the CopF QaH< Co Lf Toronto MAP TO AC C OMPANY HAN x^ h ^2\ z,^ \ \bA I L' AS KJIV, N D TERR IS ON Bav Mtxkd Forest 'f ftnd. Ve*/ietahf^?. <2-. C BN(] >0/*>. PlNHJ TlMBKR / r^i .s^^ Por> UanXIMATtL SCAL« Of MILES HANW^, COMMERCIAL UNION -B HANDBOOK OF COMMERCIAL UNION. I r TAN I) HOOK OK KHKI» . ... Ill iiy tho Hon. ,1, VV. Lonolkv, Attornoy-(«onoral of Nova 8cotia, Malifax. (From 77i.' iVcel:, Toronto.) AnuiiKHs on Com.mehcial Union 122 By James Pkauhon, Toronto. (Delivered at Almonte, Ont., Feb. 2()th, 1888.) Addhkhh to tub Fahmekh op Haldimani) 131 (With a reply on tho Disloyalty Cry, delivered in tho House of Commons, Ottawa, on the Debate on Uociprocity, March K), 1888.) By John Cjiarlton, M.P. for Norfolk. How CoMMRHOiAL Union Would Affe«;t the Laijour Market 142 By Alfred F. Jury, Toronto. (Reprinted from The Mail, Feb., 1888.) Address rrfore the West Peterhoro' Farmers' Institute. 147 By Wm. Cluxton, late M.P. for West Peterboro'. (Reprinted from The Mail, Mar., 1888.) llECU'ROCITY IN THE NoKTH-WeST 155 By F. C. Wade, Winnipeg. (Correspondence of IVie Mail, April 24th, 1 888. ) The Ontario Farmers' Institutes and Commerciai. Union. . 1G5 (Circular issued by the Executive favouring Commercial Union with the United States.) SrEEc^ii ON Commercial Union at the Toronto Board of Trade (June 16, 1887) 160 Uy Henry W. Darling, Toronto, Covin) 1 1*. vii I'AUK. TlIK MAN(rFA( rrUINO IntRHKHTS IV RkLATIoN to CoNfMKIlCIAf, Union. (A reply totlio lion, .iamea Young, M. IM*.). . , . 175 With an article contributed to the I'ruHson A Por.HYTifAT Would Hknkkit Canada. By J. DKYl^KN, Jr., (Ult. A Skiuks of Lkttkrh Addhfshkd hy Mr. (Ioldwin Smith to the Toronto Ma;7, on the subject of CoMMKR<;iAh Union, dealing with the iliscussiou in its various phasun, and meet- ing the arguments successively advanced against the mea- sure. (Jieviscd hy the Author) 1 IX) A Lbttkr Addresskd from Washington by Mr. Goldwin Smith to the Secretary of the Commercial Union Club, To- ronto, on the progress of the movement in the United States. (Washington, April 'S, 1888] 234 A Letter Addressed hv Mr. Ooldwin Smith to the Toronto Mail on Imperial Federation as an alternative to Com- mercial Union. [Toronto, Fob. 17, 1888] 238 • A Letter Addressed by Mr. Goldwin Smith to the New York huieptndent, on Commercial Union, and treating the sub- ject in its relation to the Americans. [Toronto, Jan. 24, 1888] 243 A Letter Addressed ry Mr. Goldwin Smith to the New York Chamber of Commerce, from the New York Times. [Toronto, Nov. 5, 1887] 250 Si'EECH IN the House of Commons, Ottawa, on the Re<'i- pRociTY Debate (April Cth, 1888) 254 By Wm. Mulock, M.P. for North York. 234 ^ viii Contents. PAOE. Tiih Ekfk«jt ok UK«JirKo»'iTY vviTU THE United States on the LuMUEtt Trade 201) By A. H. Cami'ijell, Toronto. (An Address before the Commercial Union Club, Toronto, Feb. 8, 1888.) A Series of Articles on Commercial Union from the Toronto Mail 272 By Edwarl Farrer, Editor of The Mail. Constitution (with list of Executive Officers) of the Commer- cial Union Club, Toronto 290 Map to accompany the Handbook. OTIIODIJCTIOI^. The question on which the following series of papers is intended to throw light may be safely said to be the greatest which has been submitted to the Canadian people since Confederation. It has just given rise to a debate in Parliament, second only, if second, in itnportance to the debate on the Federal Constitution. The movement for the abolition of the tariff wall be- tween Canada and the rest of the continent had not its origin in any conclave of schemers or any artificial organi- zation. Of the men who afterwards came to the front in it, not three had been know n to each other ; nor was it in any way organized till it had for some time been on foot. It had not its origin in party, for among its principal promoters were men of both parties and men of neither. Some, at least, of the Conservatives saw in it the logical sequence of the policy which had adopted Reciprocity of Tariffs only as the neces- sary alternative to the more desirable Reciprocity of Trade. It had its origin among the people, whose at- tention had been turned to their trade relations with the continent, by the Fisheries question, by the Manitoba Railway question, by a season of agricultural depression, and above all by the manifest failure of what is called the National Policy, that is the application of the Protec- tive system to markets so narrow as those of the Cana- X Introduction. dian Provinces. The movement may be said to have taken practical shape at a convention of farmers, who had grown tired of being forced to sell in the cheapest market and to buy in the dearest. The farmer has, as yet, had nothing to say to the tariff. His industry, though comprising, if we include those de- pendent on it as well as those engaged in it, the bulk of our population, has, together with the other natural in- dustries of the country, such as lumbering, mining, fish- ing, and ship-owning, been denied the title of national, which has been reserved for manufactures, and especially for such manufactures as are not natural growths, but the creations of artificial legislation. On the eve of a general election the Prime Minister assembles the manu- facturers, and intimates that in requital for their votes and contributions, the commercial policy of the country will be regulated in their interest ; but he does not assemble the farmers, the lumbermen, the miners, or the fishermen. The Ontario farmer has been made to pay a vast sum for the construction of the Canadian Pacific Kailway by which, instead of obtaining any commercial advantage, he brings down the most formidable competition on him- self, while he is made to pay a tax on his clothes and other articles of consumption for the benefit of the pro- tected manufacturer. It is not wonderful that the On- tario farmer, the truth having once dawned upon him, should declare for Reciprocity. It is not wonderful that over forty of the Farmers' Institutes of the Province should have pronounced, as they have, in favour of the object of Commercial Union. Introduction. zi If this movement had done nothing else it would have been most useful in afrming that the commercial policy of the country is to be regulated, not by one industry alone, however important and respectable, but by all, and not least by those which being native to the country must after all be the chief sources of its wealth and the main pillars of its prosperity. The farmers, as has been said, have declared their opinion by a great majority. So have the lumbermen in convention assembled. The mining interest is almost too much depressed to make itself heard ; but when it finds a voice, that voice is loud in favour of the removal of a tariff wall which keeps our vast mineral resources dor- mant, by preventing the free export of ore, the free im- port of machinery, and the free inflow of the American capital required by the risks of mining enterprise. The people of Port Arthur know that if ever the rich treasure- house of minerals in the midst of which they dwell could be unlocked by the key of Unrestri{;ted Reciprocity, their village would become a mining city. Our fishermen desire, as one man, a free market for their fish ; our ship-owners, the freedom of the coasting trade, which alone can restore life to the shipping interest in the Maritime Provinces. Our manufacturers, those at least whose industries rest on a solid commercial basis, are for the most part ready, while some of them are more than ready, to go into the free market. 'They agree with Mr. Gibson, the owner of one of the largest cotton factories in the Dominion, who says : " I want Unrastricted Recipiocity because it will give me a large market, and I am not afraid to com- xii Tntrodtiction. pete with manufacturers to the south of us. I believe I have money enough and brains enough, and our people are intelligent enough, to enable us to compete success- fully with those who are manufacturing cotton to the south of us. Give me the market, that is what I want." There is political opposition to Commercial Union of a very formidable kind, but the commercial opposition is confined to those manufacturers who feel themselves de- pendent on Legislative protection, together with the banks which have advanced them capital, and the wholesale houses specially connected with them. It is to be la- mented, and those who have taken the lead in this move- ment do sincerely lament, that justice cannot be done to the interest of the many without some risk of injury to the few ; but the many in this case are very many, the few are very few. The responsibility for any loss which may ensue must rest upon the politicians who, hav- ing proclaimed that their policy was not protection but re- adjustment, and that they had recourse to a reciprocity of tariffs only because they could not get reciprocity of trade, afterwards yielded to temptation, and attached to them- selves a corps of political supporters, dependent on their legislative patronage, by holding out to those who would engage in manufactures the promise of permanent protec- tion. The map prefixed to this volume puts the broad argu- ment in favour of Commercial Union before us at a glance. It shows the main expanse of the cultivated and inhabited continent, occupied by the United States, in the enjoyment of perfect internal free trade, and owing to ^ Introduction. xiii economical unity its incomparable prosperity ; each State, even those which by nature are the poorest, mani- festly deriving wealth from commercial intercourse with the rest. Disposed at intervals along the northern mar- gin of the continent are the four separate blocks of terri- tory which politically make up our Dominion, the Mari- time Provinces, Old Canada, French and British, the newly opened region of the North- West, and British Columbia. Each of these blocks of territory is divided from the rest by wide uncultivable spaces, or by such barriers of nature as Lake Superior or the " sea of mountains " be- tween the North- West Territory and British Columbia. They are all shut out by the tariff wall from the Commer- cial pale of their continent, which is thus deprived of the benefit of their natural resources, while they are deprived of their market. The continent is the natural market for the products of the farm, the forest, the mine, and the waters in which they severally abound, and its coasting trade is the natural field for the maritime industry of such of them as lie upon the sea. With each other they have scarcely any natural trade. An effort has been made to force a trade between them by means of a protective tariff, and at the same time to bind them together by poli- tical railroads. The a tempt to force a trade has failed, like all other attempts to turn commerce out of its natural course. The coal tax imposed in order to compel Ontario to use the coal of Nova Scotia was abandoned as futile, not, however, before it had marked the weakness of a policy which with one hand beckoned manufactures into Ontario, and with the other checked the importation of the fuel xiv Inti ^auction. necessary to their existence. The merchants of the Mari- time Provinces, as Mr. Longley, the Attorney-General for Nova Scotia says, make constant visits in the way of trade to Boston and New York, but none to Toronto ; the . business men of Ontario go daily backwards and forwards between the Province and the American cities, while their visits to Halifax, in the way of business, are very rare. The moral which Attorney-General Longley draws from our experience is, " That the Maritime Provinces have no natural or healthy trade with the Upper Pro- vinces, but with the New England States ; that the Upper Provinces have no natural trade with the Maritime Pro- vinces, but with the Central and Western States adjoining them ; that Manitoba has no natural trade with the older Provinces of Canada, but with the Western States to the south of them ; that British Columbia has no trade with any part of Canada, but with California and the Pacific States. In other words, that inter-Provincial trade is unnatural, forced and profitless, while there is a natural and profitable trade at our very doors open and available to us." This is the moral which the map, geographical and economical, enforces. In the Maritime Provinces the disappointment has been so great as to lay a heavy strain on Confederation. Each Province is practically confined to its own market, which is in no case large enough for the natural products. To any one looking at the Conti- nent as an economical whole apart from political divisons, to draw a tariflf line across it would seem insanity ; and economy takes no notice of mere political lines. The success of the political railways, constructed at Introduction. xv enormous expense, in giving effect to the Separatist policy has hardly been greater than that of the protective tariff. The Intercolonial Railway, after costing in all forty-six millions, is run by the Government at an annual loss, Apparently, of half a million, and the Government itself is actually promoting a commercial line direct through American territory, which can hardly fail to complete the ruin of its own political line. The Canadian Pacific was to be an exclusively national undertaking, and the iron bond of our nationality. No American was to have any- thing to do with its construction, and it was guarded by monopoly clauses against any connection with the Ameri-^ can system. But the Syndicate included an American firm,and the abrogation of the monopoly clauses, which had brought Manitoba to the verge of insurrection, has been purchased of the company by the Government ; a unique instance probably of a payment made by a Government for the reversal of its own policy. The Canadian Pacific Railway Company is itself connecting Canada with the American system at the Sault, and its operations in the East have a manifest tendency in the same direction' As a colonization road the railwav is unsuccessful, as it spins out settlement over a line of eight hundred miles, carrying the settler far away from his centre of dis- tribution, increasing his freights both on exports and im- ports, and depriving him of the general advantages of close neighbourhood. To what military or Imperial uses it may be put is another question ; we are dealing here only with the matter in its commercial aspect, and in its rela- tion to Canada. The removal of the tariff" by permitting xvi Introdvjctlon. the export of orc,a(lmittinjT^ mining machinery, and opening the door to American capital, would awaken mining in- dustry on the Northern shore of Lake Superior to the life which it already displays upon the Southern shore. Nothing else, apparently, in the way of Canadian com-* merce can save the Lake Superior section of the line from the fate of the Intercolonial. The fruits of an economical policy which defies nature and seeks to override her decrees, are a mass of pub- lic debt piled up while that of the United States has been in course of rapid reduction, and commercial atrophy. jCommercial atrophy is what everybody must see would ensue if one State of the American Union were cut off by a tariff wall from the rest and set, as it were, to feed on its own juices. It is of course felt more in Nova Scotia and New Brunswick, where the market is smallest and least adequate to the consumption of the natural products, than in Ontario and Quebec, which form a market of re- spectable size in themselves, though the division of race . and language between the British and French Provinces, which is so fatal to our hopes of national unity, probably also forms a certain obstacle to trade. There appear to be some who need reminding that the size of a market is proportioned to the population and the purchasing power, not to the extent of territory which, on the contrary, di- minishes the market if the people are scattered widely over it, so as to increase the difficulty and cost of distribu- tion. The inevitable consequence of commercial atrophy is seen again in the exodus which robs Canada of so many of her sons just at the age when, the country Introduction. xvii having been at the expense of their bringing up, the loss is greatest, and of no Hniall amount of property with them* Sir Richard Cartwright reckons that in the last twenty- five years Canada has lost one out of every four of the native population and three out of four of the immigrants. If this is not political it is economical and social annex- ation. The effects of the system have been most severely folt in the North- West, which though superior to Dakota both in soil and climate has been kept behind it, and nota- bly retarded in point of population, by the double pres- sure of Railway monopoly and an adverse tariff. Noth- ing surely more extraordinary was ever undertaken by a government than to force that whole region to have no commercial outlet except at Montreal. Nor is anything in modern commercial legislation more cruel than the enactment which debars the poor settler of the North- West from supplying his wants in the market close at hand, and compels him to fetch his farm implements, the materials of his dwelling, and many of the necessaries of his life, from a distant Province. The bonds of Railway Monopoly have been burst, not without the indirect assis- tance of the movement in favour of Commercial Union. It remains for the people of the North- West, in alliance with the friends of Commercial Union here, to burst the bonds of the adverse tariff, and thus remove the second of the two great obstacles which have hitherto retarded the progress of their country. Reciprocity in natural products we once had, and our tariff contains a standing offer of its renewal. The offer, xviii Introduction. it is well known, will not be accepted unless wo make the bargain fair to the Americans by consenting to a reci- procity of manufactures ; but it is an admission by our Government of the value of the American trade, and a conclusive answer to all the arguments which have been urged on the other side, so far as natural products are con- cerned. The various attempts which the Government has made to negotiate commercial treaties with foreign na- tions in Europe or South America, and the projects for extending commercial intercourse with the West Indies and Jamaica, are in like manner avowals of a conscious- ness that our market is too narrow. Their authors might be charged, as Commercial Unionists are, with dis- paraging the country, if the country is disparaged by saying that improvement is needed in its commercial position. The farmer is told that Protection, by forcing manu- factures into existence, will provide him with the market which he needs. It is a market created at his own ex- pense, since he pays for it either in the raised prices or in the lowered quality of the goods. Such a policy is rational if a man can " raise himself by his own boot-straps," and if a country can be enriched by taxation. Let capital and industry find their own way into the most profitable chan- nels. Develop the natural resources of the country, its lumber, mines, fisheries, shipping industries, and agricul- ture itself, in the only possible manner, that is by giving them a good market ; population will then increase of it- self, and farmers will have customers without paying for their creation. It has been said by one who had studied TntroducfioTi. xix tlie subject that the farniei*H along the front of our coun- try ouglit to havo enough to do in feeopulation of Can- ada have sought homes elsewhere, they must remember that the tendency of that is altogether to increase. Who are the men who leave us 1 Everyone who pays attention to the character of that emigration knows that I am stating the simple literal fact when I say that in a most unusual proportion they are the very pick and flower and choicest portion of our population. Everybody knows. Sir, that the men who leave us are just the men whom wise statesmen would desire to retain in Canada. Now were our position such, as that which formerly used to ob- tain between Scotland and England I could not complain so much, because if the same rule applied between ourselves and the United States as between Scotland and England we would still have the satisfaction of knowing that when our friends left U3 they went to swell the strength of the Empire, or the Dom- inion, as the case might be, in some other part of it. But, un- fortunately, here the case is precisely the reverse. They are a double loss to us, because they go to swell the strength of our nearest neighbor, rival and competitor. Now, Sir, a matter of consideration which perhaps is more important than all, is, what possible available remedies are there for such a state of things 1 So far as I can see these remedies are four. In the first place I think that a very great improvement might be made by reforming our present most oppressive and unjust system of taxation. I say that an immense improvement might be made by so revising our Constitution in the manner which we have pressed from this side of the House time and again, and in the manner which we have seen our friends — not our friends but the friends of the Government — in conference assembled have lately likewise proposed ; and by so altering the Constitution that this tyrannical conduct on the part of the Federal authori- ties towards the rights and privileges of the Local Legislatures should be put an end to forever. On the other hand that which is equally important is that this system of bribes, and all those frequent and incessant forays by various Provincial Govern- ments on the Dominion Treasury whenever they have been ex- travagant and got into a scrape, may likewise be put a stop to ; Sir Richard Cai'tivright's Speech. . . 16 and for a third remedy, Sir, that this most mischievous railway monopoly which has baned our progress up to the present time, and which has barred the settlement and prosperity of Manitoba and the North- West should likewise be put an end to. But most of all and most important of all, do I believe would be the success in the obtaining of the proposition which I ask the Government to try and obtain in the Resolution now in your hands, the obtain inj^ of perfect free trade with the peo- ple of the United States. 1 say,,Sir, that that is worth all the rest. Give us that and railway monopolies will cease to vex and harrass you ; give us that, Sir, and the federal (eliitions will speedily adjust then'selves as federal relations ought to do and as federal relations were intended to do ; give us that, and the sting would be taken out of those tariff combines, more particidarly if the United States, as there is now a good hope that it will do, proceeds to emancipate itself from the trade fetters it most foolishly put on. It may be said that this is an heroic remedy. Well, all I can say is that if it be, never in the history of this country, at any rate, was a heroic remedy more needed. Now, 1 am not disposed to discuss this propo- sition further without being prepared to say that it is in the highest degree advantageous to both countries. I am very sorry for many reasons that the hoc. Minister of Finance is not in his place today ; but I dare say the House will remember how in a fine glow of patriotic enthusiasm that hon. gentleman about a year ago went the length of declaring that, if we only knew it, we in Canada possess the best half of this continent. Well, I will not venture to go quite that length, but I will say that we are able, man for man, dollar for dollar, to give a full and perfect equivalent to the United States fcr all we ask them to give us. 1 desire that it should be so. I do not believe this proposition or any other for mutual trade, can be successfully carried out unless we are able to give- as much as we get ; and, while 1 say that, while such trade would undoubtedly, in my judgment, enrich four or five million Canadians, quite as much enrichment would accrue to four or five million, or it may be to eight or ten million Americans. Sir, the advantages to Canada are very obvious, but I will come to those presently. In the meantime, I take this opportunity to point out that free trade with Canada would give to the United States an extremely valuable market at their very doors — that free trade with 16 Haiidbook of Commercial Union. Canada would open up to American enterprise vast new areas, equal to at least a dozen new States ; and, 8ir, in such a case as I suppose, I have no doubt whatever that the growth of Canada would be so rapid that we should become within an ex- tremely short time, in all probability, the most valuable customer the United States possessed. A Member — Hewers of wood and drawers of water for the Americanb. Sir Richard Cartwright. Hewers of wood and drawers of water ! Sir, I have a better opinion, and I may say the Americans have a better opinion, of the ability and capacity of our fellow-countrymen than to suppose that they would con- sent to be hewers of wood and drawers of water. Does not my hon. friend, whose heart is better than his head in these matters — does he not know of his own experience that the Canadians who unfortunately for us leave this country, do not subside into hewers of wood and drawers of water on the other side of the border 1 Sir, as I have said, they take the highest places amongst the best citizens of the United States. Sir, we have, to say the least of it, enormous stores of raw material of great value to the industries of the United States, and these are very thoroughly appreciated, let me tell the hon. gentleman opposite, by American economists of very high degree. I have quoted the passage before — it may be said to be a hackneyed passage — but nevertheless I will take the liberty of quoting again in this connection the language in which one of the most, eminent living authorities on political economy, in North America, at any rate, and perhaps in the world, has described the advantages which Canada has to offer, if it is allowed to ob- tain free trade with the United States. This is the passage. Sir, and I make no apology for repeating it to a Canadian audience : North of Lakes Erie and Ontario, and of the River St. Lawrence, and east of Lake Huron, south of the iSth parallel of latitude, and included mainly in the present Dominion of Canada, there is as fair a country as exists on the American continent, nearly as large in area as New York, Pennsylvania and Ohio combined, and equal, if not superior as a whole, to those States in agricultural capability. It is the natural habitation on this continent of the combing-wool sheep. It is the land where grows the finest barley, which the brewing interest of the United States must have if ever it expects to rival Great Britain in its annual export of eleven millions sterling of malt products. It raises and grazes the finest cattle, with (iualities (specially desirable to make gooil the deteiiora ion of stock Sir RicJiard CartwrigMs Speech. 17 iu uther HectionH, and itH climatic conditions, created by an alinont encircle- ment of the jjreat lakeH, especially fit to ^rt^w men. Such a country is one of the j,'reateHt gifts of Providence to the human race; better than bonan- zas of silver or rivers whose sands run i^old. Now, Sir, in all that you will find nothing of the vast virgin wheat fields of Manitoba ; you will find nothing of the vast treasure troves which still exist scarcely scratched on the slope of the Kocky Mountains, west and north of our side of Lake Superior, and within the gorges of British Columbia. And, Sir, I would not duplicate, but I could produce twenty testi- monies like this from Americans who know the value of Canada to the American people, in support of my contention that Canada most assuredly will be able to give a fair equivalent for all that, under my proposition, Canada is likely to ask the United States to give her. Does any hon. gentleman opposite choose to gainsay this proposition 1 Then, Sir, let hon. gen- tlemen consider what, with all the absurdity )f two hostile tariffs stretching for two thousand miles between these two countries, wo have done already in the way of mutual trade and intercourse. Of the $202,000,000 which represents our total volume of trade, over $80,000,000 (in spite of all foolish artifi- cial legislation), or nearly one-half, and that the most profitable half, is with the United States. Sir, it is an interesting ques- tion, but it is a question on which I hardly dare to offer an opinion, if, with all these obstacles deliberately put in our way, such is the force of nature that it will overleap all these arti- ficial obstacles and secure us a trade of over $80,000,000, what might we not do if perfect unrestricted free trade were obtained 1 I will venture to say that it is well within the bounds of possibility that with unrestricted intercourse with the United States that $80,000,000 might within a very few years swell to $300,000,000. It is, I believe, scarcely necessary for me to insist on the enormous advantage which unrestricted trade with the United States would be to us. Who does not know that for an im- mense number of the products of the people of this country, the United States is not merely the best market, but substantially the only market. Now, I do not blame the Government much in that they have tried, at all hazards, to force trade among the various Provinces of this Dominion. I have always myself re- garded it as very uphill work, about as profitable indeed as an B 18 llandhoolc of Commercial Union. attempt to make water run up hill, and the liistory of the In- tercolonial Railway goes very far to show that 1 have been right in that contention. But 1 am going to give the House a cur- ious practical test of the results which have attended the efforts made, I do not doubt, in all good faith, to promote inter-pro- vincial trade among the several Provinces of the Dominion. Hon. gentlemen know very well that where there is much trade between different States or countries, you have one very good practical test where the climate and conditions of life are the same, and tluit test is the intermixture which takes place among the various peoples trading together. Now, I have here the Census return for 1881, and I have to call the attention of this House to a few very simple facts which these returns expose. I find that in 1881, there were of natives of Ontario, 105 settled in Prince Edward Island, 310 in New Brunswick, and 333 in Nova Scotia ; in all 748 natives of Ontario, settled in the Mari- time Provinces. I find much the same state of things in Que- bec, with the exception of two counties which border on certain counties in New Brunswick, where the population on both sides are essentially of the same origin. I find, and it may interest hon. gentlemen to know it, that at the same hour and day there were, of persons of United States birth, 009 in Prince Edward Island, 5,108 in New Brunswick, 3,004 in Nova Scotia, or, in rough terms, about thirteen times as many natives of the Unit- ed States in the Maritime Provinces as there are natives of On- tario. Lest any hon. gentleman should say that the natural course of immigration is westward, I took the trouble to go back a few years, and I found that, twenty-five years ago, in 1861, when we were not confederated together, when we had no Intercolonial Railway, 7,600 natives of the Maritime Provinces had taken up their quarters in Ontario ; while in 1881, after fifteen years of Confederation, and knowing more about us, I sup- pose, only 7,200 were found there. The number had been posi- tively reduced by several hundred. Take the Census returns. Turn to the Province of Lower Canada, and you will see eight or ten large, populous counties with a population of 150,000 or 200,000 souls, and not one representative of my hon. friends from the Maritime Provinces is to be found there. It is almost phenomenal, and what is a very curious fact, which appears in the Census returns, is that there was far more immigratiojgi in the decade from 1851 to 1861 than from 1861 to 1881, in spite Sir Richard GartwrigMa Speech. 19 of the ofKcial cunnection. Is it not idle to deny such facts as these 1 Is it not idle to fight against evidence *? Must we not admit that no matter how the Government may strive, no matter how the people may strive, you cannot establish any great inter-i)rovincial trade from which any great profit can re- dound to the people of this country. What is the history of the Intercolonial Railway ? It is contained here in our Public Accounts. We find that on the 30th of June, 1887, the Inter- colonial Railway stood as an asset in the books of Can^dci for $46,431,000; we find that the total expenses of the Interco- lonial Railway for that year were $2,828,000, and the total receipts $2,596,000. Not only did the Intercolonial Railway not pay one copper of interest on its cost, but there is an ad- mitted loss of $231,000 in the running of that road for one single year, and a real loss, if we properly charge up the ac- counts, of $400,000 or $500,000 ; and in addition to that, every single year since I have had a seat in this House, a million dol- lars at least of extra expenditure has been charged to the capi- tal account Take the whole together, the interest and sinking fund, and they represent a dead annual loss of $2,070,000, and the loss of running it must at least be $400,000 or $500,- 000, while we spend a million dollars on capital account every year besides, which we will contin&e to do for many years yet to come. Do hon. gentlemen venture to tell us there is any hope of improvement here ? Does the House remember that a few weeks ago I put the question across the floor as to the re- sult of the first seven months' running ^ And does the House remember that for this current year 1888, the Intercolonial Railway has cost us just $340,000 in seven months more than we received from it ? Just $340,000 dead loss on seven months' running of the Intercolonial Railway, and I may add, as if that were not enough, that we have recently been called on to sub- sidize a so-called short line for the express purpose of cutting through and destroying the value of the same Intercolonial Rail- way which has cost us $50,000,000, thus probably doubling the huge deficit that now exists. I think, Sir, that every hon. gentleman will admit I have shown conclusively that, do what you will, trade will seek, in spite of all your legislation, for its natural market. Who does not Jnow, who dares deny, that the trade of Halifax naturally seeks Boston, that the trade of Toronto naturally seeks New 20 Handbook of Commercial Union, York, that the trade of Winnipeg Heeka St. Paul and the country south of it, and that the trade of Victoria naturally seeks San Francisco and the rest of the Pacific coast 'I There is an old saying, and I think a true saying in part, that trade follows the flag; but I tell this House that it is still more true that trade follows the })eople, and we have unhappily already sent out about two millions of missionaries to cultivate friendly trade relations with the United States. More than that, it is well to remember that great economic changes are in progress, that there has been a very material alteration in our position as re- gards the markets of the world. It is quite clear that, in older Canada, at any rate, grain production is on the wane, and that the only cereal which we can depend upon as likely to continue to be raised in large quantities is the article of barley, for which we have practically no market except the Wnited States. That is also true in a very high degree of the more important of our other agricultural productions, with perhai)3 the solitary excep- tion of the important article of cheese. Now, I dontend that for almost everything which our farmers have to sell, the Unit- ed States, if only we had free and unrestricted trade with them, would afford us absolutely the besi market ; and I contend fur- ther that, besides being the best market, it is literally the only - market lor a great many important articles which we produce. See, in spite of all artificial obstacles. Low huge a percentage of the total volume of our trade is the volume of our trade with the United States. Out of a total volume of trade of $202,000,000, the United States supply $83,000,000. Out of $81,000,000 of exports of our own produce, we sell to the United States, or sold last year, over $36,000,000, or very nearly one-half. Out of a total of goods entered for consumption of $105,000,000, we bought $15,000,000 from the United States. And to come to details, which is necessary in order to lay the case fairly before the House, what do we find as to an enormous, number of articles produced by agriculturists in this country % These figures are instructive in a very high degree. We find that, of 18,779 horses which we sold, the United States bought 18,225. We find that, of 443,000 sheep, the United States bought from us 363,000. We find that, of 116,000 cattle, in spite of all tariflF restrictions, they bought from us 45,000 head. Of $107,000 worth of poultrv, the United States bough t, $99,- 000 worth. Of about $2,000,000 worth of eggs— $1,825,000, Sir Richard Cartwrifjhf s Speech. 21 to be accurate— the United States bought all. Of $593,000 worth of hides, the United States bought $413,000 worth. Of 527,000 tons of coal, the United States bought 404,000. Of 140,000 tons of gypsum, the United States bought all. Of iron ore, the United States bought all. Of salt, all that we sold, the United States bought from us. Of stone and marble, all that we sold,theUnitedState8 bought from us. Inspiteof fishery disputes, and taxes I suppose, of $6,875,000 worth of fish that we sold, the United States was our best customer and bought $2,717,000 worth. Of $20,485,000 worth of lumber, the United States bought as nearly as possible one half, $9,353,000. Of 1,410,- 000 pounds of wool, the United States bought 1,300,000 poi nds. Of 9,456,000 bushels of barley, the United States again bought all. Of $743,000 worth of hay, the United States bought $670,000. Of $439,000 worth of potatoes, the United States bought $338,000. Of $83,000 worth of general vegetables, they bought $75(000 worth. Of $254,000 worth of miscel- laneous agricultural products, the United States bought $249,- 000 worth, without speaking of innumerable smaller articles, such as apples, flax, and a great variety of other things ; and, if the duties were once removed, no one who has ever been in Manitoba and the North-West but knows that the United States would become by all odds our best customer for a great deal of our high class wheat. Why, in the mere articles of manufac- tures, the United States, out of a total of $3,079,000, bought $1,289,000 worth, and of miscellaneous articles the United States bought $569,000 worth out of a total of $644,000. There are two things to which I want to call the attention of all the members of this House. One is that, for very obvious reasons, our exports to the United States are largely under- valued. They do not at all fairly represent the amount we sell. So long as they maintain a high tariff, it is the obvious inter- est of every Canadian seller to underestimate the value of the articles he has to sell, and, as every one knows, the thing is habitually and constantly done. In another respect it is very important that the House should know that in the case of an enormous number of the articles to which I have called speci- fic attention, there is room for well nigh unlimited expansion. Given free trade, given unrestricted intercourse, and that trade might assume nearly unlimited proportions in regard to a great many of those articles ; and these are two facts which should 22 Handbook of Commercial Union. be borne in mind wben we are considering the possible devel- opment of our American trade. Now, not only have I shown that, even fettered and thwarted and hampered as it is, our trade with the United States forms an immense proportion of our total trade with all the world, but I ask the House to consider what sort of a market it is that these Resolutions of mine propose to open to the people of Can- ada. Why, look for one moment at the host of great and grow- ing cities which stud our southern frontier alone — Chicago, Detroit, Cleveland, Buffalo, Boston and New York. Those cities alone which 1 have named, with their environs, contain a population of something like five millions of people who are the very best customers on the face of the earth. Consider how conveniently they are situated to our markets. There is hardly one of all those I have named which is more than twelve hours distant from a Canadian market. The Canadian seller might talk over a telephone with the American buyer in almost every one of those cities. Then look at our railway system. I speak more particularly of the railway system of the Provinces of Ontario and Quebec. Look at the huge sums we have expended upon it, and the small returns up to date which that large out- lay has brought. The returns show that we have about 12,- 000 miles of railway all over the Dominion, a very large per- centage of which is centred in Ontario and Quebec. These railways are alleged to have cost $6^3,000,000, and, although I believe a considerable amount of that is water — as it is techni- cally called — I believe our system of railway represents an out- lay, or would be worth at any rate, about $500,000,000. Now, to-day the gross earnings of those roads are put down at about S33,000,000, the expense of operating them, at over $24,000,- 000, and it is known that the amount returned as the ex- pense of operating them does not include all that ought properly to be charged to that account. That $653,000,000 of nominal cost therefore does not to-day on the aver- age pay 1^ per cent, on the nominal expenditure. Give us unrestricted intercourse with the United States, and I tell you that, as far at all events as the central Provinces are concerned, you will double the gross earnings and treble or quadruple the net profits of these railways, and from a very poor property convert these vast amounts, which have been largely supplied from i^broad, into a very good, paying, profitable investment, to Sir Richard Cartwright's Speech. 23 the great advantage of the people of Canada as well as to thai; of the men who originally stipplied the money. Then another point. Let ua consider how our population is distributed. We all know the natural impediments which interfere with inter- provincial trade. We all know how conveniently the Maritime Provinces, Manitoba and British Columbia are situated for trade with the United States ; and how exceedingly inconveni- ently they are placed for trade with the central Provinces. I apprehend that no man on either side will dispute my position that to the Maritime Provinces at any rate, to Manitoba, to the North-West Territory, to British Columbia, free and unre- stricted trade with the United States is of the most enormous importance. But, Mr. Speaker, I am coming to the country I know best — old Canada, from Quebec to Sarnia — how is the population distributed there ? Why, Sir, it is known to every man here that nineteen-twentieths of the population of these two great Provinces is so situated that it is within tive hours' rail, on the average, to the American frontier. Then consi- der the advantages of such a market Remember that it is one of the most rapidly growing markets in the world. Within the last twenty-five years the American market has grown from 30,000,000 to over 60,000,000 of consumers, and it has not stopped growing. In all human probability before the next census is taken in 1 890, the statisticians of the United States compute that the population will have grown to something like 04,000,000 or 65,000,000. More than that, the population, especially the population of the great cities 1 have alluded to, is one of the very richest populations on the earth. There is no population in the world, keen bargainers though the Americans are, no doubt, with whom it is so desirable for the agricultur- ists of any country to establish free trade relations as it is with the population of the great American cities. It is perfectly well known to all who are familiar with that people, that there is no market, I repeat, on the face of the earth, where the man who has a first-rate article, particularly of food, to sell, is half so sure of obtaining a first-rate price for it, as in the United States. Nowhere have I known men who spend so lavishly on their own personal living and for their own personal comfort, as the great millionaires, and for that matter the great bulk of the population, of the great cities of the United States. And these, Sir, are reasons which make it more and more desirable 14 , Handbook of Commercial Union. to US that we should obtain free and unreHtricted intercourse with them, bo that we can take advantage of the very great facilities which our natural position, in Ontario and Quebec more especially, gives for trading with those great centres. They are at our very door. We do not require to make long journeys in order to make the acquaintance of our American customers. As I said before, we can literally talk to them from the telephone. At the worst, a few hours' journey V>y rail will bring us face to face with them. We have no middlemen to fear in dealing with the United States. We can thoroughly understand the market, or it is our own fault if we do not. ICvery merchant, every man of business, knows what an enor- mous advantage it is in any trade that the men who sell should understand thoroughly what the purcha.'ier wants to buy. But, Sir, I do not know that it would be necessary for our people to give themselves the slightest trouble. I remember, and I dare say there are plenty of gentlemen who remember, what habitually took place under the old Reciprocity Treaty, when Canada prospered more than she has ever done since. Why, Sir, when we had something approaching to free inter- course with the United States there was this curious peculiar- ity, that the buyer sought the seller and not the seller the buyer. It was a matter of everyday occurrence, particularly in the Province of Ontario, that our farmers, during the existence of the Reciprocity Treaty^ were visited daily, and almost hourly, by American purchasers who were ready to buy the apple off the tree, the crop on the ground, even the unborn foal, if the farmer was willing to sell it. Again, I repeat that there is no market where a man who has got a good article to sell has any- thing like as good a chance of selling it as the people of Canada, and particularly of Ontario and Quebec, have in dealing with the American people. Sir, I have been taken to task on more than one occasion for venturing to say, what I now repeat, that in my poor judgment, one native born Canadian was worth more to this country thaii any half-dozen imported immigrants, and I say that without, in the slightest degree, desiring to re- flect on the many good, worthy and industrious men who, in time past, have cast in their lot with us, my opinion always has been that as a tax-payer, and as contributing to the devel- opment of the country, one native born Canadian is worth a half-dozen of any other nationality. Sir, in the same way, one 8ir Ricfiard Cartivright'a Speech. 