1178 ADMINISTRATION AND LEGISLATION [PART V 
the maintenance of the present rule against differential 
duties. 
Moreover, if the principle of differential duties were 
admitted, it would be very difficult to limit the application 
of the principle to agreements between particular Colonies. 
The New Zealand Memorandum points out that ‘ the vast 
limits of the United States bring that country into ready 
communication with Australia as well as with British 
America, and that it may be for the interests of the Austral- 
agian Colonies, just as much as it has been for that of the 
British American Colonies, that arrangements should be 
made to admit free articles from the United States, or from 
some other country.’ 
These are the logical consequences of the adoption of the 
system of reciprocity agreements, but no such questions are 
involved in the establishment of a Customs union. 
It is observed in the New Zealand Memorandum that the 
measure proposed by the Colonial Governments may be used 
to make similar arrangements to those which were introduced 
in the treaty with France, devised by the late Mr. Cobden. 
Her Majesty’s Government would certainly have no 
ground for objection if the Colonial Governments proceeded 
upon the principles which were acted upon by this country 
in the case of that treaty. Instead of establishing differen- 
tial duties, the British Government extended to all countries 
the benefit of the concession made to France ; and, far from 
seeking any exclusive privileges for British trade, they 
cherished the hope, unfortunately now frustrated, that the 
treaty would pave the way to the complete adoption by 
France of the system of free trade with all nations. 
Some stress is laid upon the agreement made in 1867 
between Victoria and New South Wales respecting the duties 
on the land frontier between the two Colonies, as affording 
a precedent for reciprocity agreements between the Colonies. 
It appears to me that the agreement of 1867 was rather of 
the nature of a limited Customs union. No differential 
duties were imposed under it upon goods entering the ports 
of Victoria or New South Wales; but, so far as concerned 
commercial intercourse by land, the two Colonies were united, 
the loss to the New South Wales Treasury by the arrangement, 
being redressed by a yearly payment of £60,000 by Victoria. 
The precedents in the case of the North American Colonies 
are, however, to a certain extent in point, as I have already 
admitted in my dispatch of July 13 last year. It may 
indeed be observed that, as the whole of the British Posses-