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1 2 3

• *

.' (

SPEECH

THE HON. A. T. GALT,.

MINISTER OF FINANCE OF CANADA,

ON TNTRODUCINQ

THE BUDGET OF 1862,

TOGETHER WITH

■STATISTICAL AND FINANCIAL STATEMENTS.

Delivered in Committee of Ways and Means, May 16th, 1862.

■■■}-Y':it^i-^:v

SPEECH

•H:

-n
■JfX

THE HON. A. T. GALT,

' MINISTER OF FINANCE OF CANADA,

On intrddueing the Budget of 1862 ; Delivered in Committee ef
ways and means, May 16th, 1862.

Hon. Mr. Galt rose and said, — Mr. Chairman, I shall have, on
this occasion, more than at any similar previous time, to crave the
indulfi;ence of the Committee for perhaps a somewhat longer
period than is usually occupied in making financial statements.
The circumstances in which we now find ourselves placed are
widely different from what they have been before, and I am sure
the best attention and consideration of the Committee will be
given to the facts which I shall have the honor to lay before them.
I trust, Sir, it may be in my power fully and clearly to place
before the Committee the views of the Government, having
reference to the finances of the country and the measures whicm
we deem necessary to put those finances on a sound and proper
footing. I hope if I fail in setting forth to the Committee the full
sense which we entertain, as weU of our own responsibility as of
the importance of the steps necessary to.be taken, that the blame
will be imputed to myself, without injury to the great interests
involved. (Hear.)

When, Sir, I last had the honor of addressing the Committee of
Supply, at the beginning of the year 1861, the progress of the a
country had been most satisfactory. Commerce had revived, we
had been blessed with a most abundant harvest, and our people
were happy, industrious and contented. Now, we find an
entirely different state of things. Shortly after we separated last
year the unfortunate fratricidal war in the United States broke
out, and it has been found to affect our interests almost as
disastrously as their own. The great convulsion which now
shakes the United States from the centre, we feel in Canada too. ^
The throes through which they are now passing, we cannot, from

our near proximity to them, fail to experience in the injury they
produce to the trade and commerce of our country also, and we
nave, thus, an index to the suffering now being felt both here and
there. Sir, at the time when we last considered the question
of the finances of the country, we had no prospect of the
peaceful relations of this country and of the mother country
being disturbed. We had nothing to fear from our neighbors
to the South, consequently we had no apprehension of the
necessity of our making provision against warlike inroads.
But before the year closed, the tocsin of war sounded the alarm
almost at our very doors. The country was alarmed at the
expectation of immediate invasion, and we are not even now
altogether free from the apprehension then excited. Happily, the
strong reasons which then presented themselves for taking prompt
measures do not now obtain ; but still we have to make more
than the ordinary provision for the maintenance of peace and
order. We have to encounter charges incidental in some measure
to a time of war. We have to bring down to the House a measure
intended to organize the youth of the country with a view to its
defense in case of need. We have, at a time when trade has
suffered and our revenue is failing, to meet additional cnarges on
the public exchequer, for defensive purposes. !t is necessary that
this subject should be broached at the same time that we
acknowledge the patriotism of the people and their determination
to do all that in them lies to protect their privileges and institu-
tions. (Hear, hear.)

It is true. Sir, that our trade has suffered. The Public AccountiHt
and the Trade and Navigation Returns, which have been laid
before the House, shew the extent to which it has been depressed,
jpore particularly during the latter part of last year ; and I shall,
in the course of my remarks on this occasion, have to point out*
the extent to which that depression has prevailed during the
present year. Still there are some considerations which are
beyond those of mere finance. The preservation of our country
from invasion and the defence of our dearest rights, require sacri-
fices greater than those demanded by any other cause. And, Sir,
at the time when the Government have to come before the Com-
mittee to ask at their hands the means of maintaining the institu-
tions of the country and defending it in case of war, it will be well
to inquire as to the extent of our ability to meet those charges.
If we were in a position of difficulty, such as we were in three or
four years ago, the matter would be a more serious one than it is
at present. Fortunately, however, our circumstances are in this

