^^'^^ VICTORIA UWVERS/rr
\^S -LIBRARY
'^ A CANADIAN SCHEME
OF
AGORESSION
UPON
AMERICAN COMMERCE,
AND HOW IT SHOULD BE TREATED.
BY
JOSEPH MMMO, Jr.
lA{
May, 1889
WASHINGTON, D. C.
Gibson Bros., Prinikrs and Bookbin^E'^s
18S9.
INTRODUCTORY REMARKS.
The chief object had in view in the preparation of this
article has been to present the constantly growing and
now clearly developed necessity for a thorough rectifica-
tion of our commercial relations with Canada, if not, in-
deed, for a radical change of policy regarding our Canadian
relationships generally.
The almost absolute freedom of restraint which marked
the beginning of the " transit trade " has been found to be
in important particulars incompatible with a pioper ad-
ministration of our Interstate Commerce Act. The rail-
road political policy maintained by Canada during the last
twenty years has shut railroad extension by American
companies out of the Dominion, while Canadian companies
have been enabled under the provisions of general rail-
road laws of our border States and by persistent entreaty
at the doors of State legislative halls to gain every year
some new favor. By dint of almost unremit^^ed begging,
the Treasury Department has also been coaxed into the
granting of favors to Canadian railroads, until dutiable
goods may be transported through Canada with even less
restraint of our customs regulations than is imposed upon
American railroads. The whole situation of afi'airs lacks
those essential elements of reciprocity, which should
always cliaracterize international arrangements, both of
treaty and of comity.
The Treaty of Washington, by a blunder or a fraud,
gives to Canadian railroad companies the right to trans-
port goods from one point in the United States, tli rough
Canadian territory, to another point in the United States,
without payment of duty, but omits to give to American
railroad companies the reciprocal right of transporting
goods from one point in Canada, through the United States,
to another point in Canada, without payment of duty.
For several years past the Dominion government has
granted a rebate of 18 cents a ton on grain passing through
the Wolland Canal in favor of export via Montreal, al-
though the practice is held in this country to be clearly in
violation of Art. XXYII of the Treaty of AVashington.
Although Canadians are constantly shipping merchandise
across the territory of the United States, even to the value
of $40,000,000 a year, free of duty, the Dominion govern-
ment still refuses to allow American fishermen to ship pro-
ducts of the sea fisheries across Canadian territory free of
duty. But the most vexatious and injurious disturbance
of the natural interaction of commercial forces has arisen
from the eonstriiction of the Canadian Pacific Railway, by
means of a governmental subsidy of over two hundred
million dollars, in connection with heavily subsidized
steamer lines across the Atlantic and the Pacific, which
steamers receive additional British Admiralty subsidies in
consideration of the fact that they are so constructed as to
be available as armed cruisers. These warlike features of
a political scheme for turning trade out of the natural
channels are accentuated by a formidable British military
establishment on the Pacific coast.
The uncertainties which characterize our Canadian re-
lationships and the audacious and persistent course of
the Dominion government in taking advantage of such
uncei-tainties and of using the full force of its political
power in the direction of diverting American commerce
has led the United States Senate to assign to two of its
committees, within the limits of their respective spheres,
the duty of investigating and reporting upon our Cana-
dian relationships. The awakened sense of our people
in regard to this matter has also thrown a weight of re-
sponsibility upon the present administration of the Gov-
ernment. i'> )
The nation is now confronted bj conditions at the North
which far outweigh any possible American interests which
may be involved in the internecine struggles of unenlight-
ened and barbarous people upon isles of the sea with which
our commercial and political relationships are of compara-
tively insignificant value.
Any line of policy which fails to guard the commercial
and political interests of the United States against Cana-
dian encroachment or which does not fully and fittingly
respond to every act of aggression on the part of the
Dominion government will be lacking in prescience and
in courage.
A CANADIAN SCHEME OF AGGBESSION.
A most audacious proposition has within a few days
been made by the Canadian Pacific Railway officials.
The managers of that line, built for political purposes
inimical to the United States, and with the object of
diverting American commerce from American steamer
lines, American seaports, and American railroads, have
come up here and asked that the Secretary of the Treas-
ury shall so exei^cise his discretion in the conduct of the
*' transit trade " as to place their road upon terms of per-
fect equality with American lines, or, in other words, en-
able it to establish connections for tapping American
transportation lines and diverting commerce from Ameri-
can cities. It is proposed, in this connection, briefly to
consider the true character of this new and glaring in-
stance of Canadian presumptuousness.
The (Canadian Pacific Railway is a political and military
enterprise, conceived and carried to execution for the pur-
pose of accomplishing the following objects :
' ' \
First. Politically to unite the four disconnected blocks of
inhabited territory comprising the Dominion of
Canada.
Second. To cause these foiir sections of the Dominion to
trade among themselves instead -of trading with
the United States.
Third. To suppress the growth in Canada of a sentiment
favorable to annexation to the United States.
Fourth. To divert as much as possible of the internal and
foreign commerce of the United States from
American transportation lines and American
cities.
