established Government of Upper Canada, seems to have been the primary object of all the military arrangements and consequent settlements in the Upper Province.

The actual state and general importance of this trade must be perfectly known to their lordships, by the very advantageous circumstance, in all respects, of the port of Quebec being the sole place from whence its produce can be exported to Great Britain. My observations on this head will, therefore, be confined to what may tend to the present protection or future increase of some of its branches, The trade to the north-west, which is carried on by a powerful and enterprising company, is at the most valuable branch of this commerce. Although the route of this traffic be through the Province of Upper Canada, it is so far without the inhabited part of it that I cannot offer any report on the general state of this branch of the trade, but what your lordships can better collect from that of Lower Canada.

The trade carried on from Michillimackinac, which is at present the general place of deposit upon Lake Huron, to those rivers which flow into the Mississippi, appears of the utmost importance, as offering the greatest probability of future advantages.

I beg leave to submit to your lordships that, under the singular regulations which now subsist between Great Britain, Spain, and the United States, it might be of great public advantage if, without exciting the jealousy of Spain, a British factory could be established on the western banks of Mississippi, perhaps opposite to the mouth of the Ousconsing, in some spot of land well adapted to the following purposes: general protection, the building of houses, storehouses, and shipping. The factory might be established on nearly the same plan offered to consideration for the Miami.

The lands of the Indians might be purchased by the Crown with all due solemnity, and an annual quantity of goods to the amount possibly of £500 might be punctually delivered at Michillimackinac by the King's superintendent, to the agent of the factory.

The factors should have no monopoly of the trade; their advantages should result from the occupation of such parts of the territory to be purchased, as might not at present, or at any future period, be wanted for the purpose of the Crown, and from the influence which they must naturally acquire as the distributors of the annual presents, which should be given to the savages for the free passage of the British traders by the Fox and Ousiaing [? Ousconsing] Rivers. The presents may be deducted from the general allotment made to the Indians, and need not be additional to the annual quantity; means may be easily devised to secure the annual delivery of these presents by the factors to the Indians.

The advantages would be many; a considerable trade might be opened with the Spanish as well as with the Indians; such presents as are suitable to the Indian trade which the Spanish Government annually permit to be sent from Great Britain to New Orleans, would probably, by this channel of communication, operate to a wider extent, and become of greater benefit to the British nation. It is generally asserted, though perhaps without solid foundation, that the subjects of the United States on the Ohio and ou the other rivers which flow into the Mississippi, will find it advantageous to build ships, and loading them with the produce of these countries, send them down the Mississippi, and sell both the ships and cargo at a foreign market. The establishment provided would effect a similar advantage and with fewer difficulties, for if, as concurrent circumstances seem to be necessary, the Spanish Government should wish for an open or understood guarantee of her American dominions by Great Britain, it is obvious she would rather encourage than oppose an establishment on the Mississippi, whose object should by no means whatsoever be the extension of territory or of force, but simply of commerce. She would also particularly encourage that commerce if, as is probable, it would alienate the inhabitants of Kentucky and Cumberland Rivers from the United States, and render them totally independent of the Atlantic for their manufactures. This purpose would be effected by the British factory being able to furnish such manufactures in exchange for the cotton, tobacco, and other articles of commerce of those increasing countries, and by such means divert them from their attention to the forcing of the passage of the Mississippi, in opposition to the Spanish interests, but which their present dependency on the United States imposes upon them. The intercourse which this factory would have with Kentucky, &c., might probably contribute to turn the course of trade in taking articles from the circuitous channel the European commodities must take to pass by the Gulph of Florida into the Mississippi, to the communication of those rivers which intersect with Lake Michigan, the

Illinoise, or Ousconsing, it being by no means incredible that this will eventually be found the cheapest route to the London Market, to the inevitable benefit of Great Britain and her Colonies. The Atlantic Governments of the United States seem totally to have forgotten that their colonies (such may be considered all settlements since the peace of 1783, beyond the Alleganys), in the room of continuing the mediums by which they are to possess themselves of the fur trade, and other imaginary sources of wealth, will most undoubtedly make every due advantage of their own situation, and, in the business of commerce at least, not sacrifice their interests to those of the great Confederacy. If the Atlantic [Governments] cannot subsist, as seems to be admitted, without credit, the principle is applicable in a greater degree to their colonists. If it be the interest of the British merchant to give that credit, he may do it as safely upon the returns of the Cumberland River by the way of the Mississsppi and the Ousconsing, as risk it by those of James River in Virginia, or the Delaware. It is true the British merchant is in the habit of giving such to one set of planters but not to the other.