26 United States customer is worth to us in Canada, half-dozen Knglish customers, and half-dozen customers of any other nationality. And what is true of them to us, is true of us to them. I say that to the United States the trade of Canada is worth a great deal more than our present numbers would indicate ; I say that our trade is worth that of many times such popula> ions as those with whom the Americans are now attempting to open up trade relations in Mexico, or in South America, or in any other of those countries which extend below them, more especially if we prosper largely. Now, it is a curious thing — I do not know whether it has attracted the attention of any members of this House — that after all we have talked, and after all we have said about the desirability of extending our trade with foreign countries, these same trade returns that I have here, show in a very remarkable way that we have practically only two customers, after all said and done — one of these customers being the people of England and her colonies, and the other being the people of the United States. I do not know whether hon. gentlemen have considered that fact, but if they will look at the returns for 1887 they will see that of our own produce, Canada, in all, exported $80,960,000, of which she sent to the United States, $35,250,000 ; to Great Britain, $38,750,000 ; to the British Colonies, about $3,000,000, and to all the rest of the world, $3,800,000— $77,000,000 to the United States, to Great Britain and her Colonies, and less than $4,000.- 000 to all the rest of the world put together. In 1873, to show that this is no mere casual accident, I find that an identically similar state of things prevailed. Then our total exports amounted to $76,500,000. The United States bought 36,755,- 000; Great Britain bought $31,421,000; the British Colonies bought $3,953,000 ; all others put together bought $4,500,000. So when we trace the course of our commerce down for these fifteen years, we find that it is literally true, for practical purposes, that we have but two customers, as yet, of any im- portance in the world, one the United States and the other the people of Great Britain and her Colonies. And what is true of exports is true likewise of imports. Take 1887 ; we imported a total for consumption of $105,639,000 worth. We bought from the United Statos, $45,107,000 worth; we bought from Great Britain, $44,962,000. Of $105,000,000 worth, $90,000,- 000 were purchased from our two chief customers. In 1873 26 If(tudhook of Commercial Union, we purchaflod $47,750,000 (lollars worth from the United Stat«'H, from (ireat Britain $08,500,000 worth or $ 1 15,000,000 out of $127,000,000. That I contend is a matter of firHt-rate importance, for this reaHon : I hav«« shown the Hoiine, that, nay what we will, we have but two {/reat customers, (ireat Britain and the United States. One admits our productions without the slightest let or hindrance : we and all the nations of the world in common M'ith us have a perfectly free entrance to British markets ; in the other case, partly of our own doings and partly by the action of the United States, the most formi- dable artificial restrictions are imposed on our commerce. But still the fact remains that we have but those two customers. Which of the two is likt'ly to be more important to us 1 Well, there is an easy test. Twenty years ae;o the British population was about 30,0000,000 ; to-day the British population is about 35,000,000. Twenty or twenty-five years ago the American ])opulation was 30,000,000 ; to-day the American population is 00,000,000 or 01,000,000. Judge, then, for yotirselves which of these two countries, situated as they are, is likely to afford the greatest possible benefit to Canadian traell-to-do, monied men a keen practical interest in watching the public expenditure and checking extravagance. You will do more, if it must be done by that means — you will create a sound, wholesome, healthy public opinion, the want of which is so great an evil in Canada to-day. I dwell on that particu- larly, because I am aware that, at this very moment, there are certain gentlemen, presumably in the interest of the hon. gentle- men opposite, who are losing no opportunity to impress upon the farmers of this country in particular, that if we get unre- stricted reciprocity with the United States, the Federal reven- ues will have to be raised by direct taxation, levied in the same way as the municipal taxes are to-day. I for one will protest to the uttermost of my power against any such injustice ; I for one declare here, speaking on my responsibility in my place in Parliament, speaking with a knowledge of the subject, that our present system is monstrously unjust to the poor man and too favorable to the rich man, and that injustice ought to be re- dressed, not by adding to the burden of the farmer, the laborer, the artisan, the mechanic, the fisherman, the miner, the lumber- man, but by removing the burdens from these and placing them upon the shoulders on which by right they ought to fall. It is almost too ridiculous. Here we are, here we have been, adding millions a year to the taxes of this country and without the slightest regard to the permanent welfare of the people ; and we are told, forsooth, that although we may, without the least injury to the community, addjuany millions a year to our tax- ation, we must not alter the mode of collection one hairs breadth under penalty of producing the most terrible results. C 84 Handbook of Commercial Union. There is another shaft in these gentlemen's quiver. Having proved to their own advantage, first of all, that Canada posi- tively cannot afford to spend a dollar to gain a pound, hav- ing demonstrated that, according to the dictates of Canadian political economy, it is always more expensive to pay two cents cash for an article than four cents on credit — which is about the difference between direct and indirect taxation — these hon. gentlemen, the names of some of whom, to ray certain knowl- edge were a[)pended to a certain remarkable document, bearing date 1849, have been seized in their later days with an extra- ordinary paroxysm of loyalty ; and to back their other startling propositions they lay down this impossible, and still more start- ling, proposition : If you make the Canadian people rich by free trade with the United States, if you make them more prosper- ous, happy and contented than they unfortunately are at present, there will be great danger to their loyalty. That is the position, in almost so many words. I would have thought that those hon. gentlemen who ten years ago overrode all the pro- testations of Mr. Mackenzie and myself, when we pointed out to them that what they were doing was to adopt a policy which was a mere servile imitation of the American policy, which was in direct contradiction to the settled policy of the Empire; I say that these men would have done well, recollecting what oc- curred at that time, to have spared us all these disquisitions on the loyalty of the Opposition. Do we not recollect when we showed there was danger in the policy they adopted, how we were told that, if the so-called and mis-called National Policy was bad for British connection, so much the worse for British connection. These men have not hesitated to carry out a policy which has been responsible in my judgment for driving two millions of Her Majesty's North American subjects into exile, and which had risked the loss of all British North America to the Empire. It is time that we should clear our minds of cant on this subject. I have, and I have as good right as any hon. gentleman to have, the interest of the Empire as much at heart as any man on that^ side of the House. ' I have considered, to the best of my opportunities and to the best of my ability, what policy in this crisis is the best in the real interests of the British Empire. I know that, in what I now say, I am but ex- pressing the views of some of the ablest and highest of British statesmen, when I afflrm that one great peril that threatens the I Sir Richard Cartwrighfs Speech. 35 British Empire to-day is the state of most dangerous isolation into which she has come to find herself. What is her position to-day in the view of some of the ablest of her statesmen 1 It is that she has not a friend of a high-class power in the world. She is at enmity more or less with France by reason of her oc- cupation of Egypt and her control of the Suez Canal ; she can- not hope that Germany will raise her little finger in her behalf ; she cannot expect any help from Austro- Hungary ; and who does not know that the Indian taxpayer is groaning under the additional burdens imposed upon him for the purpose of check- ing an anticipated Russian attack on India 1 That is a danger- ous position of isolation, and I say that there is but one first- class power in the world with whom England can make a firm and lasting alliance, and that is her and our kinsmen and friends on the other side of the border. I have always felt and I have not hesitated to express it to English statesmen as well as on the floor of this House, that the real problem which to- day awaits the decision of England is how, in the first place, by fair and honorable means — and no other should be used — to conciliate the good-will of the people of the United States, and to repair that most atrocious blunder which was committed a hundred years ago, and which led to most violent collision be- tween the two great divisions of the English race. In this project which we are now bringing forward, if you take a broad view of the whole situation, it' you remember what Mr. Joseph Chamberlain has taken good care to din into our ears and into the ears of the Government opposite during his recent visit, if you remember that the interest of England in maintaining friendly relations with the United States is so vast and so great that it outweighs very many times the com- paratively trifling profit which she can derive from our trade, then I think you will see there is good ground for the position which I take, and that is that, by entering into close commer- cial relations with the United States, by establishing a close and friendly intercourse with them, we will render to the Em- pire the greatest service that any colony or dependency ever rendered to the parent State. It has been made a grave ground, it has been attempted to be set up as an insuperable ground, of objection, that, when you propose to enter into a Weaty for un- restricted trade with the United States, you must thereby, of necessity, discriminate against English manufactures and the 36 Handbook of Commercial Union. maniifactures of all other countries except the United States. Now, that is true. I admit that. More than that, I will ad- rait that, prima facie, what we propoue to-day is a very un- usual thing. I will admit — I am in nowise disposed to shrink from any argument which can be fairly advanced — I admit frankly that, when a semi-dependent State, when a colony proposes in one breath to tax the goods of the parent State and admit the goods of a foreign State free, while at the same time the parent State admits our goods and the goods of other coun- tries free, and the foreign State taxes those goods very heavily, i[ is a very unusual thing indeed. I grant that it is clean against all formulas. I do not deny that. I admit that it ap- ])ears to be reversing the action of 100 years ago when Eng- land lost half of this continent because she endeavored to tax their goods without giving them representation, and I admit that we are going a little far in taxing her goods and not t))e goods of the people of the United States. I grant that this needs explanation, and I am prepared to say that I can give a full explanation why in the interests of England itself this thing should be done. I think I have stated the case as strong- ly as hoD. gentlemen can well desire. Now, let us first of all look at the material results which will flow to England should this discrimination take place, and here let me say what is obvious to everyone who has given the subject a second thought, that, in our peculiar geographical position towards the United States, it is perfectly apparent that we cannot hope to gain free inter- course and unrestricted reciprocity with them without dis- criminating against the goods of other countries, unless and un- til the United States are prepared to go in for free trade with all the world, in which case our proposition would not be necessary. The thing, I grant, is of the essence of the bar- gain. I am not in the least degree desirous of concealing that fact, but, so far as the material side is concerned, the prac- tical results of assimilating our tariff in certain points to the American tariff as agaiiist England have been immensely and I suspect purposely exaggerated. In the first place, the House ought to remember that at this very day our tariff is pretty nearly as hostile to English manufactures as that of the United States, and that there is very strong ground indeed, if things remain unchanged, for believing that in two or three years from this date our tariff will be much the more onerous of the Sir Richard CartwrighVa Speech. . 87 t'vo. Then it h well to bear in mind that, the turiff to the contrary notwithstanding, England has always managed to carry on a large trade with the United States, and csj>fcially with the northern portion of it. If I had the time at my disposal, I could advance very good reasons for believing that, suppose we do discriminate and otherwise things remain ex- actly as they are, notwithstanding that the English would con- tinue to drive a large trade with us they would have a trade relatively much larger with the people of the United States, and, therefore, the absolute loss to them would bo small. But I return again to the fundamental fact on which, as I said, this whole argument rests. There can he no doubt, I think, that if we succeed in getting unrestricted trade, we shall become much richer, and if we become much richer there is no doubt that we shall buy a much larger quan- tity of English goods than we do at the present, though perhaps not in the same line. I believe that the result of England giving us a free hand in this matter, would be simply to make some little alteration in the character but not in the quantity of the goods she sells us, and that practically she would lose nothing in a material point of view. More than that, i know something of English manufacturers. I may say, by-the-by, thfit this is a ditliculty that it will be time enough to face when it arises. Our first business is to ascertain on what terms and conditions we can obtain unrestricted trade with the United Statea ; when we know on what terms and conditions we can trade with them, then, perhaps some difficulty may arise, and that difficulty will have to be met. But I know something, as well as the hon. gentlemen, of English manu- facturers, I know they are an eminently practical, hard-headed class of men. I know very well that English manufacturers, so long as their goods are excluded from North American markets, care precious little by whose name the ukase is signed which excludes them, whether it bears the name of Grover Cleveland, or Charles Tupper, or Mackenzie Bowell. Sir, you may depend upon it that English manufacturers, at any rate, are not to be caught with chaff. They understand that 80 per cent, duty on iron is 80 per cent, duty, whether it be imposed by an American Congress or a Canadian House of Commons, and they do not care very much who imposes it, so long as the duty is there. Sir, while I speak of these things as regards 38 Handbook of Commercial Union. the mere material aspect of the case, in relation to Knglish manufacturers, there are other arguments which the people of Canada may very justly use toward English statesmen and the English people. I say that the past history of this country supplies all Canadians who care to study that history, with abundant arguments. Mr. Speaker, the position of Canada is exceptional, in many important respects unique, so far as regards Kngland. I am not going to dwell nmch on the fact that we are more than a colony, that we are a Dominion, charged with the responsibility of managing the affairs of half a continent, and entitled to claim for ourselves greater privileges and greater powers than should be granted to any ordinary colony. I do not dwell on that, but 1 dwell a little en certain features in our past history which 1 contend give us a right to claim to be heard in this matter. Sir, England is the great colonizing nation of modern times. England has obtained colonies by exchange, by barter, by conquest, by direct purchase, by voluntary and involuntary settlement, but of all her hundred colonies, England has but one, and that is the Premier Province of this Dominion, which was originally taken possession of, and has since been held by men who did not occupv or settle through any of the ordinary motives that induce men to forsake their native homes but to give up their broad fields and pleasant lands for the purpose of maintaining their allegiance to the English flag. Now, Sir, this question is being argued, to some extent, on the sentimental side, and I am ready for my friends there. To tell you a profound secret, Mr. Speaker, which I trust will not go outside the walls of this House, 1 have never been able exactly to understand the very deep obligation under which the people of Canada lay to England. In point of fact I rather think that the obligation is the other way. I do not think. Sir, that although we have cherished, I hope we will continue to cherish, the most friendly feeling toward the ^parent state, I do not think for my part, that we are under any deep debt of gratitude to English statesmen, that we owe them much, unless, per ciiance, it may be the duty, as Christian men, to forgive them for the atrocious blunders which have marked every treaty, or transaction, or negotiation that they have ever had with the United States where the interests of Canada were concerned, from the days of Benjamin Franklin to this hour, not excepting their first or second treaty of Washington. I Sir Richard Cartwright'n Speech. ' 39 say there is no man here who does not know that from the very first hour that the United Empire liOyalists took pos- session of Ontario and held it for the British Crown, down to this year 1888, there never has been a time except, perhaps, the short paroxysm of the American Civil War, when our people could not have greatly benefited tiieir material inter- ests by throwing in their lot with the people on the other side. We have not chosen to do so, we do not now want to do so, we desire to maintain our autonomy. On that point, I am quite atone with some hon. gentlemen on the other side. But I say at this moment, a remarkable opportunity has pre- sented itself in which a little skilftd statesmanship and com* mon honesty would enable us, at one and the same time, to obtain great benefit for ourselves, and to render a most impor- tant service to the whole Empire by aiding to re-knit together those two great divisions of our race which were unfortunately sundered by the blunders and incompetence ot English states- men 100 years ago. Sir, if the hon. gentleman chooses, as I have said, to argue this matter on the ground of sentiment, all I can say is that a Canadian who understands and feels what his country's history means, will not find great difficulty in meeting him on any such grounds. Moreover, Mr. Speaker, I think that in this matter, supposing that we dismiss all other considerations, and look on it as a pure matter of right, we have some right to follow the example of England herself. No man knows better than the hon. gentle- man opposite that England has always adopted a very different rule and measure in dealing with the United States from that which she has adopted in dealing with any country under heaven. I dare say that English statesmen could bring forward good reasons for their departure from their ordinary customs in such cases. Now, I am not here to criticise her right to do what she has done, at any rate, I am not criticising the reasons for doing what she has done, but I say that J'jiigland has not hesitated, as the English plenipotentiary the other day was good enough to tell us, to give up the admitted legal rights of Canada for the purpose of conciliating the good-will of the people of the United States. So be it. We may have to bow, probably we will have to bow. But by every parity of reasoning, we, under these circumstances, are justified in saying to England: We give up at your behest, for your benefit, and for the sake 40 Handbook of Commercial Union, of the Empire, our admitted legal rights, now you make us a little concession of your admitted le^al rights m a matter in which we do not deny them, for your benefit and ours, and for the sake of conciliating the good-will of the American people. Sir, I said that was the lowest view. I believe that the great mass of Knglishmen who have made investments in Canada, and notably in Canadian railways, would, like ourselves be entin^ly Hiitisfied if wo carried out this proposition, and I believe that if all Kui^lish investors in Canada Aafere pollod after having tie case properly explained to them, they would go with us in saying that it was m the interests of England, that it was in the highest and largest sense for the interests of the Empire, that we should be permitted, if we desire to make such a bargain as this with the people of the United States. Sir, there is a third argument, which requires perhaps a little more considera- tion. We are asked when we make, or when we suggest such a proposition to be made, not by the hon. gentleman opposite, who has maintained a most judicious reticence so far on this ques- tion, as I have noticed, but we are asked by some of his followers and myrmidons : What grounds have you for believing that, if you make this proposition, the people of the United States will agree 1 Well, Sir, what I have to say in answer to that is this : When two men are desirous of making a bargain, or when one man is desirous of making a bargain for mutual benefit with another party, the time has come to enquire and negotiate on what terms and conditions a mutually advantage- ous bargain can be made. \ I say, moreover, that this is, even in a pre-eminent degree, a matter for the two peoples of the United States and Canada. This is a thing which, if done at all, has got to ))« done in the broad light of day, not in dim diplomatic twiiight. We know how the American Executive is constituted and how the American Congress is constituted. We know that this thing can only be done with the consent of Congress, and, practically, with the consent of the American people, ^and, therefore, it is that I have ventured to take, as I have said, the responsibility of bringing this matter forward on the floor of Parliament, because I know^ and hon. gentlemen know, that it is not in their power to make an agreement behind backs with the American Executive which wouhl be in any degree binding on the American people. More than that: I say the[ present moment is eminently in our favor for coming to the Americans Sir Richard Cdrtnu'li/ht's Speech. 41 with Hoint) Huch propogition aa this, and I have good and fair proof of what I ntate. In the firdt place, everybody kiiowH that an enormous reduction in the American taritf is iuimineiit. Things have come to such a pass there that tiie people will insist on a very great reduction and alteration in their tariff. In the next place, we have got a very direct and very important invitation, or at all events a very important expression of the goodwill of the man who stands in the highest place today in the American Kopublic, and who I trust for their sake will continue to enjoy the confidence of his countrymen for a second term. Sir, I note that President Cleveland in the recommenda- tion which he addressed to Congress respecting the Fisheries Treaty, after stating the advantages he thinks he has achieved, goes on to say : Our social i^nd commercial iiitercourHu with tboue populationn who have been placed upon our borderH and made forever our nei^hborH \a made ap- parent by a liHtof the United Stite.i' common carrierH, marine ami inland, connecting their lineH with Canada, which woh returned by the Secretary- Treawury to the Senate on 7th of February, in answer to a resolution of that body ; and thU is inntructive as to the threat volume of mutually proHtable interchange which has come into existence during the last half century. And then the President goes on to use these important words, which coming from so high a source at such a time can he taken as nothing less than an invitation by the President of the Unit- ed States to us to come forward and see on what terms we can negotiate for unrestricted reciprocity with them. Says Presi- dent Cleveland : This intercourse is still but partially developed, and if the amicable en- lerpriaes and wholesome rivalry between the two populations be not ob- structed, the promise of the future is f idl of the fruits of an unbounded pros- perity on both sides of the border. Sir, will any gentlemen here or elsewhere dare to maintain that when President Cleveland in an official document of the highest importance uses such terms as these with respect to intercourse with Canada^ we, forsooth, should be debarred by any sense of dignity from responding to an invitation like that 1 I have an- other, not so formal, and yet more important perhaps. I find that as long as a year ago, at a time when there was a danger of hostile collision between the two countries, Mr. Secretary Bayard, a man, as the First Minister knows, of the highest rank next to the President of the United States, a man who is vir- 42 Handbook of Commercial C/Vi *.;ri. tually Premier of the President'a Cabinet, a man whose name is honored and deservedly honored by friend and foe from one end of the United States to the other, — I say that Mr. Bayard, the virtual Premier of the United States, wrote a year ago to Sir Charles Tupper in these terms : The immediate difficulty to be settled is found in the Treaty of 1818 be- tween the United k^tates and Great Britain, which has been questiu rexata ever since it was concluded, and to-day is suffered to interfere with and seri- ously embarrass the good understandinjj of both countries in the in^portant commercial relations and interests which have come into being since its rati- fication, and for the adjustment of which it is wholly inadequate as has been unhappily proved by the events of the past two years. And then comes this important paragraph : I am confident we both seek to attain a just and permanent settlement — and there is but one way to procure it and that is by a straightforward treatment on a liberal and statesmanlike plan of the entire cummercial re- lations of the two countries. I say commercial because I do not propose to include, however indirectly, or by any intendment, however partial or ob- li(iue, the political relations of Canada and the United States, nor to affect the legislative independence of either country. This is a just, a wise and a statesmanlike proposal from a man of the highest place and highest character in North America. Have we not seen within the last two weeks two distinguished members of Congress, Mr. Butterworth and Mr. Hitt, both Re- publicans, both opposed to the party of Mr. Bayard and Presi- dent Cleveland, introducing Bills, one of which is almost sub« stantially on the lines of the Resolution I have placed in your hands, Mr. Speaker, the other of which goes further than I think it would be judicious or wise to go, but both in the di- rection of free trade and unrestricted reciprocity with Canada. Looking at this communication which has been placed in our hands, and as to which something was said to-night, I cannot but fear that a grand, opportunity was lost by the delay of the Government in not endeavoring to settle the fishery question a considerable time ago in accordance with Mr. Bayard's sug- gestion. I repeat one thing which I said before, but it will bear repetition. It must always be remembered that Canada has a good deal to give as well as a good deal to get, and in making a bargain with the United States I for one would give very fair and full equivalents. I wish that the treaty should be perfectly and mutually beneficial, that for every dollar of profit Sir Richard Cartiuright's Speech, 43 we make they should make their dollar, and that for every Canadian who is benefited an American should be benefited likewise. It is on such a basis alone that a firm and permanent treaty of reciprocity, or a firm and permanent arrangement for free and unrestricted trade can be carried out. As 1 have said, the people of the United States need new markets as well as we do. I do not contend, for it would be absurd to contend, that the thing is as important to them as it it to us. It is not as important to 60,000,000 to have the market of 5,000,000, as it is for 5,000,000 people to have the market of 60,000,000. That much is clear. •Jiut I do contend, Sir, that we have it in our power to give a full equivalent, and benefit quite as many Am- ericans by this arrangement as Canadians will be benefited. I also say that this is emphatically one of those questions in which very nearly everything depends on how the question is presented to the various parties to the negotiation. You may approach this if you will in the spirit of statesmen, or you may approach it in the spirit of flunkeys. It is a large question which demands a large treatment. Now, whatever the faults of England or English statesmen may be, I have always felt, and 1 have al- ways maintained, that England is essentially just, and that when England understands fairly and properly the ground upon which we make this claim that England will, I believe, be pre- pared to concede it. As for the United States, I have no doubt that they have got their faults as we have got our faults, but with all their faults no man can have mixed much with the Americans without knowing that they are emphatically a great and a generous nation. I have heard one most foolish complaint and most foolish fear expressed, and I have heard that com- plaint made by men who ought to know better, the complaint that the people and the Government of the United States, for- sooth, are not prepared to gush over or to rush into our arms or those of England at every pretty phrase. I do not blame them for that As I have said, I know something of the history of North America for the past one hundred years, and something of the history of the dealings of England with the United States during that interval. Even during the last five and twenty years I say, that we have not always so acted as to war- rant us in expecting that the Americans will rush at once into our arms whenever we propose a friendly treaty or arrange- ment with them, but I say that if you go to the United States 44 Handbook of Commercial Union, and make fair, just and reasonable propositions to them that there is every reason — and we have the proof of their highest statesmen's assertions that we will be so received — there is every reason to believe that we will be fairly and honorably received, and that it is in our power to make a treaty which shall be mutually advantageous, honorable and profitable to both nations. I do not gush over the United States either. I admire the United States, but I am in no way disposed to cringe to them. I think I may remind the House that the only negotiation during the last one hundred years in which Canada obtained a tolerable equivalent for l^er concessions was the negotiation conducted at Halifax by the Hon. Mr. Mackenzie and my lamented friend Sir Albert Smith. I take no shame to admit, and I have said it before, that for many a year I have made it my deliberate purpose that I would do all that one man could do, all that any man honorably could do, to make friends as far as I could or to cause my people and the Plnglish people to become friends once more with the people of the United States. Our position towards the people of the United States has been vastly changed within the last five and twenty years, and it is well that this House should remember that. Five and twenty years ago but a small proportion of her population were in the United States. To-day, ^ir, the United States, in the most emphatic possible maniter, are becoming liter- ally Jlesh of our flesh and blood of our blood, I think my friends from the Maritime Provinces and Quebec probably can afiirm my statement, when I say that I know whole counties, I know great regions, in Canada where you cannot findo^e single soli- tary Canadian familj' which has not a son, or a daughter, or a brother, or a sister, or some near and dear relative now inhab-. iting the United States. We will do best honor to the United Empire Loyalist traditions if we in our degree contribute to bring those two great races together, and to repair in this way what I have always looked upon as a great blot in English policy within the last century, Now, there is another side of this question. Suppose the hon. gentlemen entered into those negotiations in good faith, suppose they tried their best, suppose they do their best, and suppose the negotiation fails, well, all I can say is that I would advise the people of Canada in that case to set to work and put their house in order. H we go on as we are going now, our Sir Richard Cartwrighfs Speech. 45 position will soon become intolerable as compared with the United States. I do not think that hon. gentlemen opposite have at all appreciated what the United States has done during the last dozen years. Sir, I do not think this House is at all aware of the fiscal position in which the United K:ftates stand to-day. I have here the last Un>3d States Treasury return, and what does it show 1 It shows. Sir, that the total expendi- ture of the United States, less sinking fund, was just $268,- 000,000, of which $35,500,000 came from miscellaneous re- ceipts, and $233,000,000 was all they required to raise by direct taxation. Now, Sir, they ooUect $120,000,000 in round num- bers by excise, and, therefore, all they require to raise by cus- toms duties is a bare $114,000,000. Sir, it would be in the power of the United States Secretary of the Treasury, if Con- gress gave him the authority, to raise either the whole of the customs revenue in either of these three ways. He might main- tain the existing tax on sugar and impose a very small income tax indeed, and raise all the revenue he wanted ; he might main- tain the tax on sugar and impose a very small ad valorem duty and raise all the revenue he wanted ; or he might maintain the present taxes on a very few articles and make his trade list free. Now, I would like to direct the attention of this House for a few moments to what might befall if the United States adopted such a course. We have no less an authority than Joseph Chamber- lain for saying that if the United States chose to reduce their tarif? materially, they would become a most formidable compe- titor to England in the markets of the world ; and if they be- came a formidable competitor of England, what sort of a com- petitor would they be with our farmers and manufacturers under such circumstances — we heavily burdened with debt and the United States almost free ? What, I should like to know, would the hon. gentlemen do in such a case ] And it is a case which is imminent, a case which may occur at any moment 1 Will they go on and heap further taxes on the people 1 Do they think they could prevent a much more deplorable exodus than we now have 1 Now, Sir, if the hon. gentlemen refuse to act — this is not a motion of want of confidence ; they have not committed themselves, at least the First Minister has not, and I do not think his colleagues have committed themselves, against this proposi- tion — if they refuse to act, I ask them to consult their own Finance Minister as to whether I am not right, looking at the 46 Handbook of Commercial Union. result of their Fisheries negotiation, in saying that a most in- tense feeling of disappointment will pervade the whole of the Maritime Provinces at any rate. An intense feeling of disap- pointment, I know, will pervade a vast number of the farmers of Canada from one end of the Dominion to the other, and I tjiink there will be a very great and bitter disappointment on the part of many of the inhabitants of Manitoba and probably also of British Columbia. Now, Sir, it must be borne in mind that our circumstances within a few years, not wholly by our own fault, not wholly by the fault of government, but in con- sequence of great economic changes which have been taking place of very great importance, have been materially changed. Then, it is notorious that our position, in comparison with that of the United States, has in twenty years been reversed, and reversed enormously to our detriment. Twenty years ago our taxes were one- third of the taxes of the United States ; twenty years ago our debt was one-third of the debt of the United States. To-day, by the last returns I have here, our debt is two and a half times, as nearly as may be, greater per head than the debt of the United States ; and the necessary taxes which the United States require to raise for the purpose of carrying on their government are one- third less than the necessary taxes the people of Canad«^ require to pay. Then, Sir, the European mar- ket, to which we formerly looked, is dwindling fast, so far as we are concerned. We are exposed to intense competition from every part of the world. On the other hand the American market is growing with immense rapidity, and has become vastly richer to-day than it was a short time ago, while we are not able to keep the emigrants we bring here. As I said before, a great change in the United States is imminent, and it is our bus- iness to prepare to meet it. Sir, let me review our course for the last twenty years. Can hon. gentlemen opposite, with the Public Accounts in their hands, venture to deny that within twenty years our debt has trebled, having risen from $73,000,000 or $75,000,000 to $230,000,000, and that our taxes have trebled likewise, having risen from $11,500,000 to 30,000,000 ? And that does not at all represent the real increase of taxation. Can they deny. Sir, that there is proof, absolutely conclusive, over the greater part of the Dominion, that we have lost three emigrants out of every four that we brought here, and one in four of our own people ? Can they deny that there has been Sir Richard GartwrigMs Speech. 47 an enormous reduction in the volume of trade, until the volume of trade to-day. is nearly 50 per cent, less than it was in 1873 1 Can they deny that there has been a very great fall in the prices of the articles produced by our agriculturists, on whom we mainly depend 1 What shall I say of the immigration for the last six years ? I have only got the municipal statistics of Ontario to go upon, but what a sorry story they have to tell us. I have the returns, of every rural municipality and of every town and village of Ontario for the last six years, and what do I find 1 I find that of forty-four counties in Ontario, barely three have increased their rural population more than the natural growth of -the populatioi^ warrants; of the re-' mainder, twenty- two are either stationary or have gained less than their natural growth ; and nineteen have absolutely lost population. The total gain in Ontario, from 1881 to 1886, is about 13,000 souls on a rural population of over 1,100,000. In those six years we have gained about one half of one per cent., according to the municipal statistics of Ontario. Of 206 towns and villages, 38 have increased in size more than their natural growth of population ; 91 are stationary or have less than their natural growth, and 67 have lost population absolutely ; 168 out of 206 have either lost absolutely in popu- lation or have grown less than the natural growth of papulation warrants. T need not go over the list of rural municipalities in detail, because they show precisely the same results ; and I am sorry to say that I find from information furnished me within the last few days by my esteemed friend Mr. Blue, the Secretary of the Department of Agriculture, that the record for the year 1887, is rather worse, if that be possible, t' an the records for the years that have preceded. What 8ht.il I say of the comparison between Manitoba and Dakota 1 Manitoba and Dakota started seventeen years ago on equal terms. Each had a white population 1 4,000 strong. In about ten years Dakota had added not a little over 100,000 to its population ; Manitoba had added a little over 50,000 to its population. In 1881 Dakota had 130,000; Manitoba had 65,000. Then, Sir, we began to spend the money of the public by tens of millions in making railroads and promoting immigration to Manitoba. In 1886, we find that after spending 8100,000,000 of public money, and perhaps nearly half as much private funds, the population of Manitoba has grown but 30,000, and according 48 Handbook of Commercial Union. to the last statistics I have been able to obtain, in 1886, the population ot Dakota considerably exceeds 500,000. They have added nearly 400,000 to their population within the last six years, while Manitoba has added but 30,000 according tc the last census, after an expenditure of $100,000,000. Now, do you call that satisfactory 1 If you do not, then the time has come to search for some appropriate remedy. I say that, rightly understood and fairly understood, the interests of Cana- da and the United States and the mother country are really identical, and that the time is come and is not far distant, when, at any rate the best, the wisest and the most intelligent men will realize that, if they do not realize it now. I am no an- nexationist and I do not propose to become one. 1 have no desire to see our country merged in the United States, and I can tell the House that after conferences with a good many distinguished Americans, I am well advised they do not par- ticularly desire to add to their heavy responsibilities by seeing us politically incorporated with them. I have always held and declared that I regard annexation as undesirable. I have no more wish to see my country merge her existence in that of the great state to the south of us — although I admire much in the institutions of the latter — than I would wish to merge my own individual existence in that of another man's because I admire his abilities or envy his great estate. We have a plain duty to discharge. We are, some of us. Privy Coun- cillors, and it is our bounden duty to advice Her Majesty the Queen of Canada in the true interests of the people of Canada, whatever those may be. That may carry us far. To a very considerable extent the choice lies with the people of Canada, to decide whether they shall continue to fulfil the somewhat ignoble office that they now fulfil, of beiAg prac- tically, and in fact, a sort of hostage to the United States for the good behavior of England, or whether they will rise equal to the situation and become a link of union and concord between the two great English races. Which is the safer, which is the more honorable, which is the wiser, which is the more statesmanlike policy 1 I have abstained of set purpose from alluding to the fishery matter, except in a most cursory way. 1 do not wish to animadvert on the conduct of the English plenipotentiaries in that matter, but I may take this opportu- nity of pointing out to the House, and the Finance Minister Sir Richard Cartwri towns have grown and pro8j»eroil within the past few years, l)ut I say it is none the less true that over many wide areas of this country our population is stationary and even retrograde. It is none the less true that from one end of Canada to the other, the value of farm lands is less to-day than it was six, seven or eight years ago ; it is none the less true that the value of farm products is enormously lowered, and that our farmers are ex- posed to a far more intense competition than they hitherto ex- perienced. Great new forces are coming into existence, the full effect of which we are only beginning to feel. There is danger lest Canada, so far as regards our native born population, should sink into a mere residuum, a country from which the best and most intelligent of our people are fleeing, not by hundreds or by thousands, but by millions. Then as to foreign immigrants, if these statistics can be relied upon, it is clear that we are be- coming a mere dumping ground for the refuse of th'^se whom we import into this country. It is quite clear we are not growing up towards the light, and I hold it to be a very miserable symp- tom of our political growth, that there should exist here this craving to hang on to our mother's apron string. Under such circumsf ances, it is our bounden duty to ascertain at the earliest moment we can what are the views of the people of the United States on this great question. This is not u question of eti- quette. We have here, to all intents and purposc^s, the invita- tion of the President and virtual Premier of the United States to go and treat with them on fair and equal terms ; and if it were a question of etiquette, the hon. gentleman is a Shakesperian stu- dent, and he knows that **nice customs curtsey to mighty kings. " If two peoples desire to have a great boon like this, they need not stand on little paltry questions as to which shall make the first advance. If we fail, it will then be time to consider the situation anew. But I repeat that our real interests and those of England and the United States are perfectly identical, and will be substantially furthered by this proppsition. I hope that, in th'S discussion, on both sides of the House, . every man who speaks will remember that he is here as a Canadian representative, that he is here as a trustee of a cer- tain section of the Canadian people, that our business here, all that warrants us in being here, is for the purpose of discussing the welfare of Canada, and I hope that we will be spared cer- tain stale and tawdry hypocrisies of which we have heard too Sir Richard CartvyrighVs Speech. 