IMAGE EVALUATION TEST TARGET (MT-3) 1.0 I.I '..: 1112 2.2 1.8 1.25 1.4 1.6 -^ 6" - ► V] *i<^isii^^*^ SIR FRANCIS HINCKS' BUDGET SPEECH. Friday, March 10, I87I. 3S Sir FbaNCIS Hincks, in rising to make his financial statement, moved that tho Speaker leave the chair. lie said — 1 am deeply sensible, sir, of the importance of the duty which ilovolves upon me on this occasion, and as I am fully conscious of my inability to discharge this duty in a manner satisfactory to myself, I can hardly hope to be able to discharge it with satisfaction to the members of this House. I therefore feel it nf cessiry to throw myself upon their indulgence, assuring them I will do everything in my pawer to place before this House and the country a statement of tho exact financial position <.if the Dominion. I regret very much that some important members of the House are absent on this or;casion, because a great deal of discussion took place during the recess upon tho suaject of the finances, and by some of those gentlemen statements were made, calculated, in my humble opinion, seriously to alarm the people of the country with regard to its iinancial state ; and I felt it my duty myself to take an early oppoi-tunity — almost the only opportunity that I had during the recess — of afllrmiug that those statements were grossly incorrect, and of pledging myself that, if I lived to meet one hon. gentleman (not now here) in Parliament, I should expose the misstatements h^ had made on this subject. Now, du ing the recess, at a large public meeting which was held in a western county, it was affirmed that it was impodsible for any man to take up the public accounts and ascer- tain the amount of the debt ; that tlie Government knew there was an annual deficit, and that if t'ley imposed taxation to the extent necessary to meet the public requii'ements they would be called to account, and that therefore they sought to hide the true state of atTair.^. And it was said, in addition, that on this ground there existed a reason or motive on the part of the Government for framing the Insurance Bill passed in 1868, and that the eflect of it was to place $4,460,429 in the liands of the Government, which repre- sen ted " large increase of the public d'^bt from that source. I felt it my duty to end ?avor, when the public accounts lor last year ■were proyented,to have a statomet.t carefully con piled, showing the exact state oc' the public debt at the time of tlie Union oi the iat Jidy, 18G7, and also at the period of 1 870. This statement has been some time .n the hands o" hon. members, r.nd it will be seen from it, that, so far froiait bein<; correct is to a great increase of the public debt, the total increase of the deot since Coni'ederation l.as been bui; $i;,481,- 101.71 while there has b(!3n, during tje same period, an expenditure on account of )ublic works, chargeable to capital account, of ^4,75U,33o.081eaving acajnt 1 expenditure lar the three years of $2,278,234.79. I think this is a very satisfactory statiof things. (Ci eers.) In order to remove all pc^ssible giourd of exception to this statorae:;t — because we have had discus^ions during last session about the manner in which certain items were clarged to capital account of pu1)lic workj — '1 would throw over the public ">.'.'orks altogether, tho ordinary public works, although it wes expressly understood they W! re to be so charged. Authority was given to oorrow raonoy for the completion of those } ublic works. How- ever, I will dispense with them, and confine myself to two particuhvi' items, about vvhich there can be no possibility of doubt. There was an expenditure upon the Intercclonial Railway of $1,778,450, and upon the acquisition and opening up of the North West, specially provided for l)y loans, and which expenditure amounted on the 30th June to $1,828,877, making together a total of $3,607,327. But the aggregate increase of the debt was but $2,277,234. A great deal was said on the subject of the Insurance Companies' deposits. The most sinister motives on this subject were attributed to the Government. It was asserted the deposits or guarantees were not exacted for the pro- tection of the public so much as for the obtainment of money by the Government. Hon. Mr. HoLTON — Hear, hear. Sir F. HiNCKS — I believe that at present very few have any reason to think so, or that it was other than a most desirable thing that in the interest of the country there should have been this protection to policy-holders provided by the Act, more especially as regards foreign Insurance Companies. I only refer to this matter at present because it has been so prominently raised. It was stated in that speech to which I have referred, delivered in the West, and, doubtless to the belief of every hearer — because there was nothing but cheers and laughter throughout the address — that Goverument had got hold of all the money required by the Act, amounting to $4,460,429, while it appeared by the last return, made up to tliat time, that the total the Government had received was but $1,837,000. This is the sore of accuracy that characterised tho statements of that speech. (Cheers.) I frankly admit that four millions is the amount the Insurance Com- panies have deposited, but a great portion of their securities are in British Consols, United States Securities, rind Government Debentures of various kirds, all of which pro- duced no effect upon the ]>ublic debt ; so that the amount I have already given ($1,837,- 000) is the amount actually paid into the Government and invested in Dominion stock. A similar erroneous statement was made with regard to the Savings Banks. It was alleged the Post Office Savings Banks gave the Government $2,387,650, whereas they yielded but $1,859,000. An old story was, on the occasion I refer to, raked up in rela- tion to the Intercolonial Railway Loan. It was asserted the money ($0,575,410) intended lor the building of the road was diverted to Government uses. Tlie same re- mark applied, it was said, to the Great "Western Railway Bonds. This subject of the Intercolonial Railway has been so often discussed, so much has been made of it, that it may not be uninteresting, after all that has taken place, to explain I lie state of the mat- ter. As to the Imperial Loan, the people in England were led to be ieve that the money had actually been taken to build the edifices in which we are now tilting. All sorts of stories were told on this subject, while the fact is the whole i.mount of the Inipeiial Loan is bearing interest and on deposit in the Bank ready for use when r squired for railroad