The proposed factory appears to be an advanced station from whence a commerce, its advantages and disadvantages, may be contemplated, duly compared, and properly balanced. To the observations on this important subject, which I respectfully submit to your Lordship's consideration, I beg to make the following deduction, that as Kentucky establishes her credit or her capital, she will, in setting up for herself, not only make use of all the commercial advantages she can obtain from the United States, but she will extend her views to the fur trade on the western side of the Mississippi, unless some such permanent factory, on a greater or less plan, shall bar the avenues to the ports of the river, by preoccupying the good will of the nations, and by underselling all rivals, or possibly by diverting the attention and jealousy of those who may be disposed to become rivals, by displaying the advantages that a more general and less precarious traffic shall offer be tween the colonists on the eastern side of the Mississippi and the British Empire. It may be also of serious consideration that, if the credit and capital of the British merchants invigorate the merchants of Philadelphia, Baltimore, &c., it is evident that the merchants of Kentucky, deriving their means of traffic from the credit which those of Philadelphia, &c., give to them, have no intermediate intercourse with the original fountain of supply, and are totally uninfluenced by any connections with them from whom they draw their primary support. The basis of this traffic arises from the product of the orig inal loan or credit of the British merchants. It seems, therefore, in a national view, that this intermediate agent, the Atlantic American merchant, should, as far as possible, not be the medium through which British credit supports the inhabitant of Kentucky in his mercantile or agricultural pursuits, but that such a medium should be sought for in a British subject, the inhabitant of Upper Canada. By these means the inhabitants of Kentucky, having a nearer interest and more intimate transaction with Great Britain, through her subjects, would naturally be disposed to support a mutual alliance and friendship with that nation, beneficial to both countries, so opposite to the views of the popular party, who have given their present supposed leaders. It is generally understood that above half of the inhabitants of Kentucky and the western waters are already inclined to a connection with Great Britain.

In the course of these observations, the trade of Detroit next comes under consideration. The war that has so long continued on the frontier of this district, has materially affected its commerce with the Indians; in particular, those on the Wabash some time since retired below a post that the United States held at Vincennes, and of course the produce of their hunts centered among those people. It is understood that these nations have now returned to their former place of residence, and that the commerce will revert to its former channel, unless the armies of the United States take post on the Miami River, the channel by which the most considerable part of the peltries are conveyed to Detroit.

It is said that in consequence of the Indian warriors, who are the best hunters, being so often called off to defend their country, the increase of deer, &c., has been prodigious. Some boats are sent from Detroit to the St. Joseph's, on Lake Michigan, as well as to Sandusky [and] Cayahaga [Cleveland], but their returns are of no great value. This settlement supplies the north-west trade annually with eighty thousand barrels of flour, and the quantity is increasing.

The consequence of Detroit depending on the trade it has hitherto drawn to itself by being as it were the factory in this part of the country, must necessarily be gradually opening as their settlements are forming by the British or United States in its vicinity in the Niagara district, which may be included from Long Point, on Lake Erie, to York, on Lake Ontario. The peltries are considerable, but in general they are smuggled into the United States, where the high price they bear, added to the facility that a woody and unsettled country gives for contraband traffic, are inducements which there is reason to believe few or none of the traders or factors resist. *

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The inhabitants of Lower Canada, are almost entirely settled on the banks of the St. Lawrence, and at no great distance from its waters in the Upper Colonies. Factories in the Upper Country were formed on the same system when Upper Canada was erected into a Province. It was apprehended by some merchants that its settlements must be continued in the same manner, and no doubt they would have been so, were such persons to limit the views of mankind by what they fancy to be their own immediate interest.