51 much. I have the greatest possible respect for genuine loyalty and for genuine loyalists wherever I have met them. Even if they ai'e sometimes a little wooden-headed 'and perverse, the thing is so good in itself that T can excuse a good deal ; but there is a certain -lass of loyalty, and there is a certain class of loyalists to whom I cannot extend any consideration at all. I must say that 1 have not much respect for 35 per cent, tarifl' protection loyalty or for 35 per cent, tariff protection loyalists ; and I think, if the right hon. gentleman will permit me to say so, that the First Minister showed that he ajipreciuted correctly that class of loyalty and of loyalists in the famous parable he delivered a few years ago, wherein he compared himself — it is his comparison, not mine — to a monkey who had stolen into a farmer's orchard and was shaking down the apples for the benefit of the herd of swine that were grunting and rooting below. England can take care of herself, as England has shown many a time and oft. If the English Cabinet, wlien this matter is fully represented to them, as it ought to be, see fit to object, it will be time enough to take up that part of the question. In discussing it, I admit that all men who think that this will hurt Canada either morally o' materially — because 1 do not desire to keep the question down to the mere ground of material interest — have good and fair grounds for expressing their views, but I say that none else should be heard on any pretext in this House, and I say that the worst foe of British connection is the man who would attempt to stifle discussion on that ground. More than that, I say what every one who has thought on the subject must know and feel to be true, that, in many important respects, our position is anomalous and transitional. No one supposed, when we came together in this Confederation, stretching over half a continent, that we were to remain serai-dependent forever. We are growing in stature, not as fast as hon. gentlemen say, but still we are growing, and we are entitled to a larger measure of responsi- bilities and to a larger measure of rights. One thing is clear, that everyone, as I have said, who thinks twice on the subject knows and feels, that matters are not satisfactory for us in many ways. Why, even the Imperial Federation ists know this. They do not know exactly what they want, I grant ; they know still less how they are to get it, I grant ; but they know that there is a want and a lack in our present relations, and they 62 Handbook of Commercial Union. desire to fill it. I have looked at that question long and often, and, as far as Canada is concerned, I see no way out for them. I see no way of our becoming a valuable member of a British federation save only on one consideration, and that is that you broaden your bases and take care that you unite yourselves with the United States in the bonds of a firm and friendly alliance whioh is not likely to be broken, and there is no way in which that is more likely to be done than by greatly increasing and promoting the trade between the two countries. In mutual advantage and benefit the surest bond of union will be found to exist, and I believe that Mr. Goldwin Smith was eminently right in saying that it was an idle and silly de- lusion to say that either P]ngland or the United States pro- fited by the great struggle of the last century, that it was a thousand pities that the violent collision took place, and I know tjiat not only Goldwin Smith expressed those views, but that they were held by the greatest and best of the Americans of that day, by men like George Washington himself, by men like Alexander Hamilton, by men even like the Adamses, though they had strong republican leanings ; that they were held by all the best thinkers of the last century ; and that these are the views which are held by the best and wisest Americans of the present time, and those were sub- stantially the views, as their correspondence in certain re- cords exists to prove, which were held by our own United Empire forefathers, who did not desire to see Great Britain tax the colonies for her own benefit, but did desire to testify to the great and grand idea of a united British Empire and a united British people all over North America. It is idle for any human being to rise up and tell this House that, when we have lost a number equal to half the whole population that now remains, things are satisfactory with us. There is not another country, except perhaps Ireland, that has sustained so heavy a bleeding as we have done during the last few years. (^I say the time lias come when Canada may justly claim the right to make her own commercial treaties. I say it is for the inter- est of the Empire that she should have that right. j These things at any rate are perfectly clear. It is quite clear to any one who will carefully study those trade returns and will study the figures which I submitted before recess, that the United States market, if it were qnly made free, is "worth more thau Sir Richard Cartumghfs Speech. 53 twice over to Canada than all the rest of the world put together. It is perfectly clear that it is the only market open to us for a greataraount of our own productions. It is perfectly clear to me — it may not be to hon. leentlemen opposite — that our position relatively to the United States may become intolerable, and that there is need of present action in this regard. If we do nothing, and the United States act wisely, we may prepare — farmers and manufacturers alike — for a very severe competi- tion, for a great and increasing exodus, and for very great and increasing dissatisfaction among our various Provinces. I must not be misunderstood. I do not say that there are no other expedients possible for us, but what I do say is that the expedient 1 now propose for the consideration of the House is the surest, the simplest, and the easiest expedient open to us ; that it commends itself in a very high degree to the instincts of our people, as it has been unmistakably shown ; that it is in itself a fair, just and reasonable proposition ; that it is best for us, best for the whole Empire, best for our kinsmen and neighbors on the other side of the line ; and, believing that that is so, I beg to move the Resolution of which I have given notice. • / A FAllMEirS VIEW OF COMMERCIAL UiNION. RY THOMAS SH \W, Secretary of the Permanent Central Farmers' Institute^ Hamilton. This is without doubt the raost momentous question that agitates the public mind to-day in the Dominion of Canada. It relates to the welfare of no less than five millions of the peo pie on this side of the United States* northern boundary line, and of fifty-five millions on the other side of it. Its adoption or rejection will undoubtedly have an important bearing on the progress of every one of the individual Provinces that go to make up this great Confederation, larger in extent than the en- tire domain of the United States. The question is so many- sided that it will aflfect all the leading industries of the country, agricultural or otherwise, in their entirety and in their sub- divisions, and also the material well-being of the humblest citi- zen engaged in the prosecution of these, so that no one who has the welfare of his country at heart can look upon the sub- ject with cold indiflference. WHAT IS IMPLIED IN COMMERCIAL UNION? Commercial union between Canada and the United States implies a free interchange of all the products of both countries of whatsoever nature, whether of the waters, the soil, the sea and the mine. It would involve (1) an assimilation of tariff rates against all other countriee ; (2) of internal revenue taxes ; and (3) very probably an arrangement for pooling receipts and customs, and distributing the same. It would be followed by the discontinuance of the services of a strong force of custom- house officials on both sides of the boundary line of nearly 4,000 miles between the two countries, which is maintained at a cost to Canada of at least half a million of dollars annually. A Farmers View of Commercial Union. 55 T^ ' V ''' ": PHYSICAL CONDITIONS CALL FOK IT. "'f^ ' ■•, ing trade, that is, keeps a varied stock and sells to the retailer from each line in quan- tities as small as will suit his requirements. Our Toronto wholesale trade belongs to the latter class. The tendency in New York is to make this distinction more clearly marked every day and to vastly increase the proportion of the package trade. The tendency throughout the United States is to local- ize the jobbing trade for each section of the country in the chief city of that section. Hence the enormous growth of the jobbing business in such centres as Cincinnati, Chicago, St. Louis, St. Paul, Kansas City, San Francisco and other places. Even such cities as Rochester, Buffalo, Cleveland and Detroit, where formerly the jobbing trade was very insignificant, are now doing a largely increasing business. As might be expected, the jobbing trade of New York is becoming more localized. The advantages of this system are very apparent. The whole- sale men of New York cater for the trade of the entire coun- try and can contract for the entire output of a manufacturer in Europe or in America, and therefore buys at the cheapest pos- sible price. In the case of foreign goods, he keeps them in bond until they are needed, and does not require to be out of pocket even the amount of the duty, till the goods are wanted for shipment. As he sells at the least possible expense of hand- ling and in such large quantities and to the class of traders who pay most promptly, he can afford to do so on the smallest pos- sible margin of profit. The jobber in different parts of the country caters only for the climate and wants of the district immediately about him and has his customer closely under his eye. On the other hand, he does not require to run the risk and expense of contracting for such large quantities of goods 80 long in advance of his needs, because he can from, time to time order from the package merchant in New York and re- ceive the goods in his premises within a week thereafter. He is thus able to do a larger business on the same capital and at much less risk and cost, and therefore at a larger net profit. At the end of the season he need not be stuck with a large stock to depreciate through change of style by the time the next sea- son comes around. Under this system there are jobbers of dry goods in the States who turn their stocks ten times or more in a year, whereas under a different system, some of our largest 96 Handbook of Commercial Union. jobbers scarcely turn ttieir stock more than three times, and live times is thought to be extraordinary. Again, this system suits the retailer admirably. He is placed in easy distance from the base of his supply, so that he can at small cost make frequent personal selections from stock, and therefore need only carry a minimum amount of goods. Moreover, he goes to a market specially adapted to his requirements and does not run the same risk of having goods of a former season shoved on to him. I therefore conclude that, through free trade with the United States, though our wholesale men would have to change their methods somewhat to suit the new situation, and though they might lose some trade through Buflfalo, Detroit, New York and other cities, they would nevertheless be greatly benefited by having their business placed on a more healthy basis, and by having their risks decreased, and by having an increased prob- ability of profit on their turn over, and, moreover, I claim that the loss of some customers would be more than compensated for by the increased purchasing power of those who remained, and by the vast additions to our population which would cer- tainly follow. Again, Toronto has very considerable'manufacturing inter- ests which it is claimed would be seriously damaged, if not ut- terly ruined, by the adoption of free trade with the United States. It is said that the extensive, long established and wealthy manufacturers of the Eastern States would flood this country with their cheap ptvoductions, and that our manufac- turers could not compete with them. (^ I believe it to be quite true that our people would in most lines get a better article for much less money, and this is one of the reasons why we contend for the adoption of this principle, but that our manufacturing interests would be destroyed I do not believe. On the contrary, I claim that they would be at once stimulated into a more vigorous and healthy growth. We would have a market as broad as have the Eastern States, and an enlarged market is the very thing we need and must have, if we ever hope to be- come a manufacturing country to any considerable extent. It is a well known fact that at present, on account of the smallness of our market, in many lines there is hardly room for a single concern to achieve the best results, and in others, two or three will fill the bill, and then they are in mortal terror lest another should be started and ruin them by over-production. In the The Prosperity of Toronto. 97 event of the other being established, a combination will proba- bly follow to keep down production and to maintain prices. This is an unhealthy state of things, tending to prevent deve- lopment and to dwarf enterpriser] If we could not hold our own against the manufacturer ofthe East, how comes it that the Central and Western States not only do so, but are beating the East almost two to one in the ratio of the increase of their products. From 1860-70, the ratio of increase for Massachu- setts, New York and Pennsylvania was 77 per cent., and for Ohio, Michigan and Illinois, 124 per cent; from 1870-80, for the former 50 per cent., and for the latter 92 per cent. And it must be remembered that we would start in the competition much better prepared for it than were those Western States at the beginning of the period mentioned. How comes it that even the State of Michigan, a much younger country than our Province, is leaving us out of sight in the manufacturing race, notwithstanding the fact that she has to meet the freest com- petition of the wealthy and long established manufacturers of the East. The ratio of increase in the value of productions in Ontario for the period 1871-81 was, according to the calculation of our Secretary, Mr. Thomas Shaw, only 38 per cent., whereas in Michigan it was 50 per cent., in Ohio 61 per cent, and in Illinois 152 per cent. I have discussed this subject with many of our mauufacturer3,^nd I find that the larger, the more intel- ligent and the more enterprising of them say, that they do not fear American competition when placed on an equal footing, as they would be by the adoption of the principles for which we contend. They say that of course their methods would have to be somewhat changed to meet the new situation, but that an enlarged market is exactly what they want and must have. Men possessing ambition and courage, such as I am proud to believe our citizens do to as large an extent as any people in the world, desire to be placed in a position of the largest opportunities, and are then willing to trust to themselves for the resultJ3 But it is not only the existing establishments that we have to consider. We believe that continental free trade would [\e&d to a great influx of capital to this country and to the establishment of not only many new factories in lines already existing, but also in many others in which at present we do nothing whatever.^ We believe that Toronto particularly, ab she has special advantages of high order, would soon become B 98 Handbook of CorriTnercial Union. one! of the important manufacturing centres of the continent. Her climate is mosc suitable. Her position is central, and her shipping facilities to the east, to the west, to the south and to the north, are most excellent. Labour is abundant and caube had at a reasonable price. Three-fourths of all the kinds of raw materials used by American manufacturers we have in inexhaustible supplies at our very door. We, Torontonions, often boast of the prosperity of our city, and well we may, for it is the most prosperous community in the Dominion, We claim that we have special trade advan- tages not possessed by such border cities as Detroit, Cleveland and Butfalo. So we have. But when I visit those cities I see evidences of a prosperity greater than that which we possess. T find that their ratio of increase of population exceeds our own, and that the indications of wealth are greater and more abun- dant than they are with us. There is no safer barometer that I know of with which to measure the prosperity of a city than the prevailing price of residential land. The highest price ever paid for residential land in Toronto is $130 per foot In Detroit, I have it on the authority of its Mayor, residential land reaches $400 per foot, 200 feet deep ; and in Cleveland, $1,000 per foot three hundred feet deep and upwards ; and in Buffalo, $500 per foot. I inquire the cause of this great differ- ence—a difference greater than their excess of population would indicate— and the only one I can find is that they trade with sixty-one millions of people, while we trade with less than five millions. We ask, therefore, that we may be placed on equal footing with them by being admitted to the free and uninter- rupted trade of the continent, a destiny that I maintain is clearly indicated by geography, race, language, similarity of institutions, and the sacredness of religion. Did it ever strike you that we are more closely related by blood with the people of the United States than with any other people on the face of the globe ) In 1881, of our total population, 3,715,492, or 86 per cent, were native born ; and only 609,318, or 14 per cent., foreign born ; and there were then resident in the United States 750,000 native born Canadians, or a number of our sons luid daughters, brothers and sisters, equal to over 17 per cent, of our total population, or 141,000 more than all the foreign popu- lation then living in the Dominion. TJie Prosperity of Toronto. 99 I imagine I already see the man with the loyalist fad point- ing his finger of scorn at me, for he is super-sensitive, not be- cause of his extreme attachment to good old England, but be- cause he thinks his petted and pampered industry is in danger, and in his utter dearth of argument he resorts to ridicule. I would tell such an one that I am a native born Canadian, that I have a stake in this country, that I expect to live and die in it, that I prize as much and desire as fervently as he to main- tain our connection with the Mother Country, that I have as genuine a love as he, and perhaps a more genuine love, for the old dag that " has braved a thousand years the battle and the breeze." No Englishman expects or desires that our loyalty should utterly dwarf our patriotism, or should lead us to sacri- fice the interests of our children and sell our birthright. Eng- land will never say one word to interfere with the working out of our own destiny in our own way, nor impose a single barrier to that which we conceive to be in our interests, in the matter of what is merely a trade policy. We have a country vast in extent, rich in natural resources ; and a city beautiful for situation, famed for the enterprise and intelligence of her people, for the beneficence of her insti- tutions, for her comparative freedom from vice, for her obser- vance of the Sabbath, for her obedience to the law of God and man. All we ask is a fair field and no favour. With this fair and open field we shall then be willing to abide the operation of Nature's inexorable law, " The survival of the fittest" THE EFFECT OF COMMERCIAL UNION ON OUR RELATIONS WITH GREAT BRITAIN. BY MR. W. H. LOCKHART GORDON. In order thoroucjhly to understand this question it is neces- sary first to examine and to try to explain what is really in- tended by those who are now supporting what has been styled the " Commercial Union " movement. Ijt is not the intention in any respect to form a union of any kind \ h the United States. I^Our sole and only object is to break dovrn the barrier that now exists between the two countries for free and unre- stricted tradef] We believe that, as there are many millions of people on this continent, some of whom are our own flesh and blood, speaking the same language, using the same articles, carrying on similar businesses and with the same ideas of liberty and freedom, there should be no statutory line or carrier which would prevent all these people trading in the most free and unrestricted manner with each other. T We be- lieve also that it is in our interests and in the interests'of Great Britain to remove as far as possible by a commercial arrange- ment with the L^nited States, — and such an arrangement would be equitable and just to all the contracting parties, — all the diffi- culties that exist between us and this great nation, and thus prevent for all time to come anything occurring that may create any friction in the friendly relations that now exist between usj To accomplish this, however, it is not necessary that there should be any union with the United States. A union with ^.he United States is no more necessary to enable our farmers, our lumbermen, our manufacturers, to sell their goods and wares in the United States than there is necessity for union between our merchants in Toronto and Hamilton before they can trade with each other.' The reason why those who first took up this question styled it " Commercial Union '' with the United States, I understand, was that they wished to make it clear that any negotiations that might be entered into with the United States Government as to the tariff" was simply a com- Commercial Union in relation to Great Britain. 101 mercial arrangement, and not a political arrangement. The object of the term " commercial union " was to show that the arrangement, if any, was simply a commercial one and not a political one."*^ THE DISLOYALTY CRY, But it is said by our opponents that we have no right to desire to extend our trade with the United States — that such an arrangement would show disloyalty to the British Crown ; that we can only extend our trade relations with the United States to the injury of the British manufacturer, and that being the case our first duty is to look to the interests of the British manufacturer irrespective of our own interests, and to ignore any advantage that we might gain by this extended trade. We are asked practically to acknowledge that this nation of Canada was simply brought into existence in the interest and for the benefit of the British manufacturer ; and that however much we might benefit ourselves by looking round and finding others to whom we could sell and from whom we could buy with greater advantage, yet, inasmuch as we originally came from Great Britain and are at present a part of the British Empire and are subject to British laws and British customs, therefore we must not, under peril of being called disloyal, improve our position to the great extent to which we believe it will improve that position by trading with a nation to the south of us which has abundance of wealth and sixty millions of people. I can scarcely believe that those who raise the disloyalty cry can seriously have examined the question. I cannot under- stand how any seriously-minded person can argue that we Can- adians with a population of about five millions, occupying the second largest country in the world, rich beyond imagination in natural resources and full of enterprise, are to be kept back and retarded in our progress for the sake of a few manufac- turers living in the Mother Country, three thousand miles away. When I tell you that the total amount of manufactures imported into this country from Great Britain last year was under $40,000,000 : that the profit on this to the manufacturer was probably not more than ten per cent., or $4,000,000, and that even if under Commercial Union for the time being a cer- tain proportion of this profit should be lost to the British manu- facturer, you can easily see how absurd the contention is that 102 Handbook of Commercial Union. the prosperity of this country and of this people should be sacrificed for the benefit of these few manufacturers. THE BRITISH MANUFACTURER. Any movement which must bring about an extended trade between this country and the United States is not likely to interfere with any other branch of trade in the Mother Coun- try except those connected with her manufactures, unless it be argued that Canada has been brought into the world not only to buy from the Mother Country, but also to sell to her. It seems to ine inconsistent for our opponents to argue that we must do nothing that will prevent the British manufacturer sending his goods into Canada to be purchased here, unless they also argue that we are bound to sell all we produce to the Mother Country. Surely if it is our bounden duty to purchase from the British manufacturer it must also be our bounden duty to sell our surplus produce to the British public. Why they should contend that we should do nothing that would pre- vent the British manufacturer selling to us, and do not at the same time assert his exclusive right to buy from us I cannot understand. It must be evident to everyone that every bushel of barley and every barrel of apples, every stick of timber and every pound of meat we sell to our neighbours across the water must leave us so much less to sell in the markets of Great Britain, thereby enhancing to a certain extent the price that the English consumer has to pay for these several commodities. If, therefore, the argument is good in the one case it surely must be good in the other. But, gentlemen, the reason why our opponents object to our entering into any arrangement with the United States that might for a limited time raise the duties against the Euglish manufacturer is not that they really believe we are disloyal, not that they really think we are desirous of doing something to the prejudice of the British Crown and nation, fbut because they themselves are interested in keeping American manufac- tures from coming into this country. If you get to the root and core of the matter you will find that this cry is being raised by those who are either themselves manufacturers or have been interested in promoting this questionable policy, which, in my opinion, is now beginning to do so much to drive Commercial Union in relation to Great Britain. 103 our people out of the country, and bo injure Canada in- every province. If, instead of unrestricted reciprocity with the United States, we were to advocate free trade in all its branches which would admit the products of English manufacture as well as those of American manufacture free of duty, we should hear nothing of this disloyalty cry as far as it relates to Great Britain, but the cry we should then hear would be disloyalty to Canada. Canada, which has sunk so many millions in building up theue manufactures and in carrying out this National Policy, we would then be told, was disloyal to herself ; we should hear very little ot disloyalty to the British Crown ; but our friends are astute enough and clever enough to keep themselves and their interests for the present in the background, and to use the cry of disloyalty to the Mother Country as the cat's-paw which they hope will draw them out of the fire. ~~] ACTION OF THE BRITISH GOVERNMENT. I do not believe, gentlemen, that if this matter were proper- ly represented to the British Government and the British peo- ple they would for a moment object to any arrangement that Canada might be able to make with the United States or with any other country that could be shown without doubt to be greatly to her interests. Let us look at the present pcjaition of affairs. The British Government have already recognized the right of the Canadian Government to impose such duties on goods coming into Canada from Great Britain as she thought expedient and necessary. It is true that some years ago the question of the tariff was one of the questions that the Gover- nor-General of Canada had power to look into, but it is well known that since the Governor-Generalship ot Lord Lome the British Government have recognized the right of the Canadian Government to impose such duties on all commodities as it thinks necessary. The present Government of Sir John Mac- donald in the year 1879 raised the duties on nearly all imports by a very great amount. There was a considerable outcry at the time. The matter came before the Home Government, and the British manufacturers and merchants who then complained were told that Canada had a perfect right to impose any duties that she thought necessary in the interests of her own people. It was said at that time that this duty was imposed by Sir 104 Handbook of Gonvmercial Union. John Mttcdonald's Government more by way of retaliation and to bring about unrestricted reciprocity with the United States than for revenue purposes. If this is the case (and undoubt- edly thero is good reason to suppose it to be so), I would ask how it now lies in the mouth of those who are opposing us, and who are mostly advocates of the policy inaugurated by Sir John Macdonald's Government in the year 1879, to raise this disloyalty cry which they are now relying on. Last year again Sir Charles Tupper, much to the chagrin and annoyance of the iron manufacturers in the Old Country, raised the duty on iron considerably. When protests were made to the British Gov- ernment the same reply was given as before. Now, sirs, I fail to see how a party which has inaugurated the system of taxes on British imports, and has increased those taxes more than once to the great annoyance and detriment of the British manufacturer, can honestly turn round upon us who are advocating a movement which will greatly increase the wealth and prosperity of this great country, and argue that we are disloyal. It looks very much as if these gentlemen had adopted the well-known rule used by skilful advocates when they have a bad case, viz., to igiiore the facts and merits of the ' case and abuse the other side. T If in 1879 it was right and proper to impose heavier duties on imports from Great Britain, either to bring about unrestricted reciprocity with the United States or in the interests of Canada, surely it cannot be wrong in 1887 to increase these duties somewhat if it becomes neces- sary to do so in order to accomplish this great object. If it is disloyal to do this now, surely it must have been disloyal to do it in 1879. Nothing has happened since then to make what was not disloyal in 1879 disloyal in 188817 MORE MONEY AND MORE PEOPLE WANTED. But, gentlemen, I will show you that it is in the interests of Great Britain that we should have closer trade relations with the United States. I have just stated that Canada is the second largest country in the world, but poor in money and / poor in people. fWhat we want is more money and more peo- ple. Our friends to the south of us have more money than they know how to use. They have sixty millions of live and active people, who from morolog till mght are seeking new ConiTnercial Union in relation to Oreat Britain. 105 channels by which to increase their wealthJ Is it very much to suppose that when we are in a position to point out to those people the value of our mines, the value of our timber forests, the value of our fisheries and our wheat lands, and thnt these can be worked by them with their own money and free from Customs duties and other senseless impositions, that a large number of these people and a large amount of their money will soon find its way into Canada ? It is said that history repeats itself, and if we believe this to be the case we have only to look back to what took place between the years 1864 and 1866, when we had reciprocity in natural products with the United States. During that period the busines transacted between the two countries increased from $20,000,000 to over $84,000,000 per annum. The dissatisfaction, the dulness of the business, the dismay in people's minds that existed previous to 1854 rapidly disappeared during this happy period. Canada never was more prosperous, never was more happy ; and we think, therefore, that we are not too sanguine when we suppose that if all trade barriers were removed between us and the United States a tremendous impetus would be given at once to all the various branches of trade. I mentioned that the interest of the British manufacturer in Canada wap about $40,000,000 per annum. You will perhaps be surprised when I tell you that the interest of the British nation as investors in our mortgages, in our railways, in our municipal debentures, in our timber lands, in our ranch properties and other things, is over $600,000,000. Now it must readily be seen that whatever directly benefits this country must indirectly benefit these investors, [jf trade increases the dividends paid by cur railways to the British in- vestor must improve. If the farmers* condition improves the interest paid to the British investor on his mortgages will come, in more regularly. J The money placed by the British investor in our mines and ranch properties must bring in a better re- turn. I say, therefore, without fear of contradiction, that in- asmuch as the policy we are proposing will benefit such a large number of English investors, and will injure only to a small extent and for a short period the British manufacturer, it is in the interests of Great Britain that our proposals should be car- ried out I wish you to understand that I think the British manufacturer will only temporarily be prejudiced by this movement, for I am satisfied that as Canada increases in 106 Handbook of Commercial Union. f.n^ wealth, and as the national debt of the United States decreases in amount, and the tariff as a natural consequence is lowered, that a larger quantity of British goods will be consumed both in Canada and the United States, and/ihat ultimately the tariff, which for the time being may be slightly increased, will be eventually reduced to below what it is at the present time. ' STRENGTHENING THE EMPIRE. Again, by improving the prosperity and increasing the wealth of the country we are strengthening the whole of the British Empire, f We are keeping our young men in Canada who otherwise will leave. / At the present time it is said that there are more than a million Canadians in the United States, and that this number is increasing year by year. For years past a large number of the surplus population of Great Britain has emigrated to the United States ; a very small number to Canada. Why is this ? The reason is surely to be found in the fact that the one ia a prosperous country, the other a poor country. Can it be argued by those who are raising the dis- loyalty cry that any Englishman, when he has the choice of emigrating to two countries, one of them being under the British Crown, and the other a foreign country, would choose a foreign country unless there was some good reason for doing so ? Q! believe that as soon as you can show the British emi- grant that prosperity has returned to the shores of Canada and that he can do as well here as he can in the United States, a very large proportion of those who are annually lost to the British nation will come and settle in Canada and continue to be good and loyal subjects of the British Crown. ] In this mat- ter alone, therefore, of keeping our young men in Canada, and of attracting to our shores the able-bodied, intelligent emigrant, who otherwise would give up allegiance to the British Crown when he goes to reside in the United States, I believe we are advocating a course that is greatly in the interests of the whole Empire. But it is said that this movement will lead to annexation. Our opponents say that Commercial Union is *' annexation in disguisa Loyal as you may be in your intentions it cannot fail eventually to bring about annexation." Now, sir, I may say here that[lf I thought that this was to be the result of Commercial Union in relation to Great Britain. 107 — 7 Commercial Union I should have nothing to do with it,.; As you know, I was born in. Great Britain, and am not a native of Canada, although I am proud to say that I have adopted Cana- da as my country. There is no one who is more strongly at- tached or has more loyal feelings towards the Mother Country than I have; and one of the principal reasons I have in advocating this movement is that I believe that unless we can improve our position by extending our trade and getting more capital and more people into the country, the time is not far distant when we would be compelled to go to our friends across the water, suing in forma pauperis, and requesting them to make some arrange- ment to hf.Ip us. From all parts of the country I hear the cry of distress. I am told on all sides that there is scarcely a business in Canada at the present time that is more than pay- ing expenses. The farmer finds it impossible to make both ends meet. The manufacturer, who is paying heavy interest on un- productive capital sunk in his buildings and machinery, has to charge exorbitant prices to the poor consumer. Manitoba and the North- West, which was tx) have been such a bonanza to the whole Dominion, has instead turned out to be a tremendously heavy weight. [' With a debt of $225,000,000 hanging over our heads, largely incurred to build the Canadian Pacific R'y, which, practically, is of little benefit to more than two cities in Canada east of Winnipeg ; with &per capita debt of over $44 tor each Canadian ; with dissatisfaction in the Maritime Provinces, so pronounced that on more than one occasion Nova Scotia has de- clared its intention to leave Confederation ; with ill-feeling in Manitoba, amounting almost to rebellion, in consequence of that province being refused direct communication with the sixty million people south of them ; with the public press, which is supposed to re-echo the sentiments of the people, stating, as did the Emerson International on the 21st of July last, that ** the opposition to free channels of trade is rapidly engender- ing a strong and wide-spread feeling in favor of annexation," I think there can be little doubt that unless something is done to remedy this terrible state of affairs we are fast DRIFTING TOWARDS ANNEXATION to the United States?? I believe, sir, that if we can assure con- tinental free trade or unrestricted reciprocity with the United 108 Handbook of Commercial Union. States that with the returning prosperity which will come to this country, and the satisfaction we shall experience in seeing our valuable natural resources turned to the best account, we shall be so satisfied with our position that we shall scout any idea of change in our political relations and continue a loyal y^ and prosperous part of the Queen's domain. £1 am confirmed in this view of the question by the fact that many of the advo- cates of annexation are opposing the movement because they agree with me in thinking that if we got Commercial Union annexation would be indefinitely postponed.7 In support of this view I may refer you to the remarks or the Globe of St. John, New Brunswick, in its issue of 30th July last, where it said, ** possibly the effect of Commercial Union would be to retard the progress of any annexation sentiment which is based on mere material considerations, inasmuch as these considera- tions would be satisfied by Commercial Union. The more ardent annexationists may therefore be expected to look with indifference upon it, if they do not really oppose that Union since it will not satisfy their aspirations." Gentlemen, these are strong words, but none the less true ; and I hold it to be the duty of every Canadian who is loyal to his own country, who is loyal to this great Dominion, who is loyal to the British Crown, to examine carefully these signs of the times, and try to find some remedy for this grave dissatisfaction which is cropping up in so many different parts of the Dominion. If we wish to retain the several provinces in Confederation we must satisfy the ])eople not by giving them better terms in the shape of periodical grants of money, but by some broad substantial commercial policy that will bring back life and prosperity to the hearths and firesides of each of the people. Our Government have on several occasions recognized the im- portance of extending our commercial relations, and have taken to themselves considerable credit for making and attempting to make commercial arrangements with several foreign coun- tries such as France, Spain, the West Indies, the Argentine Republic, etc. Why, I would ask, is it necessary to go all over the world seeking people to trade with whose laws, customs and languages are different from our own when we have within a few hundred miles of every part of Canada a people sixty mil- lions in number ready and willing to trade with us, who speak the sawe lauji^ua^e, »ui have laws and cuetgms Y^r^ Bimilar to Commercial Union in relation to Great Britain. 109 our own, and many of whom, as I have already pointed out, are related to us by flesh and blood 1 A SIMPLE MATTEK OF ARRANGEMENT. But it is said that in order to have free trade on this conti- nent it would be necessary for us to surrender our indepen- dence to the United States, for this can only be brought aboub when our tariffs have been fixed and settled for us at Wash- ington. This argument seems to be absurd. If the argument were sound, every time we open negotiations with the West Indies, the Argentine Republic, or any other small States we arv* offering to surrender to these States our independence in order to bring about the arrangement sought for. ;^ The question of ^ tariff between two countries is simply a matter of arrange- ment between the two contracting parties for a fixed period or until notice of the termination of the arrangement by one of the contracting parties, and as each contracting party has an equal voice in the negotiations leading up to the arrangement \ I cannot see how any tariff fixed in this wav can be said to be a surrender of our independence. Again, I would ask, did w« surrender our independence to the United States when w<» entered into an arrangement with them for limited reciprocity in the year 1854, and which arrangement I believe discrimina- ted to some extent against some kinds of British manufac- tures 1 If under that arrangement we retained our indepen- dence what is to prevent our doing so under an arrangement for more extended reciprocity ] DISLOYALTY A BUGBEAR. Gentlemen, it is by arguments of this kind, and having as little truth and force in them as this one, that our opponents have been trying to influence the country against this move iiient. I have carefully examined and read everything I could find that has been said or written on this great question, and 1 cannot say that I have found any argument brought forth by our opponents that we are not able satisfactorily to answer. This disloyalty cry in my opinion has nothing in it ; it is a bug- bear got up by our opponents to frighten the timid, and to divert those who are wavering from the real question in ordei (0 prevent t^e merits beip^ e^moed iu\>Q, If the (jueetion Qf 110 Handbook of Commercml Union. disloyalty comes up at all it is a far more grave one than our opponents would wish to make it. It is not a simple question of the effect of this movement on our relations to the Mother Country, but it is a question of our loyalty to ourselves. If we wish Confederation to hold together ; if we wish to have peace and prosperity in our midst; if we wish this Canada of ours to flourish, to remain an integral portion of the Queen's domain, we must look the present state of affairs fairly and squarely in the face, and at once devise some means of restoring contentment, happiness and prosperity to this great country ; and I say that that can only be done by entering into the only arrangements that our natural position points out to us to' be the right and proper one, and that is to break down all bar- riers of trade on this vast continent and bring about" as soon as possible continental free trade, i THE QUESTION SUMMED UP. To sum up then, an equitable and just commercial arrange- ment with the United States bringing about unrestricted re- ciprocity between the two countries, would affect our relations with Great Britain, as follows : First, it would greatly increase our prosperity in Canada, and by so doing would largely benefit the $600,000,000 of British capital invested here ; secondly, after a short time it would in consequence of the increased de- mand for manufactures, and the lowering of the tariff at present existing in the United States, considerably benefit the British manufacturer ; thirdly, it would open up fresh fields for the in- vestment of British capital from the new enterprises that would spring up in Canada ; fourthly, it would turn the tide of emi- gration tor the best class of British emigrants from the United States to the great wheat district of the North- West of Canada ; fifthly, it would establish Confederation on a firm basis, and so assure Canada remaining an integral part of the Queen's do- main ; and sixthly, it would remove all cause of triction be- tween ourselves. Great Britain and the United States, and thus place millions of English-speaking people on this continent on a friendly footing for all time to come ; and having accom- plished all these things I think it will be acknowledged that Commercial Union will be of inestimable benefit not only to Canada, but also to the people of Great Britain. CURRENT OBJECTIONS TO COMMERCIAL UNION CONSIDERED. BY THE HON. J. W. LONGLEY, Attorney-General of Nova Scotia, Halifax. There is nothing in the consideration of Commercial Union with the United States which involves the questions of Free Trade and Protection in the abstract. Both the Free Trader and the Protectionist can cousintently support it ; the latter, because it is contemplated that North America should have a common and high tariff against the rest of the world \ the for- mer, because unrestricted trade over a whole, great, and pros- perous continent is an enormous step in the direction of Free Trade. Personally, I would regard absolute Free Trade as a better solution of uur difficulties. But this seems not to be a practical question at the present moment. The most sanguine public man would despair of being able to induce the Canadian people to accept the broad doctrine of commercial freedom, and a revenue derived chiefly from direct taxation. This solution then having to be rejected for a time, it remains to be seen what is the best practicable course for us to take. The theory upon which the advocacy of Commercial Union is based is that our present condition of affairs is intolerable and cannot last The opposition to it goes upon the assumption that everything is all right in Canada, that the National Pol- icy of Sir John Macdonald is working well, and that all parts of Canada are not only prosperous but contented. This is de- nied in the clearest and most emphatic manner. Granting, for the moment, that under ordinary circumstances the National Policy is sound — in other words, that in a new country like Canada it is the true policy to build up domestic industries by imposing high tariffs against the pro- ducts and manufactures of older countries, still, upon a careful examination into the peculiar circumstances of our position, it must strike any mind that is not prejudiced or dull, that Buch a policy is simple madness, and mu^t sooner or later col- 112 Handbook of Commercial Union. lapse. A political union of the several Provinces of British North America was effected in 1867, but not a commercial union, and the twenty years that have elapsed have served only to demonstrate how utterly impossible a commercial union be- tween the several Provinces is. INTER-PROVINCIAL TRADE A FAILURE. I take the solid ground that naturally there is no trade be- tween Ontario and the Maritime Provinces whatsoever. With- out the »id or compulsion of tariffs scarcely a single article pro- duced in Ontario would ever seek or find a market in Nova Scotia, or the other Maritime Provinces ; in like manner, un- less under similar compulsion, not a product of the Maritime Provinces would ever go to Ontario. [_ Twenty years of political union and nine years of an inexorable protective policy designed to compel inter- Provincial trade have been powerless to create any larpe triide between these two sections, and what it has created has been unnatural, unhealthy, and consequently profit- less. 7 To illustrate : Ontario sends about $7,000,000 worth of bar- ley to the United States, and pays fifteen cents per bushel duty on it. How much does she send to the Maritime Provinces 1 She sends an equal value of the products of the forest to the United States, and pays heavy duties upon it. How much to the Maritime Provinces with no duties'? She sends over $4,000,000 worth of animals and their produce to the United States with heavy duties. How much to the Maritime Pro- vinces ? Let us reverse the picture. Nova Scotia sends nearly $2,000,000 worth of fish to the United States. How much to Ontario ? She sends of the produce of her mines $600,000 to the United States, and pays large duties. How much to On- tario with no duties? She sends $500,000 worth of agri- cultural products to the United States, and pays heavy duties. How much to Ontario ? She sends some hundreds of thousands of dollars' worth of produce of the forest to the United States, and pays heavy duties. How much to Ontario ? Of the genuine natural products Nova Scotia sends practi- cally nothing to Ontario If the exports from Nova Scotia to Ontario are carefully studied, it will be found that they consist chiefly of refined sugar and manufactured cotton, the product of Objections to Oommercial Union considered. 