Mr. Marcy to Mr. Gregg. DEPARTMENT OF STATE, SIR: The policy of the United States in relation to the future of the Sandwich Islands is presented in the instructions heretofore given to you. That policy is not to accelerate or urge on any important change in the government of that country, but if it has or should become so far enfeebled that it can not be continued, and the sovereignty of the islands must be transferred to another power, then a state of things will exist in which it will be proper for the United States to have a regard to the future condition of that country. If the Hawaiian Government and people become convinced of the necessity of such a change, it is probable that they will, if left to their free choice, look to the United States as the country to which they would wish to be united. To a proper arrrangement of this kind this Government certainly has no objection. My dispatch of the 4th of April last has reference to such a contingency which it was then supposed was about to happen. In case a transfer of the islands was proffered to the United States, you were directed to enter into negotiations as to the terms of it and conclude a treaty on that subject. The outlines of such a treaty were contained in that dispatch. You have apprised the Department that as soon as negotiations were opened you perceived that stipulations different from those indicated in your instructions were insisted on, and you very properly notified the Hawaiian authorities that you could only entertain them as matters to be referred to your Government for its approval or rejection. The draft of a treaty you have forwarded to the Department has been considered by the President, and he directs me to say that he can not approve of some of the articles. If ratified in its present shape at Honolulu and sent hither, he would not probably submit it to the Senate. There are in his mind strong objections to the immediate incorporation of the islands in their present condition into the Union as an independent State. It was expected that the Hawaiian Government would be willing to offer the islands to the United States as a territory, and to leave the question in relation to their becoming a State to the determination of this Government, unembarrassed by stipulations on that point. The interests of both parties would seem to indicate this as the wisest course. A treaty which would embarrass the United States in their action on this question would therefore be objectionable. There are other objections to the draft which you have sent to the Department, though less formidable than that which the second article presents. The amount to be paid as annuities, etc., according to the draft, is much larger than was contemplated. I think it would be proper that you should inform the Hawaiian Government that the United States would not be likely to approve of a treaty differing in important particulars from the terms contained in the dispatch of the 4th of April. This Government will receive the transfer of the sovereignty of the Sandwich Islands with all proper provisions relative to the existing rights and interests of the people thereof, such as are usual and appropriate to territorial sovereignty. It will be the object of the United States, if clothed with the sovereignty of that country, to promote its growth and prosperity. This consideration alone ought to be a suffiS. Ex. 77-9 cient assurance to the people that their rights and interests will be duly respected and cherished by this Government. In presenting objections to the draft of the treaty which you have sent to this Department, the President desires me to assure you that he takes no exception whatever to your course in this difficult and embarrassing negotiation, but, on the contrary, it is highly approved. Your efforts have been properly directed and your ability is appreciated and commended. It gives me pleasure to concur in and communicate the President's approbation of your conduct. I ain, etc., W.L. MARCY. No. 9.] Mr. McBride to Mr. Seward. UNITED STATES LEGATION, Honolulu, Hawaiian Islands, October 9, 1863. SIR: Notwithstanding the subject is a delicate one, yet regarding it as a duty to my Government to transmit information concerning the policy and views of that to which I am accredited, I ask your undivided attention to a few facts in reference to this Government, and some things connected with it. First. The King is strongly predisposed in favor of the British in preference to Americans, or those of any other nationality. English policy, English etiquette, and English grandeur seem to captivate and control him. His familiar associates are Englishmen, and where an office becomes vacated by death, resignation, or otherwise, it is filled by the appointment of an Englishman. In a word, English diplomacy here has been so adroit and sagacious as to win the esteem and confidence of His Majesty and the royal family, while American diplomacy has been a complete failure in this respect. It is plainly to be seen that the British Government places a high estimate on the future value of these islands, believing, no