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The regulation of the Indian Traders when it should be seasonable, so far as to restrain those distant people by the dread of some legitimate authority, will be a work of difficulty, but of the most absolute necessity. The outrages and misconduct of many persons in that country, loudly call for intervention; a closer knowledge and communication with. those countries within the jurisdiction of Upper Canada, but without its habitable parts, will be acquired by the alteration I have proposed. *

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It would be worthy of mature consideration, whether a systematic extension of factories on the principles which I have submitted as proper on the Mississippi, might not be the means at once of securing the Indians in that quarter, by public benefit, and personal influence, and of opening a vast mart among the inhabitants of Spanish America and those of the United States; and if any savings can be made from the average of public money hitherto allowed to the Indian Department, whether the application of such to the system proposed, would not be an object of national policy, add to the strength and power of Upper Canada, and by no means invalidate the system which I must ever contend to be the best policy, that of not permitting any agricultural settlements beyond the peninsula included between the Lakes Ontario, Erie, and Huron.

FROM COL. SIMCOE TO THE RIGHT HON. HENRY DUNDAS, ONE OF HIS MAJESTY'S PRINCIPAL SECRETARIES OF STATE.

QUEBEC, April 28, 1792.

I beg to observe that, understanding that the agent of the United States holds out the language that all our trade with the American Indians in that territory which had been ceded by the treaty of peace to the United States, would become illegal and contraband in case the forts should be given up, I thought it my duty to state to Mr. Hammond such a dangerous assumption unwarranted by the definitive construction placed by the Treaty of Utrecht upon the intercourse which Great Britain and France had with the Indians, and which, considering them as free nations, gave to the subjects of both countries the right of treating with them, and carefully secured to the Indians the liberty attached to independent nations, of carrying their commercial articles to such places in the dominions of either nation as they should prefer. And this Article of the Treaty of Utrecht was never contravened till in the year 1756, when the violation of it on the part of the French, as is generally known (but particularly as stated by an author of the United States, Gordon, professedly writing under the directions of Mr. Washington and Congress), was the occasion of the war that broke out between Great Britain and France; nor can the claims of the American Indians, to the natural privileges of independent nations, guaranteed to them by their European neighbours in the compact of Utrecht, be more amply expressed and implied than in the general representation of the state of the Indian Department, by Sir William Johnson, in 1763, to the Lords of Trade, that although fair speeches,

promises, and the convenience of trade induced them to afford both us and the French a settlement in the country, yet they never understood such settlements as a dominion. And the Indian sense of their own dependency is brought down to so late a period previous to the late war, as the 2nd of February, 1769, when a Seneca chief in his complaints against the officer commanding at Niagara, said, as appears by Sir William Johnson's report, "We are free people and accustomed to sell whatever we have to whom and where we like best." I think it may not be improper to communicate this statement to you, Sir, as elucidating the ground the merchants of Montreal, in their memoir No. 2, have taken up. At the same time, I am well aware that His Majesty's Ministers, being masters of all the documents which establish or counterbalance the value of the fur trade to Great Britain, in that point of view already possess more precise information than can be collected in this country; but it is possible that a particular view of this commerce considered in the light of an open trade, common to the British colonies, as the representatives of France, and the United States, as those of Great Britain, prior to the year 1763, and subject to no other difficulty than those of amicable competition, appearing to be a matter of great magnitude, may be illustrated by some observations on the actual state of this country.

I consider the fur trade in its present foundation to be of no use whatever to the colony of Upper Canada; an open trade may result from the happy form of Government that is to be established in that country, but it appears doubtful whether even that would add to its prosperity; it certainly would detract from its population, and, ultimately debasing the morals of the country, by the ill habits of the coureurs des bois, would injure its industry, the source of its future revenue. But Sir, it would appear to me to be productive of great advantages, if, leaving the fur trade to the north-west parts in the hands of the companies who possess or contend for the monopoly of that trade, the Indians themselves, who live near the settled parts of Upper Canada, will be induced to bring the produce of their hunts to those towns and settlements which are about to arise in their vicinity.

GOVERNOR SIMCOE TO MAJOR-GENERAL CLARK, COMMANDER-IN-CHIEF, QUEBEC.

NAVY HALL, NIAGARA, Nov. 25th, 1792.

SIR,-I must beg leave to call your Excellency's attention to a circumstance that may happen, should it be the determination of Washington, as I believe it is, to carry on the Indian war, and in consequence to refuse the British intervention.

