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U .<>± S S~ .#j lo SUf)G^3^¥ j>klivki;j:d in thk HOUSE OF COMMONS OIF C^ItTj^r)^, f 0\\ Tuesday, ll\c i6ll\ I^cbnuuy, lS('5, nv nii: HON, MR, CARTWRIGHT, minist!=:r of finance. Hon. Mr. CAUTWilRJlIT, iii moving tho House into Comnuttto ot Supply, said : — Mr. Speakku, — It is ahvny.s ;i iii:itt«n' of sonic interest, .iftci' any conKitler- ablo chauires liave Itoeii made in the tarill" to examine lio\v thev have affected the year in which tliey occurred or succeeiling ones; and probably on the j)reseut occivsiou somewluit more than usual interest may bo attached to the subject, because those changes, as the House knows, wei'o of rather an important clwiraet"r. It will also be niv dntv to ''iv(i the House some explanations with regard to the loan negotiated lust Jimo in London, and I propose to take; advantage of this o})portunity to examine the general linancial position of tho country, and to exi>lain the mode which the Government think ought to be adojited to meet the very serious obliga- tions to which we are committed. Now, Sir, as the Hoiuse lias been in possession of tht; PuIjUc Accounts since the first days of the Session, anil as the JCstimates do not recpiire, I hope, any very great time to enable lion, members to understand them, I shall pi'oceed without further prefiice to briefly review our j)osition throughout the financial year ending 30th of June 1874. Perhaps for convenience it may be as well, instead of adopting the Bomt'wlmt cumliroiis fomi of "1873-74," to sny tluit when lifroiiftor I refer to any year, I mean the financial year terminating on the 30th Jtme, in the year named. If hon. gentlemen M'ill refer to that jtage of the Public Accounts containing a companitive statement of tli(! i-eeeipts and expendi- tures from the connnencement of Confederation to the present time, they will observe that in the ex]»enditu!'e forl874 a total sum is set down of no less than $23,310,000 beiiig an excess of about $4,140,000 over the expenditure of the year preceding. It will be well that I should enumerate the causes which have led to that very large and remarkable increase. These, Mr. Spkakku, in round numbi^rs, are as follows : In the ni-st place, an augmentation took place in the charges of interest on d(ibt to the extent of over 8500,000. In the next place, owing to the admission of I'rince Edward Island into the Union, our annual chai-ges wore increiused nearly $600,000 on that account. The assumption of the Provincial debts and the subsidy granted to New Brunswick, in Ucii ftf exjioit duties on timber, amount together to $850,000, Avhile the additional ex- penditure incurred for the proper maintenance of the railroads owned by the Dominion involved no less a sum tlian $900,000 additional. While I am on this subject I may as well state that the Government have carried o\it, as they declared they would last Session, the policy of charging to Income Account everything that properly belongs to the miiintenance of these railways. On this subject I may have something to say further on, but for the present I shall content myself by merely adverting to the circumstance. Then there were statu- torv increases, such as increases of.indemnitv to members, and other sub jecta of a similar chai-acter, which requiretl $400,000. The item of elections involved an expenditure of nearly $200,000 ; the North West Mounted Police, $200,000 ; Indians, and similar purposes, $100,000 ; Post Office, $300,000, and various other miscellaneous charges, $200,000, making a total of $4,250,000, which repi-esents, and indeed a little exceeds the increase to which I have called attention. And this increase, Mr. Speaker, is specially notewoi-thy, because, as the House will gee, the greater portion of it consists of what are calleUc ■xpeiuU- ne, they lown of )vi'i* the i\iniorato iucrensc. i-st place, ne extent jf Frinco eel nearly ;ial debts 31-t (lutiert tional ex- i-ftilroails 8900,000 well state hey woiiUl rthiug that is subject I lall content were statu- 1(1 other sul> I of elections st Mounted Post Office, )0, making a exceeds the VIr. Speaker, the greater charges, over lid for whicli we to make ]>roviHion as of course. Turiiiny to tlic (itht-r siili-, the ITm-se will jiereeive tliat the total rerei|tts fVnin iiU sources iiiiiount to $24,200,000; Iwing iin inciviise over tlic iMciMMliu;,' year of .>?;3, KM »,()()(► ; leaving, theivfoi-e, a noniinal hnlanee of .^H.'^S.OOO to the crt'ar. I .said that if the sums estimated for by Mr. TiLi.frr wei-e to have lieen expended Iflst year in addition to what we knew wj*s about to he e.xjieuded, tin- Estimates for the year 1874 would have anmunted to !?2^,l('0,0rK». I ■tated also, that, to the best of my judgment, the House must make up its mind for a temporary pause in the advance in imports, ami j)articu- larly in dutiable imports ; but I added if the House were willing t(» give to the Government the sui)plies they demanded, I had no doubt those supplies would W ample, to enable us not only to meet pres' iit ex|ten ditures, biit to make provision for our future liabilities. I sluill proceed. Sir, to give to the House, ger'uitiin^ the ])roof of the accui'aoy of those state- ments. The one to which most attention will probably be direc*'ed is th(^ declaration made by me that there would have been a considemble deficit last • Note. — Over $120,000 was actually Kpentin 187:^4 on the Bounnt for tlioaltcratiuii of tlif ti'iitl'. !f the Ifousc will hxjk tit tlioHctstatc- iii'.nits — I !ill\j(le to tlio <'oiiii>iinitiv(! stjitcnipnt of receipts ami exjH'iidituivH — tli(.' HoiiH(» will oltscr/c that ii: tin- two iiiMiii iti-ms from which our real jvvcj'.iK! is (•liit'lly (l('i*iv(Ml, — custoni-^ ainl excise, — tlh'i'c is an iucrca-w fov i -^"t of no It'ss th'Ui )?'J,r)r)0,OiMi ill loinid iiuiiiJk'I's. Of that iiicrcaso, as f •iliali |>r('-71 than it was for 1S7M, the exact figures heing .