113 two mushroom industries called into existence by the protective system, and which do not affect one way or another the inter- ests of five hundred individuals in the entire Province of Nova Scotia. Does anyone ask why this state of things exists 1 The answer is simple. God and nature never designed a trade between Ontario an^ the Maritime Provinces. 7 If I have a barrel or ton of any commodity produced in Nova Scotia, and I desired to send it to Toronto or Hamilton, the cost of sending it thither would (unless it were gold) probably be more than the value of the commodity. But I can at any moment put it on board of one of the numerous vessels or steamers which are daily leaving every port in Nova Scotia for Boston, and send it to that city for 20 or 30 cents. If I desired to go to Toronto or Hamilton to sell it, I should have to mortgage my farm to pay the cost of the trip, whereas I can go to Boston and back for a few dollars. Will some one be good enough to explain how it happens after all the^boasted results of the National Policy, after the glorification we hear in the party press when a car load of sugar leaves Halifax for Ontario, that at this moment all the trade relations and all the social relations of Nova Scotia are with the New England States, and all the trade relations and all the social relations of Ontario are with the people of New York, Chicago, BuflPalo, Cleveland, Detroit, and other large American cities T How happens it that Manitoba, where millions of the people's money have been lavished in the attempt to engraft a mad system of forced inter-Provincial trade upon the North- west, is to-day on the brink of insurrection — over what ? Simply the right to have railway connection with the United States. Sir John Macdonald and the Canadian Parliament have decreed that the people of Manitoba shall sell their wheat in Montreal or Toronto, and trade with Ontario and Quebec. God and Nature have decreed that they shall sell their wheat in and trade with St. Paul, Minneapolis and other contiguous western cities. Whose decrees are most likely based upon wisdom, and which are most certain to prevail 1 Will some enthusiastic advocate of the present system please rise and ex- plain why, after twenty years of Confederation, a Nova Scotian is never seen in Ontario except as a traveller or a delegate to some denominational convention ; and why, with the exception 114 Handbook of Commercial Union. of the " drummer " an Ontario man is as great a curiosity in Nova Scotia as a South Sea Islander ? There must be some- thing generally wrong with a system which, after twenty years of enthusiastic gush over the Confederation and the building of a National sentiment, has for its product complete isolation between the several Provinces ; which sees the merchants of the Maritime Provinces making constant visits in the way of trade to Boston and New V^ork, and none to Toronto ; which sees the business men of Ontario going daily backward and forward between that Province and the American cities about them, and coming to Halifax in the way of business once in a century. In all seriousness is there not material in these facts — undoubted facts — to cause sensible men to reflect upon the prosperity and permanence of the existing conditions of things in Canada ? If any moral can be gathered from the incidents already re- ferred to, it is this : That the Maritime Provinces have no natural or healthy trade with the Upper Provinces, but with the New England States ; that the Upper Provinces have no natural trade with the Maritime Provinces, but with the Cen- tral and \/estern States adjoining them ; that Manitoba has no natural trade with the larger Provinces of Canada, but with the Western States to the south of her ; that British Columbia has no trade with any part of Canada, but with California and the Pacific States. In other words, that inter-Provincial trade is unnatural, forced, and profitless, while there is a natural and profitable trade at our very doors open and available to us. Does not this'suggest Commercial Union with the United States as the supreme solution of our present difficulties in tones so clear, so unmistakable as to be apparent to the dullest ? The remedy is simple : strike down the unnatural and absurd barriers between this country and the United States, and let trade flow freely in its natural channels from the Atlantic to the Pacific. DIFFICULTIES AND OBJECTIONS CONSIDERED. Having stated the general principles which seem to make a Commercial Union extending over the continent natural and desirable, it remains to deal with some of the objections which have been taken to this policy. They may be summarized briefly as follows : First — It will lead to Annexation or political Objections to Commercial Union considered. 115 union. Second — It will be injurious to the manufacturing industries of Canada. Third — It is impracticable ; inasmuch as it is impossible to frame a common tariff satisfactory to both countries ; and if this were done in the first instance how is this common tariff to be changed from time to time to suit the exigencies of either country 1 Fourth — It will tend to separ- ate Canada from her connection with the Empire^ These are the chief objections urged against the scheme, so far as I have heard them, and it is proposed to deal with each. First — It will lead to Annexation. This must be considered from two standpoints — that of those who are rigidly opposed to political union with the United States, and those who are nor. [f Belonging to the latter class, and believing firmly that " the interests of the Dominion of Canada are more identified with the continent of America than with any portion of the world, this bugbear has no terrors for me ; nor would I, and many others who believe with me, resist Commercial Union, if satisfied that the material prosperity of the country were bound up in it, for mere sentimental considerations. , But it is for the benefit of those who, for some reasons which are not very clearly defined, have an instinctive horror of political union with their English-speaking brethren on this continent, that the objection is now to be considered. , The onus is upon those making this objection to, establish their point. It is suBicient in answer merely to deny the fact and call for the proof. The facts of history are against any such theory. The period when the Annexation sentiment was strongest in Canada was just preceding the Reciprocity Treaty of 1854. The advantages of trade with the United States were then deeply felt by the masses of our people and large numbers at that time believed that the only w^ay to master the evils under which we were then labouring was to seek union with the States. The public men of the other provinces joined in a movement in this direction, and Annexation was a more vital question in Old Canada than in the Maritime Provinces. ' But the treaty ot 1854 put an end to this feeling. As soon as our people secured the advantages of free access to the American markets for tlieir staple products content followed, and all mention of Annexation ceased. The Treaty terminated in 1866. The next year the Dominion was created, and a noble effort has been made by our people to substitute a national life, 116 Handbook of Commercial Union. or policy, in place of American trade. If the conditions were favourable the struggle would be worthy of our best endeavours. But I aimed to show in the former article that it could not be done, the geographical difficulties are overwhelming and per- manent. And to-day we find arising in the several sections of this Dominion the same feeling of discontent, and the people seeking the same natural remedy — trade with the United States. It is fair and reasonable to conclude that the advent of a policy of unrestricted trade with the United States would put an end to this discontent, and allay any growing tendency to seek re- lief by political union with our great neighbour. But it is not necessary to be sophistical on this point. A ready and con- clusive answer to those who croak ol' Annexation is at hand. The question comes right down to this : Are the (>anadian people afraid of themselves ?^ None of us have much fear of conquest, or a forced union with the United States ; therefore, if Canada ever becomes a part of the American Union it will be because a majority of the Canadian people want it. When that period arrives what is to be done? Shall not the will of the majority prevail ? ^ With or without Commercial Union, Annexation will never take place unless a majority of Cana- dians want it and vote for it. What, then, need we fear ? Is it said that Commercial Union will hasten the desire in this direction*? Why ? Only in one way — by making the advan- tages more apparent. Would this be a disaster ? [jLet us all console ourselves by this thought, in this and in all other im- portant matters connected with our destinies, — the will of the Canadian people will be supremo^ If now and evermore the great mass of people are inexorably hostile to political union with the States, then they have nothing to fear, either under Commercial Union or without it. If, on the other hand, it is a good thing, and would tend to advance our interests, then the sooner it coines the better. Let us not be afraid of our- selves. Second — It will injure the young manufacturing industries of Canada. If this objection is well founded it is a disagree- able confession. It either means that our manufactures are of mushroom growth, and highly artificial, or that we are not equal to our confreres in this important field of labour. I reject both theories. T Some industries have been forced into an unnatural p^istence D^ mef^us of »» unsound trade policy, The colUps^ Objections to Commercial Union considered. 117 of these will not be a national calamity. But there are indus- tries in Canada which are able to compete with the continent, and which would be vastly strengthened and enlarged by open- ing to them the markets of sixty millions of people.^ The effect of the Reciprocity Treaty of 1854 was not to depress the manu- facturing industries of Canada, nor has any one a right to pre- sume that unrestricted trade with the continent woul^have any such effect. However, it may be admitted that the/immediate effect of Commercial Union will be to injure some few of the manufacturing industries of Canada]^! but the other side of the case must also be considered. Manufactures ultimately adjust themselves according to facilities, and no one can doubt that Canada offers facilities which will attract to this country Ameri-' can capital and American enterprise the instant that an en- larged market is assured. Take the iron industry of Nova Scotia. From Pennsylvania to the North Pole, so far as we know at present, the condition of coal and iron lying side by side does not exist in America, save in Nova Scotia. For years past the National Policy has done its best to foster the iron industry in Nova Scotia. Large duties have been imposed upon imported iron. Then came a bounty of $1.50 per ton on pig. Then special rates over the Intercolonial Railway for coal and coke. Yet with all this nursing the Londonderry Iron Works of Nova Scotia have never thrived, and the Steel Company of Canada is now in liquidation. But who doubts for a moment that in the day that the markets of the whole continent are thrown open large iron works will spring up by the agency of American capital in the counties of Pictou and Cape Breton, where coke can be obtained at the very works themselves at $L 50 or $2 per ton ? This only serves as an il- lustration of many other industries which would boom at once as soon as a natural and unlimited market was available. But it must not be forgotten that while manufactures are an ex- ceedingly important factor in the national prosperity they must not be allowed to overshadow all other interests. It would not be wise to sacrifice all other industries for the sole benefit of a handful of manufacturers. Is it nothing that Commercial Union will double the profits of the farmer, who represents nearly fifty per cent, of the entire population 1 J Are we not to regard the interests of the lumberman, the fisherman, the ship- buildw; the nai»er ? Are we to ignore forever all the inexorn' il8 '.. Handbook of Commercial Union. ble laws of trade 1 Must everything give way to play the game of the petted manufacturer ? Surely every reasonable person will answer, No ! But we have yet to Bnd any man in Canada who has addressed himself to the task of proving that in the aggregate the manufacturing class in this country would suffer by having opened to them in a day the markets of the greatest industrial and consuming nation in the world. ^.' DIFFICULTY IN ADJUSTING A COMMON TARIFF. The third objection taken to the scheme of Commercial Union is the most difficult to deal with. It is that it would be im- practicable for two independent nations to adjust a common tariff satisfactory to both. It is argued that the revenue necessi- ties of each might differ, and a tariff which produced enough revenue for one of them might not produce enough for the other. And even if a satisfactory adjustment was made in the first in- stance, in the course of time the exigencies of either might re- quire an incrv^ase or a reduction, and that infinite difficulties would stand in the way of a readjustment, These are substan- tial difficulties, and need to be looked into carefully. It will be kept in mind that this objection is one in form, not in substance. It is a mere matter of detail. If it can be successfnlly shown that the result of Commercial Union would be to double the wealth of Canada in five years, it is not likely the Canadian people would be daunted by any mere difficulties of detail. But the objection is a practical one, and merits con- sideration. Granted that Commercial Union is a good thing, how is the scheme to be worked out ? This very difficulty suggests the folly of tariffs of all kinds. [^ Who can doubt that the world would be better and the whole human race be brought nearer to the realisation of a common brotherhood if there were no such things as Custom-houses 1 7 Wlio also will undertake to controvert the fact that tariff rev- '' enues are the foundation of national extravagance and official jobbery ? It is a vulgar impression that a revenue collected through the Custom-house and excise departments is not a tax at all, and that consequently the more revenue you get the more money you will have to lavish. This is the origin of reckless expenditure and growing and multiplying wants. If all the money required by National Governments were raised by objections to ComTYiercial Union con»idered. 119 direct taxation we should see a system of economy which would remind one of Spartan virtue, and we should not have to worry over such questions as Commercial Union, Jot th6 whole world would form one great Commercial U nion. This is the ideal condition of affairs. We unfortunately have to deal with the real. But the indications are that this continent is about to turn its course in the direction of commer- cial freedom. In the United States the Protectionist party is still ascendant, but the advocates of a reduced tariff are steadily gaining ground. The enormous surplus which is being rolled up each year, and which the Government do not know what to do with, is an immense lever in the hands of those who are endeavouring to lead their country in the direction of sound economic principles. Therefore, though we have to deal with things as we find them, and make all our calculations on the basis of a tariff collected revenue for many years to come, yet one thing we may confidently rely upon in all estimates for the future, and that is that the United States will adopt the policy of a gradual and steady reduction of their tariff. If the Con- gress agree to the principle involved in Mr. Butterworth's Bill, and a Commission is formed to adjust a common tariff, it is safe to affirm that that tariff will be lower than the existing tariff of the United States. It is equally safe to conclude that if a re- adjustment of this common tariff is afterwards sought by the United States Government, it will be in the direction of a fur- ther reduction, and not an increase. If these be the facts, then we can make our calculations ac- cordingly. It will be satisfactory to Canadians to have a com- mon tariff lower than the present American tariff. Indeed it is one of the objections urged in many quarters to Commercial Union that it will involve too high a tariff ; therefore we have nothing to fear from the first common tariff American policy and Canadian interest will run parallel in this regard. But suppose that American policy, which is likely to prevail under a common tariff, should seek a still further reduction in the com- mon tariff, in the course of a few years, as we feel quite confi- dent it will, how will this affect Canadian interest 1 Would it not be entirely in line with it ? Have we anything to fear from a reduced tariff 1 CJVe have always the alternative of direct *^ taxation, and I believe this to be the very best meaus of col- lecting a revenue.7 Sound and enlightened opinion the world 120 Handbook of Commercial Union. • ' over is tending in this direction. Every educated writer on the subject plants himself upon this solid basis. Therefore .1 sum up the whole objection thus : The common tariflf likely to be formed is one which will exactly suit Cana- dian interest, and all probable changes will inevitably be in the direction of sound policy, which no intelligent and patriotic Canadian will ever be afraid of. It will not improbably happen that Commercial Union may teach both countries the folly of Custom-houses, then indeed will it prove a blessing to this great continent. THE SENTIMENTAL DIFFICULTY. I come now to the fourth and last radical objection to Commer- cial Union, — that it will tend to separate Canada from the British Empire. I wish above all things to be frank in the discussion of this vital question, and therefore I am compelled to admit that there is a large basis for this objection. But the relations between Canada and the British Islands are not very close at this present. Recognising tliat we are part of the great Empire of which wo may justly feel proud, we are loyal to the British Crown, and, what is more important, loyal to the British race. The accident that we are at this moment Colonists, in my judgment, does not exercise a very powerful influence in moulding the sentiment of the Canadian people toward Great Britain. We are practically independent at this moment. We make our own laws, frame our own tariffs, and in no sense accept any interference with our affairs from the British people. It is true that the Judicial Committee of the Privy Council is our final Court of Appeal, but this is only because that it is so, not because there is any necessity, advant- age, or philosophy for this tribunal ; therefore, the point I wish to make is that the Colonial relation between Great Britain and Canada is essentially a slender one, must necessarily come to an end some time, and does not now have a very marked effect upon Canadian policy. It cannot be disguised, however, that there exists an enor- mous sentiment of loyalty and affection for Great Britain in this country, and nothing can occur to eradicate this. Surely no man with any spirit or sense would wish to abate this one jot or one tittle. Who can fail to be proud of the achievements of the British race and the glory of the British Empire ) Who is Objections to Commiercial Union considered. 121 80 dull as not to recognize that Great Britain stands to day as the foremost representative of civilization and enlightenment in the Eastern Hemisphere ? Who fails to appreciate the rejected glory of the race in the development of North Ame- rica ? The second point then which I wish to make is that if the Colonial relations between Great Britain and Canada were to terminate, either as a result of Commercial Union, or for any other reason, this would not make the Canadian people less devoted to the interests of the Empire, or less impregnated with sentiments of loyalty and veneration. But it must not be inferred that I admit or believe that Commercial Union with the United States would involve In- dependence. On the contrary, I am fully persuaded that Commercial Union would be the easiest and best settlement of the Fisheries dispute, and at the same time would be entirely in lino with British interests. The common tariff, which would be called into existence under Commercial Union, would un- doubtedly be more favourable to British trade with North America than the multiple of the two existing tariffs of the United States and Canada. Therefore, I apprehend that the proposition to make a permanent settlement of the Fisheries difficulty on the basis of Commercial Union will meet with no serious opposition in Great Britain, neither will it cause an abrupt termination of our existing relations. It is not wise or sensible to make our calculations of the future entirely on existing lines. Canada is assuming national proportions, and her future is still a matter of doubt and un- certainty. Important changes must come with time. Imperial Federation is simple madness, and not to be seriously enter- tained in Canada. The only true policy for us to pursue is to seek to promote our own material interests by the most natural and palpable method. Anything which tends to the prosperity of Canada will not be resisted by the British people. Our destiny is in our own hands. Let us work it out with patriot- ism and manliness. if ADDRESS ON COMMERCIAL* UNION. ^ Delivered at Almonte^ Ont., Feb. 20fh, 1888, ^^ BY JAMES PEARSON, TORONTO. [From the Almonte Gazette.] A well attended and interesting meetinsj of the North Lanark Farmers* Institute was held in the Town Hall, Almonte, on Monday, the 20th inst, called for the purpose of discussing the now important question of Commercial Union between Canada and the United States. Mr. 0. M. Simpson, President, occu- pied the chair, and, after a few introductory remarks, announced Mr. James Pearson, Barrister, Toronto, and a member of the Commercial Union Club of that city, as the speaker. Mr. Pearson began his remarks by saying that though now a resident of Toronto, he was not a stranger in the county, for he was born and brought up a farmer in the township of Huntley, and, true to the instincts of his early vocation, now found himself the owner of a farm in Victoria county, and so could speak to the farmers he saw before him not only as a lawyer but as a farmer, and in the interest of the farming com- munity. He liked to hear the question at issue discussed, and he didn't shrink from referring to it with those who held views inimical to his own. He considered it a question of the far- mers, the fishermen, the lumbermen and others on the one side, and the manufacturers on the other, and when we undertake to discuss questions of this nature, which necessarily affect the INTERESTS OP THE WHOLE COUNTRY, we should be prepared to treat them in a calm, deliberate manner, relying upon cold facts to bear us out in our conten- tions, and always having the best in'*»re8t8 of the countr}' in view. He would first call attention to some facts relating to the population and trade of the country, so that his hearers would be able to follow him through his remarks. He would speak of figures in round numbers. Canada, he said, was Address on Commercial Union. 123 practically an agricultural country. She had other interests, to be sure, but those of the farming population outweighed all others, and were spread over the whole country. Taking the aggregate trade of the Dominion from the time of Confedera- tion, the speaker pointed out that of the exports of the country farm produce aggregated over one-half of the total ; lumber came next with a representation of about one third ; the products of the fisheries one-twelfth, the exports of the manufacturers nobly bringing up the rear with a repre- sentation of one-twentieth. It could be seen from this that the interests of nine-tenths were to be considered on the one side and those of one-twentieth on the other. He gave the figures in round numbers, as shown by the statistics, of the aggregate trade for the years 1885-86-87, showing a falling off in the sec- ond year from that of the first, and but a small increase of the third over the second. Our imports, he said, exceeded our ex- ports by $20,000,000, annually ; and our trade for years had been much larger with the States than with England. Our trade with those two countries was about 89 percent, of the whole. We did more or less trading with China, France, Ger- many, and even the Argentine Republic, but, as he said be- fore. United States and England represented 89 per cent, of the whole. We have a tariff at present against all countries ; every article, wherever it came trom, had to pay the duty im- posed by our tariff laws — by the wall which had been built around the Dominion ; but the States, too, had a tariff wall, and articles going into that country had to pay a heavy duty or toll ulso. England was a PllEE TRADE COUNTRY. There was no duty to be paid on the articles sent ther:,. If, with that tariff, we export as much to the United States as we do to England, is it not reasonable to suppose that we would export much more to the former country if the wall were taken down 1 It is true that we sent articles to the United States that we could not very well send to England, but if it were not for the States what would we do for a market for our eggs, poultry, etc. Last year we exported $2,000,000 worth of eggs to the United States, and about a quarter of a million worth of poultry. England, it was true, furnished oar staple markets for 124 Handbook of Commercial Union. horned cattle, as shown by the figures for last year ; 75,000 went to England and 45,000 to the United States. But again, in the matter of horses, we were obliged to fall back on the States. The speaker pointed out that, out of 262,000 exported since Confederation, only 5,000 went to England, 450 to other countries, and the balance to the United States. Canada didn't produce the kind required by England, but did produce the kind wanted in the States. In 1886 England wanted horses for military purposes. A man was sent out to inspect and purchase these horses, and, out of 8,000 Canadian horses in- spected, bought 80. Then, as to the question of barley, he said that farmers were getting out of conceit of growing wheat. The United States purchased nearly the whole of our barley. In 1887, 9,000,000 bushels of the latter product was exported to the States, the duty on which amounted to the ENORMOUS SUM OP $1,400,000, which went to swell the already enriched coffers of the U. S. treasury. There was no doubt, that by the existence of tariff laws, the farmer got less for his horses, less for his barley, and less for all other articles exported than if the walls between the two countries were removed. He explained in an explicit manner the geography of the two countries, and showed that our population was spread along a line of 4,000 miles. Ontario, the nucleus of the Dominion, grew more grain to the square acre than any State in the Union. Large countries might prosper under protection, such as the United States and Ger- many. They had the elements of trade within themselves, and could go on building up walls until every country under the sun was shut out from them ; but it was absolute folly of Can- ada, a country of great extent, and unlimited natural resources, with a small population, to build up a tariff wall shutting out the trade of the United States, her nearest and largest cus- tomer. The natural market for the products of the coal fields and fisheries of the extreme east and extreme west of Canada was not in Ontario, but in the States to the south of them, where they were sent to-day in spite of the tariff. The agri- cultural interests predominated in Canada. In the country to the south of us they had different products. Every mile the climate got warmer and warmer, until at the Gulf of Mexico ' Address on Commercial Union. 125 they had continual summer. The natural trade of the conti- nent ran north and south, and when we undertook to build a tariff wall around Canada we attempted to divert trade from its natural course, and send it East and West. Mr. Pearson here showed that the agricultural products of Canada were much greater than those of the United States, per capita, THAT OURS REPRESENTED ANNUALLY $400,000,000, OR $80 PER HEAD OF OUR POPULATION, and theirs $2,500,000,000, or only $41 per head of their popu- lation ; that the energetic, populous part of their country lay up against the line dividing the two countries. He explained the successful working of the Reciprocity Treaty of 1854, and pointed out the benefit that would be derived from a similar treaty to-day, the interests of the manufacturers being consi- dered with the rest. The United States, however, would not open their markets to us unless we opened ours to them. But here comes the difficulty. The manufacturers want to continue the protective policy, antirland had twitted him with having made a huge jump over the fence. He thought it extraordinary that he, a free trader, should be found advocating Commercial Union. All he had to say in reply to this was that whatever benefits were derivable from protection were largely increased in connection with sixty million peopla The evils were largely minimised from the same cause. He now came to the point that Commercial Union would discrimin- ate against Great Britain. He did not desire to dissemble the gravity of this branch of the question. He firmly held to the 174 Handbook of Uommercial Union. opinion that the union should only be accomplished with the consent of the Mother Country. On a limited scale it would be in consonance with the most cherished principles of Great Britain. When the union was accomplished a portion of the British Empire would be then in enjoyment of free trade with the United States. It might be the precursor of larger things. Britain could not object to the principle, but only to its limited application. It would be injurious to her no doubt, but the thoughtful people of England could not forget the geographical contiguity of Canada to the United States. He did not believe that Great Britain would ever say nay to the strongly express- ed desire of Canada. Were Great Britain, however, to say that the consummation of commercial union would mean separation, he freely admitted that the scheme would unquestionably fall to the ground. He desired to express his sincere and honest conviction that this free intercourse with the Republic would be of immense advantage to the Republic and Canada, and give an enormous impetus to the development of our natural resources, and prove of lasting benefit to both countries. Occupying the powttion he did he could not advocate the adoption of any course which would be destructive to any important commercial industry of this country or of its prosperity us a whole. They were aware that these meetings had been called at the instance of the Council of the Board of Trade, the object being to afford an op- portunity for discussion. The rules of the debate required that they should proceed with a resolution before them. That which he had the honour to move aflSrmed that the subject was worthy the fullest investigation and the earnest consideration of our people. He did not desire to commit the Board further than that. He congratulated them upon the important contribution that had been made to the discussion, which must be regarded as worthy of the Board and of the important interests which it represents. V THE MANUFACTURING INTERESTS IN RELA- TION TO COMMERCIAL UNION. \A Reply to the Hon. James Young, M.P.P.'j BY J. DRTDEN, JR., GALT. The Hon. James Young has recently addressed to the press a series of able letters on the subject of Commercial Union. He presents a candid and clear statement of the case from the Restrictionists* point of view, which I propose here briefly to examine. Like many opponents of Mr. Butterworth's proposal, Mr. Young spends a good deal of time and energy to oliow that it is not Commercial Union but Reciprocity which we want, when the simple statement of the fact that we can't get Reciprocity ought to set at rest this Reciprocity business. A writer who has given the subject so much study as Mr. Young evidently has given it, should know that the Reciprocity Treaty of 1854 was terminated by the United States because they found that Canada secured thereby a market for $229,000,000 worth of products, while the States sold scarcely more than half that amount to Canada. What is the use of harping about partial Reciprocity when the United States have time and again re- fused it ? We have a standing offer on our statute books, but this has been ignored. Mr. Young sets out with the statement, often rung in the ears of our farmers, that the agriculturists are not " suffering serious disadvantages as compared with our American neigh- bors," but that they are •' wealthier, healthier and happier" than in the most favoured parts of the Union. Assuming this to be correct, which I doubt very much, does it necessarily fol- low that the Customs line is not a serious impediment to the prosperity of the farmers of Canada, and that they would not gain anything by an enlarged market 1 If the farmers of On- tario are more prosperous than those of the States, is it not be- 176 Handhook of Commercial Union. cause Ontario possesses a better soil and climate and is inhabi- ted by a more frugal and industrious class of people 1 On this point, however, Mr. Young does not give us any reliable data. Even supposing the farmers of Ontario are in a better position than those of the States, the mere fact that a large proportion of our surplus population seek farms in the Western States in preference to our own North- West, and the further fact that the Western States are settling up rapidly with foreign and other immigration while our own Canadian North- West is at a standstill, should disprove the statement that the farmers of Canada {i. e., over the whole Dominion) are in a better position than those of the States. The whole case of Mr. Young seems to be a strained attempt to prove that Great Britain is a better market for our farm produce than the United States. I take his figures. They are as follows : — Surplus farm production. $150,000,000 Exported to Great Britain... $22, 543, 936 Exported to United States. . 15,495,783 Exported elsewhere 1,678,493 39,718,212 Home market consumed.. . . $110,281,788 The above is for 1886. Then he goes on to say that our home market is " incomparably the best which our farmers possess, while that of Britain ranks second and that of the United States third." His conclusion is of course that Com- mercial Union is bad and Protection good. Here Mr. Young has not gone far enough. His conclusion is not justified. His statement is lacking in one important particular. He does not nor can he say how much, if any, this home market has been built up by our restrictive or Protective policy. If Mr. Young can show that our home market has been built up by tariff* re- strictions we will tell Messrs. Wiman and Butterworth to stay at home and we will build a real " Chinese wall " along our border. Mr. Young next gives a statement showing the exports from Canada to Britain and to the United States during the last seven years. During those seven years there was sent to the United States $108,437,212 of agricultural products and to Great Britain $208,102,110, showing that Britain took nearly $100,000,000 more agricultural products from Canada than the United States took from us during those seven years. He then The Manufacturing Interests, 177 gives the following statement which he has compiled from offi- cial records. It is a valuable statement and ought to be studied by every Canadian who wishes to post himself on this ques- tion : — U. S. Gt. Brit. Cattle $ 724,967 $4,998,327 Horses 2,189,394 19,279 Sheep 831,749 317,987 Butter 17,545 773,511 Cheese 20,219 7,261,542 Eggs 1,722,579 Meats of all kinds 83,570 698,776 Wheat 325,271 4,789,276 Flour 125,520 1,092,461 Oatmeal 15,630 297,415 Barley 5,708,130 11,248 Indian corn 59,450 1,330,1 31 Oats 87,697 1,160,528 Peas 377,003 1,739,917 Hay 897,806 69,534 Potatoes 374,122 192 Hides and skins 468,461 785 Wool 271,424 45,254 Apples 55,302 410,898 Then from this imposing array of figures Mr. Young comes to what he considers the irresistible conclusion that "this makes it tolerably clear that Britain is our principal market for for- eign export." We are indebted to Mr. Young for these figures, but his conclusions therefrom or his interpretations thereof we must decline with thanks. Mr. Young has here fallen into the error — which seems *^^o form the basis for the stock butt argu- ment against Commercial Union, but which we should scarce expect from a writer who has given the subject much study and research — of comparing our exports to Britain with those to the States in order to find out which is the better market. Did it not occur to Mr. Young, when compiling these statistics, to ask himself the question, " Why are the people seeking Com^ mercial Union ? " Is it not to rid themselves of a high tariff, or in other words a ** Chinese wall" which prevents us from ex- porting to the United States? That is the object of the " Chinese wall," to keep Canadian products out of the United States market, and that it has fulfilled its object is evident from the length of time it has been in force. Mr. Young, in 178 Handbook of Commercial Union. his zeal to prove what he claims to be his stock argument, for- gets that in Britain we have a free market, while before we can get to the United States market we must climb this " Chinese wall." It merely requires to be mentioned to be seen how un- fair is the comparison between the United States and English markets, and how mistaken and absurd the conclusion that because we export more to a free market than to one that is not free, therefore the former is our natural market for our surplus products, the market from which the farmer is to derive his wealth, the market in which to isell the hard-earned product of honest toil, (rive us a free markets in the United States and I venture to say that our exports to that country will be double that at present sent to Britain. Give the farmer ten cents a bushel more for his barley and there will be such a stimulus given to the production of barley that in place of sending $5,000,000 of barley to the States we will send $10,000,000. Give the farmer 20 per cent, more for every horse sent to the States, and in place of $2,000,000 worth of horses, we will send annually across the lines $5,000,000. If we can send over $700,000 worth of cattle to the United States and pay the high duty, is it not reasonable to suppose that with the removal of the duty the cattle export to that country would be greatly enlarged 1 If we can export over $1,000,000 worth of sheep and wool and pay the duty, will it be denied that with a free market the ex- port would be more ^han doubled ] Look at the above state- ment again. See the item of eggs. This is the only product admitted free to the States' market. .And what do the figures showl Nearly $2,000,000 worth of eggs have been shipped across the lines, and not one. dozen of eggs has been shipped to Britain. How do the opponents of Commercial Union account for this showing 1 Will they have the hardihood to deny that that business would not have amounted to its present enormous proportions with tariff restrictions placed upon it ? Mr. Young professed some solicitude for the Town of Gait. In this town tre have a large egg business. Will Mr. Young deny that it was " Commercial Union" in this particular product that built up this business which is of so much value to our town and surrounding country ? Let us be fair to ourselves, let us be honest, and give credit where credit is due. Why not ship these eggs to Britain if Britain is our natural and principal market ? In this article we have Commercial Union, but, con- . The Manufacturing Interests. * 179 trary to the logic of those British loyalists who see in Commer- cial Union Annexation, the two countries still remain separate politically. ""i;^ Again, these figures show that Mr. Young's contention is absurd that on the removal of the duties the competition of the American farmer would prove disastrous to our farmers. Surely if we can compete with the American farmer in his own market, as the above statement shows we are competing, and pay a high duty to get into his markets, no one is so dense as not to see that the American farmer cannot compete with our farmer in our own market. We are shipping over $800,000 worth of sheep annually to the United States and paying a duty thereon, and according to Mr. Young if that duty is abol- ished by Commercial Union our market for sheep in the States will likewise be abolished, of which contention any farmer will see the absurdity. So with the other articles mentioned in that statement which compose all the principal farm products of Canada. The writer goes on to say that our British market would be ruined by Commercial Union, a statement which he neither explains nor substantiates. Does he mean to say that England will shut her doors against us if we adopt Commercial Union? If so why does she not shut her doors against the United States ? Does he mean to say that her buyers will retaliate and fight shy of Canada altogether 1 Then why does she not refuse to purchase American products ? Is this English justice ? Is this British fair play 1 Mr. Young might have added an- other leaf to his statistics to show us what amount of farm pro- ducts England buys from the United States. He might have told us such exports are in the neighbourhood of $90,000,000, while the Mother Country only favours Canada with $25,000,- 000. Talk of British loyalty ! Why, our loyalty to the Mother Country has only a market value in England of $25,000,000, while the Yankees sell their loyalty to the British flag for $90,- 000,000 ! Every one, every farmer at anyrate, will dlearly perceive the benefit to our farmers of free importation into the United States markets, but that is only half of Commercial Union. Our farmers need not be told that the free entry of American manufactures and some of her natural products into Canada would be money in their pockets. Mr. Young seems to lose sight of this phase of th^ subject, or at any rate 180 ' Handbook of Gommercial Union. he fights shy of it. The farmer need not be told that with cheaper corn he could raise cheaper and better beef He need not be told of the immense savings in the cost of implements and the reduction in the cost of raising grain which this saving would cause. Mr. Young is careful not to mention the saving in the cost of living to all classes, farmers included, which Com- mercial Union would eflfect. No greater boon could be given to the settlers of the Northwest than cheaper implements. Half a million dollars would have been saved to the farmers of the Northwest in this one article of farming implements if allowed free entry, and perhaps much of the present discon- tent and talk of rebellion would have been averted. Manitoba is essentially a wheat-growing country and anything having in view the establishment of manufactures on the prairies is surely an insane policy. Anything that will prevent the fullest development of its natural riches, the fertility of its soil, MUST HAMPER THE GROWTH OP ; and destroy our hopes of seeing in the near future, a great nation in itself, great in the wealth of the productions of its soil, great in its British institutions, and imbued with a Can< adian national sentiment I can conceive how a good deal can be said against Com- mercial Union from a manufacturer's standpoint. I can con- ceive how something can be said in favour of Protection even from a farmer's standpoint so long as the United States keep up their high tariff wall. But it is inconceivable how any one, looking at the subject for a few moments from a simple honest standpoint, can come to the conclusion that the com- plete obliteration of the tariff walls on both sides of the boundary is not in the highest degree desirable for the great producing population of our country. I had intended to deal shortly with the manufacturing as- pect. But this subject is so vast, such a community of inter- ests enter into it, that to discuss it with any semblance of jus- tice would require a separate article. However, I just want to say a; few words here. Mr. Young says that if Commercial Union can be proved a benefit to the agricultural classes he will support it heart and soul. This is an important admission. He admits that the farmers' int^rest8 are paramount to those . The Manufadui'ing Interests, 181 of the manufacturers. In other words, he is willing to see our whole manufacturing industries ruined if the farmers are going to be benefited. Our manufacturers will remember this. His remark that Commercial Union will prove disastrous to such rising manufacturing towne as Gait will be TAKEN FOR WHAT IT IS WORTH by our manufacturing classes. I do not believe that they will be led away or prejudiced by any such statement. I have no doubt that many of them, in our own town at any rate, which has been justly called the "Manchester of Canada," will re- sent such an imputation. Most of our manufactures were es< tablished before we adopted Protection. They have become firmly rooted, and if anything were needed to show that they can hold their own against American competition, it is the fact that they are now shipping their manufactures across the linoB and finding a market there, paying a duty thereon and compet- ing with American manufactures on American soil. Give them a free entry into the United States, and I question very much whether they will seriously object to Commercial Union, if they do not indeed favour it. Mr. Young has not touched upon the national and political aspect of the question, but I am glad to know that he promises to take up this phase of the subject in a future paper. This paper will be looked forward to with interest. His readers will be curious to know how he will account for the present disin- tegrating forces at work in the Dominion, how he will reconcile the present discontent in Manitoba and the other outlying Provinces with the idea of a Canadian nationality. I shall be curious to know how he views the alarming increase in our Dominion debt. I shall be curious to know what view he takes of subsidising outlying Provinces at the expense of Ontario to prevent them seeking relief from the bonds of Confeder- ation. As to the political or ANNEXATIONIST ASPECT OF THE QUESTION Mr. Young has expressed himself pretty clearly. He will, no doubt, emphasise this point and endeavour to prove that Annex- ation will undoubtedly come from Commercial Union, and from 182 Handbook of Commercial Union. that he will tell us to beware of that dread monster that brought disaster, commercially, politically and morally, when it swallowed up all the States and united them under one Gov- ernment, and we shall no doubt learn that California and other later acquisitions have been sorry and repentant all the days of their wedded life. I shall expect to be told that Commercial Union, with its accompaniment, Annexation, will flood Canada with bad morals and infidelity. He will see nothing in the teachings of Sam Jones, Moody and other American evange- lists, but secession, hoodlumism and disloyalty. We shall be curious to know how the morals and religion of one million of our brothers across the lines have been affected, and if they have succeeded in holding their own with those shrewd, un- scrupulous, Yankee monopolists. We shall perhaps learn that they have succumbed to Americanism and that they died curs- ing the land of their adoption. And last, but not least, if we afe " to endure the ills we have," how are we to prevent an- other million of our brothers being enticed away to that deadly and inhospitable climate 1 II. A POLICY THAT WOULD BENEFIT CANADA. When the Commercial Union movement was first inaugur- ated the cry of the Kestrictionists was that it would ruin the farmer. This cry of course came mostly from manufacturers or those interested in the maintenance of a high tariff. Notice their magnanimity or supreme unselfishness. There was no word about the ruination of their own businesses. They saw that if they gave the real reason for their opposition to Com- mercial Union, i.e., to fleece from the consumer their thirty per cent, tribute, they would only be adding fuel to the agita- tion, they would at once array every farmer and consumer in favour of the movement This would unite the farmers as they never were united. Perhaps those farmers who are so blind to their own interests, who are so easily led astray by the politicians, would experience a rude awakening and for once see their true interests, which are the interests of Canada. But not so. The manufacturer would not take the bull by the horns. He preferred to fondle the farmer, to take a deep in . 