.
      To meet this legitimate view we have offered to France at various points concessions of importance to her, but which can in our opinion be granted without detriment to British interests.

      These are:—
      (a.) A rectification of the Eastern frontier of the Colony of the Gambia, which will give to France an access to the navigable portion of that river.
      (b.) The cession of a small group of islands known as the Iles de Los, situated opposite to Konakry. These islands are of small extent and of no intrinsic value. Their geographical position, however, connects them closely with French Guinea, and their possession by any Power other than France might become a serious menace to that Colony.
      (c.) A modification of the boundary fixed between the French and British possessions in Nigeria by the Convention of the 14th June, 1898. The line then laid down has had the effect of compelling French convoys, when proceeding from the French possessions on the Niger to those in the neighbourhood of Lake Chad, to follow a circuitous and waterless route, so inconvenient that they have been obliged to obtain permission to pass by a shorter and less inconvenient way through British territory. The new boundary will bring to France an accession of territory, the importance of which is due mainly to the fact that it gives her the use of a direct route between the points which I have mentioned.
      An Agreement has also been come to with the French Government in regard to the interests of the two Powers in the neighbourhood of Siam. It will be in your Excellency's recollection that by an Agreement arrived at in 1896, France and Great Britain undertook to refrain from any armed intervention, or the acquisition of special privileges, in the Siamese possessions which were included within the basin of the Menam River. It was explained by my predecessor that the restriction of the undertaking thus given did not imply any doubts as to the validity of the Siamese title to those portions of her possessions which lay outside the Menam Valley. To this view His Majesty's Government adhere. The Agreement of 1896 has none the less been regarded as implying that the relations of the two Powers to Siam and to one another in respect to the regions lying to the east and to the west of the guaranteed area differed from their relations to her and to one another in respect of the central portion of the kingdom. In point of fact, British influence has for some time past prevailed in the western, and French influence in the eastern, portions of the Siamese dominions. The Agreements which have been entered into with Siam by His Majesty's Government as to the Malay Peninsula, and by the French Government as to the Mekong Valley, show that the two Powers have each on its side considered themselves at liberty to acquire a preponderating influence in those parts of the Siamese Empire.
      The exercise of such influence is compatible with the absence of all idea annexing Siamese territory, and in order that this may be made abundantly clear, both parties to the Convention have placed it on record that neither of them desire to take for themselves any portion of the possessions of the King of Siam, and that they are determined to maintain the obligations which they have incurred under existing Treaties.
      These Treaties, as your Excellency is aware, entitle Great Britain to most-favoured-nation treatment in all parts of the Siamese dominions.
      Advantage has been taken of this opportunity to further regularize the position of Great Britain in Zanzibar and of France in Madagascar, and the two Powers have intimated their intention of endeavouring to arrive at an arrangement for putting an have end to the difficulties which have risen in the New Hebrides in consequence of the absence of any effectual mode of settling disputes as to land titles in those islands.
      In the preceding observations I have endeavoured to give some account of the reasons for which, in the opinion of His Majesty's Government, the Agreements which have been concluded are, if considered by themselves and on their intrinsic merits, believed to be desirable.
      It is, however, important to regard them not merely as a series of separate transactions, but as forming part of a comprehensive scheme for the improvement of the international relations of two great countries.

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      From this point of view their cumulative effect can scarcely fail to be advantageous in a very high degree. They remove the sources of long-standing differences, the existence of which has been a chronic addition to our diplomatic embarrassments and a standing menace to an international friendship which we have been at much pains to cultivate, and which, we rejoice to think, has completely overshadowed the antipathies and suspicions of the past.
      There is this further reason for mutual congratulation. Each of the parties has been able, without any material sacrifice of its own national interests, to make to the other concessions regarded, and rightly regarded, by the recipient as of the highest importance.
      The French privilege of drying fish on the Treaty Shore of Newfoundland has, for example, been lately of but little value to the persons engaged in the industry; but the existence of that privilege may be said to have, so far as our Newfoundland colonists are concerned, sterilized a great part of the littoral of the Colony.
      Similarly, in Egypt the rights accruing to the French Government under the laws of 1879, 1880, and subsequent years, have not really conferred any practical benefits either upon the French nation or upon the French holders of Egyptian securities, but the existence of those rights has been a constant hindrance in the way of Egyptian administration, and has seriously retarded the progress of the country.
      In Morocco His Majesty's Government have been able to gratify the natural aspirations of France, and have willingly conceded to her a privileged position, which, owing to her geographical situation, she is specially competent to occupy; but they have done this upon conditions which secure for our commerce an absolute equality of opportunity, which guarantee the neutrality of the most important portions of its sea-board, and which provide for the due recognition of Spanish requirements, which they have from the first desired to see treated with due respect.
      In Siam, again, they have admitted the preponderance of France within an area over which she has, in fact, of late years, exercised a preponderating influence, and with which they have neither the desire nor the opportunity to interfere. They have, on the other hand, obtained the recognition of a corresponding British preponderance at points where they could not have tolerated the interference of another Power, and where the influence of this country has in fact already been established with the best results.
      For these reasons it is fair to say that, as between Great Britain and France, the arrangement, taken as a whole, will be to the advantage of both parties.
      Nor will it, we believe, be found less advantageous if it be regarded from the point of view of the relations of the two Powers with the Governments of Egypt, Morocco, and Siam. In each of these countries it is obviously desirable to put an end to a system under which the Ruler has had to shape his course in deference to the divided counsels of two great European Powers. Such a system, leading, as it must, to intrigue, to attempts to play one Power off against the other, and to undignified competition, can scarcely fail to sow the seeds of international discord, and to bring about a state of things disadvantageous and demoralizing alike to the tutelary Powers, and to the weaker State which forms the object of their solicitude. Something will have been gained if the understanding happily arrived at between Great Britain and France should have the effect of bringing this condition of things to an end in regions where the interests of those two Powers are specially involved. And it may, perhaps, be permitted to them to hope that, in thus basing the composition of long-standing differences upon mutual concessions, and in the frank recognition of each other's legitimate wants and aspirations, they may have afforded a precedent which will contribute something to the maintenance of international goodwill and the preservation of the general peace.

I am, &c.                          
(Signed)       LANSDOWNE.   

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