^127,r)()(),(JO() for 1^7:5 as against Sll'7, 1<)0,<)I)(> for lS74. Now, Sir, if the House will fiii'tli-'t turn to what are known as dutialile goo0 as r:,.ii:ist !?71 ,4n!),(»0() imported in 1S7.^, lieing an a]>]tarent difference tlieiv- f(.)re i!: favn'.w of tlie past year (jf T!l,S()(),(MjO, in round numhers. From this sum is to 111' dediu-tfil, in the first place the sum of .S4:()0,000, being the excess of imports into ^lanitolta uuder tlie four per cent, tarifj', and tlusrefore jn\e millions, one and onedialf millioi\s were cau.sed directly l>y the removal from the free list, undi-r tla; recent taritl', of certain goods, as any one can see iin ( lamination of tho taldes ; and at least the remaining one and a half mil- iifjiis, if not more, were anticipated in consetpu'nce of the expectation that new duties would be imposed, and were, in fact, borrowed from the revenue of 1>'7.'5 in advance to make up for tho deficiency of 1874. INIy allegation is, therefore, that of tlu; sum of !?2,'>.">t),0U0, the excess in customs Jind excLsc' no less than .^2,000,000 are due to the new tariff, the ditlerence of 8-'5jO,O00 being accounted for partly by the admission of Prince Edward Island, and partly liy the regular increase which might have been exi)ected in the Excise * NuTK.— Only $!1,000,000 of ilutialfk- goods are returned as imported into P.E.I., but it ii known that a good deal luoro was [aire lias jd (duty paid) in other parts of tbi Dcaniuion on P. E. I. account. nig pi iu 18 $8;i.5, near liave borro thous oper; secon been the plana expei mite . J>robi| Inteil on a J the II iH(!Stilt»'- iMir ri'iil •t'lisc fov list', IIS r directly to tht! olwevvf tie ICHH 500,000 ic Ilcnisc imi>oi't('(l il volume :V2Mi) as lice tliere- Fioiii this being the I therefore is the real )r nppareiit due to tlio ! i-eiuainini; the removal one can sec Jahalfmil- ctation tliat tlie revenue lUegation is, I and excise- of 85jO,OOU Ishvnd, antl iuthe Excisi cl intoP.E.l., ler parts of tbt Dep:irtnient. Alliioiigli I do not legurd tlii.i point as one (f very ;.;'e.it iniportiinoc, for the siiu]»h' reason (liat the tiixittion was injposed not souui'.h to meet a duiicit in the year tlicn nearly expired, as to provide for future engagouients, it may he as well to give some still further corrohorative pr.>of-' of my previous ass«'rtion. Of these ilici-e is no ,sc;:rcity. In the i'wMt pLu':'. if we ct)Uipare the importations tor tlie ei.,'lil mon(ln ending the 2Sth Fehruiiry, 1S7.j, wIththo.si; for the .-.i.iie |ifri(>l of 1S71 (hefore the now tarifl had any eflei-t on th^ importations), we sh;i!l tind tlnit the tot;;I i.f dutiii^'le imports for 1S73 amounts to Al 1, fOO,0(tO. ,is ugainst )?4r),r>7r.,OOr» for 1S71. heing a diflerence in ftvoiu" of 1S74 of .*1,1 70,000 iu round luiudiers, almost all of whieli is ciMe to the admission of Priuee Kdward Island. < M- takini:: another foi 111 of proof. — Takeihc ten days' statements of the money paid into the exche(piei' from the first to the tentli of April, and from tli*' tenth to the twentieth of April, of 1>7;5 and l>7{,andv.c have these I'esuUs — (I :uii ineludinghdth oust ^nii and excise): — In 1S7;"',, l.ciw. ( u th*; (Ir.st and t'.nth of April, we received ^r»!."),ono. In 1^7} w,- rea-ived !?l,?.7r),(», 0y the suhsetpi^'ut operation of the tarilT, as evidenced in these tables. With respect to my second .st,it<'ment, that if the sums estimateil for by ^Ir. TiLLEV had been cxi)ended in addition to those which we hnew would be expendeil. the estimates nnist have reached at le.ist 824,100,000, very little cx- j>lanation is needed. The House is ;iw..ire that the estimate tif the !~-uiiis exi)ended in Pubilc AVorks chargeable to income falls short of ihat«;-ti! mated by ]\£rTiLM:v, by no le.is a sum tl'.aa 8024,000. The House is also probal>lv awan; that ihe sum of 82.'>0,000 demanded bv him for workiu;: the Intercolonial Railway was not exi>ended. and that the further ;mm of 840, ''00 onaccouut of boundary survey is not chargid in last ycar'.s accounts, although the money has actiudly lK,'en «'\peude I, and will have to bo paiil this ye.iv to tlio British Govi.'nmujiit. Tlio.sc tlirt'i- suiiis c-oiul>iiif.l exoccd •t'OOO.OOO, unci the llousi" wil! tlicn-furo wtf tliiii I was within th»f iiuiik, aud iiotabovu it, wlit'ii 1 .-.tiitod to the Housi? th.it tinwc t'.stiiuAtes Wijiijil exceetl $-'4,100,- (i.<0 un tlie hasis statftl hy inc. W'itii n;.siK'ct to my ollu-i- Htiit«'Uieiit tliat tlioi'c was ii strong luobaliility that thoir wouhl Imj a iiauso in tho vohinioof tiicgent'r.il iiujiorts of tliis country foi- at h^ast two or thrct- ycain, tlu' House liwA only turn to th(! TraWf luid Na\ i;jt,ition Kcturns to see tliat that stat(»- iiiout has ht'fiu literally vcritic.l. The total volume of trade for 1S73 amounted ti> 8127,.')