Fifth. To serve as a line of military communication be-
tween the different parts of the Dominion.
7
Sixth. To promote the scheme of British Imperial Con-
federation, to which the leaders of the Dominion
Government are devoted.
These several objects were fully discussed throughout
the Dominion when the proposition to construct the road
was under consideration, and an appreciation of their po-
litical importance led to the accomplishment of the enter-
prise.
Sir John A. Macdonald, the Premier of Canada, aijd
chief promoter of the Canadian Pacific Railway, declared
a year ago to the editor of the Pall Mall Gazette that his
chief aim was to establish a strong government on this conti-
nent, hased upon monarchial principles^ and, at the same
time, he expressed his ardent espousal of the cause of
British Imperial Confederation — the Canadian Pacific
Railway being the chief instrumentality for the accom-
plishment of both those objects.
In order to carry out its gigantic political and military
scheme, inimical to the interests of the United States, the
Canadian government has incurred expenditures whereby
its debt has been increased from $96,896,666, in 1868, to
$284,513,842 in 1888. In a word, the Dominion govern-
ment, for the accomplishment of this object, has imposed
upon the people of Canada, with their consent, a burden
of debt proportionally as great as that assumed by the
loyal people of the United States in order to preserve our
Union.
The political character of the Canadian Pacific Railway
is indicated by the fact that it has received from the Do-
minion government the following subsidies :
Cash and concessions which became available
as cash $105,000,000
Bonds and stock guaranteed by the Dominion
government 110,000,000
Total subsidy $215,000,000
President Van Home of the C«anadian Pacific Railway
WHS compelled to own up to this entire subsidy before the
Interstate Commerce Committee of the United States
Senate at its last session in New York.
Recently there has appeared a statement, which I have
not yet been able to verify, that during its late session the
Dominion parliament appropriated $53,0U0,000 for rail-
wav subsidies.
The total cost of the Canadian Pacific Railway, with its
equipment, plant, <tc., &c., was, however, only $165,000,-
000. The total stock, bonds, and liabilities of the road
amount to only $121,000,000.
The enormous subsidy granted to this Company so
greatly in excess of the cost or capital of the road has
enabled it to enter upon bold schemes for the capture of
American commerce. This it has done and is now doing.
A steamer line has been established on the Pacific with
a subsidy of 1300,000 a year as against |16,75C paid by
the United States Government for the carriage of our
Asiatic mails. Besides, the Dominion government has
just granted a subsidy of $500,000 a year to an Atlantic
steamer line to operate from St. Johns, N. B., or Halifax,
upon the completion of fclie Canadian Pacific line soon to
be opened across the State of Maine.
These steamers on the Atlantic and the Pacific will also
receive " Admiralty " subsidies from the British govern-
ment, in consideration of which fact they are all to be so
constructed as to he, available as armed cruisers in the event
of vmr. .\ , ; . , : ^- ■ _ ., ;. ■ -, . -.' , ._ ..._ ,. :..:.,..;^,_
The i)olitical and military character of the Canadian
Pacific enterprise is also clearly indicated by the formida-
ble fortress and naval station within sight of our shores at
Esquimalt, on the Island of Vancouver. A prominent
officer of the British Navy declares that this establish-
ment " holds a pistol at the' head of San Francisco." The
following press despatch of the 28th inst. seems to indicate
the present significance of this naval station :
9
IS THIS A MENACE?
Victoria, B. C, May 28. — The entire Britisli fleet now
at Esquinuilt, consisting of the war ships Swiftsiire, Am-
phion, and Icarus, have received orders to proceed to
Behring Sea. Thoy will sail June 10.
Alreadv the United States Government has been forced to
take the preliminary steps toward the erection of a naval
and military station at the entrance to Puget Sound, which
is now totally unprotected against attack. Surely it is
time for us to awake out of sleep.
The commercial and political attitude of the Canadian
Pacific Railway towards the United States is quite the re-
verse of that of the Grand Trunk Railwav, The latter has
received from the Dominion government only $25,607,393,
its total cost having been $247,507,306, whereas the Cana-
dian Pacific has received aid from the Dominion govern-
ment to the amount of $215,000,000, its cost having been
only $105,000,000. Again, the Grand Trunk carries a
large amount of American produce through Canada and
to Montreal for export, but it also brings to American
lines and to American seaports, chiefly New York, Boston,
and Portland, Maine, a large amoimt of traflic. Through
these ports Canadian commerce, to the amount of about
$40,000,000 a year, is carried on. But the Canadian
Pacific is reaching out for all the American commerce it
can get, and it proposes to wheel it through the forests of
Maine over its rail line in that State, subsidized at the rate
of $180,000 a year, and connecting with a steamer line to
Europe, subsidized to the amount of $500,000 a year, thus
cutting off* New York, Boston, and Portland, and their
tril)utory railroads, from the benefits they enjoy of the
" transit trade " through the Grand Trunk and its connec-
tions in this country.