purposes. (Cheers.) Th is a very important addition, but there has been no less, liinco Confeder ition, than ton per cent, of new post offices added to the sisrvice. In the Past Office servi<;o the increase of ex])enditure rose from $41 ,000 in 1866-7 o $52,000. This is the Department where the greatest augmentation has takon place. Bu;; is it pos- sible, in a Department where such an immense increase of business and revenue appears as in the Inland Revenue Department and the Customs, which Lave augmented at a most extraor- dinary rate, and are still augmenting, that they could go on with the same old limited staff? (Cheers.) Then there is another Depvi-tment whii h has shown a very large increase ejf business — I mean the Agricultui-al- -vath its labcu-s in regard to patents. (Hear, hear.) It is therefore not at all surprising- there should be a trifling increase in 'he expenses in connection with these branches of the service, which I am sure will be fomd not to have proved in any sense excessive. (Cheers.) ] releiTed last ;.'ear, Sir, to the very satisfactory position ol' this country an compared with '.hat of other cuuntries — our immediate neighbors to the south of us, and tht Mother Coun ry, — both with regard to the rate of taxation and the amoinit of debt. I will not tioulle the House by going any further into that matter now, but there is one point whicl I think is deserving of attenvion, in reference to the position of the country, and that is tLat Canada lias in the last year, with regard to its busiaess transactions with the Moth3r Country, risen from the rank of No. 1 1 in the list to that of No. 8, ]:Ion. Sir Gko. E. Cautier— Hear, hear. ] Ion. Sir Francis HiNCK3~The exports to Canada exceed thos:e to Russia, China, Brazi , and Turkey, all countries liaviug a very large trade with Great Britain. But there is a very important fact in connection with this, which f.liould not be lost sight of, that thei'o is no country which trades with England that receives from her so large a pr.- porticn of her goods Jis Canada in proportion to her population. (Cheers.) I have Hscerliiined from st itistics that the United States with forty millions of people, took dnriii:; tlie last nine months, the returns of which I have been able to get, £20,000,000 Avorth of goods, being at the rate of ten shillings per head of the population. During tlie si'.me period, Canada with 4,000,000 of people, took £6,000,000 worth, being at the rite of £1 10s. per head, or exactly throe times as much for our population as the Vnited States. (Cheers), m^n Hon. Sir Geo. E. CARTIER—Each of \jh worth threo Americana. (Lauijhier.) Hon. Sir FkancisHincks- -When you look to other lands wliir-h am put down .is heing the groat countrins with which there is trade, to British India, for instance, whicli stands very high after the United States, the difforenco is even greater. It must bo renirrnbered that British India has a population of 1.').'5, 000, 000, an 1, therefore, tho exports to that country amomt to about two shillings per head. Russia receives Is. 6d. per head ; O 'rinanv, which also stands very higJi in the list, about eight shillings per head ; so that we liavo tli3 satisfaction of knowing that this country is the one which in y)roportion to its popnla- lation carries on the most commerce of any country in the world. (Cheor.'^.) Tliis is a very satisfactory statement of our relations Avith tho Mother Country. I desire, Sir, in refernnce to the public debt, before closing my remarks on tliat branch of the subject, to make .some reference to a Avork which T havo no doubb i^ familiar to nearly ev.^ry^ mam- ber in this House, but which I am sui'e they cannot ba too Dften reminded of in conneo- tioi with this matter. I think it is important to evil their attention to it at this moment, because the probability is, that at no distant day, looking at tho s'ate of puV)li • opinion, that works of connderablo magnitude will be imdertaken, and it is iinportunb th it people should not be alirmed as to the state of the finances— that they should not bo alarmed at a debt, which, coisidering the resources of the country, I own 1 do rot look unon with the slightest apprehension. I wish. Sir, to call attention to that celebrated T>as«ago in Macanlay's History of England, where a reference is made to the Engli^Ji debt. In describing the history of the period when that debt first originated, lie refer i in mo^t eloquent terms to th3 state of public opinion at various times as to ilo publin debt of the nation. »He says; : " Such was the origin of that debt which has since become the greatest ])ro(ligy tliat ever perplexed the sagacity and confounded the pride of statesmen and philosojther. At every stage in the growth of that debt the nation has set up the same cry of .xnguish and de:s])air. At every stage in the growth of that debt it has been seriously asvrt^id by v/iso men that bankruptcy and ruin were at hand. Yet still tho delit vmt on f,rowing, and still bankruptcy and ruin wfere as remote as ever. * * * * ^tj,,^ j^,, gloomy was the view that Oeorge Grenville, a Minister eminently diligent and ]n'acticai, took of cur financial situaticm. The nation must he conceived sink under a de':t of cno Imndrod anh fifty millions, unless a portion of tho load were borne by the A]nerican colonies. The attempt to lay a portion of the load on the American colonies ^rodnced atiotlier wai". That war left us with an additional one hnndretl millions of (l:!bt, and without tho colonies whose aid had been repi'esented as indispensaVOe. Again Enp land was given over, and again the strange patient ])ersi3ted in becoming stronger and moic» bloom- ing in spite of all the diagnostics and prognostics of State physicians. As she 'ad been visibly more prosperous with a debt of one hundred and fifty millions than with :i debt of fifty millions, so she was visibly more prosperous witli a debt of two hundred f.nd fifty millions. Soon, however, the wars which sprang from the French Revolution, nivl which far exceeded in cost any that the world had ever seen, tasked the powers of jjubl'.c credit to the utmost. When the woi'ld was again at rest, the funded debt of England amounted to eicrht hundred millions. If tho most enlightened man had been told, in 1792, that in ISl.'i, the interest on eight hundred millions would be duly i)aid to the day at the bank, lie would have been as hard of belief as if he had been told that the Government would bo in possession of the Lamp of Aladdin, or of the purse of Fortunatus * * * '^ # * The beggared, the bankrupt society not only proved