(IO,()00. The total volume of trade for 1874, Prince Edward Island included, only amounts to i?lJ7,40l),UOl>, being a falling olf in tho total volume of trade of .'?100,00U. Tla,' ajiiiarcnt incr(;ase on dutiable goods 1 li.ive already .sutUcl(;ntly exi)lained, I have in my hand a Htatoment recently given nu- liv the Connnissitjner of ('ustom.-i, showing the exports and imports i')i' the six ii> mills of the current yeai- as eom])ared with those of the six months ending on tlu; ;Hst of Deeemlier, 1873. The result of these i will hrietiy itad to ihe House. During the half year ending tho 31st l)eceml»er, I'^r.'i, oui' total exports anu)unted to §')7,2") 1,000. During the six mouths of the current year, our total exjtorts appear to have amounted to $.">3,3r)7,0tH), being a decreases 1 am sorry to .say, of nearly four millions. Of articles entered for consumption our total imports amounted to$!71,OG8,- 0(;0. in 1873, and in the corresponding period of 1S74, the total imports amounted to !?')y,.')88.00(t, lieing a delicit of about one million and a half, though this is chielly of iu»n-dutiable goods. With respect to the fouith statement unuh by me - that if the House consented to grant tlio.se supplies for which we asked, we did not think we would be likely to call n])on them for a(Mitional taxatioir— I will ri^serve any further comment u:itil a later piM-io;! of my reuiarks. I may, however, take this oppoilunity of .stating briefly that so far as wo can now judge, I have no rea.son to believe that the estimates I made of the i>robable receipts for 187a will fall short. I7p to the present time the recei[)ts have corresponded very nearly with the estimates made by me, and ])ossibly may exceed them, although it is too .soon yet to form any aUsolutely correct idea of the trade movements during the remaining portion of the year. As regards the expenditui-e of 187.'), 1 think my hon. fricnid beside me (the Ministei of Public Works) may ' .' able to make a considerable saving in those two It ot ubovu 24,100,- itMit that ohimo of HoUHO lilt stiit«>- unounteil il iHlaiul tho total le goods I it i-ecently ul iinitovts of the six ut' these 1 ,' the 31 at During the ! anioimted III- uiillions. to .^71,008,- itiil iinports uilliou and spect to the grant those ikely to call ler comment uppoi'tunity LO leuson to or 1875 will iponded very ?xceed them, idea of the As regards (the Ministei in those two large it^Mus, nuuifly, inihiie works charg»'il to inconn-, an«l rxiMndituiv in the inainteniince of {inlijic works ; hut on tlir u\\wx liiiml, I am afraid 1 shall \w ol)liged to bring dowu cfrtain Su|iiiU)mentary KsLimatc.s in ulher quarters, it hcing si iuvely jM>,ssil)l»' for any Ufpaitnuint, howuvt-r . i^ilant, to avoid incurring st)m(' unfun-sci'n expenditure in a jK'tiod of nearly eighteen montlis. With re.sjwi't to the F].stimates suhmitted l)y iiie the other day, having refereiKV' to tin; prolialilc* expendituve fir tin- ensuing yiir, the Ifouso will observe that the sum total chargealile to income is «'.stimated at ^24, of tlji- (h-mands constantly made upon us in that direction, we shall be obliged to ask the House to give us this year i?LH)(),Ol)l), instead of 8100,000. For the riiiladelphia Exhibition 'we have put a vote of !?tO,000 in the PLstimates, and, for an object which I think the House will not grudge, immely, the rewarding of the remaining veterans of IS 12, we ask for an increase in the pen.sion list of 8'»0,000. In addition to these, customs and the administration of justice ■will reipiire an augnuuitation of about .^70,000. The increase in the case o Administration of Justice is almost entirely statutory, and will reipiire no expliinatioii from mo. The increase in the Customs Department, I may say, is largely due to my hon. friend, (the Minister of Customs) having determined to give the merchants in large c ties exem])tious from cei-taiu vexatious dues which are not exacted, 1 understand, from those residing in the ainaller towns. Tljeu there are »everal miscelluneous services amounting to |i80,000, which we hope will be repaid by fees, iw hon. gentlemen will tind 8 state I if til"}' will n'f>'r to tlio p.vrticuhir Estiiuitos to wliicU I am now allii liu;^. Fov In lians, wo will ro|nirc, in consequouc? of the roooat treaty, an aillitioual giMut to tho extent of soiuo 83."), 000 ; au'l a similar sum will b;) ro'iuirctl for the reorganization of the North-West, in respoct of ■which th3 Minister of Justie'o is abjut to propose a bill to the Ilouse. These I think CDvui- all the inoroa->e-i of any injnv'iut to wliich I need call your att!^ntion in th'):so Estimates. 