2 he ManufactuAng Intereata. 183 terest in his affairs, and tell him that Commercial Union would give him no more for his barley and horses and add nothing to the value of other produce. Unfortunately we yet have in Canada a few farmers who can be " bamboozled," so to speak, and it is to be feared a few have allowed them- selves to be so treated. These tactics, however, are now fail- ing. The benefits to be derived from Commercial Union have now been made so clear that a man must have a good deal of self-assumption in his make-up to try to prove the contrary. So the Restrictionista are beginning to appeal to the " last refuge of scoundrels," which Johnson calls patriotism. Commercial Union on the one hand is disloyal to England, and on the other hand it is entering into an arrangement with a foreign nation which means separation from the Mother Country and union with another country, whose constitution is all wrong, whose public morality is of the lowest order, and contact with whose people means contamination by all that is base and deceitful. While there are some sincere in their attachment to the Mother Country, it is equally true that a large number, I might say a large majority, of the opponents of Commercial Union oppose it not for any love they entertain for British connection, but for their own private aggrandisement. Were they as con- sistent as they are zealous in presenting their case they would not merit this imputation. Since the year one in Canadian politics the cry of British connection has been hawked about and made to serve the purpose of wily politicians. It has been dangled before the people till they have come to look upon it as some dread monster who will wreak vengeance upon anyone incurring his displeasure. This same cry was held as a threat over the people of Canada when they fought for and obtained responsible Government, and more recently we have seen it do duty when Canada asserted her right to frame her own tariff laws. And after all, has our love for British connection been lessened by these accessions on the part of England ? Is our love for England not as strong to-day as it ever was 1 Were anything further needed to show the inconsistency of those who denounce Commercial Union because it discrimin- ates against England, it is the fact that Canada is now discrim- inating against England and in favour of the United States. The figures will speak for themselves. During the year 1886 our imports from Great Britain amounted to 140,601,000* 184 Handbook of Commercial Unions The duty collected thereon amounted to $7,817,000, being equal to 19| per cent. During the same year our imports from the United States amounted to $44,808,000, and the duty collected thereon $6,790,000, or slightly above 15 per cent, showing a practical discrimination against England of about 4i\ per cent. Also in the matter of free goods our tariff is far more liberal to the United States than to Britain. Dur- ing the year 1886 we admitted goods from the United States free to the value of $15,198,000, and from Britain $10,215,- 000, showing a discrimination here in favour of the United States of what amounts to 33^ per cent. Did those super- loyalists who profess such an ardent attachment for the Mother Country, who guard with a jealous eye the tie that binds us together, ever inquire into this 1 How can they reconcile this fact with their contention that tariff discrimination against England means separation 1 We are doing this under our present protective tariff, and yet their boast is that Canada is loyal. Then what do these figures prove ] They prove that a tariff is not an article that separates or unites two countries, and that a tariff is not a true measure of our loyalty to Eng- land, and, therefore, that Commercial Union does not mean separation from Britain. If those who thus blindly oppose Commercial Union are consistent, if they are truly loyal, they will at once turn their attention to our present tariff arrange- ment and see to it that it does not bear more heavily on Britain than on the United States. But, let us ask, what does this *' discrimination against Eng- land," mean, anyway ) It means that the manufactures of the United States shall have free entry into Canada, while our present tariff, or probably a higher one, shall remain against British manufacturts. It is held that the manufacturers of England will suffer by it, inasmuch as it will injure their Canadian market. No one pretends to say that it will seriously affect the great body of the people. Well, then, the question arises : Does the manufacturer represent public opinion in England ? Does he rule the land ? Has he alone the right to goy whether our connection shall cease or continue ? Is there no other tie that binds us to the Mother Country but the purse-strings of a few British manufacturers ? Will England sever our connection because her manufacturers say so ? Will England disown us because we have discovered a new source - The Manufacturimj Inter eaU. 186 of prosperity ? Shall we be dishonouring her name if, in fol- lowing her example, espousing her economic religion and emul- ating her spirit, which has been the glory of modern civilisa- tion, we build up a great and prosperous nation here 1 Far rather, shall we not be dishonouring 'her name if we do not avail ourselves of that liberty which England has been trying to teach mankind the use of the world over 1 Will Canadians take this view of British connection 1 I prefer to think they will. The utterances of Mr. Joseph Chamberlain at Belfast are to be commended to those miscalled loyalists. The sentiments may not be true, but they show the absurdity of this loyalty talk in Canaaa. Coming as they do from a leading English statesman as well as a large English manufacturer it would appear that our sentiment is not reciprocated. He says : — If Canada desires Commercial Union Canada can have it. But Canada knows perfectly well that Commercial Union with the United States means political separation from (Ireat Britain, for it is quite imjMssible that (Ireat Britain should retain all the responsibilities and obligations of the colonial connection when all the advantages are taken away. Here is a practical declaration that England will have noth- ing to do with Canada unless she can reap some advantages from Canada, and it would appear from this that hitherto Britain has not been a loser financially from her connection with Canada. Then what are those advantages Mr. Chamber- lain speaks of 1 He says they will all be taken away by Com- mercial Union. The advantages must, therefore, be the privi- lege the exporters or manufacturers of England have of selling their goods in Canada — an advantage to be measured by the amount of dollars and cents they can take out of Canada. Then it may be fairly asked, where do our advantages come in ? Does England sell her goods cheaper to us because we are under her rule ? Does she pay more for our produce than for the produce of foreign nations 1 Does she discriminate in our favour 1 Does the English emigrant prefer Canada to the United States because Canada is a colony ] This, then, is the great question : Is our country being populated, are her re- sources being developed, is she increasing in riches because of her relations to Great Britain 1 If that can be answered in the affirmative, and if we can afford to discriminate in her favour and against the United States, by all means let us do so. But no one has taken this stand. Not even the most bitter 186 Handbook of Commercial Union. opponent of Commercial Union can go that length. But, they say, we are protected by England ; we are under her shelter- ing wings. But does she not in return claim the right to draft soldiers in Canada in time of war ? Does she not secure a short route for troops t<9 India and the East through Canada, and does she not secure the right, which she is exercising at the present time, to negotiate our treaties 1 Is this not ample recompense for our protection without giving up a great dollars and cents advantage, which some have pleased to call it, in the shape of Commercial Union with the United States 1 Mr. An- drew Carnegie is, perhaps, a little to a republican for our taste, but he presented a true republican doctrine with great force when he said, " A nation must have much to offer in exchange, more than I see that any nation has, which stifles in the breast of the most ignorant people in the world the sacred germ of self-development." After all that has been said, is it clear that Commercial Union will so seriously discriminate against England ? Is it clear that England will not endorse the scheme when the time comes for her to pronounce upon its merits ? Is it clear that there is not some reason to hope that Commercial Union will not only not weaken British connection, but rather serve to maintain it and at the same time tend to promote good feelings between the United States and the Empire at large 1 I need not here repeat the arguments that have been advanced in support of this view of the case. Mr. Wiman has, on different occasions, and Sir Richard Cartwright in his Ingersoll speech, argued with great force that no danger may be feared of British con- nection ; but, on the contrary, that Commercial Union would be of great benefit to the British Empire. No ; we are not certain that England will object. Strong reasons have been given that she will not object when the time comes. Then what is the use in spending ourselves until we know England's wishes 'i It will be time enough then to cry halt if England says so. Let us study what is best for ourselves, and there is no doubt England will take care of herself. Our first duty is to ourselves. Self-preservation is nature's first law. In all our past dealings with England there is no precedent that would lead one to expect that in this case she will inter- pose any serious objections. On the contrary, in all our deal- ing England's policy has ever been to give to Canada the fullest The Manufacturing Interests. 187 measure of Belf-govemment, to encourage her in all national enterprises, to allow her the fullest latitude in choosing and doing what is best for herself. They deny this who assert thai Britain will object to Commercial Union. In speaking of the opposition of manufacturers, a distinction should be made. While the opposition comes almost wholly from the manufacturing class, it is not true that all manufac- turers are opposed to it. Were all our manufactures estab- lished and continued in existence by the tariff, we might then expect that all manufacturers would be opposed to it But, in point of fact, most of our manufactures were established be- fore the adoption of protection. At any rate it is safe to assert that the great bulk of the manufacturers now would not be in- jured, while a great portion of them would be immeasurably benefited by the expansion of their market and by the free entry of their raw material. The manufacturers I have desig- nated above as opposing Commercial Union are those whose only excuse for existence is thnt they are manufacturing goods which the high tariff prevents the people from purchasing in a better and cheaper market. Even w.^re it true that the whole manufacturing interests were arrayed against the project there would still be no valid reason why we should retreat one step from our position. There would still be no reason to despair of ultimate victory. I go a step further and say, were it true that the whole manu- facturing interests were to be ruined, the more incumbent would it be upon every well-wisher of Canada to lend a hand to the consummation of this scheme. But, I ask, why should they be ruined 1 Before answering this question, let me ask what right has a manufacturer to existence in any country, or what is it that calls hiin into existence 1 Why is a railroad built and allowed to exist ? Because it cheapens transporta- tion and reduces the cost and adds to the comforts of travel- ling. A railroad is not essential. It is convenient. So with all manufactures. If we cannot get a manufactured article which we want we say establish a manufactory, or if the price is too high we say establish a manufactory and reduce the price. If a manufacturer establishes a plough factory in a locality where other plough factories exist, he must either manufacture a superior plough or sell it cheaper, or his factory will prove a wild-cat venture. There is no law that will compel 188 Hamdhook of Commercial Union. a farmer to buy a dearer or an inferior plough, and were a Government to impose a tax upon the old ploughs in order to establish the new plough factory, the old manufacturer would be justly indignant, and the farmers, to say the least, would feel it a very grievous and unjust piece of legislation. A manu- facturer has no right to exist unless he manufactures an article that cannot be obtained in any other way, or unless he can sell it cheaper than is at present charged for it. In other words, he has no right to exist unless he confers a benefit upon the community in which he locates. In direct contravention of this principle is the policy that compels a people to buy dearer and in most cases inferior goods in order to establish a manufactory. Not only does the manufacturer not confer a benefit upon the people — -he does not add to their wealth or happiness — but, on the contrary, the people have to pay to him, nolens volens, a tribute of thirty per cent, by foregoing a measure of that freedom which is the boast of every free State. Were a scheme proposed to abolish the thirty per cent, tax on the old ploughs, and consequently to reduce the price to the farmer, would the farmers be likely to object to such a scheme because it might ruin the business of the new plough factory 1 No, that would be absurd, you say. The only man in the locality likely to object to the removal of the tax would be the protected manufacturer himself. Well, then, this is the posi- tion of the manufacturers with regard to Commercial Union. If Commercial Union will ruin them they have no right to exist. If such are allowed to exist it can only be at the ex- pense of the consumers by selling their rights^ for the consumers have rights as well as the manufacturers. It is to be hoped that this cause, where such a great prin- ciple is at stake, will prosper. It certainly augurs well for its success when the two greatest of Canadian journals are lending their powerful influence in its behalf. It is a pretty sure in- dex of its strength when it has taken such a hold upon the people at such a time. Unhappily it has hitherto been the case that public discussion could be aroused only by a fierce election contest, when an intelligent discussion of a subject was out of the question. Nevertheless, shame be it, there are public men and newspapers in Canada, now that they have a chance to show their independence, to show the stufi* they are made of, hanging back, waiting for the call of their masters. The Manufacturing Interests. 189 In declining this golden opportunity they convict themselves of being slaves to party and traitors to their country's best interests. They have no opinions that are not cut and dried by their masters. They know no public good but the good of their party. And calmly bent, to servitude conform, Dull as their lakes that ahimber in the storm. LETTERS ON COMMERCIAL UNION. BY MR. GOLDWIN SMITH. . [The following letters were addressed to The Toronto Mail, at different periods of the discussion, and deal with the controversy in its successive phases /] L The discussion of Commercial Union appears to have reached a turning point. Party, on one side has declared against the movement, and it seems that political influence is being used to stop the passing of resolutions in its favour by Farmers' Insti- tutes. This is no fault of those in whose hands the conduct of the movement has been. The constitution of the Commercial Union Club expressly disclaims party, nor, I am persuaded, has that rule been broken by any of our members. Our meetings have been public and discussion has always been free. We have among us representatives of both political parties. I vofed myself for the N. P., of which I have always treated Com- mercial Union as the continuation, not the contradiction, the objeciL of the N. P., as at first promulgated, having been to force open the American market by the pressure of a retaliatory tariff. Nor can I see how Conservatism, if it means opposition to revolution, has anything to do with a narrow commercial policy. The only antidote to revolution in a free country is contentment, and the way to produce contentment is to let the people enjoy the fair earnings of their labour and the full measure of prosperity which nature has destined for them ; neither of which is possible under the present system of vicious restriction. However, to this it was pretty sure to come, and we can hardly blame a Protectionist Government, which receives the support of protected manufacturers, for doing its utmost to re- sist the progress of commercial emancipation. The two policies — the Continental and the Anti-Continental, as they may be called — at last fairly confront' each other. The policy with Mr. Goldwin Smith's Letters to the " Mail." 191 which Sir John Macdonald's Government is identified is that . of severing the Canadian provinces from the continent of which economically they are integral parts, by means of a tariff wall, and at the same time connecting them artificially with each other by political railways, and forcing, in nature's despite, a trade between them. This system appears now to be breaking down at every point Its inevitable consequence in each of the provinces, but especially in the Maritime Provinces, is a com- mercial atrophy attended with an exodus of energy and enter- prise, the serious extent of which is doubted by no one who knows Dakota, Chicago, and New York. Of the political rail- ways, one, after costing forty millions, is run at a loss, while the Government itself is dealing what cannot fail to prove a heavy blow to its own road by promoting a short cut across American territory, and thus in the teeth of its own policy placing its great line of inter-provincial communication in American hands. The political part of the other railway north of Lake Superior is probably destined to a similar fate. Light has at length dawned upon the mind of the people ; they begin to see, and they will see every day more clearly, that free trade with their own continent is indispensable to their prosperity and that nature must have her way. In the North- West especially, the break-down of the Separat- ist policy is conspicuous. The rich promise of that land has been half strangled by Railway Restriction and the tariff wall. The political railway has failed to serve the purpose of settlement or commerce, and when the harvest is good the railway fails to carry out the grain. Meanwhile, in the rival settlements of Minnesota and Dakota, freedom of railway development has been enjoyed. The people of Manitoba have been engrossed by their struggle against railway restriction ; if they had not, they would be in revolt against the tariff. Commercial Union- ists might also be content to fold their hands and watch the course of events in the North-West, so certain is it that the people of the Nortl^West, if they mean to prosper, or even to escape complete failure, must in the end burst through Res- triction. The organization of the Farmers' Institute is in itself a great gain to the cause of commercial emancipation, since it will enable the farmers to balance the industry which alone has hitherto been organi^sed, and has consec^uently had the com- 192 Handbook of Commercial Union, mercial policy of the country almost under its [exclusive con- trol. The change is wholesome, not only with reference to the' special industry represented by the Institutes, but in the general interest of the country. It will be noted that the Association Chambers of Commerce in London, England, have had Commercial Union under con- sideration, and that the result is a resolution affirming the im- portance of the question and designating it as one the progress of which ought to be carefully watched. The inference seems to be, first, that the Chambers are advised by their correspon- dents here that the movement is important^ and, secondly, that there is as much feeling against Commercial Union on their part as would lead them, in case of its adoption here, to call for the application of the Imperial veto. In a sympathetic article on the memorial in favour of arbitra- tion between Great Britain and the United States, the organ of our Government and of opposition to Commercial Union repro- duces what it apparently deems a satisfactory answer to the ob- jection that mutual submission to arbitration would be a waiver of national independence. " The engagement being reciprocal — England and the United States mutually agreeing not to make war against each other — there is really no waiver of in- dependence in either case. There was, for example, no invidious distinction in the waiving of independence beween the United States and Great Britain when they agreed at the close of their last war to keep only nominal forces of ships of war on the great lakes." It is difficult to see then how there could be any waiv- ing of independence in an agreement which would be equally reciprocal between Canada and the United States to keep their import duties on a common level. Of the two, submission to limitation of armaments might seem more derogatory to national sovereignty, and in case of a sudden outbreak of war it might entail a serious disadvantage on one party, whereas a recipro- cal regulation of import duties, with power of withdrawal after notice, could entail no disadvantage whatever. So easily do the dictates of common sense find entrance into the mind in cases where neither sinister interest nor prejudice stands in the way. I shall not presume to add to the number of conflicting opinions as to the merits of the Fisheries Treaty. Nobody doubts that the British Commissioners have done for us all that Mr. Goldwin SmitJia Letters to the " Mail." 193 could be done by negotiators who had morally no force behind them. What is too evident is that the treaty is not likely to put an end to quarrels. An end can etiectuall;^ be put to quar- rels only in one of two ways ; either by excluding one of the two contending parties from the ground altogether or by ad- mitting both oa perfectly equal terms. Commercial Union would admit both parties on equal terms, while it would give a free market to Canadian fish and throw the coasting trade open to Canadian vessels. About Imperial Confederation I confess I am sick of talking. Once more we are told that the principle is unspeakably grand and beneficent ; that we who fail to embrace it are abject souls with a lurlf ing tendency to treason ; that nothing can really be easier than its application, but that we must not ask for de- tails. Tn other words, we must not ask for an intelligible plan or for satisfactory answers to practical objections of the most obvious and apparently the most insurmountable kind. To bid us, in a practical matter, embrace a principle without a plan, what is it but asking us to embrace moonshine 1 The Asso- ciated Chambers of Commerce, it will be observed, have de- clared by an overwhelming majority against ** Fair Trade," in other words, against discrimination in favour of the colonies, an essential part of the Federationist programme. Nor does any- one who knows the temper of the British masses imagine that they would deprive themselves of cheap food for the purpose of strengthening a political connection with dependencies which they could not point out on the map. Not less vehemently would our protected manufacturers repel any proposal for the free admission of British goods. As has been said before, gov- ernment by the British monarchy, if real, might have its ad- vantages, and from that point of view there may be something to be said for the old colonial system. But monarchical gov- ernment has practically ceased, and the only political relation of a sound and rational kind which can subsist between kindred democracies is that which is denoted by an Anglo-Saxon fran- chise. n. In settling the question of Commercial Union it is not nec- essary to come to any decision between the abstract principles H 194 Handbook of Commercial Union. of free trade and protection. In truth there is no such thing in these matters as abstract principle. Economical questions are questions of pure expediency to be determined by the cir- cumstances of the particular case. Adam Smith himself admits that there are cases in which a departure from the rule of free trade is legitimate. Mill admits that it may be expedient to protect an infant industry ; though it must be owned that, as free traders derisively point out to us, the longer the infant industry is protected the more protection it seems to demand. I never could see any reason why a retaliatory tariff, though in itself a violation of the law of free trade, and demonstrably in- volving a commercial sacrifice for the time, might not be rightly employed for the purpose of enforcing reciprocity of trade. The N. P. has always seemv to me perfectly justifiable in princi- ple as a measure of self-protection against a highly protected neighbour on our side, though reciprocity of trade, if we can get it, is infinitely to be preferred to reciprocity of tariffs. Nor is commerce alone to be considered : patriotism may sometimes require that commercial objects should give way to political or military considerations. It is best, as a rule, for Governments as well as for ordinary purchasers to go into the open market, but he must be a purist of free trade who would condemn the Government for building its own navy or manufacturing its own munitions of war. At the same time experience warns us to be very sure that patriotism is not class interest in disguise. It is hard, however, to understand how any sane man can doubt that free trade as a rule is best both for production and distribution. That we should produce that which we can pro- duce most easily and at least cost, sell our products where we can get the highest price for them, that is, where they are most wanted, and buy where there is the greatest plenty and where (consequently) the goods are cheapest, are dictates of common sense, ratified by the universal practice of ordinary life, which nobody in his senses, I presume, ventures to dispute. Nor is it easy to imagine how anyone can study the natural laws of the economical world and see how just and admirable is their operation ; how, if they are left to themselves, they set each producer throughout the world his proper task, and distribute the pay in proper proportions among the myriads in different parts of the globe, whose labour is combined in the production of the simplest and cheapest article, without feeling that to im- Mr. Goldwin Smith's Letters to the " Mail." 196 prove upon them by legislation must always be a hazardous undertaking. No doubt there are zealots of protection who have persuaded themselves that if this continent could be cut into squares, each fenced against its neighbours commercially by a Chinese wall, the inhabitants of each square would be much richer and happier than they are now. The theory of my old friend, Mr. Isaac Buchanan, seemed to go that length. He also believed and did all that a nimble pen could do to convince us that national wealth might be increased to an indefinite ex- l-ent by any Government which would only issue a flood of promissory notes, under the name of paper currency, and re- f:iso payment. I have observed that the two theories are apt to be found in company with each other. That prosperity can be generated by monetary fraud, and that a community can be made rich by taxation, are indeed beliefs likely to make their home in the same brain. Often, however, the staunch Protec- tionist abjures argument, and says that all the theorists are on one side, but all the practical men are on the other. By prac- tical men it would be found on examination that he means men interested in protected industries, by theorists independent en- quirers. Turgot, Pitt, Peel and Cavour were practical men in their d^y, and the members of the Anti-Corn Law League were manufacturers almost to a man. Protection must make a case. It must show a special reason for departing from what in ordinary circumstances is the dictate of common sense, and for depriving the members of the com- munity at large of the natural right of buying the best and cheapest goods in whatever market they may be found. Pro- tection is always in effect and for the time being a tax levied on the community at large in favour of a particular class of pro- ducers, and as such it requires justification, more especially as it is exceedingly apt, under institutions like ours, to ally itself with political corruption. The case which protection, as the policy of this continent, makes is that certain industries native to the soil and naturally profitable if they can once be securely established, are prevented from securely establishing themselves by an abnormal, unfair and blighting competition with the paup- er labour of Europe. Whether the labour of Europe is really pauper labour, and whether the case is made out as between America and Europe, is a question which need not here be de- termined. No such case can be made out for protecting the 196 Handbook of Coinmercial Union. Canadian producer against the American, since the price of la- bour is pretty much the same on both sides of the line, or rath- er cheaper her& The Canadian producer also enjoys the ad- vantage which every producer enjoys in his home market of freedom from the cost of carriage ; and the greater the bulk and weight of his products the greater of course his advantage will be. It is ditficult to see why Mr. Clarke's trunks or Mr. Gur- ney's stoves should have anything to fear from their American rivals : judging from their reputation, perhaps we should say that their American rivals would have at least as much to fear from them. Some fruit-growers near St. Catharines have been stimulated by a local politician into a declaration against Com- mercial Union. But surely it is hard if iresh fruit cannot hold its own against fruit from a distant market. All weak producers, of course, would like protection. Mak- ers of inferior books would like it as well as makers of inferior woollens and cottons. If shoddy were allowed to regulate the tariff there would be nothing but shoddy to buy or wear. I heard the other day of a farmer who complained that a new overcoat failed to afford him against the rain the protection which it enjoyed against foreign cloth ; and I suspect that his experience was not singular. At least in the debate at the Toronto Board of Trade an eminent opponent of Commercial Union pleaded in plain terms that certain classes of Canadian goods were so inferior in quality to the American goods of the same class that they could not bear the competition for a mo- ment. On what principal of expediency or justice Canadian consumers could be compelled to buy the inferior goods he did not say, nor did he explain why free competition would not in this case, as in others, be the necessary stimulus to improve- ment in production. Of our stronger Canadian manufacturers, however, not a few are in favour of Commercial Union ; they, or some of them, might have to adapt their production to the larger market by making fewer desciiptions of goods and on a larger scale, but, this being done, they feel that the larger market would bring greater gains. Mr. (now Sir) George Stephen, in a circular addressed in 1875 to the beads of the woollen trade, and quoted in the Toronto Nation of that year, said that if we could have free interchange with the United States of all the native pro- ducts of both countries, whether natural or manufactured, Can- Mr. Ooldwin Smith's Letters to the "Mail." 197 ada would soon become the Lancashire of this continent and would increase in wealth and population to a degree that could be hardly imagined. In this opinion he did not stand alone. I am surprised, in going through the country, to find how many manufacturers there are on the side of Commercial Union, and my relief is equal to my surprise ; for the painful part of this movement, as I have very keenly felt, is that while we are do- ing justice to all our great natural industries and to the great body of our people, we cannot help placing in some jeopardy the interests of those who have been tempted to invest capital in trades more or less artificial by the promise of legislative protection. That the farmer will find more or better customers in the protected and artificial, than in the natural industries, so that his interests are specially bound up with protected manufac- tures, is an assumption which, though it underlies a good deal that is said on the subject, will not bear a moment's scrutiny. Whatever makes the country most prosperous will give the farmer the most and the best customers. The number of the farmers' customers is not increased any more than that of the customers of other producers by a system which leads to an exodus. It is the same with regard to the interest of the work- ing class. The rate of wages and the abundance of employ- ment must depend on general prosperity, not on the forced prominence of any special, least of all of any exotic, industry. Some arguments of a rather fanciful kind are used as props or embellishments of their cause by the champions of protec- tion. It is desirable, we are told, to force manufactures into existence,' even where they would not rise of themselves, in order by varying industry to diversify national character. But surely in every civilized and opulent country the natural vari- ety of industries is sufficient to beget, so far as any economical influence can beget, varieties of character enough to satisfy any ethical connoisseur. Some peculiarities we must be content to forego. Northern countiies cannot have those of the planter, nor can inland countries have those of the seaman. Why there should be such a passion for propagating factory life on a large scale it is not easy to see. The result in England, physically, has been degeneracy ; politically, the growth of an element at once revolutionary and feeble, which threatens to stifle the greatness of the nation, On the other hand, nothing can be 198 Hcmdbook of GommercicU Union. more clear than that protection, if misapplied, demoralizes as well as impoverishes a country. Our own Government has entered into sinister relations with a protected interest, and we have already a ring in cotton. Kings are sure to be gener- ated with hot-house rapidity when protection is applied to a small area, because its spasmodic action in over-stimulating pro- duction and thus bringing on violent fluctuations of prices is more felt in the narrower sphere. However, where protection makes a case, no disturbance of the existing system is involved in the present measure. Against Europe the Canadian as well as the American producer re- tains his protective tariff. It is only where protection makes no case that it is now proposed in the general interest to re- move the barriers against freedom of trade. A Protectionist may vote for the abolition of the Customs line between Ontario and New York State on the same grounds on which, if he held a sane form of his theory, he would vote against the establish- ment of a Customs line between Ontario and Quebec, or be- tween New York and Pennsylvania. He may in fact regard Commercial Union with the States as the establishment of his principle on a rational basis and the rounding off of its proper domain. There can be no question that the movement gains ground apace.' The farmers almost everywhere are showing the keenest interest in it No weather prevents them from coming in large numbers to the meetings. The Ontario farmer has only too good reason for his willingness to listen to anything which promises to make his future more secure. The price of farm lands seems to be generally falling. The competition of the North- West, which the Ontario farmer has been made to pay for bringing down on himself, will soon be felt The harvests of India will encounter the Ontario wheat-grower at Liverpool. In the opening of a new and immensely rich market, to which Canadian energy and intelligence may adapt themselves, surely lies the best hope for Canadian agriculture. III. A member of Parliament was reported the other day to have said that, in speaking to the citizens of Detroit on Commercial Mr. Ooldwin Smith's Letters to the "Mail" 199 Union, I had hinted that Commercial Union meant annexation. I must have been either misreported or misunderstood. I wish to be perfectly frank upon this as upon other points, and not to leave it to be said hereafter that anything has been held back. It is my avowed conviction that the union of the English-speaking race upon this continent will some day come to pass. For twenty years I have watched the action of the social and economical forces, which are all, as it seems to roe, 'drawing powerfully and steadily in that direction. Intercourse of every kind, co-operation for every sort of object, interchange of hospitalities, inter-marriage, are daily on the increase. The unifying influence of railways is felt more and more as the inter- national system becomes more complete ; and it is strange that men whose calling it is to promote and facilitate such communi- cation should be found recoiling with horror from the thought of Commereial Union. An actual fusion is in fact taking place through the migration of Canadians to the centres of wealth and employment ; and the Separatist system, as it impoverishes Can- ada, thus militates against its own political object by driving Canadians into the arms of the American Republic. The popu- lation on the two sides of the line being not only kindred and similar, but identical, and the political institutions of both being, not only in principle but almost in form, the same, the consummation to which all this points can hardly fail some day in the course of nature to arrive ; though no one who had a particle of statesmanship in his composition would desire to anticipate the course of nature or to hasten the union by a day. Such, I say, is my settled conviction, and so far as I am able to gauge popular opinion, while there is nothing like an annexa- tionist movement on foot, the prospect of closer relations with the people of the United States is ceasing to be a bugbear, and the alarmist cry of annexation is losing much of its elfect. Tn the special circle of the U. E. Loyalists, the feeling may still be strong, and it sometimes displays itself in a rather angry and menacing style. I have, historically, the most sin- cere respect for the tradition of the U. E. Loyalists, as I have for that of the Cavaliers. But it is vain to suppose that an industrial and commercial community will forever remain dedi- cated and will sacrifice its present interests to any historic tradi- tion, however generous and touching. The grass must grow at last over every grave. I happened the other day to be in an 200 Handbook of Commercial Union. Knglish manor-house, the owners of which represent the stand- arii-bearor of Charles I. They prize and cherish the relics of their ancestor, but they are themselves Liberals. I fancy by this time we should Hnd not a few descendants of the U. K. Loyalists on the south of the line. While I have watched the action of the lying forces which draw us towards our kinsmen in the United States, I have also watched the growth, both in bulk and in intensity within our own political borders, of a French nationality as alien to us as anything can well be, and the presence of which seems fatal to our hopes of a really united Canada. " The country of the French-Canadian," says La Verity, in a passage recently quoted by The Mail, *' is the Province of Quebec, and none other. No doubt it is his duty to live in harmony with the inhabitants of the other provinces, to which his province is joined politically ; but we repeat, he is bound to remain a French-Canadian and that alone ; to regard the Province of Quebec as his true and only fatherland ; and to treat the other groups by whom he is surrounded merely as neighbours." This is not mere rhetoric or petulance, it is the real sentiment of the French, and the principle on which they are acting towards us, while the British element is being fast extruded from Que- bec and will soon have no foothold except in the commercial quarter of Montreal. The forces of a whole English-speaking continent might have been potent enough to assimilate the French element in Quebec, as they have assimilated, sufficient- ly for political purposes, the French element in Louisiana ; but the forces of Canada alone have manifestly failed. It seems impossible, I repeat, that British and French Canada should ever bt come in heart, or in anything but in mere form and name, one people. When we talk of welding together a Cana- dian nation by means of political railways and tariffs we over- look this unwelcome and stubborn fact. The alien nationality of Quebec and its interposition between British Canada and the Maritime Provinces are obstacles to consolidation of a very different kind from those which American confederation en- countered and overcame in its early stage, though a false parallel between the two cases has been drawn. There is another point in the situation which perhaps is more distinctly present to my mind than to that of Canadians who have seen less of British politics than I have. We have Mr. Ooldwin Smith' 8 Letters to the '*Mail." 201 just Vi'iOii told in relation to the Fisheries dispute that the British '' do not care a continental for us and would not burn a drachm of powder in our cause." The first part of the state- mt-nt is untrue, as well as offensive, but the second is true. The military unity of the Empire, as well as its commercial unity, is practically at an end. The democracy which has now mounted to power in England could not be induced to fight ''n a colonial quarrel. It could with difficulty be induced, I suspect, to fight in a quarrel concerning India, though of the whole mass of dependencies, miscalled Empire, India is the only one over which England really holds Imperial sway, and her interests in it of various kinds are immense. Not only is the democracy unwilling to fight, but it is totally incapable of governing distant dependencies, or of understanding an Im- perial policy. This, if I mistake not, will soon appear. By the bond of the heart we shall, I trust, always remain closely united to the Mother Country, but the political bond can hardly fail to grow weaker and to be gradually displaced by the ties which bind us to our own continent If I am wrong in this forecast, let my error be corrected ; but truth can never be treason. I felt the greatest sympathy with the aspirations of Canada First, and mourned when its flag went down, I consoled my- self with the reflection that whatever might happen to us in the political future we shonld be still Canadians, and even as States of the Union, if such was our destiny, might