able to meet all its obligations, but, while meeting those obligations, grew richer and richer so fast, that the growth co'.ild almost be discovered by the eye. In every county we saw wastes recently turned into gardens ; in every city we saw new streets and squares, and markets, more brilliant Limps, more abundant supplies of water in the suburbs of every greyt seat of industry ; Wc) saw villaa multiplying fast, each embosomed in its gay little paradise of lilacs and roses. While shallow politicians were repeating that the energies of the peoi'le were borne down by the weight of the public burdens, the first journey was performed by steam on a railway. Soon the island was intersected by railways. A sum exceeding the whole amount of tho national debt at the end of the American war was, in a few yeai's, art T .'I'. in,; (Ik V' t)\0 Dia no Til :-:tri ma: for froi t!ia ;icc( not vor the' all to trat voluntarily ftxpendod by this ruined people on viaducts, tunnols, embankments, bridges, station* and oiiijines. Meanwhile, taxation was almos.; constantly becoming lighter and lighter, yet still tlieeichequcr was full. It maybe now aflirmed without fear of con- tradiction that v.o liud it as oaKV to pay the interest of eiglit hundred millions a? our anceito-'i foimd it, a century ago, to p.iy the interest of nghty millions." He go?i on : — "A hni;^ experience justifies us in b>?lioving that England may in the 20th century be better able to pay a d('l)t of 1 ,000 millions tl. m she ig at the present lime to bear her present loaho'/ of a similar kind t Why. Sir, r had a st.iti^mcut put into my hnul the other day whi^h I have not had an opportunity of vorit'iin^', l)ut I h'iv3 no duu))t it is sultstantially correct and carefully prepared. It gives the following figures. In tlie year 1828, just a couple of years before I can)o to (>\inada, the jiopulation of the whole Home District was o\ly 21,329, and the cntin* assessed value of property amounted to .'31,269,252. T'lat district, Sir, the capitil of which v/as then Little York, witli a population of 4-000, comprised York and Sincoe. At the ])resent time that .same division has the city o:' Toronto, three Hidings of York, two Iltiling.s of ;^imcoe, two Ridings of Ontario and th>j County of Peel. The popul itiou i'l 186 1 had risen from 21,329 to 216,000, and I d.ire sa,', in a few weeks, we will find th.it tlio increase during the past ten years has been in t ven a greater ratio. In 1801 the :i'jsess:;d viilue of property had risen from $1,209,252 to tlie enormous extent of 809,077.000— an amount not very far short of the whole amount of the Dominion (h^bt. Well, Sir, I think we lind the country progressing in c. very satisfactory maunor. This is only ' no instance, and I believe almost as great prog 'ess has b?en nnv.le in other ]ivrti of the Pi'ovince of Ontario. I am sure there is no part of the Province of Ontario wlier-j one R39S greater signs of ini])rovomenfc and progr3S3 thai in the city of Montreal, (hear, hear.) I have not had such an opportunity of judgiiv^ of the increase in other parts of the country, but tho.e is not the smallest doubt that t'i3 development of railway^, iidd- 1 to our r.|dendid water eommunications--that these havj tended to make this country advance in a ratio whicli is not not cxeeeded in any other country in the woild. (C]ieern.) T Inve noNV, Sir, to come to the really important v)art of my duty, having explained exactly, what the real increase of the debt is— that, in point of fact, alt'aough tlie debt has, ap;>irently, increased very much, at the same tim<» the assets have also very con- siderably incrftftsed, and that the real 5o;i514 595.5 t, b\it there is a bum of 6209,050.69 whii.h should have l-eeu applieil (o the Sinking Fund of that year, but war? net carried to the c jcount during the year, an deductcil from that am -Hint. There are also certain putdic works wliicli wt^re not constnicted, and it is not fair to treat the money appropriated for them, Init still unoxpendfMl, as a saving. The result of it is that the money is in the chest insteatl of being expeiulc 1, and it is not, i-tvictly speiilcing, saved, as the works will have to be construotofl anothcM- year. T.y that iT)3ans the actual oxptuditurc was brought down to $14,345,-109.5S. Th" actual jec; ipts fov the year having l)e;;n $15,512,225, there was, therefore, an excess of $1,100,810, l;ut from th.it is to be deducted a further sum. I would remind my honorable fiiend oppcsitc, that gr-Mt complaints were ra.ade last year, with referuico to certain items in th(! ])'iblic aocount'^. These were charges against tlie jMiblic works which, it was said, oi;ght not to have been made against capital, but should have been charged against income. It very off en happens that there is a good deal of ditlienlty in classifying the.se items under the head of jtublic works, and I have been always sensible that there has be"n ground, jit uU events, for complaints on that score. I have, however, caused the sum of $104,988.18 to be writtan o3' against Consolidated Fund— or to be taken from capital account and transferred to income account since the accounts were published. If any hon. gentleman has got the piiolic accounts, I could at onco rofor liim to the placp. It will be found at pago 177 of the Puhlic Accounts. Thoro are a number of items, such ns stores in oxcL'SS of issues sinco Juno, 1870, amoiintinf» to $3(5,1 r»2. 0(1, iinothcr amount on tlio Parliamonixry and Dopartmental Iiuildiugri in Ottawa,— that account lias always bsen ti'oat^d as capital account in C()nso(|U'.!nci' of the building; i th«!ins(uv(\s havin;^ b.icn con- structed on capital account— but still tlit'rc are scivoral items in that such as caro of grounds, payment of clerks, it;\ Tlio aggregate anmuiit is iJS'J.D-l.lO ; and there is another item of tho various <;hargos counwctcd with tht? Wolland and Cornwall can ils of .i?88,'J14.33 Those it(?m3 have all bjen carried ta capital acount in rciluction of that amount : lut it is satisfactory to know that there is roally an nulual surplus of nearly $1,'.)