0;i tho otlivr hand, the l[ou.so will sen on r.!ferenc3 to the itoin of Public "Works hm 1 buildln''s "diarcjeable to income" that we propose a re Inetion of !?3O9.O00, and on Piiblit' AVoi'ks under the liead of "Collection of Revenue," of AbS-^.OOO, which two sums taken in conjunction with the saving on Military »Jtores (the last of our instalments to the B 'itish (i jvernm )ut h iving bj 'u i>aid off list year) enable? us to bring down our l']-itiin ites with a slight roduction. I m ly remii-k with respect to these Estimates, that there are several sums included Avhieh, from the nature of the ease, will not ncl to b^ aske 1 again; aout $159,000. With respost to the Po>t O.fijo D.ipirtment, I may further say that although tho exponditure is always considerably in advance of the revenue, yet it is to be remembei-ed that the revenue increjises steadily from time to time, and I am in liopos that in the course of a year or two the receipts from thatsourc3 Avill very nearly, or probabl}' quite counterbalance the erponditure.i we are obliged to injur. As regards the estimite of our probable receipts for the year 187j-7G, I miy say that I make thjui as follows : — From Customs I think we shall derive soaiething like fifteen millions and a half, provided 110 check o.'curs to the geneiMl volume of trade. From the Exc's? I estimate anJ Hoi pra| of M IS :'-X \\\\ now treaty, tu'.u will If which Those I 3.1II your [ill Si'e on inco'.no" inilor tlio takfMi ill istahneuts IS to briii.:^ th re.Hpect 1, from the V iastimce j^xhihitiou, vctcrnns of ighty years L \ii>ou the ion. friend, ilo I exphin- say, g«ii''- 111 with the hich he pro- (leoreme his ,000. With although the I, yet it is to o time, anil I n that sourc3 iture.i wu are ceipts for the 11 Customs I lalf, provitleil "s3 I estimate we will derive a further sum of five and a half millions, amounting to ahout twenty-ono millions. From Staniji^ T estimate the revenue will be about $250,000. From the Post-OiTice T am afraid T must expect this year some- thing like 81,050,000, instead of .^1,100,000, tlie first operation of these changes btnng likely U) cause .soiiif> r.^ luetion in th" ivoeipt.s, although T think tli'y will ultimately increase the revcnui'. From Public Works I Iio'ic to i-i-civc soiiiftluMg lik'^ !?1.700,000, ;;n'l from the otli^r sources — intorr'st on invcst-ii'Mits ;md fvom casual ri'-'-'-ipts -a little over .'^l.OOO.OOO, making a sum total of twivity-fivc millions and a rpuirter, or thereabouts. Now, Sir, turning to the formidable items of cajtital account, which altogether will amount to no loss m sum than 81 +i"l ".'*'"*, T may briefly say that a very large proportion of this e\-p";idinire aI>o is, fiMin the uatiire of the case, not likely to be repeati'l. Foi- example. T hop* next year that ^Vl! will see the last of the Tjitercohiniul and PriiiCi' Ivlwii-d Tsl.r.id Railways, as far as capital ex[)"nl:*-u:-e is ('.Jiioerned. Tiie f^am ' r'>:!i irk v.'i'l apply, probably, to the extension of tlif i-ailway into Halifax and to a very lar^re part of the expr^nditure takoi f >i- the I'ariti'^ Railway, wliieh the TEous'^ will see is no less a sum than .-^O, 250,000. It is not likely that eitliei- the charge for the construction of telegrajdi lines or foi- st -el rails, or indeed, for more th?.n a portion of the remainini; charges, will rerjuiie to be i'e])eated next year. With respect to canals, so mncli d"p"nd-< on the snecfss of the contractors in prosecuting these works with expedition, that it is impossible for me to say how much my hon. friend (MiuistiT of Public Works) will Ix; able to spend under that head. The House is t'nilv awarw of the practice of that department of Viringing down estimates for nil that can b;- any pos- sibility be s]>ent within the current year. T \\\\\o suggested to my lion, friend, and T repeat the suggestion to the ITouse, that it may be woi'th e()nsi;i of Iiou. gentlemen opposite, wlio are bound to clieok any unconstitutional proceedings of ours, and if they will co!ic.n-, p'.M-haps the House will allow us on future occasions to pare down these Estimates of capital account nuich more than we can do at pre- f.:\t. I will now proceed, i[r. Si'E.VKicii, to give the House explanations, • with r(.'S]»ect to the lo:in of four millions stx'rling recently negotiated in London. But, [)erhaps, before I do tliis, it may be well to state to the nous(> what has been done with the. fdu.ls realized therefrom. That loan being ])laced at 00, realized the sum (if about seventeen million and a half dollars, the gross amount Ijoiug nineteen and a half million dollars, or four millions sterling, and the net proceeds being, as I have said, a little over seventeen and a half millions. Now, Sir, what we propose to do with these funds is briefly this : We pro[)ose to pay off ten millions of the public debt, including the grant to the Sfijui'urs for compensation ; and the remaining seven and a half millions we inteml to apjdy to any public works that we niiiy undertake. Possildy, to prev(>ut misconception, I should rather say that the loaTi has fre(;d other funds in our hands applicable to «uch purposes, because as the loan was maile for public works, it is well to observe that the money does go bona Jide to public works, although prac- tically the result is as I have stated. Now, as these seventeen millions and a half cost this country $77v">,OOU a year, and as the ten millions of debt which W(! propose to j)ay have cost us C per cent., or oG00,000 a year, the result of the operation is that w(! get seven and a lialf millions on hand with- out increasing the charge on the revenue more than $178,000. In other words, to put the matter in a more concise shape, if the House would permit me to invest that money at the ordinary rate which we receive for deposits, we would be the gainer by the transaction to the extent of $200,000 ii year. "With respect to the loan itself, as far as I understand, three objections have been taken to it. First, as to the expediency of borrowing at all upon our own credit ; secondly, as to the ex})etUency of borrowing so large a sum ; and, thirdly, as to the terms