doubt, that the Pacific and other railroads will be built, and that these islands will become very important as a "half-way house" between Europe and America on one side and China and Japan on the other, and also in their capacity for growing the sugar cane, coffee, rice, and cotton, which, no doubt, will be very great when fairly and fully developed. The salubrity and peculiar pleasantness of the climate must also add much to the intrinsic worth and importance of this country. Secondly. The King's health is poor, being afflicted with asthma and other chronic affections, and therefore it is not at all probable that he will live many years, and, like other valetudinarians, his death would not surprise his acquaintances at any time. The English influences which are thrown around the King in the persons of English school teachers recently imported, and a number of English clergymen sent here by Her Britannic Majesty at the request of the King, and he not a pious man, and the filling of vacant offices by Englishmen, on the whole, being considered, is shrewdly suspected of being a political affair under the garb of religion and intended at least to supersede Americans holding office under His Majesty's Government, American school teachers, and American clergymen, many of whom have already been turned out; in other words, an endeavor to thoroughly Anglicize this place and prepare it for a British regency. J Thirdly. The native population is decreasing so rapidly as to produce the general, if not the universal, belief that within a short period, say from twenty to forty years, there will not be enough of them remaining to perpetuate this Government. This being the case, these islands must, of necessity, pass into other hands and their destiny be controlled by other people. The question then is, to what nation shall they belong, and to whom ought they belong, the English or the Americans? They are the only competitors. Fourthly. An Englishman a little over a year ago loaned this Government $90,000 for ten years at 10 per cent per annum, interest to be paid annually. This Government, in all probability, will not be able to pay more than the interest, if that, and will be more likely to hypothecate lands to Englishmen or to the English Government for more money. Such an event would be a sufficient excuse for Great Britain (Napoleon-like) to take and hold these islands as an indemnity, and everybody knows what the result would be. The payment of this debt by the United States, and, if need be, the loan of half a million more, together with presents both ornamental and useful to their majesties and to the heir apparent, cautiously and wisely bestowed, might be the means of giving Americans the vantage ground in point of court influence and other interests which may come up in the future. I beg leave to further say that American interests greatly predominate here over all others combined, and not less than four-fifths of the commerce connected with these islands is American. The merchants, traders, dealers of all kinds, and planters are principally Americans. The English have no commerce here worthy of the name and but one or two retail stores; the Germans about the same amount of business as the English. Many American merchants here are doing quite a large business, and would extend their business still more but for the danger of British rule over this group, which, if it should become the dominant or governing power, American interests would be crushed out with eagerness and dispatch. Such is the universal belief of all American citizens with whom I have conversed, and such is my own opinion. It would be a flagrant injustice to American citizens, after they have labored for the good of these islands for the last forty years, after they have brought these people out of barbarism and taught them civilization, science, and religion; in a word made them an intelligent and Christian nation, and have done all that has been done in the development of the resources of the country, and given it a world-wide popularity, to be either driven out or so treated and harassed as to make it necessary for their interests to sacrifice their property and leave, which is believed would be the case provided the English obtain greater influence with the King than they now have; which influence it is the desire of Americans here and for the interests of the American Government to avert. Some merchants and planters are contracting their business, so that they may not suffer so heavy a loss in the event of the change which seems probable at no very distant day. I am also informed that the British Government since the commencement of the rebellion in the United States sent a deputation to examine and report on the cotton-growing capacity of this group, and the report is said to be remarkably favorable. This may aid in explaining the lively interest which Her British Majesty's Government takes in this Government and the final disposition of these islands so far as conduct is a faithful index to design. The cotton-growing capacity of these islands has been sufficiently tested to demonstrate