()0,000 on the transactions of the year. I desire to call attention ti> the manner in which that surj)lu8 has been attained, and liow our J''iStimates wrre at fault. Tn that year there ■wa.s nn excess f>f rpAcnue OT(;r the preceding year, in the arti<;les of sugar and molasses alone, of ;?37 1,000. Tea was in exco'^s, 3l':M,onO ; brandy, gin, and fjurits, $13 ),000 ; wino, $40,000; iron and hardwar(\ 830,000 ;— tho total being iiiSOr) ,000. Theie was, also, an increa.S(? in Excise of fyjO[),t)'3i. (Hear, hear.) In this way we have got, then, a laigo .surplus fur the year 1870. I ^hall now come to tho current year. The estimates for the year — the original p.stinuites I made last year W3re$8,C0O,(iOO for Customs ; to that we added $1)50,000 as an estimate fur the new duties, giving an aggregaio- of S0,r)r)O,OOO. According to our present estimates, we believe tha: the Customs llevenuo for tho current year will reach §10,500,000, giving an excess over our estimates of §050,000. TIcre, again, I will call attention to the articles in which tlis incicaso has taken place. I stated, the articles on which the great increase took i)kce in tho prciviuus year 1809 and 1870. During that year there was no material ir crease, in fact, I am not sure there was any in the great staple articles of cottons and AVOoUens, from which a very large reveriue is deriveil ; they were about the same as tlie jirevious year. But during the past half year, wo lind there lias boon an increase in a luiniber of ailicles — nearly nil staple articles— of impcrt, of which some of the articles to which I liave refcirrd, bear a very small j)art. But there is no material incioase in the tea duty; in the sugar duty there is an incrcas<* of ^61,000, in bramly there is an increase over the previous year of $33,000; gin, $45,000; wine, $30,0()0; cigars, $22,000. There is also a very* considerable increase during thin current year, on some other articles — namely, on woollens, $201,000; on cottons, $126,000; on silks, $03,000. There is, also, an increase on many other items, making alt.ogetker an increase of $858,000 in the fir.st six montlis. (Hear,hear.) In .Customs there will be a rei-y consideral)le increase beyond what we anticipated. The Exci.sc! will give $7^5,000 above the estimate. The estimate on spirits was $2,375,000, we expect $2,750,000. We -expect from malt, $250,000 ; and tobacco, $030,000 ; and we also anticipate an increase from petroleum. We expect $4,200,000 from Excisj, giving ns a surplus above the estimates of $775,000. I expect to get $25,000 from stamps, and smaller sums from miscellaneous items, with which I need not now occupy the attention of tho House. The total result will be to give us a revenu ; during the year of $17,300,000. In the estimates for the year $15,000,000 is the suim stilted to ")e needed, but there are some items to be added. For instance, the sinking'; fund of tha previous year, which falls due the pi'esent year, though it does not belong to this year. Some balances will also be carried forward. For frontier expenses, the sum of $1 19,000 will have to be added. The tot-al sum therefore would be $15,588,927. as the aggregate estimate. I may hero state, that there is some addition to the subsidies in con.sequance of the new Province of Manitoba being brought into the Dominion, and also a charge in connection Avith the silver, both which will amount to $311,616; so that tho aggregate estinuite we calculate may reach $15,900,543. There may yet be some saying. I find there is an estimated s;iving in the Militia of $295,000 ; but against that I am rather inclined to think that the Minister of Militia has a supplementary estimate. Hon Mr. Holton. — Hear, hear. Hon Sir Francis Hincks — This supplementary estimate will more than absorb that amount. But still thora is a saving on tho Militia Kstimates of last session. The estimates for premium and discount will bo reduced l>y SIO.OOO; nearly nil the exchange bought the present year bi-ing under par. There has been a saving in niisoelianeous items under tha head of " unforeseen expenses." In the charges for Pulilio ^V'or'cs, wo expect to save 875,000 ; altogether wo anticipate a saving of 81 3;?, 170; which v/iU leave \xn an actual expenditure for this year of $15,167,373. That, deducted from the estimated revenue, as taken from the best information, will leave us a surplus of .$1,8J2,(327 for the current year; from that wo will have to deduct anything that may bo voted by Par iament for the services of the current year. I have now tt) approach the yeur that is to come — th(« year ending the 30th of June, 1872. In the estimates which have been submitted, it will be found that the aggregate amount, including what is jn-ovided by peiinauent acts is $25,682,000. Of tliat sum, $7,8 l(i,«JOO belong to Public W«)rk8, chargeable against ca|)itiil — such as the Intercolonial Railway. Deducting that sum tor Public Works tliert* will I'cmain $17,835,472; and from that two deductions are to be niade — one the amount of redemption of debt to the amount of $1,040,000, which will be redeemed during the yeai". There is, besides, a re-vote of $400, OtO for the North West, which, of course, is already j.rovided for by the Act, as a chai-ge on capital. Th« aggregate of these is $1,440,000, leaving the estimates at $10,3'J4.OOO. That is a largo estimate, certainly, and it is in excess of what it haa been usual to bring down. Therefore it is desirable to cr.ll attention to the leading items in it, which have an unusual character. In the first place, there is a large item for tho taking of the census, an item of $360,000. Then there is a special am )unt required for the purposes of the IMilitia — the sum of $276,000 — not for ordinary militia services, but for the pr.rchase of various arms, under an arrangement of a very desirable kind, made with tho Imperial (Jovernment. There is another item which is of quite an unusual character, though it will have to appear in the estimates — the item of $50,000 for a boundary survey between tiie Pi'oviuce of Manitoba — on the North- West -- and the United States. There has been a dispute about this boundary, and a propo.sitiou was made to the Ijnpcrial Govenmient witli reference to having a new survey by a joint commission, and at a joint charge. The Imperial Government, under all the cijcumstances, considering the independent, or semi-independent state, we have bc(.roine,has dealt with us in a very fair spirit. Tliey ha\'o proposed, in acce^iting the proposition of the United States, for a joint survey, to pay one-half of the British share of the expenses if we paid the other. Under the circumstance, tliis was a reason- able proposition. We are interested in the matter, and cannot complain. The Public Works— chargeable against income — are considerably in excess of A\ hat is tho usuil chivrge. This is nece.ssary, from the construction of several public works, whiih are urgently demanded. The works are of urgent necessity, and I trust will, when the time comes, commend themselves to the favorable consideration of the I louse. These items, which aro quite exceptional, amount to $1,180,000 in tlu) aggregate. The question no\v is, what is our position with regard to ways and means. I estimate that our revenu.