retain everything that was distinctive in our character and everything that WAS glorious in our traditions, while we sent forth states- men to act on the ampler scene. Of disregarding sentiment, and looking only to material interests, I hope I am guiltless ; I should disgrace my bringing up if I were not ; though I do not believe that sentiment can ever live long when it is divorced from the real interests of the people. Sentiment is the flower, but the plant on which the flower grows is the public welfare. Surh is my faith ; but I am equally sincere in expressing my belief that the questions of commercial and political union are not only theoretically distinguishable from each other, but are practically distinct ; and that Canada may modify her fiscal or trade relations with her neighbour in any way, or to any ex- tent she pleases, without surrendering her political indepen- 202 Handbook of Gormriercial Union. dence. A certain resignation of control over the national tariffs on both sides is a necessary part of every commercial treaty, and would involve no forfeiture of political autonomy in the case of Canada and the United States any more than in that of England and France. The rates would be fixed by mutual consent, and liberty of withdrawal after due notice would be reserved. Why increase of commercial intercourse with a neighbour should threaten the integrity of a nation any more than the increase of social, religious, philanthropic, intel- lectual and general intercourse, it is difficult to see. The question has been often asked, and never answered, on what ground, if partial reciprocity showed no tendency to impair nationality, we should expect complete reciprocity to destroy it. There is a school of fiscal reformers which proposes to abolish all import duties and raise the whole revenue by direct taxation ; Cobden inclined to it, and I have often discussed the question with him. Supposing that school prevailed and im- port duties were abolished, would the nationalities cease to exist 1 Would they even be sensibly affected by the change 1 The immediate effect of Commercial Union would be to relieve Confederation of a heavy strain, to allay the discontent of the Maritime Provinces, and by giving our people generally the commercial advantages of union with their continent to make them content with existing political arrangements. Americans who are strongly desirous of annexation, are, as I have recently had occasion to observe, opposed on that very ground to Com- mercial Union. It is from this quarter and from certain pro- tected manufacturers in the United States, who are also opposed to the measure, that we get these terrible pictures of the loss of independence and the humiliation which Canada in embracing Commercial Union would have to undergo. But everyone who has mixed with the Americans or watched American opinion must know that the number of Americans who desire the annexation of Canada, or even think about it, is comparatively small. The general feeling is that the Re- public has territory enough, and that a further extension would be dangerous. The inducement which the Free States once had to bring Canada into the Union for the purpose of coun- tervailing the power and the southward extension of the Slave States has ceased since the extinction of slavery. The politi- cians also fear that by the entrance of so large a body as Can* Mr. Ooldwin Smith's Letters to the "Mail" 203 ada into their politics the balance of parties might be disturb- ed and existing combinations overturned. What the precise effect of the increased commercial intercourse might be on in- ternational sentiment, it seems impossible, amidst such a variety of complex influences, to foretell. The declining force of the feeling against annexation is so marked, and Commercial Union has taken so strong a hold up- on the mind of the people, as to render it not impossible that if the movement in favor of Commercial Union is defeated a movement in favor of annexation may ensue. Stateiimen, at all events, before they decide upon their course, will do well to take some surer means of ascertaining the real mind of the country than the conventional language into the use of which the people have been drilled. What is perfectly certain is that there is not a man promi- nently connected with this movement who can have the slight- est interest in bringing about political annexation. Not one of the number has any feeling but that of the most loyal affec- tion for England. Not one can be even imagined to cherish any personal ambition pointing in the direction of the United States. Not one of us, in fact, is in public life at all. To sup- pose, therefore, that we are political conspirators veiling an- nexationist designs beneath a pretended scheme of Commercial Union is not only uncharitable but preposterous. Nobody on either side of the question, I hope, has any object in view but the good of the country. The project of an Imperial Zollverein, proposed as a more loyal aTid patriotic mode of improving and extending Canadian commerce than Commercial Union with this continent, evidently meets with little support either in England or in the colonies generally. It runs counter to the fiscal policy jv^hich appears to have been irrevocably adopted by Great Britain. Emanat- ing from the quarter whence it at present emanates it can hardly be regarded as anything but an attempt to create a diversion. It would involve the free admission of British goods, to which our protected manufacturers would be the last men to agree, while the sacrifice of revenue would be just as great as that entailed by the removal of the Customs line between Canada and the United States. Before this controvery about the probable effects, economical and political, of Commercial Union, comes to a close, it is not 204 Handbook of Commercial Union, unlikely tbat the question may settle itself in a rough way. In the North-West there is an open frontier of eight hundred miles, with a population absolutely identical on both sides of it. The settlers care little for the Ottawa Government or its revenue ; smuggling already is said to be rife ; and when popu- lation increases it will scarcely be possible with any force that the^Government can command to maintain the Customs line. IV. In the debate on Commercial Union, the union between Scotland and England in its commercial aspect has naturally presented itself as an analogous case ; and, allowing for the distance of time, the analogy is close and instructive. The commercial condition of Scotland before the Union was no doubt much below that of Canada at the present day. The comparison therefore must not be too closely pressed, nor must we expect the same extraordinary results in our case which ensued in the case of Scotland. But we may reasonably expect a measure of the benefits which in the case of Scotland followed the removal of commercial restriction and the free admission of a highly industrial and energetic race to a great and rich market. In the Duke of Argyll's recent work on Scotland the chapter narrating the economical effects of the union bears the signifi- cant title, " The Burst of Industry," and truly marvellous is the transition of a nation from poverty to wealth which it nar- rates. Illustrations without number might be produced, but they are almost needless when the general fact is one of the commonplaceg^of economists and the theme of all who have written on the domestic annals of Scotland. Buckle has a long and glowing passage on the subject. Mr. Lecky says : " In the ten years preceding the union the commercial inter- course between the two countries had been so slight that the goods imported from Scotland to England only twice exceeded the small amount of £100,000, and the imports from England into Scotland never in a single year exceeded .£87,536, while the whole shipping trade of the smaller country was annihilated bv the Navigation Act But immediately after the union the movement of industry and commerce was felt in every part of Mr. Goldwin Smith's Letters to the ''Mail." 206 the Lowlands. Glasgow, having no port or vessels of its own, chartered ships from Whitehaven and began a large trade with the American colonies. In 1716 or 1718 the first Scotch ves- sel that ever crossed the Atlantic was launched upon the Clyde ; in 1 735 Glasgow possessed sixty-seven vessels, with a tonnage of 5,600, and in a few years she had become, in the American trade, a serious rival to the great seaports of England. It was in the first half ot the eighteenth century that Greenock laid the foundation of its future greatness by the construction of a commodious harbour, and Paisley rose from a small village into a considerable manufacturing town. It was computed that the aggregate tonnage of Scotch vessels rose between 1735 and 1760 from 12,342 tons to more than 52,000 ; and it was noticed, as a significant sign of the growth of the industrial spirit in •Scotland, that from the time of the union it was common for the younger sons of the gentry to become merchants, and to make voyages in that capacity to the Continent. In the seven- teenth century almost the only Scotch manufacture had been that of linen. In imitation of the curious law which encour- aged the English woollen trade by providing that every corpse should be buried in wool, a Scotch law of 1686 had enacted that every shroud be of linen, but it was not until the union gave the linen manufacture a wider vent, that the trade began really to flourish. It was introduced into Glasgow in 1725, it speedily spread through many other Scotch towns, and we find it appearing evon in the Orkney Islands in 1747. It was no- ticed by the historian of commerce that on Oct. 23, 1738, no less than 151,219 yards of Scotch linen, as well as 3,000 spindles of linen yarn, were imported into London, and that of late years the entries had been annually increasing. The value of the Scotch linen stamped for sale in five years, from 1728 to 1732, was £662,938. In the four years, from 1748 to 1751, it had arisen to £1,344,814. In Aberdeen trade in woollen stockings largely increased, and a considerable manufacture of coarse woollen serge grew up. Some time before the century had closed, cheap Scotch carpets had penetrated to most Eng- lish houses. The preparation of kelp, which was introduced into Scotland in 1720, gave some industry to the poorest coasts ; and the first Scotch country banks were established in 1749 at Aberdeen in Glasgow." 206 Handbook of Commercial Union. Specially instructive is the new value which was given to the natural products of Scotland^ kelp and black cattle, each of which having before been comparatively little remunerative became a mine of wealth when developed by the capital and admitted to the market of England. A small country is pretty sure to have natural products in excess of its own demands. Canada has among other things minerals far in excess of her own demands, actual or possible. An attempt is now being made by legislation to force her to develop an iron trade without a sufficient market or sufficient capital. English experts treat the attempt with derision, predicting that it will be a total failure. The legislation needed for the development of Cana- dian minerals is the removal of restrictions on the market. About that the people of Port Arthur feel no doubt With regard to the probable increase in the value of natural products, we may look to greater profits than were reaped by Scotland. Black cattle and kelp are small matters compared with our stores of minerals, phosphates, fish and lumber. In the French province we have a great fund of labour highly available for factories, which at present, like the redundant labour of Scotland before the union, finding no employment in its own country is driven to wholesale emigration. If the French clergy want to keep their people at home they had bet- ter, instead of forming repatriation societies, which are utterly futile, bear a hand in making thfi home a place in which the people can earn a living. It is true that the union of Scotland with England opened to Scotland, besides the trade with England, the trade with the American Colonies and West Indies. But the temporary union in the time of Cromwell, when the Colonial and West Indian trade had not become of much importance, had been, as Bishop Burnett says, a period of great prosperity for Scotland. It is curious to see what arguments were used by the oppon- ents of the measure, and notably by Lord Belhaven and Fletcher, of Saltoun, the latter of whom had proposed, instead ^f opening a new market for Scotch industry, to relieve the poverty of Scotland by introducing slavery. Here also the analogy is close. The Scotch people were assured that the of- fered participation in English commerce was a mere delusion, that English commerce was occupied entirely by the English themselves, and that they were being invited to a feast at Mr. Goldwin Smith's Letters to iJie ''Mail" 207 which every chair was already filled. For this mere shadow they were told they were to give up their substantial trade v/ith France and their independent competition in the markets of the world. Subtle reasons no doubt were given to them fcr believing that the trade with France was much more profit- able than commerce with the rest of their own islands. All the benefits of the union, it was said, would go to the greedy and over-reaching Southern. The workman would have to pay English prices for his food but would not get English wages, since all the profitable trades were already engrossed. Even his jug of ale would be snatched from his hand by taxation proportioned to the capacities of the rich Englishman. Lord Bellhaven, in his famous speech, described the artisan as drink- ing water instead of ale, and " eating his saltless porridge," whtle he saw " the laborious ploughman, his grain spoiling upon his hand, cursing the day of his birth, dreading the expense of his burial." In the middle of his speech Lord Belhaven formally paused for some time to shed a tear over the departing glory and opulence of his country. Lord Marchmont, in reply to him, said that he thought a short answer would sufiice — t " Behold, he dreamed ; but, lo, when he awoke, behold, it was a dream ! " The reality was the farms of the Lothians, the works and warehouses of Glasgow, and the shipbuilding yards of the Clyde. J n the case of Scotland, the union being political as well as commercial, the seat of government was to be removed, and it was not unreasonable to fear that a certain amount of wealth would depart with it This argument was addressed with special effect to the citizens of Edinburgh, who might well think that they were called upon to make a great sacrifice. But even Edin- burgh gained more by the general increase of prosperity than she lost by the departure of the Parliament. Toronto would gain by the general increase of prosperity, while its Parliament would not depart. In reply to the assertion that Toronto would be en- gulfed by New York, while Rochester, Detroit, Buffalo, Syra- cuse and Albany are not engulfed, we need only say, " Behold it was a dream ! " In entering a commercial union with England, Scotland espoused the heavy, and, as people then thought, ruinous debt which England had contracted in the War of the Succession. This it was that gave point to Belhaven's prediction of intolera- 208 Handbook of Commercial Union, ble taxation. But Canada would enter into partnership with a nation whose federal debt is per head considerably less than half of ours. To Scotland the benefits of free trade with England were also partly countervailed by the necessity of con- forming to impolitic restrictions to which English commerce itself was subject in those days. She had among other things to cease exporting her wool. The advantages of a free trade at that period were, moreover, greatly reduced by freights which were enormously higher when goods were carried by pack horses than they are now that goods are carried by rail. I found it a little diiHcuit to interpret a parable which an eminent manufacturer lately made use of in a communica- tion to the Press on the subject of Commercial Union. But if I did not miss his meaning he may derive some comfort ^om the case of Scotland. He seems to be afraid that the richer country will by some fell force of attraction draw away all the commerce and wealth from the poorer country, and he paints a picture of the coming desolation not unlike that drawn by Lord Belhaven. That we '* were and are not," according to him, will soon be our epitaph. But instead of drawing away the wealth from Scotland, England filled Scotland with wealth. The development of the linen trade by the influx of English capit2,l moie than made up for the loss of the piofits on the trade in wool The native manufacture of woollen cloths, it is true, suffered from the importation of the cheaper English goods, but the people were better clothed, which after all is a point of some little importance, though, as Chambers observes, the general rule in commercial legislation is to fill the mouth of every special interest and leave the crumbs to the community in general. Why should Canada be expected to suffer by a commercial connection with the United States when we see that all those States of the Union which are by nature less wealthy gain by their connection with the wealthier States ? Would Maine, Vermont and New Hampshire b^ better off if they were severed by a Customs line from the rest of the union ? No Canadian manufacturer has yet told us in plain terms that he fears American competition in a fair market and given us the reason of his fear. Why is it, we must once more ask, that the Canadian producer, with freight in his favour and some ad- vantage also in regard to the price of labour, cannot hold his own against the producer on the other side of the political line, Mr. Goldwin Smith's Letters to the ''Mail" 209 as well as the producer in the younger States of the Union holds his own against the producer in the older States ? If the prin- ciples veiled under the parable above referred to were clearly stated and pressed to their logical results, I fancy they would lead us to the conclusion that Toronto was a curse to Ontario. Fallacies are uttered in the present debate by defenders of restriction which were uttered by opponents of Commercial Union between Scotland and England, and then received their practical confutation. It was constantly assumed, for example, that in every bargain while one party would gain the other must lose, and the alarmists of each nation declared that, as the other nation was the sharper and the more unscrupulous, the loss would be on their own eide. That in a fair bargain both parties profit was a truth which, simple as it is, had then hardly dawn- ed on the commercial world. Trade altogether would be an evil if some of the things which were then said and are now being repeated were true. On that occasion, as on this, the lack of commercial argu- ments was liberally supplied by appeals to international anti- pathy. English objectors denounced Scotland and Scotch objec- tors denounced England as a community of rapacious sharpers. There no doubt was commercial dishonesty on both sides of the border. There is commercial dishonesty on both sides of our border. The oflScers of the Ontario Investment Association, of London, are not Yankees. There have been some wooden nut- megs among us which had not been raised in Connecticut. If the Yankees as a community are knaves and cheats^ why do we take their bank bills at par 1 Why are we so anxious to con- nect ourselves with them by means of railways 1 Why did we make a Reciprocity Treaty with them, and why, since their withdrawal from it, have we more than once sought its renew- al 1 Are they honest in regard to natural products while they are dishonest in regard to all the other articles in the taHff 1 What do all those thousands of Canadians who have settled in New York and Chicago say 1 Have they gone to take up their abode among thieves? Can anything be more absurd than to talk of a community as too knavish for commercial in- tercourse when we are actually fusing with it, and it already contains nearly a million of our native citizens 1 It is worth while to observe, too, that whatever was valuable in Scotch nationality and in Scotch character remained unim- 210 Handbook of Commercial Union. paired, though it was not less the subject of doleful predic- tions than Scotch trade. Another recent opponent of Commer- cial Union seems to apprehend that if we trade freely with our neighbours we shall be betrayed into keeping Sunday in their way. But the Scotch Sabbath remained just as strict after Commercial Union with England as it had been before. Bales of goods may carry physical infection, but they will hardly carry ecclesiastical contamination. Heaven forbid that a word should be said in disparagement of national aspirations, or of any generous aspirations of any kind. But if we are asked to sacrifice the material wealth and happiness of our people to nationality, it is as well to ask what in our case nationality means. Does anybody seriously believe that British and French Canada will ever become, in the true sense of the term, a nation 1 Is not everything tending direct- ly the other way 1 Does our union with Quebec really mean anything more than connection, which no commercial change could disturb, with the same Crown 1 If there is no chance of Anglicizing Quebec, is there any chance of really uniting to Ontario the British provinces which are separated from us by Quebec, and the people of which, as anyone may satisfy him- self by going among them, still regard us as strangers 1 Is there any nationality, in fact, actual or possible, except that of British Canada, in other words, of the Province of Ontario 1 And why should the peculiar character, traditions, memories or sentiments of Ontario be impaired by free trade with the States any more than those of Scotland were by free trade with England 1 A curious nationality this — so intense that every- thing else ought to be sacrificed to it, so feeble that it is liable to be extinguished by the reception of goods from the other side of the line on which Customs duties have not been paid I After Commercial Union we shall be not a whit less a nation than we ar<3 now, while a great strain will have been taken ofi" Confederation. What wound could be given to nationality which would be worse than the running sore of the exodus 1 Yet the exodus is sure to increase if commercial restriction is maintained. Our people now, besides being taxed by Government fifty cents higher than the Americans, are paying a heavy tax to the pro- tected interests on their clothes and other necessaries. The effect of this, combined with the exclusion of capital and the Mr, Ooldwin Smith's Letters to the "Mail" 211 consequent dormancy of our resources, cannot be doubtful. Nationality will mean expatriation. But the truth probably is that the financial and commercial progress of the United States will before long begin to act upon us in a more direct and pal- pable way. It will become impossible to maintain for political objects a little Egypt of artificial impoverishment and indebt- edness by the side of a continent advancing in wealth and financial prosperity under internal free trade. A reference to the economical experience of Scotland is, of course, like other economical arguments, " au appeal to the pocket." The Scotch have always thought of the pocket, but this has not prevented them from thinking, and to some pur- pose, of other things also. Commercial Unionists want our peo- ple to have the fair earnings of their industry, and the share of wealth which nature has intended for them. They believe that a good measure of material prosperity is essential not only to happiness, but to civilization and to the existence of affections of which a comfortable home is the centre. Civilization and family aifection are not lest) objects of genuine sentiment than those exclusive idols of the Imperialist fancy, for touching which we are threatened with bloodshed. " Keep up your bright swords for the dew will rust them." Bluster rusts the sword worse than dew. If there is anyone who helped, by dragging Canada into the quarrel between the North and the South, to kindle the anger of the North against us, and thus deprive our people of the benefit of the Reciprocity Treaty during all these years, he has surely done mischief enough for one life-time, and had better be sensible and quiet for the future. Protectionism is just as much as free trade an appeal to the pocket, though it is not an appeal to commercial justice. In the desperate struggle against nature which is carried on under the present system not only are our people impoverished, but they are corrupted. The provinces, linked together by no bond of commercial interest, and drawn each of them naturally to trade with the States, can be held in forced union among themselves and forced severance from the States towards which they are drawn, only by a vast system of bribery, which has now been carried on for twenty years, and has its monuments not only in the debt, but in a public life to a lamentable extent saturated with corruption. This consideration, too, if it is not sentimental, is moral, and may be worthy the attention even of 212 Handbook of Commercial Union. those who are too chivalrous or too spiritual to care whether the commercial system is just to the people, or whether indus- try receives its fair reward. In measuring the progress of the movement in favour of Commercial Union and estimating the chance of its success, it must always be borne in mind that the movement, as I have said before, is spontaneous. It has been set on foot by no " gang," to use that playful expression, of any kind. I believe ' I may say with truth that of the Canadians who take a leading part not more than two had ever been in a room to- gether. I suppose I have myself the honour to be accounted one of the gang, and I have done nothing but advocate in your columns or on the platform the policy which I have ad- vocated as a journalist for many years. I have gone to meet- ings only when invited, and I have declined about as many invitations as I have accepted, So far as I have been con- cerned or know, there has been no wirepulling or propagandist machination of any kind. Indeed, our opponents, while they may be able to prove that Mr- Vtilancey Fuller, Mr. H. W. Darling and I are mistaken, will find it difficult, I imagine, to show what motive we can have for conspiracy. It seems most desirable that this question, the most important since Confederation, should be fully presented to the people, and that their opinion should be formed upon it irrespectively of party. But for my part I shall be very glad when, the question having been thoroughly ventilated and the mind of the people having been made up, the time arrives for handing the matter over to the regular politicians. Let us hope that the regular politi- cians are preparing to deal with it, when their turn comes, not merely as an affair of party tactics, but with some reference to the real interest of the whole people. Of the meetings some have been very large, and all that I have witnessed have been significant The audience has not been a miscellaneous crowd, such as is drawn together by a display of rhetorical fireworks at election time, but a gathering of farmers or other men of substance, who have come, often from considerable distances, to hear what was to be said about Mr. Oold/wln Smith's Letters to the "Mail." 213 a practical question in which they were deeply concerned. There has been nothing to produce excitement or enthusiasm, but there has always been the most marked attention. In the way of rhetorical attraction we have had very little to offer, as tao clearly appears when I have to be pressed into the service. The expression of dissent has been invited, but hardly any- where has dissent been expressed. The meeting at Clinton was called a fiasco, and triumphantly cited as a proof of the de- clining force of the movement The managers had pitched their expectations of numbers far too high, and expressed un- due disappointment when their expectations were not fulfilled. The absence of Mr. Valancey Fuller, whom the farmers would specially wish to hear, was damping, though we were indemni- fied by a most excellent speech, bearing the evident impress of thoroughly independent conviction, from Dr. Macdonald ; and there was a counter attraction in the shape of a fair. But if a large majority of those present were believers in Commercial Union, an enemy of Commercial Union has not much chance of election in Huron. Politicians tell us that all this means noth- ing ; that the farmers will come to meetings or picnics, listen, go home, forget all about the matter, and when election time comes vote with their party. It might be so if the subject were a mere party issue like the sanity of Riel or some project for bedevelling the franchise ; but men do not so easily forget their pockets. The farmers will be reminded of Commercial Union every market day. N. P. swept the country in 1878, taking a large nuraber of voters out of their party lines, and Commercial Union is a good deal more important as well as a good deal sounder than N. P. At Clinton the chair was taken by a Conservative. The chair has been taken by Conservatives elsewhere, and I hear on all sides of Conservatives pronouncing in favour of the move- ment. Why should they not? Conservatism is bound to order, property, and government by intelligence ; but it is in no way bound to a vicious commercial policy, which must keep up discontent among the people. Pitt and Peel were the great emancipators of trade. By the leader of the Canadian Con- servatives the work of Commercial Union has already been half done. Sir John Macdonald it is who has " levelled up" the Canadian tariff to meet half way the American tariff which is coming down. The great difficulty in the way of Commer- 214 Handbook of CoTwrnercial Union, cial Union was that of aHsimilabing widely different tariffs ; of this Sir John Macdonald's policy has relieved us. Commercial Union has in this sense been justly designated as the comple- ment of the N. P. The Conservative leader too it wa8[who pro- claimed with no uncertain voice Commercial Home Kule for Canada, which Mr. Brown used to denounce as rank treason, and gave the most practical effect to his principle by imposing protective duties on British goods. The longer the discussion lasts the clearer the case becomes. The map settles the question. Here is a great continent, infinitely varied in its productions, the bulk of it enjoying per- fect freedom of trade within its own paie, and manifestly owing its boundless prosperity to that system. But on the northern edge of it are four blocks of territory separated from each other by wide spaces or great physical barriero, having little or no natural trade among themselves, and at the same time shut out by a customs wall from free commercial intercourse with the continent at large. Each of the blocks has natural resources — minerals, lumber, fish, or capacities for special farm products — which by reason of its isolation, remain but half developed. Is it possible that such a state of things can be sound or that it can last 1 Looking at the case from the American point of view, is it possible that the people of the Continent at large should be content forever to exclude these northern blocks of territory from the commercial pale and forego the additional wealth which their resources, if developed with the aid of American capital and enterprise, would bring 1 Difficulties there may be in getting rid of any established system, and even when the people have made up their minds as to their own interest it is not certain that legislation in that sense will at once follow. Every day shows us that a government in posses- sion of power and patronage, though elective, may be a differ- ent thing from government by the people. Yet in the end nature cannot fail to have her way. It is from manufacturers alone, or from banks and wholesale dealers connected with them, so far as I can see, that the com- mercial opposition comes, and even in this quarter it is far from universal. Many of the manufacturers recognize the benefits which the measure would bring to the whole country, and are willing, or even more than willing, to take their chance in the larger market, though in some cases they would have to spend Mr. Goldivin Smitfis Letters to the "Mall," 215 money in adapting their system of production to it. Not one of our leading manufacturers, so far as 1 am aware, has yet plainly avowed his inability to compete y'^ith the Americans. My friend Mr. H. E. Clarke complains that the argument in favour of Commercial Union is a mere torrent of words. Let him give the discussion a thoroughly definite and practical form, in one part of the field at least, by declaring, as the chief of one of our manufactures, that he is incapable ot holding his own against the Americans in a fair market and telling us his reasons for that belief. Of the plea of infantile weakness, ex- perience has already disposed. The m'\nufactures of the West- ern and Southern States were set up and are flourishing in face of the long-established manufactures of New England. As has been said before, the newest works are likely to have the latest improvements, and hence to be the strongest not the weakeot. Labour is at least as cheap and good on thiH side of the line as on the other. What then has Mr. Clarke to fear 1 Does he really fear anything commercially, or is his opposition mainly sentimental 1 I do not wish to decry sentiment of any kind, or to say that commercial considerations ought not sometimes to give way to it. But if , as a clerical opponent of Commer- cial Union has been reminding us, man does not live by broad alone, man does live by bread, and I would submit to Mr. Clarke that of all sentiment the most undeniably genuine and precious is that which has its seat in a happy home, while homes can hardly be happy unless the people receive the full earnings of their labour and enjoy a fair measure of material comfort. The industries which unhappily have some ground for alarm are more artificial and less strong than that of Mr. Clarke. But, to borrow in part Mr. Clarke's simile of the bay and the lake, I doubt whether the little fishes of the bay have not as much to fear from the big fishes of their own secluded waters as they have from any incursion of the big fishes from the lake. The tendency of an artificial system like that under which we are living seems to be to beget millionaires and to extinguish such traders as are not strong euough to meet the violent fluc- tuations sure to be produced by protection applied to a limited area. For the rest, I can only say once more that this is the painful part of the subject, but it was not without such warn- ing as journalism could give that the Government, from the 216 Handbook of Commercial Union. ^^: policy of a revenue tariff with adjustment to national indus- tries, allowed itself to be drawn in an unlucky hour into a policy of protection. An effort at least was made at the time to point out that whatever might be tlie effect of protection when applied to a territory so vast, with a range of production so unlimited as that of the Unitei States, when applied to the comparatively small market of Canada, and to a country with so limited a range of production as onrs, it was certain to be a failure. Instead of saying the market of Canada, it would have been more correct to say the market of a Canadian province. The provinces, as has already been said, have little or no natural trade with each other. Each of them, at least each of the foiu* divisions of them, under the present system, is to itself the only free market on this side of the Atlantic. The millers, a most important and influential interest, seem to be generally in favour of Commercial Union. Well they may be, after the experience of the last nine years. The eyes of the farmers are being opened. They begin to see that the development of our natural industries which Commercial Union promises, would provide them with more customers than can be provided by any forced industry, and with customers for whose creation .they will not have to pay a heavy percentage in the shape of duties, on all the imported goods which the farmer uses. They are also beginning to ask whether, if American goods are, as Mr. John Macdonald told us, of such quality that Canadian goods could not compete with them in an open market, it is really wise to deny themselves the liberty of buying American goods. Nor do they miss the moral of combinations to keep up the price of sugar or cottons. Appeals to hatred and mistrust of Yankees are evidently worn out ; while arguments based on an alleged antagonism between the interest of the Imperial country in this matter and that of the colony, or on the impossibility of obtaining the benefits of Commercial Union without accepting political union, are pro- ducing an effect the very reverse of that which those who use them would desire. Ultra-sentimentalists may depend upon it that they have been living in a fool's paradise on these points. I am the very last man to treat with levity any profession of attachment to the Mother Country ; otherwise I might be tempted to laugh at the expressions of filial horror at the thought 01 discriminating against British goods which continue Mr. Goldwin Smith's Letters to the "Mail." 217 to proceed from commercial gentlemen who are themselves excluding British goods by protective duties, and are besieging Ottawa to get those duties raised still higher. Little does it signify to the British manufacturer whether the tariff" by which his goods are excluded is passed by Canada alone or by Canada in conjunction with the United States, though it is assumed by our Protectionists that in the first case all is well and in tlie second case the skies of commercial loyalty must fall. Our movement is in response to that made in Congress by Mr. Butterworth, and for the purpose of ascertaining how his proposal would be received on our side. VVe shall presently see what the mind of the Americans is, if only the manoeuvr- ing of political parties for the inside track in the Presiden- tial race does not interfere with a fair consideration of the question. All along the border, and wherever a lively interest is felt in the question, we have every reason for believing that the feeling is favourable. We hear of special interests being adverse. It is said that iron-masters of Cleveland and the lumbermen of Michigan wish to keep out Canadian iron and lumber. Not all the lumbermen of Michigan are hostile, for a letter from one of the greatest of them is before me, expressing the strongest sympathy with the movement. But we must be prepared for some opposition of that kind. The feudal baron planted his castle on the route of commerce, and sallying forth with his men-at-arms levied toll upon the trader with a strong hand. The baron of monopoly instead of a castle sets up his restrictive code of law, and instead of men-at-arms keeps in his pay his lobbyists ; and perhaps we may rather prefer the toll- taker, who avowed that the toll was his object, and did not pretend that he was fostering infant industries, diversifying the national character and enriching the community by taxa- tion. What is the mind of the Washington Government, we have as yet no right to say. But we know that President Cleveland has declared against taking more money from the people than the necessities of government require. In other words he has dec'ared for such a reduction of the tariff as would probably bring it very close to ours ; and if he keeps that flag flying he will be re-elected. The question of commercial relations between the two coun- tries can hardly fail to come up in connection with the Fish- eries Commission. The appointment of a Western man by the 218 ; Handbook of Commercial Union. ■ ^ American government as one of its commissioners seems to indicate that such is the expectation. It is a pity that Mr. Chamberlain is to go straight to Washington without first visiting Canada and learning the needs and wishes of our peo- ple, about which he probably knows little ; but to have our affairs settled by those who do not know much about them is a consequence of our being a dependency. Mr. Chamberlain's Canadian colleague and adviser will be a party politician with party objects of his own which may or may not coincide with the interests of the community at large, and the question will be settled in a diplomatic conclave uninstructed and uncon- trolled by the people whose vital interests are at stake. This is not satisfactory, but it is a part of our present system. VI. An American politician, and one certainly not wanting in sagacity; writes : — " The time will undoubtedly come when the Dominion and the United States will be more closely united, but I /ear that Commercial l/nion would defer indefinite- ly the political union" Such is the real feeling, so far as I have seen, of those Americans who set their faces against Com- mercial Union and would scare Canada from it. Here is the answer to the insinuation that in promoting a measure which would make the Canadian people content with their com- mercial situation we are inciting them to political change. With more plausibility might the adversaries of Commercial . Union be accused of conspiring to show the people that there is no way of obtaining a free market for their produce and securing the fair earning of their labour except political annexa- tion. Restrictionism, which drives the flower of our popula- tion across the line, is annexation by inches and in the saddest form. A false impression has, perhaps, been produced by dwelling on the assimilation of tariffs as if that were the object of the measure. The object of the measure is the removal of restric- tions on trade. Assimilation on tariffs is merely a necessity incident, or apparently incident, to the practical adjustment of the scheme. If the tariffs were not assimilated when the cus- toms line between the two countries was removed the seaboard ' Mr. Goldivin Smith's Letters to the "Mail." 219 of one country would become a backdoor for smuggling into the other. Far from seeking an assimilation of tariffs as the main object, and as a step toward political union, Commercial Unionists, I apprehend, would be perfectly ready to dispense with it if any other mode of obviating the difficulty, such as declarations as to the nationality of goods or transmission in bond, could be made to serve the purpose as well. But it is preposterous to contend that a special agreement with a foreign Government with regard to fiscal arrangements involves a cession of national independence. The two families of the English-speaking race on this con- tinent will some day be one people. Such is my belief, and I never conceal it. Nor do I conceal my conviction that the union will be happy for both parties, and not less happy for their common Mother, who has no real political interest on this continent except amity with the whole race. But I am equally sincere in saying that I see no reason why an extension of commercial intercourse should bring with it a change of politi- cal relations. I see no reason why an extension of commercial intercourse should do this any more than the extension of rail- way communications in which commercial restrictionists take an active part. The railway connection which the C.P.R. is making with the United States at the Sault seems to me fully as annexationist in its tendency as the removal of the Sault custom house would be. Do the alarmii s think that on the opening of free trade with the States the Ottawa Government would disappear or relieve by abdication the people from whom it takes so much and for whom it does so little ? Accounts from the United States continue to be good so far as the disposition of the people and of the bodies which repre- sent commercial interest is concerned. We have strong proofs of the growth of favourable opinion. Since attention has been drawn to the subject the interest does not seem to be confined to the border States. Boards of Trade have been moving in differed parts of the Union. The minds of the politicians at present are, of course, absorbed in the faction fight for the Presidency, and no legislative question, whether domestic or foreign, stands much chance of settlement or even of practical consideration in Congress till the Presidential election is over. Party, whether in the United States or in the Dominion, cares for nothing but its own game. Moreover, Canada and Cana- 220 . Handbook of Commercial Union. V IT-. dian questions are prejudiced in negotiations with the American Government and Legislature by the odium attaching in the minds of American politicians, at least of such as play for the Irish vote, to a dependency of Great Britain. The Fisheries question would soon be fairly settled if Canada were an inde- pendent commonwealth of this continent. In this country we are asked to believe that Commercial Union is dead. If it were, Annexation would rise from its grave. But why, when it is dead, are such desperate efforts made to kill it ? The new organ of the Government and the protected manufacturers seems to have hardly any other em- ployment. Into any constituency where the issue is raised at a bye election speakers and money are poured. Cries that treason to the tariff must be stamped out resound on all sides. It is disagreeable to see, in connection with this subject, a ten- dency to revive the system of " rib-stabbing " in the old interest and under the old auspices. The people have now had a taste of better things, and rib-stabbing is out of date. There are things which are very much beneath the dignity of a Prime Minister of England or a President of the United States, but not, it seems, beneath the dignity of a Prime Minister of Canada. We are always being reminded that we are a depen- dency and not a nation. Mr. Thomas Shaw, the secretary of the Central Farmers' Institute, and of the Commercial Union Club, who has been the object of attack, is no hireling. He has served his cause honourably and from conviction, if ever man did. All who have read his pamphlet know that he has served the cause well. In the meantime our meetings in different parts of the country continue to be held, and with the same encouraging results as before. I have myself just returned from a meeting at Brampton, where the farmers of Peel were represented, notwithstanding the severity of the weather, in numbers which overflowed the hall, and the resolu- tion favourable to Commercial Union was carried without dis- sent. It is impossible to believe that the men I there saw before me will in the end allow their vital interests to be dis- regarded or sacrificed to party watchwords ; much less can it be siipposed that they will permit themselves to be cowed by slanderous accusations of disloyalty or blustering threats of military coercion. What does loyalty to England mean ? Up- holding her honour against the attacks of