In this event, as he seems already to have quitted the original and untenable grounds of the war, that this Indian territory was ceded by Great Britain,—he will probably, from our influence with the savages, deduce the necessity of perseverance in his operations.

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The main body of General Wayne's army

I conceive may be employed to

cut off all communication between the Six Nations and Western Indians by proceeding up the Alleghany to Fort Franklin, and ultimately to Presqu' Isle. By this position General Wayne. will be on the most direct and practicable route by land to Niagara. Their establishment at Presqu' Isle would include the building of batteries and proper gun-boats, and ultimately the forming an establishment at Miamis Bay. It is in the possible event of the United States equipping a naval armament at this or any part of the Lakes that I wish for your Excellency's instructions whether I shall not consider it hostility. That it would be so in the event, cannot be denied; that the possession of the Forts has always hitherto been supposed to secure that of the navigation of the lakes is a known fact; and that popular conversation has led the minds of the inhabitants of this country to expect an immediate opposition on our part, of any armament appearing upon the lakes, is a matter of general notoriety. I find no general order to direct my conduct, but that force must be repelled by force; and this interpretation I should certainly place upon any attempt of the United States to pass through those communications, both shores of which are in His Majesty's possession.

COLONEL SIMCOE TO MAJOR-GENERAL CLARK,

NAVY HALL, NIAGARA,

June 14th, 1793.

The Commissioners for making peace with the United States have remained in this house since the 17th May. They are in expectation of hearing from Colonel McKee when the Indian nations shall be assembled. All the public conversations that I have had with those gentlemen is detailed in the enclosed papers, to which I am to add that, upon my reading to them Lord Dorchester's speech of the 15th August, 1791, to the deputies of the several nations, and the boundary line then given to your Excellency, they have desired copies thereof, particularly as it stated those documents to be those on which I founded my answers to the speeches that have hitherto passed between me and the Indian Americans.

II. EXTRACTS FROM THE SIMCOE PAPERS.*

ROBERT HAMILTON TO GOVERNOR SIMCOE.

NIAGARA, January 4th, 1792.

SIR,-The trouble this letter gives you does not arise from vanity, in wishing to correspond with a person high in office, as you are. My only motives are the good of my native country, and my atttachment to the interests of this part of her dominions, in which I have resided for many years. We have just heard of your arrival in America, invested with power to terminate all differences, and to form new treaties, between Great Britain and these States. The line of division between their western frontiers and our possessions, and between them and our friends the Indians, must necessarily be an object of considerable consequence in your arrangements with them. Any information on these subjects I trust will be acceptable; the obscurity of the source from whence it comes, is not the question.

When Mr. Oswald made a peace with the Americans in 1783, he evinced his total ignorance of this country and its true interests, in the line he fixed as the boundary between us and them, from the place it joins the St. Lawrence, above Montreal, to its termination in the unknown regions of the North-West.

Navigable rivers and lakes surely form the worst possible boundaries betwixt commercial nations settled on the same continent, as on a high-way their carriages must certainly meet. They will often jostle, and endless contention and strife must ensue. By this line we should have given up every post and possession we then held in this country, the small picketted posts of Fort Erie only excepted. Oswegatchie, Carleton Island, Oswego, Niagara, Detroit and Michillimackinac, all must have been yielded up to the Americans nor was this all. By this line, a free opening was afforded our rivals to reach our most distant and most valuable trading posts. In many of the most essential articles for the fur trade, they have considerable advantages over the adventurers in the Province. I shall only mention Spirits, the produce of one of their most considerable manufactures, and East India goods, now a material article in their commerce. Soon, in consequence of this ill-judged line, must our fur trade have been annihilated, had not our rulers, possessed of better information, declined, for this and other reasons, to fulfil that part of the Treaty which respected the surrender of the posts. Thus has the business remained undecided to this day.

On this last point, I would gladly hope my present address may be found to have some merit. Between the Americans and the Indians, some line along the Ohio from

MSS. in the Library of Parliament at Ottawa, vol. I., pp. 430–3, 463, 472, 487-8, 517-18, 559, 580–7 ; vol. III., pp. 12, 71-3,96-8, 127, 143-4, 390-1, 399, 400.