^ M-ill be from Customs $10,000,000; inland revenue $4,300,000 ; Post office $.")00,000; Public Works, $1,000,000 ; Stamps, $100,000; miscellaneous, $850,000 ; and, taken togi-ther tho aggregate will be $16,810,000. I have reason to belie<'e- however,t]iat there will be a supplenientaryestimatewhich will add something to our expendi ture — about $300,000. My honorable friend beside me (Hon. Mr. Morris) has a measure to bring forward— a i\i\v syatnn of weights and measures, tlio introduction of which system will cost aVjout $59,00'). Thon3 avc some other matters connected with the Public Works, which we shall have to deil with ; and we h.ave some items to put on yet, which will swell the amount. Still, there will be, in tho amount of estimated revenue, a sur[>lus of $300,000. I think, sir, that the statement I have made with regard to the actual results of the operations of the last two years, and my anticipations if tho year to come, are very satisfactory ; and possibly there are many ^Members who think they will justify a nuieh larger reduction of taxation than the Government feel justified in proposing. Itmay, perhajjs seem hardly regular to considerthese points before going into Committee of Ways and Means, still I may mention what wc propose to do with regard to taxation. It will not be found that there U anything very serious ccutemplated, I dare say there will bo sgme disap- 6 pointment expressed by certain Membei-s when they find that their particular holibies are not hkely to be realized. But I trust I shall be able to give reasons that will satisfy even those Members, that at the present time, it is not expedient to adopt the course which a <^-reat many are anxious we should adopt. I am anxious, before touching on that subject, to state what the Government are prepared to propose. The very first step to be expected from the Government in making a reduction in the unties, would be the removal of ta» additional five per cent, on all duties imposed last session. Then the next step that would naturally engage our consideration would be those duties to which so much opposition was made last session ; 1 refer to the duties on coal and flour. But I feel (piite s ire that the House will consider with me that this is not a suitable time for dealing with that question (hear, hear). I think a more unfortu- nate time could uot,be seL^cted for taking up that ipiestion. At present, as we all know, negotiations are going on at Washington, and it is not improbable that this very question of duties, of commercial relations between the two countries, will receive con.sideration at the hands of the Commissioners. I, therefore, think that alone, if no otlier reason could be ollered, is suflioient to prevent ■ohe Governuieat taking up that subject at the present time. It is not on account of the great amount of revenue to be derived from these articles that the Government desiie to postpone the consideration of the removal '>f those duties, because really and truly if the Government felt it advisable at present to deal with that particular question, the consideration of revenue would not be a serious one. But we may ba told " if you are not prepared to deal with those duties, why lof'uss to i-educe the duty on other articles ?" Well, I do not think it is exj)edient to do so in the face of the probable large demands wjiich will bo made upon us lor the construction of great public works, although the subject of constructing these great works has not yet engaged the conbideration of Parliament, it cannot be doubted that some of them at least v.'ill have to be undertaken. 1 do not think that it will be contended tliat the taxation now levied on the people ia causing any public inconvenience, or that any sericas com- plaints are being made regpecting it — passing over the particular question with regard to the coal and flour duties, lespecting which I admit there is a considerable amount of drjsatisfaction. That being the case, and looking to the future when w« tihall have to go into the market to borrow money to meet the large expenditure which we will, n > doubt, have to incur before very long, we thought it advisable to keep up tlie reven'ie so tliat the credit of the country might be increased, and we miglit be abh; to borrow upon more favorable terras than we otiierwise could. I believe, therefore, that it will be foum'. a great deal more advisable to avoid taking off any other duties, and more especially as it is within the boimds of possibility and even of probability that the duties on coal and flour will be taken off. There has been a constant demand by many raember.s of this House, and by various sections of the people for a reduction of the duties upon various articles which are either raw materials, or (juasi raw materials entering into the manufactures of the country. I think it is soinid policy to aid thode manufactures in every possible way, and that it is exceedingly desirable to add thesa articles to the free list. These applications are frequent and they are made very often during the recess of Parliament. Yv^e propose to ask Parlia- ment to empower the Governor in Council from time to time to transfer to the free list articles which are used as materials in Canadian manufaLtures. Of course a list of the articles thus transferred to the free list by orders in Council will be laid before Parliament within fifteen days of the opening of the next session. 1 think the House may fairly trust the Government with that power, believing that it will be exercised with disci'etion, and I feel sure it ia a proposition that will meet with general satisfaction. There then was some dilBculty Avith respect to machinery. For a long time machinery was adraitted free of duty, but last session we again jilaced it in the 15 per cent. list. A great many applications are continually being made to ua upon this subject. On the one hand it seemi a very unreasonable thing that Canadian machinists should be subjected to a duty upon the various articles which they imp.