of the loan. With respect to 11 amounts nt year, oportioii iiary. I opposite) i.l if they 1 to pvvft lo !vt pre- auatious, • itiateJ in state to lu. That ion and a iloUiirs, Ol- id, a little bo do with the public and the hlic works I should plicable to ; is well to ough prac- illious and Dus of debt a year, the hand with- in other ould permit or deposits, ,f $200,000 ^taud, three f burrowing orrowiug so h respect to the first })oint, I may say the Government had a good deal to consider before they detei mined on borrowing on their own credit. ISo doubt it would have been very easy to make the loan on the Imperial guarantee, but it must be observed that had we done so we wovdd have lost a very favor- able opj»ortunity for negotiating a loan on our own credit whieh luiglit not return again, and — what I consider of more importance — we wouhl have lost the control of the market to a certain extent, that is to say we would have lost the power to go to the English market as borrowei-s at such times as are most convenient and suitable for oui"selves. Moreovei', 1 think it would have plaoetl us at a certain disiulvantage with the Imperial Govonuuent and British Cohunbia if we had asked for ilie Impeiitil guarante*' while there was any di.sj>ute between ourselves and that Province lus to the consti'uc tion of the I*jH.'irie Itailway. For all thest; reasons 1 advised my collea- gues, and they accepted the suggestioii, that we slioulil avail oui'selves of •the o})})ortunity for negotiating a loan on our own unaided credit. As to the amount of tlie lo;in. I may remark that it is not r cent, loan, issued at 75^, but which at the time of my arrival in England had fallen to 73. The second was a Braztliau five per cent, loan issued in 1871 at SO. The third wa' a Danish five p?r cent, loan, issued at 04J. Tlu^ fotu'th was a Dutch four per cent, loan, issued originally at 82. The fifth were a series of Russian five per cents., which were issued during the six or .scAen j'ears ])revious to 1873, ranging at various jtrices, one large loan in 1866 being at 86, another at 1873 at 93. The .sixth was a Swedish five per cent loan, issued in 18G8 at 90. I may remark that in all these cases, saA' imn, I belicA-e these loans not only included alieavy sinking fund, but . ..,■.) allowances quite etpial to that nuule by me. Now — I speak under correction, because I am aware that although I have been at sonic pains to investigate the authorities on the subject, I may be deceiving myself in the statement I ar.i about to make — I think that on full investig' tion t [it at the sh Three Four por ^hor, but by causes ■itandard, fer to it, ipare the mder the Uowances find that 5 shillings premium • iinuuni.) lue on our illiugs per four-fiftliK order that to a state- f the very otiated by ud. This arrival in C(!ut. loan issued at dly at 82. during the one large a Swedish all these •y sinking -I speak 11 at soiiK ing myself restig' tion this gt'ueial result will ht\ apimrtMit, naiULily, tliat the loan wliich was placed in the English market last June was ol)taiu«;d on better terms than any otlier of e(pial amount for the past twenty years. I lK'lie% e that there wa.s one foreign loan — the Belgian three per cent., to which 1 have alluded, but which was only to tlie amount of one million .sterling, while ours netted three and half millions — which was obtained at a shade better terms. When in addition I state, as 1 have stated, that our loan wius placed on tlu; market at less than olle per cent, of the rate which was cliarged with th(! Imjieiial guarantee added, 1 think I may fairly say that the Dominion of Cannda has no reason to be ashamed of the position iu which it stands iu the Knglish mark(!t. There is another point on which Ls.sue has been taken by gentlemen op))8site. We li;i\e Ijceu eondcmn«Hl, I think unadvisedly, for electing to issu»> this loan at a iliscount. Xow, if there is one principle of finance which is lictter established tliau another, it is this , — that it is almost impossible to o)»taiii a,s good a price in proi)ortion for a .^oan issued at a premium as can be obtained for loans issued at a discount. •I need not enlarge u])on the reasons that cause investors to prefer such loans. Sutlicc to .say that the fact is notorious, and if further proof of it is wanted it will be found in the fact that all 'these States to which 1 havu alluded have .preferred to issue their loans at a discount, a.s 1 did. 1 have not referred to the issues of France and the United Statt^s, because great iis the resources of these countries are, and high as their credit usually staiuLs, thev :ire ct, namely, that no ungiiaranteed loan of eipial magnitude has been floated on the English market on such favorable terms witlun the })iust twenty years. More- over, in considering the situation, it must be borne in mind that no bonajule , C inadian loan on our own credit Inul l^een issued since the loan raised bv iHir Alexander CIalt in 180O, except one small loan of je.'300,000, negotiated by Sir Joii.v EosE under peculiar circumstances. It must also u !l })Q l»oino in mind tliat tho great numhor of fofcign loans now pressing on tho Englisli miirkct has cjiusod an increase in the rate of intei-est even as regards securities of the first-chiss, as any gentleman will find l)y referring to the share list, and more particularly to the price of consols