it as a fact that it is not at all inferior to Alabama, Georgia, or Mississippi, either as to quality or quantity per acre. There is some cotton now growing in the suburbs of this city as rich and luxuriant a growth as I ever saw in the Southern States. The capacity of these islands for growing sugar cane is of world-wide celebrity and is known to be not inferior to that of any other country. All the sugar plantations of any note on these islands, with the exception of two or three, belong to Americans. Cof fee grows here well and it is believed that with proper care and skill it might become equal to those more celebrated coffee-growing countries. A great deal is now raised here, although for the last few years there has been in some localities what is here called the blight on the tree. This soil grows rice of an excellent quality in great abundance. Indian corn grows well here and yields from 20 to 40 bushels per acre. Garden vegetables also grow well here. This group of islands under the control of our Government, in my judgment would be far more valuable than the ownership of both Cuba and the Bahama Islands. All of which is respectfully submitted. I have the honor, etc., JAMES MCBRIDE. 7 Message of the President of the United States, communicating, in answer to a resolution of the Senate of the 4th instant, a report of the Secretary of State, relative to a proposed reciprocity treaty between the United States and Sandwich Islands. FEBRUARY 8, 1864.-Read, referred to the Committee on Foreign Relations, and ordered to be printéd. To the Senate of the United States: In answer to the resolution of yesterday on the subject of a reciprocity treaty with the Sandwich Islands, I transmit a report from the Secretary of State, to whom the resolution was referred. WASHINGTON, February 5, 1864. ABRAHAM LINCOLN. DEPARTMENT OF STATE, Washington, February 5, 1864. The Secretary of State, to whom has been referred the Senate's resolution of yesterday, requesting the President, "if not incompatible with the public interests, to communicate to the Senate any recent correspondence at the Department of State relative to a proposed reciprocity treaty between the United States and the Sandwich Islands," has the honor to report that application has been made for a revival of a similar treaty which was negotiated here during the administration of President Pierce, but which was not approved by the Senate. After due consideration, however, especially in connection with the probable effect of such a measure on the public revenue at this juncture, it has not been deemed advisable further to entertain the subject. It is not deemed expedient at present to communicate the correspondence called for by the resolution. Respectfully submitted. The PRESIDENT. WILLIAM H. SEWARD, T No. 10.] Mr. Seward to Mr. McBride. JAMES MCBRIDE, Esq., etc.: DEPARTMENT OF STATE, SIR: Your dispatch No. 9, of October 9, 1863, has been received. The subject of which it treats, viz, the policy of Great Britain in the Sandwich Islands-the efforts made by its officials there to shape and control the future destinies of these islands-and the measures which you indicate, with the view of counteracting these influences, are all deemed of much importance and they will receive the consideration to which they are justly entitled. I am, etc., WILLIAM H. SEWARD. Mr. McBride to Mr. Seward. No. 37.1 UNITED STATES LEGATION, SIR: As the United States Government is now paying rent for a piece of ground for a naval depot, and as a permanent depot here will be vastly more important to our Government in the future than it has been in time past, from the increased necessity for naval defense, owing to the States and Territories on the Pacific Slope, the number of American whale ships floating in various parts of the Pacific, the increased and increasing commerce with these islands, and last, though not least, the immense commerce which we have the right to anticipate between the United States, China, and Japan, I hope it will be considered proper in me to suggest that, if a reciprocity treaty should at any time be made with this Government, a fee simple to a piece of land at this port, sufficient for a wharf and buildings for a naval depot and also for a dry dock, should be made one of the conditions of said treaty, as the principal advantage accruing from such a treaty will be to this Government, as shown in my dispatch of yesterday. I have the honor to be, etc., JAMES MCBRIDE. Mr. McCook to Mr. Seward. No. 6.1 LEGATION OF THE UNITED STATES, SIR: I have the honor to acknowledge the receipt of your dispatch No. 3, inclosing the opinion of the Attorney-General in the matter of the American ships Josephine and Blue Jacket. I regard it as a cause for congratulation that the Government has arrived at the conclusion indicated by the opinions of the AttorneyGeneral, for the Hawaiian courts have in the past certainly shown a disposition to unnecessarily annoy American shipmasters, and the Hawaiian Government has invariably refused to redress their grievances. In examining the correspondence of my predecessors I observe that |