-rt and use in their manufactures, and at the same time the machinery which they make comes in fx'oe of duty. That seems to be vary objectionable. Ou that ground wo propouad last a gvervt various either I try. I lat it is frequent i Parlia- frec list list of be laid 1 think ,t it will ill meet hinery. ] I laced it tlo to ua Canadian port and omes in "jad last session to put machinery on the 15 per cent. list. But it has been represented, and thevfl is no doubt of the fact, that it is sometimes very important that machinery, which is not and cannot be manufactured in this country, should be admitted free. We propose, therefore, to ask Parliament to authorize the Governor in Council to admit free of duty any machinery on satisfactory evidence, that like machinery is not manufactured in this country. Of course any provisions under that head would also be submitted to Parliament within fifteen days after the opdning of the session. It will be necessary to provide for the extension of the customs duties which fv^ere authorized to be levied in the Province of Manitoba to the whole of the North- West Territory. There is but one other item at all affectinp;, I can hardly say the revenue, but the commerce of the country, to which I will very briefly lefer. Very strong representations have been made to the Government from time to timi^ within the last two or three years with regard to the necessity of taking some steps to prevent the destruction of hemlock trees which ha« been going on. In relation to tins matter I may just read a statement of facts as set forth in a petition to the Governor in Council, and I may add that enquiry has been made, and reliable persons have assured us thnt these statements are substantially tioie : — " Within a few years a swarm of speculators havi,' carried on to a very large extent the trade of exporting bark to the United States, thus stripping our forests of all the hemlock to an alarming extent. Large quantities of well timberoji hemlock lands have fallen into the hands of speculators, who, after taking all tlio bark, leave the same with the timber rotten and totally unfit for actual settlement. Tres- pas.ser3, also, foi the sake of gain, enter upon unoccupied lands belonging to the Crown and to individuals and destroy all the hemlock timler." Kow, there is an extract from this hemlock baik, which is exported to the United States. The United States Gov- ernment, no doubt very wisely, looking entirely to their own interests, have imposed a pretty smart duty upon this extract, that is, manufactured in this country, but admit hemlo;k bark duty free. We propose to counter-check this action on their part by putting a duty of SI. 50 a cord upon hemlock bark. This is not a question really affecting tlic revenue ; we neither hone nor expect to get any revenue in tLis way, nor do we desire it. But it is very undesirable that our hemlock trees should be all cut down and the 1 ark st-nt out of the country. 1 may say that while the representations on this subject chief.y came from tl;e Eastern Townships, we received some representaticms to the same effect from the Proviiice of Ontario. Under these circumstances the Government considered the matter, and ht.ving reason to believe the truth of the representations, they thought it their <'uty at all ovents to enable the House to decide upon it. It is not a matter that they take any very warm interest in. They believe it is right to make the proposition, and they leave it to the House to deal with it as it may see tit. These, Sir, comprise the statements which I think it necessary to make, and I have only in conclusion to thank the House very sincerely for the attention they have given to me (ohoers). Silt Francis Hincks rose to reply to the speakers who followed his budget speech, including Sir A. T. Gait, Mr. Cartwright, and others. He said — Before I make a few remarks on the speech of the Hon. Member for Sherbrooke, I wish to say a few words in reply to the remarks of the last speaker, the Mon. Member for North Oxford (Mr. Oliver), on the question of the public debt. The hon. gentleman surely has got a statement before him of the exact state and particulars of the debt and assets, and he must see that every- thing is stated there clearly from Confederation down to the last fiscal year, and that the debt his not increased more than the amount actually set down. In fact, it is evident there has been a very considerable saving, as I showed in my former remarks — that the increase of debt from 1867 has been $2,481,101. I have shewn that the expenditure from capital in purchasing and opening the North-West, and in connection with the Interco- lonial Itailway, has been $3,009,337 (cheers). With regard to the course of the Hon. Member for Sherbrooke, I think it has been most unusual ; and nothing has been more extraordinary in relation to the proceedings of this evening than the course taken by the Member for Chateauguay, who has been sitting silently during the discussion, but who commenced it by proposing to me, as a matter of convenience to the House, that this diajussion should be entered upon with /ou, Sir, in the Ch^r, instead of going into S 10 Committee of Ways and Mcuns, as usual. Whether the hen. gentleman 'cnew that the lion. Member for Sherbrooke was going to propose a motion equivalent to o.'ie of want of confi- dence, I am unable to say. All I do tnow is, that I would rather cccupy the postion of the Government than tho position ol those hon. gentlemen in takin;.;' this course (cl.eers and counter cheers). The Hon. Memb'jr for Sherbrooke took a grea : deal of credit to himself for bis tariff of 18()6, and in referring to the fact that no substantial alteration has been made in that tarill', he said, in soma respects there had been a departure i'rom sound principles. Of course I understand why he shrank from naming the particular points that constituted a departure from the sound princijile in question — and if the remark had come from the Member for Lambton or the Member for Chateauguay, I might have admitted it bore an air of consistency, because they no doubt would have condemned everything l.ke a duty on articles of food. But not only did the Member for Sherbrooke impose a duty upon such a tides as iish and oils, but on lard, tallow, floiir, Indian corn and corn of all kinds, meat, butt r.cheese, and so forth. Yet this was the geni leraan who ace jsed the Government of a departure from sound principle in i-egard to the present tariff (chejrs). He may she .ter himself urder the statement that he referred to coal. Is that duvy a departure from sound princ; pie ? All I need observe is, that I will venture to say that if Confederation had existed when he brought in the tariff of 1866, coal would have Iwen placed side by side with flour (hear, he&r). At that time there was no Nova Scotia to consider, and there was no ooal from her brought to Canada. Canada was importing coal from other places, and, no doubt, if we had been in the same position