On the West our Asiatic commerce is also being cut off"
from San Francisco and from our trans-continental rail-
roads by the sheer force of Canadian and British subsidy,
10 "^
amounting for the one railroad to more tlian four times as
much as the total amount of aid granted by the United
States Government to all our trans continental railroads.
But if Canada, with a population of less than six mil-
lions, can afford to pay nearly ten millions of dollars a year
interest on a debt of $284,513,841 , contracted mainly for the
purpose of preventing her own citizens from trading with
the United States and of capturing a large part of the in-
ternal and foreign commerce of the United States, surely
the United States with more than ten times the popula-
tion, and probal)ly twenty times the wealth ; and, hopefully,
an equal degree of patriotism, ought to be able to defend
itself Against Canadian aggression.
The present proposition to place the Canadian Pacilic ^
in our international traffic arrangements on the same plane
with our American lines is manifestly absurd.
The whole Canadian Pacific Railway scheme, with its
Esquimault fortress and its subsidized steamer line
" armed cruiser " appurtenances, vividly call to mind one
of the strongest points made by our forefathers in their
grand indictment of the King of Great Britain in 1776,
viz.", that he had " given his assent to legislation for cutting
off our trade with all parts of the world." This is just
what Canada, in her own peculiar way and to the extent
of her power, is now doing. The present proposition tliat
the United States Government shall aid Canada in work-
ing her sweet will in diverting tlie internal and foreign
commerce of this country is enough to make the lilood of
every true American boil with indignation. It would be
much more sensible and patriotic for us to devise some
plan of discrimination against Canadian and British ag-
gression. That is an obvious duty of the hour.
The assertion that the Canadian Pacific line is shorter
and, therefore, a cheaper route than any one of the Amer-
ican lines, is utterly false and absurd. The (vanadiaii Pa-
cific is simply a British slugger in American commerce,
driving traffic out of its natural channels by the sheer force
11
of subsidy. It has very appropriately been termed the
Canadian Government on wheels. To call it " a mere com-
mercial enterprise " is a solecism of the baldest character.
In the face of the facts just stated the Canadian Pacific
officials have the audacity to come up here to AVashington
*
and ask the Secretary of the Treasury to use his discre-
tionary power over the " transit trade " in order that they
may be enabled to loot upon the internal and foreign com-
merce of the United States. The time is especially un-
favorable for such an attempt in view of the difficulties
which are being met in carrying out the provisions of our
Interstate Commerce Act, on account of the unrestrained
condition of the Canadian roads and their disposition to
take advantage of their extra-territorial opportunities for
depredating upon the American roads. Even now the
Grand Trunk is violating a clearly expressed agreement
with the American lines. The " cut " in its favor thus se-
cured may lead to a railroad war and the demoralization of
commerce.
The inopportunity of the present petition of the Cana-
dian Pacific is also marked by the fact that only a few
weeks ago the Dominion government renewed its " Order
in Council " allowing a rebate or discrimination of 18 cents
a ton in tolls on all American grain shipped to Montreal,
which action the Hon. Nelson Dingley, jr., of Maine, on
the floor of the House of Representatives, showed a year
ago to be clearly and flagitiously in violation of Art. XXVII
of the Treaty of Washington. The Dominion government
may expect to be called to account for this infraction of
Treaty agreements before its alter ego, the Canadian Pa-
cific Railway, becomes the beneficiary of privilege from this
Government.
The whole story of Canadian aggression upon American
commerce may be told in a few words. From the time
when the Wellaud and St. Lawrence Canals were opened
the United States has adopted a policy of perfect recipro-
13
city of transportation facilities toward Canada, in what is
commonly known as " the transit trade." Passage through
either country has been allowed without an}' impediment
of customs duties, over lines partly in one country and
partly in the other, and forming direct routes of trans-
portation between the West and the seaboard. If railroad
construction in the two countries had been left to the inter-
action of commercial forces, that policy might have been
permitted to go on undisturbed. But the Dominion gov-
ernment has seen fit to throw the full force of its political
and financial power into the struggle and given it an en-
tirel}^ new character. Besides, the Dominion government
has all along taken large advantage and small advantage
of every opportunity to encroach upon the commercial in-
terests of the United States by discriminations in favor of
the people and the transportation lines of Canada. That
government obstinately refuses to allow citizens of the /
United States to go to the relief of American vessels in Cana-
dian waters — a right of common humanity — and it also per-
sistently refuses to allow fish caught by American fishermen
on the high seas, to be transported free of duty across
her territory, while Canadians are, every year, shipping
millions of merchandise across our territory free of duty.
The story is one of international relationships between a
small country whose foreign policy is shrewdly commer-
cial and a large country whose foreign policy is ingen-
uously political. At last we are confronted by a po-
litico-military policy regarding the conduct of commerce,
such as character- as the commercial relations existing
between contiguous countries in Europe. Our Northern
neighbor has thus forced us to the consideration of a new
line of international policy which shall provide adtjquate
securities for the honor, the dignity, and the interest of
the United States.
JOSEPH NIMMO, Jr.
Washington, D. C,
. May 31, 1881).
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