during the last twenty or twenty-five yeaw. According to computations made by jiei-sons entitled to respect in these mattei-s, notably, I believe, Ijy Mr. Dudley Baxteh, it ajtpears that no less a sum than two thousand millions sterling have been added to the national indebtedness of various nations appearing in the English Stock Exchange within the last twenty years. Moreover, it may bo as well to call the attention of the House to the fact, as bearing on the advi.sability of choosing our own time for placing our loans on the market, that the English Stock Exchange is an extremely fluctuating and sensitive body. How fluctuating it is may best be known by the simple statement that within a short period the prices of consols, although artificially kept up, has varied from six to ten and twelve per cent, witliin a single year. It will be apparent, therefore, to the House, that in addition to doing all in our power to maintain our credit, we must also be in a position to choose our own time for putting our loans on the market, and unless we do so, no matter how good the financial condition of the country may be, we may be required to pay more than the rates we have bean previously paying. I may also renvirk, though this for the present is merely a sug.;;stion, that I believe it would' greatly con- duce to the advantage of Canada if we could consolidate the various seen- rities which ai"e now bearing several rates of interest, into one consolidated Canadian stock. Some st*>ps have been tivken which, I hope, will ulti- matelv result in achieving that desirable end. Htm. Mr. TUPPER— What rate has the hon. gentleman fixed for the Sinking Fund ? Hon. Mr. CARTWRIGHT— One-half per cent. The Sinking Fund, I may remark, in Mr, Tilley's loan is one per cent, and, therefore, the former transaction is a little niore favourable to us than would appear a first sight. My hon. friend knows that a Sinking Fund at one per cent means a much earlier payment of principal than a Sinking Fund at one- kalf j)er cent And now, Mr. Speakeu, I desire to review the present financial j)ositiou of this country with reference to the engagements to :i^ ■•-*'-Sv- 15 wsiug on il even as ' refen'ing iig the last by pei-sons r. Dudley ns sterling appearing Moreover, as bearing ans on the bnating and the simple s, althougli e per cent, the House, our credit, putting our the financial ore than the though this greatly con- various secii- j consolidated )pe, will ulti- fixed for the Unking Fund, therefore, the ould appear a b one per cent. Fund at one- 3W the preseni ugagements to which this Govcrnimtnt and the country at large is coninilttcfl. That posi- tion is one of very peculiar chanictej-, as lion. gfiitlenuMi will readily pex'- ceive. I shall begin from the 1st July, 1874, and lay before the llou.so a short synopsis of our engagements down to tho end of the year 1884 tliat being the period at which most of our loans now current will mature. Our position is peculiar, bocause, in adrudent, with these Injavy engagements, to maintain a steady, moderate surplus, we will ju'obably have another million per annum from that source, amounting to ten millions more. Of the total $125,000,000, I alre,'uly sw my way tolerably clear to provide 1^70,000,000 Ji the way indicated, which would leave some $oJi, 000,000 to be bon-owed on our own individual cretlit. The House will understand that twenty-five or thirty millions of this amount may be paid at our option, but there are many reasons why we should jiay off that jiarticular debt when it matures, if jtossible. This sum is the loan negotiated by Sir A.. T. Galt. The House will therefore see that it will be neces- sary, or at any rate, expedient, to borrow $75,000,000, (including i0 16 Able ▼hi( that will ontis jpve , maj our ( of al my h tmct the w fill in fbrth) the English guaniiitoe,) within tlio next nino or ton years ; in other wonlH, it may bo necessary for ns to aj^iear in the Knglish market as borrowers tljree or four times during that j)erio(l. If we sneered in borrowing that sum at the rates which liave been recently established, the results will be as follows:— §12.),000,000 borrowed at an average of four and one-half jKjr cent. wouKI cost §0,025,000, from whirh we deduct five or six per cent, interest on 305,000,000, (that l/eing the amount of tlie old debt maturing), whicli would represent iS!3,000,000, leaving an additional burden of $2,025,000 per annum. We may further deduct from this the sum of )$750,000, represent- ing interest on the Sinking Fund and mi the surplus, which I propose to secure a.s part of our assets. Tliis would give the total of the additional interest for which we will lia\e to pi'ovidc, if the House does not rusli into fi-esh entanglements and cngiigfim-nts at $1,250,000. Now, I havf no doubt whatever that the resources of this country will be ample t. meet that additional demand on us, though for reasons frecpiently stated by me from my place in this Hous(\ 1 am not willing to add to tlic ])ermanent expenditure of the country in the shaiKi of interest any more than I can help. But in ord(;r that we may obtain these several loans at ; numer cheap rate several things are requisite. We nuist enjoy some modenitt ifl, thai l)rogress, which I have no doubt will take place, and we nuist inspire on; feir o: creditors with coufidcnco that we will not again rashlv conunit ourselvc in thol to any inipi'udent engiigements. 