last Session, coal would not have found its place in the tariff. Nothing could be more unfair than the observa- tions of the Hon. Member with regard to the quotation I made from Macaulay's Hisiory of England. There was nothing in what I said to intimate I thought it was desirable there should be a great pub'ic debt. I wanted to shew that, notwithi^tanding that great public debt — and let it be observed, that was contracted almost exclusively for carrying on war — and surely no one can imagine it is a desirable thing to contract debt for such an object — however necessary it may be to contract debts for the defence of the country — the mother country had increased in wealth and prosperity. But here we are in very different circumstances. Our debt was contracted, not to cany on war, but for the noble, the ]oromising work of public improvements (tiheers). I do not hesitate to say, I beiieve it has been the means of increasing largely the material prosperity of the country, and of accelerating its progress (hear, hear). I'his debt of ours has not been, as the hon. gentleman strove to make it appear, a serious disadvantage. The Hon. Member talked a good deal about the tendency to speculation resulting from a debt and loans, and warned us anxiously in regard to them ; a:id he went on to condemn the municipalities for going too fast in giving subsidies to railways, and also the Provincial Governments of Ontario and Quebec. I saw an announcement, not meiiy weeks ago, that the Hon. Member for Sherbrooke was himself solicituig aid from tl.e Government: of Quebec for a certain railway. Yet he now actually condemns it for its generous policy on this subject (cheers). Then, however, he was urging that Government to go even further than it proposed in its contribution (renewed cheers). Moreover, one of the conditions of the Union we are about consummating with British Columbia is the construction of a great railway to the Pacific and surely no one imagines it is possible t'dat great work can be built without material public aid. The Hon. Member is well aware, besides, that ona of the terms of the Confederation compact was the improvement of tie western canals. He certainly, therefore, was the last person, unrler the circumstances, who should have uttered this warning with regard to the public works. It is not the first time he has talked about speculations, e:;travagant and improvident axpenditure, aid so forth, of the years 1852 to 1854. For my own part I am not prepared to defend all the grants and loans which were contracted in those years with regard to the railway improvements, yet I will not hjsitate to say that I believe that, or the whole, the expenditure of money which took place under the acta to which I refer, cid tend very much to the improvement am. advantage of the Province of Ontario in whicL the expenditure cliiefly took place. If wi are to go oa with upt of; Go the Wf has wh wh( the u improvements, it it absolutely impossible that impiovements of a larger description cnn b« paid out of the ord aary revenue, but it is really a little too bad that after all the attacks mad) on the Gov( -nment from Ihe other side o'the House ibr paying too much out of capilal — that is to s iyforbor;-owing monoy for the purpose of malting public impi ovfiments — when W'j come forv ird to s; y that we have the m ?ans of payi ig them out of (ur ordinary reveiue. and do pa; them out of tliu'". source, it is ioo had that ive are assailed foj- it. At all rverti, as far p;i my owi expt ri'?nce goes, I hive no kno\/ledge of any precedent for this, (Cheers). WJnt have v'e had this evenin'5'? We have hat a regular disci s.sion on the estiniatas, just as if the Houue werK in Cor\mittee of Supply. We have had til the items passed under revieAr, and alracks niaile on the Government which it is almost impossible in discuiision of this; kind to meet. I certainly fee! prstty stroigly on the subject, because the honorable genlleman, not content with attacking the (Jov^i'nment, has actually assailed me persont ly as Minister of Finance. Hon. Sir A. '1'. Galt— No, 10. Hon. Sir FRiiMCis HiycKS — Yes, yes ! I my yes, foi' the honorable gentleman attackeil the mode of dealing with the finances of the country, iind said it was my financial polity ('lear, hear). Now, ;he ho lorable gentlem in withdre-^* last session a charge of a similar kind which lie was making, when he sail ho knew very well that :h6 Finance Minister was not nvsponsible for the estimates of ih?. Governme:.t. I do not wait to shrink from the responsibi' :' ty of the estimxtes, but I do say that it is not a proper charge to bring a personal charge arainst the Minister of Finance 'jecause the I'ublic Works Department or ai:y other department submit e.s timates larger than the Hon. tjentlemen thinl:s desirable. The ;rue way is to take up these items and ask are they wanted for the country or not (heai', hear). I say with regard to the item of $150 000 for the erection of a puV>lic building in Toronto, T say thit the state of the public building there, used as a Custom House, is a standing disgrace to this country. Mr. Harrison — Hear, hear. Hon. Sir Fra> ois Hincks — There is a paltry custom house building that I recollect seeing there twenty years ago that is wholly inadequate for tae trade of that city, where such anenormous portion of the revenue of theDomiaion is collected (hear, hear). And then the Inland Revenu*' Department is without any office, e.x;cept a hii-ed one in tie exchange building? though itn oiiicers are obliged to collect an immense nwenue which, with the cus- toms revenue, is tqual to the 'vholo amount collected in the province when the builcing was erected. I am prepared to vindicate that vote and every other vole in the public estimates, and it is not honorable members to say that the estimates are lai 9;er this year than they were last year. Af; I have said, we have been assailed time and a jiin when wo Mere not able to make im])rov'ements without enlarging the debt, but now, v.