Her enemies, vindi Mr. Ooldwin Smith's Letters to the "Mail." 221 eating her rights, exerting yourself to defend the integrity of her claim against dismemberment, or charging other people with disloyalty to her while you lay protective duties on her goods ? There is, of course, strong opposition to be encountered ; effort and patience will be required as usual ia proportion to the prize, which is nothing less than the emancipation of Cana- dian industry. The Dominion Parliament will vote us down, as it master hus announced that it will, and will thereby show once more that elective government is not necessarily the same thing as government for the people. The process carried on for twenty years with consummate skill and full command of the public resources has produced its effect on the character of the Legislature, and, at the s%me time, as these election trials show, on the political morality of the people. Party manageis may also be disposed to resent the intrusion of a great ques- tion on the machine tactics by which they have just been leading their party to victory. Their hostility shows at least that Commercial Union has had its origin, not in party machi- nations against the Government, but in the natural desire for Continental free trade engendered among the people by the vices of the restrictive system. From the Local Legislatures, if they will take up the question which the report of the Inter-Provincial Conference has laid before them, we may expect something more like a genuine expression of the mind of the people. The truth is that of all the recommendations of the Inter- Provincial Conference this is the one which the Local Legislature may discuss with the best hope of a practical result. For improvements of our constitu- tion, which require amendments of the British North America Act, they might as well order prayers to be offered up in our churches as send petitions to the Parliament of Great Britain. Overloaded at all times, and now paralyzed by Irish obstruc- tion, the Parliament of Great Britain has not a thought, much less a moment of time, to spare for anything Canadian. Help in that quarter there is none, but in regard to the commercial question we may to a certain extent help ourselves. In Manitoba almost everyone, except those in the service of the Government or of the C.P.R., is in favour of free trade with the continent, which is manifestly a vital necessity to that province. But the Liberals are more likely to act indepen- 222 Handbook of Go^m/mercial Union. dently of the restrictionist influence at Ottawa, and therefore the transfer of the Government to their hands is a gain to Commercial Union. Appeals are addressed, and from Restrictionist quarters, to Mr. Mowat to develop the mines of the province. What is he to do % Is he to go down with a pick, raise the ore and sell it to himself ) How is it possible to develop any resources otherwise than by giving, them a market ? Continental free trade and nothing else will bring about the development which my friend, Mr. Hamilton Merrifct, desires, I am not aware that there are any new arguments to combat or any new fallacies to expose. Denunciations, threats, per- sonal abuse, appeals to sentimental prejudice, and prophecy are still the order of the day. Nobody, I suppose, believes or even supposes it to be seriously asserted that all the leading friends of this movement, including the principal farmers of Ontario and the chiefs of our other great natural industries, are in the pay of Mr. Wiman and are serving his grand design for raising the value of real estate on Staten Island. The people are not influenced by such monstrous fictions, nor will one who is firmly convinced that his cause is good and will succeed in the end allow himself to tarnish and conipromise it by engag- ing in an ignoble brawl. This is the only answer that can be given to personal attacks. Do protected manufacturers sup- pose that if motives are to be called in question no motive can be assigned for their opposition to the emancipation of Cana- dian industry, except pure and single-hearted attachment to the general good ? The farmer, I believe, is by this time pretty well awake to the fallacious character of the argument that Restrictionism, by forcing capital out of natural industries into hot-bed manufac- tures, furnishes him with more customers for his produce. He sees that the development of the natural industries, when their fetters were struck off, would furnish him with a much larger number of customers, and without making him pay toll for their creation on his clothes and other articles for consumption. He has grasped the fact that our protective policy is at once a tax and a manacle upon those industries which are not pro- tected. American competition, we are told day after day, would be "crushing to our manufactures." Those who reiterate this Mr, Ooldwin Smithes Letters to the "Mail" 223 wail do not see how completely they give away their own case. If a trader is crushed by fair competition, it must be because his goods are very inferior or much too dear. In other words, the community under the present system must be suffering extortion. That the competition in the present case is not fair cannot be pretended, since the price of labour is somewhat higher in the United States than here. Restrictionists always assume that all our manufacturers are in the same boat. But the truth is that not a few of them are willing, while some of them are more than willing, to go into the open market. That there are some who having been lured into investment by the delusive policy of the Government, might be in danger if the false basis on which their industries are founded were with- drawn, can hardly be denied. This, as I have said before, is the painful part of the matter, and alone causes me any mis- giving or compunction in advocating a measure which I believe, as firmly as I believe in my own existence, to be fraught with increase of wealth and happiness for the mass of the Canadian people. We must hope, and I do hope, that in the first place the number of manufactures adversely affected by Commercial Union would not be so large as is supposed ; and, in the second place, as the change is not likely to come suddenly, there would be no danger of anything like a crash. VII. The interviews with leading manufacturers published in The Mail show plainly enough that if the race were open the Can- adian manufacturer would have a perfectly fair start. Ada[i- tation of his mode of production to a wider market, by making fewer articles on a larger scale, would be all that, if his bus- iness was sound in itself, he would need. And what can any- one in reason desire or claim more than a fair start 1 Can it be necessary again to set forth the proof that by forcing capital and labour out of their natural channels into artificial channels we simply waste them, while left to themselves they would add more to the wealth of the country, give employment to more hands, and furnish the farmer with more buyers of his produce ? The policy of taxing the farmer's clothes and implements in order to provide him with customers for his grain, is surely one 224 Handbook of Commercial Union. which, had it been devised by some recluse professor of poli- tical economy, instead of being devised by practical politicians, would have drawn down derision on him and on his tribe. From the North- West I get a journal, devoted to the Gov- ernment, the tariff and the C. P. R, which undertakes to show in three columns, bristling with statistics, that the North- West- ern Provinces or Territories are supremely happy in being cut off from the neighbouring market, and that admission to it would be their ruin. It is to be hoped that the statistics are more genuine than those of Manitoban manufacturers, which Mr. Wade exposed in the columns of The Mail, and which have found their way into the London Times. But the argument founded on them applies just as well to Minnesota or Dakota as to Manitoba or to the District of Saskatchewan. Would Min- nesota, Dakota, or any other state of the Union be better off if it were shut out of the commercial pale of the continent by a tariff wall drawn round it and forced to look to a market on the other side of the Atlantic 1 Let us have an answer to that question. We have also continued comparisons between the value of our trade with the United States and that of our trade with England, from which the inference is drawn that the English market is much the better. The English market has hitherto been better than the American, for the simple reason that it has been free, while the American market has not been free. When by the Reciprocity Treaty of 1854 the American market was made free in regard to certain articles the result, as every- body admits, was decisive. But it is really needless to discuss this question. Nobody proposes to close the English market. If we get free trade with the States we shall have the American market and the English market as well. Which of the two markets is the better will then be seen. However, except as regards the case of a few of our weaker and more artificial manufacturers, the commercial argument is almost at an end. I doubt whether the man is to be found who sincerely and in private maintains that we, with our ener- getic, intelligent and frugal people, and with all our natural re- sources awaiting development, should not gain by admission to the market which is close at hand, and which is at the same time the richest in the world, As The Mail has said, it is on the political argument, ^r at least the appeal to political fears Mr. Qoldwin Smith's Letters to the "Mail." 226 and prejudices, that the Restrictioaists really rely, and against this it is that the friends of Free Trade with the continent have practically to contend. Yet that argument has never yet been presented in a definite and intelligible form. We have had nothing but shouts of '* Loyalty" and shrieks of " Annex- ation," which have no more meaning or relevancy in the present case than the cry of " Great is Diana of the Ephesians ! " What is proposed is simply a fiscal and commercial arrange- ment identical in its essential character with that made by the Reciprocity ^Treaty of 1854, though more comprehensive. Why, let us ask for the thousandth time, ^ould this affect our poli- tical relations or our national dignity 1 Why should a special agreement of this kind change the general life of a nation any more than that of a man ? In making a commercial bargain with a man you do not embrace his politics or his religion. My friend the Hon. Mr. Young is afraid that if we cease to levy duties on American goods, and to have duties levied by the Americans on ours, we may be constrained to adopt the Ameri can view of the Sabbath. There is nearly as much reason for this fear as there is for the fears of those who fancy that Com- mercial Union must bring with it political annexation. If there is a tendency to annexation, increase of intercourse will be likely to strengthen it ; this nobody denies. But in- crease of commercial intercourse will not be likely to strength- en it more than increase of railway intercourse, of social inter- course, of religious intercourse, of philanthropic intercourse or any ot the other kinds of intercourse which are being daily extended and which not even the most high-flying Loyalist thinks it possible to interdict. Assuredly no increase of commercial intercourse can be half so effective in paving the way for annexation as the actual fusion of the populations which is being brought about by means of the exodus, under and through the operation of the very system which the pro- fessors of Loyalty uphold, and which is constantly sending the most enterprising of our young farmers and no inconsider- able amount o# Canadian property with them over the line. However, Mr. Chamberlain tells us, as the result of his obser- vations, that there is very little annexationism in the States, while Sir John Macdonald emphatically delares that there is none here. If there is very little disposition to annexation on one side and none on the other, both parties being free agents, I 22G Handbook of Commercial Union. how is the catastrophe to be brought about ? Let alarmists suspend their outcries for a moment and put that question de- finitely to themselves. Of the correctness of Mr. Chamber- lain's opinion as to the general absence of annexationism among the Americans, I happen to have fresh evidence from the pen of an entirely trustworthy witness. The fact is that Party, whether in Canada or in the United States, thinks of nothing but its own game, and the American politicians tremble at the thought of admitting into their field of operations so new, so large, and so uncertain an element as the Canadian vote. What the future may have in store is a different question, and one on which I have already expressed my opinion without dis- guise. That the mere removal of the tariff wall would be nec- essarily followed by a political union, or by political change of any kind, seems to me a totally baseless assumption, though its baselessness will probably not prevent its reiteration when commercial argument or solid argument of any kind there is none. That Canada would resign her fiscal independence by enter ing into a commercial treaty, however comprehensive, with the usual liberty of withdrawing, is an assumption which seems to me not less baseless. It derives colour only from the incidental proposal to assimilate the tariffs. Assimilation of tariffs, I repeat, is not the object of Commercial Union ; the object of Commercial Union is free trade with our own continent. As- similation of tariffs is merely a safeguard against reciprocal smuggling. Nobody insists on adopting it if any other expedi- ent equally effectual can be found ; though there can be no doubt that Canada would be the gainer by assimilation accom- panied with a pooling system, if the division of the revenue were to be on the basis of population, to which, or to any ar- rangement liberal towards Canada, the Americans with their overflowing treasury might not be indisposed to consent. But if our Restrictionists think that the commercial system of this country can be settled irrespectively of that which prevails over the rest of our continent, and that we can enjoy perfect in- dependence in this sense, they never were more mistaken in their lives. If Mr. Cleveland's policy gains the day in the United States, the Restrictionists will soon see whether it is possible to maintain their present policy here. The nation of sixty millions^ with its overpowering wealth, must be, in a Mr. Goldwin Smith' h Letters to tJie *^Mail" 227 great degree, the commercial regulator of North America. A commercial independence setting at naught this influence, I re- peat, is out of our reach. If the proposal of Commercial Un- ionists were that our most convenient winter ports, with the power of licensing or suspending our winter trade, should be placed in the hands of the Americans, there might be some ground for the cry of treason. But this Nature has done ; and our own Government, by promoting the construction of the short line through Maine, to the obvious disparagement of the Intercolonial, is in fact setting its seal to Nature's decree. In spite of all loyal declamation and railing against the Yan- kees, geography will have its own. There is another way in which the Restrictionists are de- pendent on the United States, though it is in their own des- pite, and they would be very unwilling to own it. If emi- gration to the United States did not afford a safety-valve for the discontent engendered by the restrictive system an ex- plosive force would accumulate which would soon save us the necessity of further debate. To anti-American feeling appeals are no longer made except in a few eccentric quarters. Nothing can be more marked than the subsidence of that prejudice in the course of the last twenty years. In truth, not only has kindly intercourse in- creased, but actual fusion has been going on so rapidly that in the case of a very large number of Canadians a quarrel with the United States would be a quarrel with their own sons and brothers. The progress of reunion between the Americans and the English has been equally manifest and equally rapid. In shrinking from contact with the people of the United States we should be a great deal more British than the British them- selves. To accuse us of disparaging the country because we propose a change in her commercial policy, or rather a logical extension of the policy already adopted, is childish. Every change how- ever beneficial, is to that extent a disparagement of the previous Htate of things. Is the country dishonoured when it is said that the industrial and commercial qualities of her people would enable them to reap great benefit from an extended market 1 Are a man's strength and speed cried down by saying that though he does pretty well in fetters he would do much better if his limbs were free 1 228 Handbook of Commercial Union. As to the cry of disloyalty, it was well said the other day by Mr. Dewart that all reformers and improvers from the framers of the Great Charter downwards, have in their day been disloyal. They have all been disloyal to an established system and to the special interests bound up with it, while they have been loyal to the broad interests of the nation and of humanity. But before we proceed with the discussion of this rather invidious and not very fruitful topic, I have a friendly challenge to throw out. Let some manufacturer who has taken an active part in constraining the Government to lay protective duties on British goods, one of the promoters of the new iron duty, for example, lay his hand upon his heart and declare that the thing against which his loyal conscience rebels is simply and solely discrimination against Great Britain, and that he would be equally transported with loyal indignation if the measure which he supposes to involve such discrimination were to his own advantage. It might be possible, though it seems difficult, and if it were possible Commercial Union- ists would not be unwilling, by adopting, in place of assimi- lation of tariffs, some other mode of preventing reciprocal smuggling, to avoid the appearance of discriminating against British goods. Would that satisfy the loyal Canadian manu facturer 1 Would he then be willing to let us have free trade with the United States 1 The resolution moved by the Hon. John Macdonald at the Toronto Board of Trade deprecated the extension of relations with the United States only so far as it might be inconsistent with duty towards Great Britain. Should we have his vote and those of his supporters if the semblance of discrimination were removed 1 Sir John Macdonald, in reply to the outcries of the British manufacturers against his tariff of 1879, avowed, in words which have been often quoted, that in fiscal matters he was for Canadian Home Rule to the hilt, and that so long as his sys- tem suited Canada he did not care what Englishmen, Scotch- men or Irishmen might say. Great Britain has taken from the colonies all the privileges which they once enjoyed in her markets. Simple justice required that she should at the same time concede to them complete fiscal independence, and this she has done. In framing her commercial policy she keeps singly and solely in view the special interest of her own people, and she leaves the colonies to do the best they can for theirs. Mr. Goldwin Smith's Letters to tfie "Mail" 229 We have the assurance of the Conservative leader, who is at the same time a Privy Councillor and a Grand Cross of the Bath, that we may take the fullest advantage of that liberty, in face of the protests of British producers, without departure from our allegiance, and therefore without prejudice to our loyalty. Our circumstances are those of a comparatively small community placed alongside of a mighty neighbour, to whose policy we are compelled to have reference and in fact have al- ways had reference in regulating our own. In this respect rur circumstances differ from those of any other British colony, and the difference must be taken into account. Mr. Chamberlain does not pretend to deny that Commercial Union would be good for Canada ; if it would our charter covers it, and he has no right as a representative of British manufacturers, who frame their own tariff absolutely by the rule of their own in- terests, to lay an interdict on our freedom of action in this matter. For my own part, ae I have said before, I am an Englishman, and it would be difficult, I trust, to prove that I have ever failed, when called upon, to show it. Weie any measure really adverse to Great Britain proposed, if I could not conscientiously resist it, I should stand asida I am thoroughly convinced that free trade between Canada and the United States, even if it entails assimilation of tariffs, would not be adverse, but, on the con- trary, advantageous to Great Britain. The value of her six or seven hundred millions of investments here would at once rise, and a new field for investment would be opened to her capital- ists, equally to their benefit and to ours. Her farmers and farm labourers emigrating to Canada would find better employment and a more prosperous home. It is not at all likely that, suppos- ing the tariffs to be assimilated, the joint scale would be more adverse to Great Britain than the Cana lian scale is now. Such would be the immediate consequences of continental free trade to the Mother Country. If I mistake not, the ultimate conse- quences, both commercial and political, would be better still. Mr. Chamberlain tells us that before we can get Commercial Union we shall have to convince England, the United States and Canada. As to the decision of England I have no fear, when the case shall have been fairly put before her. In the United States we must not expect legislative action till the all absorbing contest for the Presidency is over, but the accounts 230 ; Handbook of Commercial Union. of the growth of opinioo are highly encouraging. That Can- ada is coining to a conviction in favour of unrestricted trade with her continent the meetings which continue to be held in different parts of the country show. We had a capital meeting of the farmers of West Durham at Bowmanville yesterday. This movement, being unforced and clear of party, has, at all events, roused the Canadian farmer to independent thought about his own substantial interests, and loosened a link in the chain of his slavery to the party machine. VIII. Sir Richard Cartwright has the advantage of being a thoroughly political, not a forensic speaker. He brings out the great points of his case with the force essential to a style of speaking the object of which is not to obtain the judgment of a court, but to leave a broad impression on the popular mind. His speech ot March 4th, though it will produce no efFe on the Government majority, will tell on the country. His reso- lution, if it comes to be submitted to the House, will be voted down of course, but not by anything like such a majority as voted down Parliamentaty Reform and the Repeal of the Corn Laws upon the first introduction of each in the British House of Commons. His chief opponent appealed to the standing ofier in the Tariff Act of reciprocity in natural products. That offer is the decisive answer to all attempts, whether made by the Conser- vative ministers, or by any other controversalist, to cast doubts on the advantages of reciprocity. It is a recorded admis- sion that free trade with our own continent is essential to the interests of our farmers, our lumbermen, our miners, our ship- owners, our fishermen ; in a word, to all the natural and truly national industries of the country. But reciprocity in natural products only, it is well known, we cannot have. The Ameri- cans will not give without getting something in return. They will not consent to what Sir John Macdonald, when it is ten- dered to us, calls " a one-sided and jug-handled reciprocity." Either, then, our government must be prepared for reciprocity in manufactures as well as natural products, or the standing Mr. Goldnin Smith's Letters to the "Mail!' 231 offer in the Tariff Act is a hollow mockery, designed only to throw dust in the eyes of the Canadian people. Like an able and discreet tactician, the chief spokesman of the government threw the main question into the background. He did not attempt to show that free trade with the continent is not essential to the development of our natural resources, or that without it our people can enjoy the fair earnings of their industry, and the country its destined measure of prosperity. He did not touch the crucial question how, if every State in the American Union prospers by reason of its free trade with the rest, a Canadian province can fail to suffer by exclusion from the commercial pale. But he contends that Commercial Union would derange our finance and disturb our relations with the Mother Country. The most telling part of his speech probably is that which relates to the disturbance of finance. Here he is fortified be- hind a sinister rampart of his own building. The wastefulness of Government by piling up debt has not only laid a heavy burden of taxation on the country, but embarrasses its com- mercial policy. What, however, is now contended is that it is worth our while to let our trade and industry be crippled, to allow our immense natural resources to lie dormant, and to expose ourselves to commercial atrophy, and i"j the exodus both of men and capital attendant on it, not for the sake of seven millions of dollars, though that would be a poor enough reimbursement, but for the sake of raising that sum by a partic- ular mode of taxation. The mode of taxation happens to be one which it will be hardly possible to maintain along the vast open frontier of the North-West when that region, to which, as it does not manufacture, the tariff is an unmixed evil, shall have filled up and become strong. A Minister cannot allow himself to contemplate the possibility that when the shackles were struck off from trade and industry, the recuperative buoyancy of the tariff, consequent on the increase of pros- perity, would go far to make up the deficit. Still less can he allow himself to see that the expenditure of the Ottawa Gov- ernment has within a few years increased by more than seven millions without any benefit whatever to the community, and might be reduced, not only with advantage to the public purse, but with equal advantage to our political morality, since a sys- tem on which Nature has laid her ban, has been aiid can be up- 232 Handbook of Commercial Union, nl held only by corruption. Disturbance of finance, if it leads to retrenchment, will be to us a blessing hardly disguised. ^^iTirfeT As to the relations with the Mother Country, let us give the Mother Country leave to speak for herself. There was a loud and not unnatural burst of indignation when those who are now shouting loyalty laid protective duties on British goods, but as yet there has been no audible burst of indignation at the pro- posal of Commercial Union, though the subject has been pretty widely discussed both in the British press and by commercial bodies. The people of England know that when colonies are permitted to lay protective duties on British goods the fiscal unity of the Empire is at an end. They appreciate the fact that their interest in Canada as investors is larger than their interest as importers, and see that in the net upshot they will be the gainers by a policy which would enhance the prosperity of this country. They might invest capital in Canadian indus- tries and thus themselves enjoy the benefits of the opened mar- ket of the United States. To act in defiance of their veto is what ffobody proposes ; but let us wait till the veto comes. Commercial Union could in itself affect no political relation, nor would it detract a particle either from the revenue or from the authority of the Crown. To the vague cry of disloyalty, again raised, we can only reply once more that the same cry has been raised against every great legislative improvement from the Great Charter downwards. It was raised against the advocates of Responsible Government in Canada by a party which soon after saluted the object of loyalty, in the person of its representative, with a vol- ley of stones and rotten eggs. We must content ourselves with asking what policy is good for the people. The policy which is good for the people must be loyal towards any government which has the good of the people for its end. Mr. Davies seems to have given the " discrimination " objection its quietus by showing that in fact we already lay a higher rate of duty on the aggregate of British than on the aggregate of American goods ; in other words, that we do discriminate in favour of American against British trade. Once more we hear of the supreme advantages of a home market, as though that were not a home market which the de- velopment of our home industries by afiording a market for their products would create. Once more, too, we are told that Mr. Ooldwin Smith's Letters to the ''Mail," 233 the cause of the exodus is the unpatriotic conduct of the people who will not shut their eyes to its existence, and that we should see nothing adverse to our prosperity if we could only be true patriots and bury our heads in the sand. There seems to be a nervous disposition to drop the name Commercial Union and to adopt Unrestricted Reciprocity in its place. I should myself have preferred *' Continental Free Trade," had we not been told that the phrase " Free Trade " would raise theoretic questions which were not involved, and which it was our policy to avoid. *' Commercial Union," as I understand it, differs from Unrestricted Reciprocity only in more clearly including mutual participation in the fisheries and coasting trade. It was adopted, I believe, in direct contradis- tinction to political union, and for the special purpose of guarding against any such idea. However, the name has now become thoroughly current in England and the United States ' as well as in Canada, and is imbedded in all the literature of the question. An attempt to change it would look like the hauling down of a flag and would not propitiate opponents who are -^ already crying out that Unrestricted Reciprocity like Commer- cial Union is annexation in disguise. I have not happened my- self, in the different parts of the country in which I have been, to hear any objection expressed to the term. The people are ready for Commercial Union, name and thing, if only the ques- tion could be put to them clear of political issues which have no relation to it, and of partyism to which, though it is utterly senseless, and not one of them can give an intelligible account of it, they have to an extraordinary degree become slaves. Get . the farmers to prefer their own bread and that of their families to a shibboleth, and the battle is won. In any case the suc- cess of emancipation is merely a question of time. What the Restrictionists have to vote down is the map. The reception of Mr. Hitt's resolution by the Foreign Rela- tions Committee at Washington argues well for the success of the movement in that quarter, and rebuts the story of American indifference propagated by those who at the same time were charging the Canadian friends of reciprocity with being the paid agents of American conspiracy. The want of an extended market, of course, presses less on the Americans than ourselves, their present market being so much larger than ours. It was therefore natural that they should be slower to move. But in 234 v . Handbook of Com/mercial Union. the United States opinion once formed spreads very rapidly, and in this case there is no opposition, so far as we can see, in any section of the Union, which is likely to prove very strong. There, as here, the chief difficulty is that of obtaining a verdict on t Speaker after speaker, passing over the material interests of the people, or throwing them into the background, appeals in pas- sionate strains to political prejudice and party feeling. In that Parliament we know too well the appeal will not be made in v6,in, but three years hence the cause we hope will come before a different tribunal. IMPERIAL FEDERATION. The announcement of a public meeting for the discussion of Imperial Federation was welcome to Commercial Unionists. Though Imperial Federationists tell us that they do not deign to regard Commercial Union as a rival policy, Commercial Unionists cannot help regarding Imperial Federation as a policy which stops the way. We shall therefore be glad to see the plan brought to the test of practicability by clear presentation and full explaiiation of detail& Nor is there anyone who could do this for us more ably than Mr. Dalton McCarthy. As this question, like that of Commercial Union, transcends party politics, Mr. Dalton McCarthy, Mr. Cockburn, or any other Conservative politician who may be concerned, will feel himself on this occasion unembarrassed by party ties, and at liberty to m«et the objections urged against the scheme by his political chief. " W0 are told," said Sir John Macdonald in his speech dh the new tariff, at Toronto, on November 3rd, 1881, *• that we want an Imperial Federation. I will not trouble you with a disquisition on that subject just now j but I tell you ;; Imperial Federation. 2S9 Imperial Federation is utterly impracticable. We could never agree to send a number of men over to England to sit in Par- liament there and vote away our rights and principles. I am, as far as this question goes, up to the handle a Home Ruler. We will govern our own country. We will put on the taxes ourselves. If we choose to misgovern ourselves we will do so, and we do not desire England, Ireland, or Scotland to tell us we are fools. We will say, if we are fools we will keep our folly to ourselves. You will not be the worse for it and we will not be the worse for any folly of yours." This is pretty de- cisive languajge, language which it would be difficult to explain away. Nor can it be questioned that Sir John is right in ap- pealing to our mistrust of Colonial delegates sitting in England. Those delegates, if we may judge from experience, would soon become more Belgravian than the Belgravians, greater courtiers ; than any lord-in-waiting. We shall, no doubt, hear what the Federationists deem the answer to this objection and to the objections which have been raised on other points. We shall hear what they have to say about the relations to be established between the Federal Par- liament and the Parliament of Great Britain, and between Fed- eral and British parties ; about the ambiguous function which would be assigned to the Crown as the head of two legisla- tures which might easily come into conflict with each other ; 7 iibout the disposal of India, which contains five-sixths of the .total population of the Empire; about the obligation which would be imposed on the colonies of contributing to European or Asiatic wars for objects in which they have no interest ; about the necessity of communities diflfering as widely as pos- sible in their economical circumstances to accept a common tariff; about the mode of t^pportioning the representation so that Great Britain should have her fair share without utterly swamping the colonial delegations. We shall learn, also, by what body the Federal Constitution is to be framed, and, what is of equal importance and still more difficult to settle, to whom the powers of interpreting the Constitution and of enforcing it in case of breach of its provisions or of disobedience to Fe other. Some system of pooling the Customs revenue and di- viding it in fair proportions might else be a necessary part of the machinery for carrying out the arrangement. There are proposals for letting the Customs Houses stand and having re- course to a system of transmission in bond or of affidavits as to the nationality of goods. Into these I need not go. Free trade between two adjoining nations, if they are so minded, is an ob- ject so manifestly practicable in itself that statesmanship may be trusted to settle the details. An assimilation of Excise as well as of Customs would be necessary for the same reason which renders necessary the assimilation of Customs. A glance at the map, the economical, not the political map, of this continent suffices to put the case before us. Here are four blocks of territory which make up the Dominion* — the Maritime Provinces, Old Canada, French and English, the newly opened region of the Northwest, and British Columbia — separated from each other by great spaces of desert or by barriors such as Lake Superior or the Rocky Mountains. With each other they have hardly any natural trade, though the attempt is made to create a forced trade among them by means of a protective tariff which compels the settler in the Northwest to resort to markets a thousand miles off for his farm implements and some of the necessaries of life. But they have all natural products — min- erals, lumber, fish, or special kinds of farm produce — which they want to send to the market of the continent. From that mar- ket they are shut out by the tariff wall between them and the United States. Each of them is in the plighf in which a single State of the Union would be if it were severed commercially by a fiscal barrier from the rest. The inevitable effects, which everybody notices on crossing the line, are undeveloped resour- ces and commercial retardation. Canada needs liberty of buy- ing in the America^i market as well as of selling in it. There are many articles which the wealthier and more scientific coun- try only can produce or can produce best and which the less wealthy or less scientific country must be content for the pre- sent, at least, to purchase. The attempt to force Canada to divert her labour and capital from the development of those natural resources which are real wealth to manufactures, and to make her provide all manufactured articles^ even the finest c, * See Map. Commercial Union in its Ame nca7i Aspect 247 machinery, for herself by means oi' Protection, hsis borne the fruits which the Protective syste/n applied to a small area and a narrow market, was sure to b.^ar, whatever may be its re- sults when it is applied to a vast area with an immense range of production, such as the territory of tl.e United States. A bad system of production is engendered, the manufacturer being compelled by the sroallness of the market to produce a number of articles, instead of producing a few on i\ large scale. Articles are lowered in quality, while spasmodic ovor-production is fol- lowed by desperate endeavours to keep up tiie price of goodis by combinations against the public. The head of our largest dry- goods establishment in Toronto avowed that the capital which had been recently drawn by Protection into manufactures, would not, in a free market, be worth more than thirty- three per cent, of its face value ; whence it followed that the interest on sixty- seven per cent, was being paid, in eflFect, by taxation of the com- munity. On the settler in the Northwest, who, as I have said, is prevented from buying his farm implements and some of the necessaries of life in the nearest and best market, the tariff presses with cruel force. This, with the restriction on the free construction of railways imposed in the interest of the Anti- Continental and Separatist policy, has manifestly retarded pro- gress in the Northwest Looking at the matter from the American side, we see Ameri- can capital and enterprise debarred by the tariff wall from opening up the rich natural resources of the northern part of the continent The wealth of Canada in minerals of different kinds is almost fabulous ; but this wealth lies dormant, and the golden treasure-house of Nature remains locked through the exclusion of your capital and enterprise, as well as from want of a free market for the ores and of liberty to import the ma- chinery which Canada cannot Tnale for herself. At the same time your manufacturers are debarred from a market which is already of no small importance, and might become very large and rich if the natural resources of Canada were developed and their development were followed by a proportionate increase in her wealth and population. It is naturally by the people of your border states that this is most felt ; the commercial com- munity of Detroit especially feels that it is cribbed and confined by the Customs Line ; but what affects one part of a nation affects it as a whole, and the entire population of the United 248 Handbook of Commercial Union. '• States has an interest in the free extension of A.merican enter- prise northward, and in the admission of American products to the northern market Scotland had not anything like the na- tural wealth of Canada ; yet commercial union with her brought to England a large increase of commercial activity and wealth as well as of political power ; and the result would in this re- spect have been the same had the union been merely commer- cial. '■ J*'' '^i' .'-^^ • •■'? ;^ *v^' '■'\'i 'i* ■• ■-' '*<■ -v^ Suppose the continent were politically undivided, who would not deem it insanity to buiM up a commercial harrier between its Central and Northern portions, so as to cut otf Central and Southern enterprise from the development of Northern resour- ces, and Northern resources from Central or Southern markets ? But the political division makes no difference in the economical relations. Why should we perpetuate to our mutual injury a state of things which is perfectly irrational, and which had its origin in political accidents as little beneficent as any in the hateful record of enmity between nations ? The Canadian tariff has been avowedly framed on the princi- ple of retaliation ; or, as its framer said, of resortinp; to recipro- city of tariff, if we were refused reciprocity of trade. Its ulti- mate object, if its framers are to be b3lieved, was reciprocity of trade. It embodies a standing offer of reciprocity in natural products, on the principle of the Old Treaty, to which our peo- ple still look back with wistful eyes. But your people naturally enough refuse a one-sided, or to use Sir John Macdonald's own phrase, a " jug-handled " reciprocity. They reasonably demand an equivalent for their admission of Canadian products, in the shape of a free market for their manufactures. Unrestricted reciprocity, in short, is the only attainable kind of reciprocity as well as much the best. Mr. Butterworth's action in Congress has met with a signal response here. Almost without any formal organization a move- ment in favour of Commercial Union has been set on foot and is daily gaining strength. Out of some forty-five meetings of the Farmers' Institutes of Ontario, called for the discussion of the question, forty-two have declared in fa' our of Commercial Union. All the natural industries of the couu cry— those of the farmer, the lumberman, the miner, and the fisherman — are necessarily on the same side. On the other side are only such of our pro- tected manufacturers as feel that they cannot hold their ground Commercial Union in its American Asj^ect. 249 without protection, the Tory Covernmetit which has called the protected mR,nufacturerB into existence as a body of political adherents, and the party by which the Tory Government is supported and which does not desire extension of intercourse with the American Kepublic. I need hardly say that to those who feel as J. do on these subjects, the tendency of a com- mercial policy to hasten the moral reunion of the Knglish- speaking race constitutes an attraction not less than its material advantage. Commercial argument against continental free trade there is absolutely none, saving the danger with which some of our weaker manufacturers would be threatened by free competition, while the stronger would only '^ave to accommodate their sys- tem of production to the circumstances of the larger market. There is nothing but vague propaecy of woe and ruin which one Jeremiah has carried to the pitch of predicting that after Commercial Union the country will relapse into a jungle, amidst which the Canadian farmer will look for his homestead in vain — a flight of vaticination equal to that of Lord Bel- haven, the great opponent in the Scottish Parliament of the union of Scotland with England, who foretold that, if the union took place, a Scotchman would be prevented from dying of hunger only by lack of money to pay for his burial. The chief reliance of the opposition is on the cry of dis- loyalty, combined with "the bugbear of Annexation." It would be disloyal, we are told, to enter into any arrangement which would involve a discrimination against Great Britain in favour of a foreign nation. Mr. Chamberlain, the British Plenipotentiary, it may be observed in passing, refused the other day in his speech at Toronto to call the people of the United States a foreign nation. However, the discrimination would not be ngainst Great Britain, who would neither lose a cent of revenue nor surrender any authority bayond what she has already surrendered by permitting the Colonies to regulate their own tariffs and lay protective duties on British goods. It would only be against a small class of British producers, whose interest is entitled to no preference over that of the Canadian subjects of the Queen. Far be it from me to dis- parage political sentiment or to say that commercial considera- tions are not to be sacrificed to it. But surely it is a singular loyalty which lays protective duties on British goods in its own 250 Handbook of Commercial Union. interest and flames up into indignant protest only when it is itself to be exposed to American competition. Ask a Cana- dian manufacturer to admit free the goods of the land to which he is 80 devoted, and the limit of his devotion will at once appear. There is besides these commercial loyalists in Canada tt small set of people who exalt themselves in their own esti- mation by perpetually railing against Yankees and trying to nurse the rapidly dying embers of the old feud between the two portions of our race. But the reconciling influences are too strong for them. There can be no serious doubt that Canada, when the question is fairly put before her, as it probably will be at the next general election, will declare for Commercial Union. Nor is there reason to anticipate any serious difficulty on the side of England. When^ the question having been formally raised in the case ot the colony of Victo- ria, the Colonies were permitted to lay protective duties on British goods, commercial autonomy was virtually conceded to them in full measure, and it cannot be restricted now. Can- ada must be allowed to do what is best for herself commer- cially as a community of this continent. This the English people will see, and, as they have over six hundred millions of dollars invested here in various ways, their interests in Canada as investors at least equal their interests as importers. As to the bulk of the British people, in whose hands politi- cal power now is, they care nothing about any question on this side of the waior, and could never be induced to interfere. The threat of a veto was uttered, I suspect, by Mr. Chamber- lain in haste, and when the time comes will, like previous threats of the same kind, be tacitly withdrawn. COMMERCIAL UNION WITH CANADA. LETTER TO THE NEW YORK CHAMBER OF COMMERCE. [From the New York Times.] The Committee appointed by the Chamber of Commerce of the State of New York to consider the matter of Commercial Union between this country and the Dominion of Canada has received the following letter from Professor Gold win Smith : — Co7ib7nercicU Union with Caiaida, 201 Dear Siii, — In reply to your letter of the Hth inst, let rao assure you that I consider it a great honour to be invited to ex- press my views on the subject of a Commercial Union between Canada and the United States to a committee of tho (yhain- her of Commerce of the State of New York. The advantaj^os of continenital free trade to Canada are too manifest to reiiuire demonstration. In her soil, her forests, her waters, and her mines, she has natural products far in excess of her own wants which seek access to the continental markets. She has also a fund of labour of the l>est quality which the development of these resources would employ. She would at the same time greatly benefit by the free imiK)rtation of those manufactured articles which she cannot produce for herself, or which can be better or more cheaply produced in the wealthier and more scientific country. To the United States, Commercial Union would bring the full enjoyment cf all the natural wealth of Canada, which Ameri- can capital Mould develop, as well as an extended market for American manufactures. That Canada at present, with her re- sources imperfectly developed, is not so rich as the United States forms no reason for believing that the union with her would not be profitable. Scotland at the time of her union with England was a comparatively poor country, yet the union proved highly profitable to both parties. It is impossible to look at the map of this country without seeing that the exclusion of the Canadian Provinces, geogmphi- cally identified with it as they severally are, from its commer- cial pale, is a struggle against nature and a renunciation of the benefits which she proffers to the continent as an economical whole, Each of the four blocks of Canadian territory — in the Maritime Provinces — old Canada, comprising Ontario and Que- bec, the newly-opened region of the North- West and British Columbia* — is inseparably connected by commercial bonds with the States of the Union adjoining it to the south, while those States reciprocally have in it their natural complement and partner. By Commercial Union the Fisheries question would be settled, and it is difficult to see how it can be settled satisfactorily and permanently in any other way. It is hoped also that a part * See map. 252 Handbook of Gommercud Union. of th(^ arrangement would be 8uch an extension of th*^ Extradi- tion Treaty as would relieve the continont from the u. *)ntive iurnished to commercial dishoneHty by the exintence of iin a8y- lum for fugitives from justice on each side of the line. The movement in favourof Commercial Union among theCan* atlian people has been perfectly spontaneous. Their thoughts hav- ing been turned by the b'isheries dispute and some other cir- cumstances to their commercial relations with their neighbours, the conviction that unrestrained reciprocity is their true interest has impressed itself upon their minds, and has been spreading rapidly without the aid of organized agitation or wirepulling of any kind. Out of thirty Farmers' Institutes in the Province, twenty-eight have declared, and as a rule unanimously, in favour of Commercial Union, one only bein<<^' adverse, and one being still in suspense. Our Commercial Union Club m this city has just been formed in response to repeated solicitations, and to sup- ply a manifest need. Those connected with the great natural industries of the country — the farmers, the miners, the lumber- men, and the fishermen — seem to be almost unanimous in favour of the scheme. The commercial opposition appears to consist of those among our manufacturers who think they have reason to fear Ameri- can competition, the banks which have advanced them capital, and a certain number of wholesale houses. The manufacturers, being better organised and more political than those who are connected with the natural industries, the opposition appears more powerful than it really is, and its aspect is rendered yet more imposing by its concentration in the great cities. Both our leading journals advocate Commercial Union. That the boon of free trade with our own continent, if fairly offered to the Canadian people, would be accepted, there can, I think, be no serious doubt. The difficulty and the danger of miscarriage arise in this, as in similar cases, chiefly from the entanglement of a commer- cial question vitally affecting the material interests of the en- tire people with questions of party politics, to which it has no relation, and with the struggles of political leaders for power and place. Were it possible to submit the subject, divested of party influences, to a convention composed of commercial re- presentatives of each State of the Union, and of each of the Commercial Union with Canada. 