1 am not going to reflect on tli time action of my pi-edecessors, but I m ill ^iiniply state as a matter of fiu wder tl that I found that the manner in which they had entered into the PaciH ''*T*y, Railway obligation was a serious obstacle in th(^ way of placing a loan oi *W en th(? P]nglish market. We must also arrange our engagements in such stepjH manner as to be able to obtain the full aiid complete control of the Engliv *** our market so far as to secure our own time for borrowing. That is tl: of our reason why I am so anxious to nstain the Inrperial guarantee by which i *his ^'M case ot need we can obtain a loan under almost any conceivable circuii Conau stances. Now, if I do not lay very much stress on the i>robability of '"''hole, gi-eat increase in the revenue from the natural growth of the country, it! w'tflfi because, as every lion, gentleman knows, this country ius it grows at ^itfi increases in prosperity will require considerable additional expenditure M'Wl'al and though I hoi)e we will always niiiintain a moderate surplus, a consiilf "*»y> jM' [>r words, it Bi-s three ov svim at tlu' , follows :— cent, would interest on ing), wliidi 025,000 per , lO, represent- , li I propose le additional tK'S not rusli Isow, I Invvi' be ample t( ^xiently state»i add to tlu' uiy more than !ral loans at ; jnie nioderiitt^ ist inspire on; miit ourselvr reflect on tb matter of fui nto the Pacili acing a loan o: ents in such 1 of the Engllv That is tl; tee V)y which i ■eivahle circur. probability of ,he country, it us it grows ai. i!vl expeudituri- rplus, a consiJf IT libit portion of the natural increase of revenue must go to meet contbgencies which, in a country like ours, are inevitable. There can bo very little doubt that to maintain the j)ortions of the Facifie Railroad which will be constructed will entail a considerable expenditure, and there will also bo a considerable outlay in settling \vith the Indians in the North-West, and maintaining wrvernmont in that region. No doubt a certain portion of thia oxptmdituro naj be fairly looked upon as productive, in the sense of bringing back into our coflfora some return for the moneys exjiendod, and I may add that of all the schemes submitted to this House, I believe that proposed by my hon. friend the Premier, for opening up that line and considerable tpKct between French River and the Ottawa Valley, is the one which on the whole is most likely to add to the paying productive population of tlio Province of Ontario. I ho[i0 also that our morchants will 1^ succesa- fol in finding new tields of trade wliich will jiartiully compensate them for that which we have for the j)re9ent failed to obtain from our friends on the other side of the Hue. My advice then, in view of those numerous contingencies which always occur m a country situated like ours, is, that we ought to consider the natural growth of our revenue as a fair ofTset against the inevitable additional expenditures whicli must occur ill the Dominion. It is not necessary for me to spend any further time in reviewing the volume of our exports and imports. I do not con- sider that it is any proof that a couutr}' likt; oui-s is retrogiading in any way, because there is a check to the iin])orts. Many authorities who are entitled to great resi)ect, iuclinc to think tint we have rather over- 8tepj)edtlie mark in our jno^'i-css in this dirc'tion, ami 1 hiDk upon tlicchf^-k to our iiujiorts m l>ominion can hardly b«5 expected to do more than compensate for the 1 rge railway eipondituro >vhich has occurred in Oiitario during the last four (•>• five years. According to the stnternfnt of that hon. gentleman upwaids of S-''0,000,000 had been, Of were about to In- fortlnvitli expended i>n the coiiHtruetion of railways in that Province alone, giving an average of six niiliions per annum, whicli I hope has been, on tlio wholis, of Hueh nature us to largely aid tho future production of that region ; but it is evident that for tho time being the annual expenditure on the ]*aci(ic Kaihvay and other works, which will bo about six millions on the average, as stated above, will not do much more tlian make up for the cessation of thi,s eypeuditure ui tho Province of Ontario and elaew]ien\ I do not myself doubt in the least that great ultimatis benefit will flow to tliat Province from the expenditure to "^Wply c which I have alluded, Init I am aware, as other hon. gentlemen are ®^>endit aware, that tho immediate rcsults are not likely to be quite as greiit as ^"^y might be su])j)osed. The l)enefit, when it comes, will be solid, and it is *^iDgstor to be hoped it will be both very considei-able and permanent. To tliose ^^^^ *^^* hon. gentlemen who consider that tiie very ra])id incrooae of our impoi-ta- ^^ year, tions from 1868-9 to 1872 ia a fair proof tliat a snmilar ratio of increase is ^^ "1^ likely to continue after the present temporary pause has passed, I would bee ^^^ ^^ to oV«erve that on looking over the imiwitations of the United States during "*'"'^'^li tho paat sixty or seventy years they will find, ns a rule, that any rajud period '^'^^t^''^' of expansion was almost invariably succeeded by a long period of comparati\x *** ^i inaction. Now, as this is a point of some little moment, I may be permitted "*^^ ^^ to call the attention of the House to tlie fact tliat whereas in the years **** I'^^te between 1832 and 183G the imports of tho TTnit(^a States uiercased, almost ^^^ ^^" as ours have (h)ne, from one hundred miUions in 1S32 to one hundred aivl '^^ "*'^*'i eighty-niiip millions in 183G; that aft-r attaining that figure in 183G, m '^^'^a^'e! less than fifteen years elapsed l)efore they again re;.ched a like sum, and that ^^^^ i"<^'''| it was not until 1851 that imi^rts to the United States I'ogained the proper **® "^ * tions they had arrived at in 1836, and that, too, in a period, on the whole ^** "^'''^fi'l of great prosfHirity in that country, and though the j)opiilution in the sam' ^^pl^'<*< interval had indreasod from fifteen millions to nearly twenty-four million' •Nbra.