-hen we are trying to keep down the debt and are paying out of our current revenue these amounts, we are assailed because our e-stimates are so la-ge (cheers). My honorable frien 1 was obliged to admit, because I stated it distinctly, that the extra- ordirary expenses were upwards of a million dolhirs larger this year. There was the census charge. That is very largo, and any one who thinks of the immense territorial extent of the Dominion will see that it is hardly possible to avoid incurring large expenses in this direction. Now, as to the negotiations at Washington — wh), sir, the Hon. Member for Sherbrooke is the last member in this House who should have said one word upon this suttject. The Hon. Member said that my remarks were an excuse unworthy of a finance minister, and talked of the duties which affected our own people and said the Government should legislate for them only. But, does the honorable gentleman rememl fir the ^rear 1860, when he was negotiating with the Committee of Ways and Means at Washington 1 When he was carrying on negotiations there with the evident intention of basing our tariff on that of the United States I Yet, he is the very honorable gentleman who now stands up and tells ua that when negotiations are going on at Washington, and when it is a i-emarkable fact that a repeal of the eoal duties is hung up in the Senate at the present time — Hon. Mr. HoLTON—No, not hung up ! It Hon. Sir Francis HivCkb — Yes, it is bo. I have the best authority for it. I stat* it on undoubted authority, and from the latest inlormation got by telegram this very day from Washington (hear, hear). Hon. Sir G. Cartie* — The Hon. Member for Chateauguay has only the newspaper.s, you know ! (laughter). Hon Mr. Holton — I happen to know what can and what cannot be done under the Constitution of the United States. A bill passed by tho late Congress cannot bo dealt with by the Ne .v Senate. It must be commenced de novo in the House of Represent:\tives. Hon. Sir Francis Hincko — lam not going to enter into all the points raised by the Hon. Member for Sherbrooke, but I cannot pass without notice his remarks with ref(;rence to the West India Commissioii. I recollect perfectly well what took place on a former occasion with regard to that subject. The honorable member for North Lanark who charged him with inaction was a member of the Government for two or three years after that time, and yet he did not succeed in getting any action taken on the report of the Commissioners. I can only say that I believe the prin- cipal recommendation of tho report to be a very valuable lecommendation ; but while I say that, while I believe it would be most desirable to have better communication with the West Indies and more intimate commerc'al relations with them, I am not insen- sible to the difficulties that have hithei-to stood in the way. Negotiations have been going on for a considerable time on tlie subject, but owing to the fact that Newfoundland aid not come into the confederation, the scheme of subsidizing a line of steamers, which would have fully answered the purpose, was thrown back. I can only say that my honorable friend and colleague, the Postmaster General, is thoroughly alive to the importance of the subject, that he has it constantly in view, but he has not yet seen a chance fores trying out any efficient scheme. There is another point respecting which I think ray honorable friend should have been the last member of this House to attack the Government, that is the withdrawal of capital from commercial purposes. That honorable gentleir.an wlio pro- jected a scheme for the withdrawal of the whole banking circulation of the country is about the last person to mako an a':tack upon the Government for withdrawing capital from commercial purposes. The m£-in withdi-awal of capital fi'om commercial purposes ■V9-ill be in the form of the issue of Dominion notes ; and really that will be to a very small extent, because, although the honorable gentleman has condemned the arrangement which obtained the sanction of Parliament last session, by which the banks were obliged to hold Jxalf their reserves in Dominion notes, that did not lead to any more withdrawal of capital, because if the banks did not hold their reserves in Dominion notes, they would have to hold them in gold, while the (Government obtained a very considerable circulation, and really economized capital rather than the reverse. The only way the Government coula possibly withdraw capital is by the circulation of small notes. In view of the fact that banks are not allowed to issue notes beyond the amount of their capital, and that that amount will be reached, as I believe will be found to be the case, without the issue of small notes, it will be found that the issue of small notes by the Government will not withdraw any capital from the country, and will not injure the banks in the slightest degree. With regard to the other alleged withdrawal of capital from commercial purposes, I believe it will be found that the measure of the Government with regard to insurance companies will tend in a different direction. Certainly it will not increase but rather tend to diminish the necessity of investing in Dominion securities. No doubt at tlje time when the Government had a large floating debt to pay off they were anxious to issue their «ecurities, but we have during the last year been rather embarrassed by insurance eom- )>anies withdrawing the securities they had deposited under the Act, and requiring us to give them Dominion stock instead. We had a great deal rather they had kept their securities in their original form. Of course. Sir, I am quite willing to give due attention to all warnings which may come from my honorable friend with regard to extravagance. I am not aware that the Govemraent are projecting any very expensive public works outside of those works to which I have already made reference. The principal item from public works which are chargeable to capital in the present estimates is the Inter- colonial Railway. Of courae fre intend to complete that railway with as much 13 rapidity as possible. Many of the other items are for carrying out works which «r. already sanctioned by Parliament, and which it woald be abfolutel7impoIsibt for us to abandon m their present state. The Buildings at Halifax J^^nf in quite an exceptional position, as the Minister of ^Custom, ttly explained We are no^v charging $10,000 a year to Nova Scotia for these SSw« n,,? have buildings at Halifax, and if the present building is not hided ovTto Z Zrl IS nodung for us to do but to build a new one. This ".ill impose no frish burdek utn ftio (fooT"'"' ^'''"!f ""*^*^t ^""^^"S^ "^« ^"^^'^ °-«'-' Nova Scot a s chartcl w t h f w nLtCirtht h' "'"^ "'!^ '^ ^^T'^^ '^'''''' '^ *^« -«^ of H new bu dT^ Hon M 'mW of SWV T"" ^"^ ^°"^T ^ "^"'* ''^ ^ '^^^ ^^' «o"rse taken by the in the Go?e nlei^^t Nor'i'! i." """«"-^«^<'' ^^ ^^ ' /irect vote of want of confi^lence .lopted otCp^ihe :z:i^L::^:^^-i ^.^^r;:^ ^druth r: anot ler year, without going into the investigation of particular items, La cou^ewhX? IhlsHo^r ""P^^^*^^'^*^^ -^ -^-1^ I think wilf not be sustaik:rb;Traj:Ht;Vf idBU