253 Provinces of Canadii, with instructions to frame a plan for sub- mission to the Legislatures, there would bo more hope of a result in accordance with the real interests and wishes of commerce and industry on both sides of the line. I am, dear sir, very truly yours, ; GounviN Smith. ToKONio, Nov. 5, 1887. .,>V:4''.'.V '' ■V. ';■!;"■' 'Vtf.'j ^V,' ,'.■ .'■.. "^^).'%.y.i\ , ..-'» • "*■ ,v .' ' ..' >■ ' > . ■••■<■' ■v-Vi. .r ■ ■■r.. l» ..!; . ri ■ ■ /■i''^' SPEECH IN THE HOUSE OF COMMONS ON RECIPROCITY WITH THE UNITED STATES. ' . IJY MR. WM. MULOOK, M.P. FOR NORTH YORK. ' =;r [/)c/tvere(i Apil 6th, 18S8.] * I do not propose, considering the length to which this debate has been protracted, to prolong it to any great extent. At the same time, considering the importance of the question, I am not prepared to give a silent vote. The subject is one which, I believe, demands from the First Minister of the Crown an expression of opinion on the floor of Parliament. Had the cir- cumstances permitted, I think we should have had an expres- sion of opinion from the hon. the Finance Minister, but when he was unable, through ciixamstances beyond his control, to give the House and the country the benefit of his views upon this question, it was more than ever incumbent on his seniors in the Cabinet to have placed their views upon record. They have not seen fit to do so. But three members of the Cabinet, at different stages of the debate, ventured to commit them- selves. The last Minister of the Cabinet who spoke, the Sec- retary of State, made a most extraordinary statement, one that does not commend itself, at all events, to my mind. He took the position that, no matter what the facts were, no matter what the statistics established, no matter what the arguments proved, no matter what interests wore involved, they all count- ed for nothing if the sentiment of the country was with him. What he had in view was the votes of the people, and not the interests of the people, and he delivered what he considered an infallible judgment at once, when he said : the people are not with you on this occasion. Where, he asked, are the petition- ers 1 Where are the expressions of opinion for or against the proposition? He got one of his answers to-day, when Prince Edward County spoke. Could there be a better evidence of the will of the j>eople than the verdict rendered at the polls, and should the debate ontinu B a few days longer, another would be given in the per- Reciprocity with the United States. 255 son of the representative of Missisquoi, who was recently elect- * ed on this very issue in a constituency that a few months ago gave at the polls a Conservative majority, and which today rendered a verdict in favour of this proposition by some hun- dreds of a majority. We had another election the other day in L'Assoniption, which had been carried by a Liberal, at the general election, by a majority of twenty-one. I am told that this trade question was the leading issue in that contest, and that it turned entirely upon it, and the result was that the people of that county, by 400 or 500 per cent over the previous majority, returned a member in favour of the proposition which is now before the House. Surely, in face of these facts, the Secretary of State need not assert that there is no evidence before the House of the feeling of the country on this matter. We had lately the benefit of the opinion of the Minister of the Interior on this question. What argument did he advance against the propo- sition 1 He admitted the right of Canada to do what it is pro-^ {>osed to da He admitted that it might be to the interest of Canada to do what this Resolution proposes shall be done, but he took the ground that we should not be mean enough to leg-, islate in a way that might not conserve the interests of Eng- land. Then we had the l)euefit of the opinion of the Minister of Marine and Fisheries, and what was his argument against this proposition 1 His argument was that there was no such thing as a natural market, that markets could be made by the expenditure of money and of energy, and that no natural mar- kets were to be found on the earth, that markets were artificial creations, and he pointed to the United States, and said that, even if we did get free trade with the United States, they were* producers of the very things that we would produce, and there- fore we would find no market there. , It is too late for one to indulge in mere opinion, but I will trouble the Minister of Ma- rine and Fisheries with some brief statistics, which I think will convince him, or which ought to convince him, that trade does find a natural level, in spite of many obstructions, artificial and natural. If you take the trade of Canada for 1887, you find that over 40 per cent of our whole trade was with our neigh- bour, the United States. We sold last year to the United States over $37,000,000 worth of the products of Canada, not- withstanding the obstructions in the way of that trade by rea- 256 Handbook of Commerciiil Union, son of the high tariff existing in the United States. Had that tariff not prevailed, I think we may fairly assume that our trade with the United States would have been vastly more during the past year than it was. If you look at the trade which Can- ada has done with the whole world during the past year, you will find that, with all the efforts we have been putting out, having established connections with all parts of the civilized world, we have only been able to sell $7,000,000 worth of the products of Canada to all the nations of the earth with the exception of the United States and Great Britain. We sold last year to the United States five times as much in value of our products as we sold to all other countries in the world, Great Biitain alone excepted. Does not that teach us a lesson 1 Can we not draw inferences from those facts ] Will any phil- osophy enable us to say in a sensible, truthful way, that trade does not assert itself on geographical lines, and follow as nearly as possible the natural directions indicated ? If not, how comes it that all nations confine so much of their trade to their near neighbours ? I think there can be but one deduction drawn from it, and that is, that if we do not interpose obstacles, trade does naturally seek the nearest market. In Canada what is the nearest market ? We sell, first of all, to ourselves, — we have our domestic trade. The vast bulk of the trade of this country is at home amongst the people, and the surplus, follow- ing the principle of selling in the nearest market, if it is the best, finds the nearest market, which is always the best, and that, in our own case, is the market of the United States. Now, my hon. friend the Minister of Marine and Fisheries says there is no natural market in the United States for anything that we have. He says that the United States are producers of the very articles that Canada produces, and therefore it is idle to seek to obtain access to the United States market ; it is bring- ing coals to Newcastle ; that is tu ) burden of his argument. I have looked through the list of imports in the United States in the past year and what do they disclose 1 I may not have made out a complete list of all products of Canada which have been imported into the United States ; if not my argument is so much the weaker ; but I find that the United States last year received from foreign countries $61,711,024 worth of products, every one of which could have been produced in the Dominion of Canada. On those products the United States customs Reciprocity v/ith the United States. 257 houses collected $19,318,181. These articles are as follows : Animals, barley, bituminous coal, copper ore, fish, hemp, furs, liay, hops, iron ore, pig iron, lead, leather of various kinds, spirits, cheese, salt, potatoes, lumber, wooden ware and wool. All these articles are producible by the people of Canada, and all of them were purchased by the United States last year to the extent of over $60,000,000, in spite of the tariff' imposed. Can any hon. gentleman say now that there is no possible mar- ket in the United States for what the people of Canada can ^ produce 1 Sir, to say so is to trifle with the facts. The vol- ' ume of trade under these circumstances would, I think, be vastly in^veased were we to have free access to the markets of the United States. My hon. friend from North Renfrew (Mr. White) touched very lightly upon the effect of the Reciprocity Treaty. If we examine the imports and exports of the old Provinces of Canada during the continuance of the Reciprocity Treaty, they will tell us whether a high tariff" is a hindrance to trade or not. In the year 1854, we sold to the people of the United States $2,162,250 worth of products; in the suc- ceeding year, our products entered the United States free and the amount of exports immediately jumped up to the sum of $4,184,319, or very nearly double the amount of the preced- ing year. I may say in this connection that as our exports to the United States in succeeding years went up, those of ' England went down. What did that prove 1 It proved that for our surplus products, in the year 1854, when there was a duty upon them going into the United States, we had to seek a comparatively unprofitable market in Great Britain, but in the succeeding years, when they went into the U nited States duty free, we sold in the best market, of the United States. During the continuance of that treaty the volume of our exports to the United States increased by leaps and bounds, so that in the year 1866, when the treaty was repealed, we exported to the United States the enormous sum of $34,770,- 261 of the products of the old Provinces of Canada. Now, I would call the attention of the Minister of Marine and Fish- eries to this point. In the year 1866, the last year of recipro- city, the Provinces of Upper Canada, Lower Canada, New Brunswick and Nova Scotia, exported to the United States products to the value of $40,127,266. That year the Ameri- can people imposed a high duty upon our products and the J 268 Handbook oj Commercial Union. effect since then has been that in the year 1887, the last year for which we have complete returns, we only exported to the United States 37 million odd ; in other words, whereas 22 years a^o these four Provinces, under free trade with the United States, sent to them over 40 million dollars worth of Canadian products, to-day, although we have become more powerful, although our population has considerably increased, our trade has fallen off with the United States to the extent of nearly three millions of dollars. So I think that so far as natural products are concerned, there is no possible argument against the proposition, that if we remove the barriers imposed by the Custom houses, our trade with the United States in natural products would vastly increase. But it is said by the friends of the manufacturers that this policy would destroy our own r^anufactures. I would deplore such a result with any man. I do not desire to see any industry in Canada sacrificed, I desire to see what is best for the whole of Canada adopted by Parliament and by the country, and being of that wish, and believing, as I do, that evidence is producible to show that our manufacturers would not suffer, I am firmly of the opinion that we will not endanger our manufactures by enabling them to obtain access to the United States markets, even by giving access in Canada to the ftianufactures of the United States. At this hour I will simply ask hon. gentlemen to apply the lesson that is furnished by the growth of the southern States, and ask whether Canada, if admitted to the markets of the United States, would not be able to have such a record after a reasonable period of time. Is there anything in Canada, is there anything in the Canadian people to war- rant us in saying that they cannot accomplish what the people of the Southern States have accomplished, given the same conditions 9 Are our people less energetic, are they less capable ? Those hon. gentlemen who say so declare want of confidence in the people of Canada. They do not mean it. They are afraid of the competition. They are afraid of mak- ing an honest trial. They are afraid to give up what they call a certainty for what may, to their minds, prove an uncertainty ; but in the light of facts and in the light of history, which should teach us and from which we should learn, I cannot see how 1^ Canada can fail in any arena in which the American Reciprocity with the United Staief^. 25.^ people have succeeded. Why, the hon. member for Centre Toronto the other night furnished U8 with a little argument upon this point. He said in his glowing language that he knew something of the Southern States, that he came from them, or had something to do with them. He stated that within the last eight months there had been invested in industries there over $100,000,000. Well, Mr. Speaker, if the conditions of the Southern States are such that, having che whole of the market of the United States, they put their capital of $100,000,000 in eight months to build up industries, why would he not apply the same reasoning to what would follow in Canada if we had access to that great market 1 Mr. Speaker, we are talking business. We mean business, and the people of Canada want business, and the people oiF the United States wanted business, and when they invested $100,000,000 during the last eight months it was for business. It was because they saw there was a market in the United States for what they would produce, and because they expect- ed a return, that they invested that capital. Whether we are under one flag or a dozen flags it does not make any difference in the amount of money we are making, if we can get the customers under the same conditions, Mr. Speaker, the Minis- ter of the Interior argued in favour of the loyalty cry. That is a favourite trick in order to take the attention of the public away from the issue involved. If this proposition is sound on business principles it is sound in its entirety. If this proposition can be defended as one likely to produce com- fort, to supply wants, to make the value of labour more than it is, that ib loyal ; and that is a proposition which ought to be commended to the people. But I am willing to take the hon. gentleman at his own words. I am willing to test him by the record of his friends to see whether they really are sincere when they try to cause this loyalty cry to be rp'sed in order to prevent the people from debating this proposition, or whether the cry is merely raised as a device in order to humbug the country. Now, in 1854, hon. gentlemen, or some at least in this House, will remember that in the old Legislative Assembly of the Provincos of Canada this very question came up, and although no final decision was arrived at, yet on the 26th May, 1854, a 260 Handbook of Commercial Union, resolution was adopted by the Coramittee of the House at that time in the following words : — ** That the principle of reciprocity witn the United States be extended to the production of m»nufai;tnre«, and to the registration of Canadian and United States built nhipR, and to the shipping and coasting trade iix the same manner as to the production of agriculture." That resolution, so far as I have been able to discover, and I speak subject to correction, was not opposed by any member of the Conservative party. It was reported to the House, but I do not find that it made any further progress. But looking at the members who constituted the committee that reported upon it, I find that they represent pretty fairly the Conservative element of that day. The chairman of the committee was a gentleman who I believe had at the time no very decided poli- tical views — the Hon.W. Hamilton Merritt I do not know that he had any particular political views. At all events that resolu- tion was then offered to the House and no protest was raised against the principle involved in it. It was not then declared to the country that it was disloyal. The Conservative party did not then declare it was disloyal. They were not nearly so loyal then as they are now, and it was not very long before that they were taking a very different view of the whole political relations of Canada. It was only about five years before that a number of their leading lights declared that the only salvation for Canada was political annexation to the United States. I do not know that the Conservative party ever treated with any great cruelty some of the prominent men that took part in that movement. I believe that one of them has recently been pro- moted to a high position in the Cabinet of the hon. gentleman opposite. In fact they have all at times come in for favours, sometimes from the Government, and in manv cases from Her Majesty, by being decorated in testimony of their extreme loyalty and worthy citizenship. At the particular time this resolution was brought in some members of the Conservative party then in the country were not as they are to-day so sensi- tive upon this question. They were prepared at all events to discuss any question involving the best interests of the country Mr. Speaker, in 1878 the Conservative party proposed wha they called their National Policy and we have several time had the resolution proposed at that time brought before the at tention of the House. That resolution told the people of Can- Reciprocity with tJie United States. 261 ada that this National Policy that they were proposing was simply the means to an end, and that end was to be what we are seeking to day, reciprocity. Not only did they tell us that, hut they emphasised it in their resolution, in order that there should be no possible difterence of opinion on the question. That policy the resolution says, after referring to some other things : " Would encourage and develop an active inter-provincial tratop to purchaning our goods from England. No Eng- lish Government would venture ti» prevent the adoption of this tariff on the ground of its injuring England. The English people, without exception, took great interest in our success, and with the exception of a few manufac- turers would bid lis God-speed on the royal road to wealth." That is the sentiment of an Englishman expressing what he conceived to be the opinion of England with regard to the Reciprocity with the United States. 265 aft'airH of Canada. What erial authorities. John Bright brought the matter before Parliament on the 20th of March, 1879, and put this question to the Colonial Secretary on the floor of the House : "Incase of any proposal to enact differential duties on the part of Can- ada, would the Bill be Hubmitted to the ( i ovemment before it was adopted ?" Sir Michael Hicks-Beach, then Secretary for the Coloniec, re- plies . ** The beat answer I can pfive to it is to read the telegram I sent to Can- ada, which received the sanction of the Government. It was in these terms : " ' They deemed the fiscal policy of Canaila rested, subject to treaty obli- gations, with the Dominion Parliament.' " The Dominion Parliament was recognized on the floor of the Imperial Parliament as being entitled to impose differential duties if necessary, without it being considered right or proper or constitutional for the Government of England to disallow that Act. What further evidence is there ] Hon. gentlemen all know that every colonial governor, when entering upon the duties of his office, receives certain instructions. The time was when all the instructions to colonial governors of all English colonies contained the instruction forbidding the governor to sanction the imposition of differential duties, and that instruc- tion is still to be found in the instructions to every colonial lieciprocUy ivitk the United Slates, :io7 governor with the exception of the Governor-General of Cana- d& In 1878, for the first time, that inatruction was eliminated from the instructions given to the Governor- General of Canada. Thus you see that the Crown recognized the fact that Canada, occupying a peculiar geographical position on the earth, cannot have her trade a flairs regulated in the same way as other col- onies of Great Britain, which are more or less insular or peculi* arly situated ; so the Government of England recognized fully that Canada, l)y reason of her imf)ortance, by reason of her position, and by reason of her constitution, cannot be trammel- led and ought not to be trammelled in the interests of the peo- ple of Canada, or for that matter in the interests of the Kmpire, even if, for her own sake, she should impose differential duties. On that point, I cannot offer to the House, I think, any better evidence of the feeling of the people of Great Britain at the present time than an extract from the work of the late Mr. Todd, who was a keen observer of current events, on ** Parlia- mentary Government in the British Colonies " At page 181, he summarises the position of Canada in regard to her trade rights, in these words : " But, on account of the growing importance of Canada, an ^ell before an since Confederation, exceptional privileges have been conceded to her, from time to time, in respect to fiHcal and commercial matters wherein the in- _ terests of Canada were concerned, with freedom to a'^ Canadian IndvAitry. » 277 Both these bold assumptions were placed in the forefront yes- terday by Mr. McNkill, who in addition, declared that Com- mercial Union would " degrade "us. Mr. McNeill does not perceive that our present condition might fairly be described as a degraded one. We are poor, but with vast natural wealth lying useless at our feet for want of a market. We are a young community, yet, in proportion to population, the immigration from our shores is as large every year as that from any Old World country where overcro v\ ding, militarism and other acute evils press upon the people and drive them forth. Lastly, un- der the existing fiscal system, we are taught to prefer the inter- ests of the few to the welfare of the many ; and led to believe that we are so wholly lacking in intelligence and self-reliance as to be unfit to meet the Americans in the field of industrial and commercial enterprise. IV. CANADIAN INDUSTKY. I The assertion so frequently made by the Restrictionist press that free trade with the States would be " a blow at Canadian industry " pre-supposes that every industry in the country dreads American competition, and could not live without the shelter provided by a high tariff. This assumption is, of course, wholly unwarranted. Manufacturers like Waterous, Raymond, Norris, Armstrong, Maasey and others of the first rank, declare that American competition has no terrors for them ; on the con- trary, they would hail free trade with the Americans as afford- ing them a vastly larger market for their output and relief from the taxes imposed for the purpose of bolstering up the mere exotics. The varied forms of labour by which our natural re- sources are transformed into actual or potential wealth, e.^., agriculture, lumbering, fishing and mining, occupy a similar position. The high tariff is a positive injury to them, inasmuch as it increases the cost of production and restricts their freedom of exchange. It will be found, in short, that the industries which desire free trade with our neighbours are those which contribute far beyond all the rest to the creation of national wealth. The best measure of the usefulness of an industry to 278 Handbook of Commercial Union. the community is supplied by the export tables rather than by the bald statistics of home production ; for the simplo reason that the latter in many case6 represent goods which have been manufactured at a loss either to producer or consumer, where- as, speaking roughly, every dollar's worth we sell to the foreigner brings us a greater or less amount of profit. The following table gives the exports of the different industries last year and in 1878, as classitied in the Trade and Navigation returns, and shows conclusively which class is making the most money for us as a people : 1878. 1887. Mines $3,044,000 $3,806,000 Fiaheries 5,874,000 6,876,000 Forest 23,010,000 20,484,000 Animals and products 14,220,000 24,24^3,000 Agriculture 14,G89,000 18,820,000 Natural products $61,437,000 $74,230,000 Manufactures $ 4,106,000 $ 3,070,000 It will be seen that the exports of the natural industries, which are all more or less injured by the high tariff, were fifteen times greater in 1878, and twenty-five times greater in 1887, than the exports of the manufacturing industries, for whose benefit the tariff was contrived. And if we could ascertain the export^ of those manufacturing industries which are injured by the re- strictive policy instead of being benefited by it, the case against restriction might be made still stronger. It will also be ob- served that while the exports of natural products have increas- ed 21 per cent, since 1878, there has been a decline of about 25 per cent, in the exports of manufactures. It may be said that this decrease is due to the circumstance that Canadian manufacturers are now supplying the home market and have therefore less to send abroad. The figures do not give much countenance to that theory. We imported of dutiable goods $60,916,000 worth in 1878, and $78,120,000 worth in 1887. Imports are not classified in the same manner as export*^, but it appears that nearly all these goods were manufactured goods, with the exception of tea and sugar. By the way, the quanti- ty of tea imported was less in 1887 than in 1878, while the quantity of dutiable sugar was about the same. Admitting tor the sake of argument, however, that our exports of manu- Our Mineral Resources. 279 facbured gocxlH are falling off becauso the home manufacturer has secured a greater control of the home market, i.e., has more effectually restricted the liberty of the consumer, the fact remains that this control is directly prejudical alike to the con- sumer and to the natural industries. But the only point we seek to make just now it that judged by the best test, the (•mall protected industries have no sort of right to speak for Canadian industry at large, or to assert that free trade with the States would be a blow to it, merely because they them- selves would suffer. V. OUR MINERAL RESOURCES. Sir Charles Tupper told us when he was imposing the iron duties that within throe years an industry affording employ- ment to twenty-five thoucand men would be created. So far, however, not a single ton of iron ore has been smelted in con- sequence of the protection afforded by those taxes. The cost of iron, and of everything into which iron enters, has been exalted to the Canadian consumer and manufacturer, but that is all. In working out his equation. Sir Charles forgot to take into account the smallness of the home market and the impos- sibility of sending Canadian iron, in the ore or in the metal, to foreign countries. We cannot get it into the States because of the American duty, and we cannot ship it anywhere else on account of British competition. A committee, with Mr. Hamilton Merritt as chairman, of the Geological and Mining section of the Canadian Institute, has prepared an instructive report on our mineral exports. It is now well known that the Dominion contains rich deposits of iron, copper, silver, coal, salt, etc. Yet of all British colonies, we are the most backward in the export of minerals. Com- paring ourselves with the United States, the total value of mineral production in Canada in 1886 was $11,500,000, whilst the total value across the line was $459,000,000. The com- mittee adds that it is *' emphatically of the opinion that this great disproportion does not exist in the mineral resources of the two countries." Then what is the cause of it) The re- 280 Handbook of Commercial Union. port (loea not ftirninh a direct answer, but it is ouvious that the compilers had in mind the fact that we l.avo no market for a large output, and that the only market we can hope for is that of the United States. Great Britain, which imports largely of ores and metallurgical products, is not likely to cut off her sup- ply from abroad hy means of a tax, and give us the benefit of a preferential tarifil The natural market for our iron, salt and coal as well as for our lumber and fish is not Europe but our own continent, from which we are divorced by the xisting policy. With regard to salt, the whole story has been told in these columns by Mr. Ranaford, of Clinton, and Mr. Coleman, of Seaforth. The salt found in Bruce and Huron is a remark- ably pure article, and would command a ready sale in the States if unrestricted trade prevailed. As it is, our salt has to pay a heavy toll on entering the American market, whilst here at home it is exposed to the competition of English salt, manu- factured under free trade conditions and carried across the At- lantic as ballast. If the N.P. were a logical and coherent structure, British salt would be subjected to a duty, or else the Canadian salt maker would be relieved of the protective charges on his coal, iron, leather belting and other things used in pro- duction. The Government, it appears, is desirous of taxing British salt with a view of " building up " the home industry, but political exigencies in the shape of the vote and influence of the fisherman in the Eastern Provinces prevent Sir Charles from doing so. The net result is that our salt interests are being suffocated. In 1886, $23,000 worth of salt was sent to the States, and in 1887 only $9,400 worth. An Eastern paper suggests that " men like Mr. Hansford should go in for Im- perial Federation with a differential duty in favour of Cana- dian products." But, even if England were to descend to the folly of injuring her own people for the sake of benefiting us, Canadian salt would not derive any advantage from it. To ship Huron salt to Cheshire would be to carry owls to Athens. As regards coal, it is not denied by the restrictionists that New England is- the true market for the production of Nova Scotia and the Pacific States for that of British Columbia, just as Pennsylvania was evidently designed to be the source of supply for Central Canada. They admit, in fact, that the coal duties, Canadian and American, are a violation of the dictates of nature and common sense. Under unrestricted trade, the " Our Mineral Resaurces, 281 manufacturers of Ontario would obtain chea|H;r fuel, and the development of our coal deposits would enrich Nova Hcotia and British Columbia beyond meaHure. In no other conceivable way can those deposits be worked to anything like their full capacity. The case of Canadian iron tells with et^ual force against the policy of commercial isolation. In this province there are rich beds of ore in Madoc, Marmora, Belmont and Seymour, and also in the region between Lake Superior and the Mani- toba and Kepwatin boundary. The udmirable work on our natural resources prepared for the Colonial Exhibition says great masses of iron ore exist on the coast of British Columbia, " lying in close proximity to beds of marble or limestone and to the coal fields of Nanaimo." In Nova Scotia also the iron lies close to the coal. Nevertheless, as the authority just referred to observes, " for a country having 1 1,000 miles of railway, with a weight of over a million tons of rails, and possessing for the manufacture of iron natural advantages which few if any y>laces in the world surpass, the deve- lopment of Canada's iron industry is wonderfully slow." In reality there is nothing wonderful about it. Capital will not take the risk of erecting blast furnaces and other costly plant for the supply of so limited a market. Under unrestricted trade, our wealth of iron would be utilized to its full extent. The geographical position of fuel and ore in the United States is far less convenient than in Canada. Ore from the Lake Superior mines furnishes one-third of the entire weight of pig iron made in the States. Those deposits are several hundred miles 'distant from the coal of Pennsylvania, and the expense of bringing the two minerals together forms a very considerable item in the general cost of production. Nevertheless, the vast area of the American market, with its sixty million consumers, enables capital to embark successfully in iron production. If the customs barriers were removed it is reasonable to suppose that American and Canadian capital together would develop the Canadian deposits, where all the conditions of cheap produc- tion co-exist. It is clear that the mere imposition of duties will avail us nothing. A market for the output is essential to pro- duction on a large scale ; and the American market is the only one to which we can look. 282 Handbook of Commercial Union, It is scarcely necessary tc add that, until we are able to make use of our natural resources, we must be content not only to see theia lie dormant and valueless, but to find the labour which under free trade with our neighbours vould be utilized in their development, going elsewhere in seijrch of employ- ment. In other words, so long as we remain isolated from the continent to which geographically and economically we belong, so long shall we be debarred from profiting by nature's kindness to us, and so long also shall we be compelled to con- tribute Canadian men and women to the growth of the United States. VI. A CRY FROM THE WEST. Hitherto the people of British Columbia have been content to bear in silence the mnnifold inconveniences imposed upon them by our trade policy. The expenditure of ten or twelve millions on the construction of the Canadian Pacific in that province, with the large outlays of the Local Government, has doubtless helped to keep them quiet. But the Canadian Pacific has now been completed, the provincial treasury is empty, and there is no immediate prospect of any fresh distribution of funds. The anaesthetic having spent itself, the patient is once more becoming alive to his ailments. The case against restriction is briefly this : It compels the British Columbia settler to buy his goods in the markets of Eastern Canada, three thousand miles distant, and to bring them in by a monopoly railroad, which, traversing a thinly peopled region, charges heavy rates ; whereas under unrestricted trade he could frequent the neigh- bouring American markets, to wlKch he has access by sea. Further, the articles which he exports, e. g., lumber, coal and fish, cannot be sold to advantage in Eastern Canada. We buy a few carloads of canned salmon from him, but that is all. The natural market for his exports is California and Oregon, but before he can dispose of them there he has to pay a heavy duty. So that, first, the settler has to sell in one market and buy in another, thus losing the benefits of exchange ; secondly, the price of what he has to sell is diminished by the amount of the A Cry from the West. 283 American tariff ; while, lastly, the price of what he has to buy is enhanced by our tariff and by the enormous cost of trans- portation from Ontario and Quebec. The Columbian, of New Westminster, in its issue of the 28th Feb. , states the matter thus, with special reference to the coal trade : " Our best market for coal is in San Francisco. Last year owr coal mines produced 413,260 tons, of which no less than 324,949 were exported to San Francisco and other California ports. This export trade is met by a duty, and the amount of duty falls upon the owners of the mines. But this is not all. The appliances required in coal mining, and, indeed, in preparing for market any of our natural products, are made dearer by the tariff. Tt comes to be a fact therefore that the tariff works both wayH against the disposal of our natural products. While therefore the tariff was framed for the piirpose of protecting Canadian manufactures, our Uianufactured exports have declined more than one quarter ; and the export of natural products, which the tariff does not protect, has largely increased. The products of British Columbia available for export are coal, lumber and fish. Not one of these is protected by the tariff, and in the production of all of them the tariff imposes burdens which place us at a disadvantage as compared with the people across the boundary." The old alchemists used sometimes to attribute the failure of their experiments to the charms and incantations of envious rivals. So with us, the Ministerial press accounts for the chorus of complaint ascending from every province in the Do- minion by assuming that the people have been misled by the advocates of Commercial Union. This is anything but com- plimentary to the intelligence of the people ; moreover, it is quite untrue. There is a venerable axiom in the dynamics of human action that general discontent is not the product of mis- conception or ignorance, but proceeds from some tangible and definitive cause. Like the British Columbia settler, the Nova Scotia fisherman and miner are excluded from their natural market and forced to sell there at a loss equal to the duty and to buy at home at a still further loss. The people of Prince Edward Island and New Brunswick labour under a like dis- advantage. In Ontario and Quebec a somewhat similar state of things prevails; while in Manitoba, as in British Columbia, the evils resulting from the double row of Customs houses along the frontier are aggravated by the presence of railroad mon- opoly. Under such a system, the proper development of our natural resources is impossible ; hence the exodus which is draining us of the best blood in the country ; hence also the desire for a radical change which finds expression in the com- plaints just referred to, and in the silent but rapid growth of a feeling in favour of annexation. 284 Handbook of Commercial Union. Commercial Unionists believe that their remedy would re- lieve the strain upon Confederation, and that it is the only measure at all competent to do so. The Government, however, is bound to the smaller manufacturers and to the owners of such monopolies as the sugar refineries ; and wedded to the policy of bribing each province in turn at the expense of the rest, which has brought us within sight of national bankruptcy. , A Ministerial journal tells us that restriction in trade and ex- travagance in expenditure are actually making us rich, as though a community could grow rich by pursuing a course that would infallibly beggar an individual. The evidence of our growing wealth, we are told, is to be found in the multi- plic.ition of factories " which could not exist for a month" un- der free trade with the States. Happily some progress has , been made by Canadians of late in the study of political econ- omy, and most of us are aware that in all cases where, by means of restrictive duties, an industry has been summoned into existence that would otherwise not have existed, capital \ and labour have simply been diverted into a channel less pro- ductive than some others into which they would naturally have flowed. The presence of these exotics and parasites, which, as our interviews with leading manufacturers show, hamper and prey upon the great indigenous industries, proves nothing ex- cept that the consumer is suffering and that the ability of the country to buy and sell abroad is being deliberately crippled. It certainly does not afford much consolation to the intelligent Canadian, who hears the muttering and rumbling of some great political upheaval, and knows that no people ever yet escaped the penalties attaching to the violation of natural law. VII. THE APPEAL IN BEHALF OF ENGLAND. The cry that Britain would be injured by unrestricted trade with th» States, inasmuch as it would involve discrimination against British goods, comes with shame and mocking from those who, in face ot the bitter complaints ot British manufac- turers and workmen, have slapped well nigh prohibitive duties on their wares. But there is a large class of persons outside the The Appeal in behalf of England. 285 Manufacturers' Association who are sincere in advancing this objection. To them we venture to submit a few facts and figures, which may perhaps enable them the more readily to seize Sir Richard Cartwright's meaning when he says that un- restricted trade would be of substantial advantage to England. Under the present tariff our trade with England is rapidly declining, whilst our trade with the States, notwithstanding the high duties they maintain, is growing. This is demon- strated by the official returns of our exports and imports to and from both countries. In 1873 Confederation was completed by the admission of Prince Edward Island. Dividing the fif- teen years from 1873 to 1887 inclusive, into three equal periods of five years each, we find that our aggregate trade, our imports and exports combined, with Britain and States has varied con- siderably, but that during the last five years there has been a well-marked increase in our trade with the States, and a cor- responding falling-off in our trade with Britain. Here are the figures : Aggregate Aggregate Quinquennial Trcfie ivith Trade Period. Britain. roith U. S. 1873-77 $478,000,000 $415,000,000 1878-82- 424,000,000 377,000,000 1883-87 441,000,000 438,000,000 That is to say, during the first five years our aggregate trade with England exceeded our aggregate trade with the States by $63,000,000 ; whereas in the last five years our trade with the States haa very nearly equalled our trade with England. Trade with the latter has fallen $36,000,000 since 1873-77, while trade with the former has increased $23,000,000 since 1873-77, and no less than $61,000,000 since 1878-82, in spite of the fact that England admits our product free while the Americans tax them about 42 per cent, all round. The import returns are particularly interesting : Aggreaote Aggregate Quinquennial Imports from Imports from Period. Britain, U.S. 1873-77 $272,000,000 249,000 000 1878-82 197,000,000 207,000,000 1883-87 222,000,03 would no doubt cliargo the exaltod price of thu raw material to the finished article, and thereby f