-— S J. \h by tlu) Y of that liardly be poncUturo jording to tiad been, railways an, wliicU ,lio future bcuig the which will t do much Province of that great nditure to tlomen arc aa greiit aa I, and it is To tliose lur impoi'ta- increase is would beg tates during rapid period comparativt je permitted in the years ised, iihuost lundrctl and ill 1 830, IK nm, (tnd thai tl the propoi >n the whole, in the sam? four nuUioii^ 19 in 1851.* Poubtlesft there wei"© Hpeciul cnusea contribiiting to tliis state of things, and I do not aniicipafco precisely the same results Uoro, but it i.-. my duty, if the House, or uuy members of it, choose to assume tliat the fact of .ft rapid increase in the past is neoeasarily a proof that an equally rapid increaae is to be looked for in the future — to call atttjntion to the (act that that great country, thougli it increased in essential prosperity in all respects in that interval, remained on one occasion without any great increase taking place in its impoi'ts for a period of no less than 15 yeai-s, and that a similir phenomenon rejxiatedly occiu'reut most proliably would not have erpiallod the importations of 187!^. This supposition is veiy strongly ooulii'uird liv thi; opinion expres.sed, both at the time of the im])ositiou of the tariiraiid sulisccpiently, by .several parties of the higliest slunding in tin' i-omnicivial ;iiipears probable that in view of the general state of trudo th(>re would have been a positive as well as a relatlu decrease in the iuipor tuition of dutiabl(^ goods in the fiscal year ending 30tli June, 1H74, unloss ilit; ntcicaiitilc coiiuiiunily had known Itolh fn»iu Ab'. Tilley's l?udg«'t s[it'(H']i us well as many other sources (wholly apart from any statement mad»! by the existing (Jovernment) that the tarilf would almost certainly be increased. How enormously the revenue for 1874 was affected by the tariff may h well illustrated from the case of cigars. Of this article l.')0,OO011jiB. hai been imported in the eight months ending 1st March, 1874, and there was no ground for expecting any larger proportionate amount to bo entered f(r consumption during tlio four montlis closing 30th June, 1874. The result of the nppro.acliing tariff wa.s to cause 278,00011(8. to 1»e ontow lions were J00,000 to aiidies and a: revenue making a ated sum sing, coiTe- Qous excess kjiril, 1874, . $569,149 . 383,252 . 730,693 . 264,270 ist 8645,000 5,000 presu- 'ter the 20tli ti a total of hout taking in tlie latter 25 prior to July, 1874, almost all in Apiil, This, allowing 78,0001bsto lejtre- seut the proiX)i'tionate im|»ortation for those four months, would show at forty-live cents p' r lb. an amount of duty of not less than $90,000 pro- Humably anticipated (t. e. borrowed from 1874-5 for beneiit of 1873-4) on this single article alone. Himilarlv in the case of brandy. Here the importation for the tirst eight months of 1874 only reaclit-d 378,000 gallons as against 352,000 same period of 1873, while in the last four months of 1874 the impoi-tation was 203,000 galloi s as against 338,00(1 gallons for the last Jour months of 1873. This would give an anticipation of ortate it appears needless to say that these figures can only be accounted for on the assumption that as stated aliove a very large nam of money wjts Miitieipi^tcd, and in etlect borrow* d from 1874-0 for tlie benefit of 1873 4. view of the as a relatin ending 30t!i 1 from Mr. art from any ould almost ariff may l* .OOOlbs. ha'i tul there was entered f(!r ■ ^>. tobeoniovf 20 MEMORANDUM B. Imports of the Umtro States f«om 1817 to ls")l, fvclusive. e Jii'inurki. 1817. 1818. 1819. 1820. 1821. 1822. 1823. 1824. 1825. 1826. 1827. 1828. 1829. 1830. 99,250,000 121,750,000 87,125,000 74,450,000 62,585,724 83,241,541 77,579,267 80,549,007 96,340,075 84,974,477 79,484,068 88,509,824 74,492,527 70,876,920 1831.. 103,191, 124 1832.. 101,029,266 1833.-108,118,311 1834.. 126,521,332 1835.. 149,895,742 1836.. 189,980,035 1837.. 140,989,217 1838.. 113,717,404 1839.. 162,092,132 1840.. 107,141,519 1841.. 127,946,177 1842.. 100,162,087 1843.. 64,753,799 1844.. 108,435,035 1845.. 117,254,564 1846.. 121,691,797 1847.. 146,545,638 1848.. 154,998,928 1849.. 147,857,439 1850.. 178,138,318 1851.. 216,224,932 It will be observed that in the United Slates a very forniidalile retro- gression took place after 1836. Canada lias not gone tlirougli such })eriod ' of extmordinary inflation, and it is not inobable tliat it has more thnn a W- * Only nine months of 1843, tlie tennii\ation of fiscal year beinj,' clmngetl at that time i'vom Septenilier 30th to eTime 30t]j. teniponiry pause to appr 'hend. Wn \ation of lie i<'tvo- ch ])C'vi()