respect changed. This country, I am happy to say, was never in
a better position than it is in at this moment, apart from the dis-
turbance of commerce caused by the American war. Our people
have had full employment, produce has been abundant and has
realized good prices, the trade of our rivers and lakes has been
larger than was ever before known. All these circumstances
ought to afford us encouragement, and to enable us to do that
which we feel to be necessary for the interests of the country.
(Hear, hear.) It is altogether a singular position we stand in at
this moment. In our whole history we have not had a period
similar to the present. We might refer, it is true, to the war of
1812; but we have never, in the memory of any now present,
been called upon to contemplate such a state of things as we wit-
nessed a few months ago. There are few nations — I may say
there is no nation which has passed through the earlier
period of its existence without having had the necessity of
struggling for its rights and making sacrifices for its indepen-
dence. Our position in that respect has been widely different.
We have, it is true, incurred liabilities. We have a considerable
debt, compared with our population and resources. But we have
the satisfaction of knowing that that debt has been created for
objects of great utility, and that while the liabilities of most na-
tions have been produced by causes disastrous to commerce and
industrv, ours have been incurred in the opening up of the great
channels of communication through the country, for the improve-
me.Tit and developement of commerce, for the sustenance of educa-
tion, and for providing the means of dispensing justice throughout
the land. I say, then. Sir, that there is but a small portion of our
debt to which we cannot point with pride as being incurred for
some great public benefit. (Hear, hear.)

With these introductory allusions, I propose to refer the Com-
mittee to a comparative statement which I have before me of the
relative national debts of several countries, with a view to shew
the proportion they bear to their respective populations. In the
case of Great Britain, the annual charge on her public debt is
£27,807,291, being a percentage on her expenditure equal to
81 .08 percent, and the charge for each inhabitant, 193. 10|d. ster-
ling. In France, the annual charge on her public debt is £13,312,-
673, a percentage on her expenditure of 16.20 per cent, and the
charge for each inhabitant, 6s. 9J^d. The annual charge on the debt
cf Austria is £7,630,874, a percentage on her expenditure of 27,
and the annual charge 4s. 0|d. per head. In Holland, the charge
is 46.04 per cent, on the expenditure, and 12s. Od. per head on

the populution. In Canada, 1861, the annual charge on our
public debt was £657,291, the percentage on our expenditure
36.27, and the total charge on each inhabitant but 6s. 2|d. The
object which I have in view in referring to this table will be made
plain by the Committee following me through another table,
shewing the annual «;x|)enditure8 of several European countriep,
as compared with that of Canada. In the case ot Great Britain,
her annual expenditure, in 1860, was £72,678,632, being £2 8«.
9d. per cent., per head sterling. In France it was 1,826,864,379
fr., or £,\ 19s. ll|d. sterling per head. In Austria it was
386,047,100 H., or £1 2s. 4Jd. sterling, per head. In Prussia it
was 130,616,266 th., or £1 Is. 8^d. sterling, per head. In Hol-
land it was 86,636,264 fl., or £2 Is. 3d. sterling, per head. In
Belgium it was 191,256,990 frs., or £1 12s. SJd. sterling, per
head. In Canada it was, in 1861, $9,318,180, or 14s. lOJd.
sterling, per head. Now the point which 1 desire to elucidate, in
connection with these figares, has reference to the population,
and the cost per head which the public debt in Canada bcirs to the
total expenditure of the country. This will be found to be very
large, making the expenditure for other purposes relatively smaller.
It is larger in the one case and smaller in the other than in almost
any other country. In the case of England, the cost of the debt
being 31 per cent of the expenditure, leaves 69 per cent to be
expended on other objects. In the case of France, the expenditure
for other objects than debt is 84 per cent., in Austria it is 73 per
cent., whilst in Canada it is only 65 per cent. Now, the inference
is evidently this, that we receive good value for the amount we
expend. The sum we pay for the civil government of the country
is smaller — very much smaller — than is paid in other countries,
irrespective of debt on both sides. The position we occupy is
therefore an advantageous one. (Hear.) It arises in great pan
from our not having been required to make provision for the main-
tenance of an army and navy. We have enjoyed the advantage,
from the connection with the mother country, of being defended by
her forces, and for this reason our revenue has not been burdened
with heavy charges for defensive purposes. The whole revenue of
the country, instead of being subjected to a drain for aAbrding us
protection from foreign invasion, has been applied either to the
payment of interest on our public debt, expended on works of
great public utility, or devoted to the maintenance of the govern-
ment of the country, to the development of our resources, to
educational purposes, and to a variety of other objects of the
greatest public importp ice.

' Nor, sir, will the percentage I have referred to compare unfa-
vourably with that ofthe other colonies of Great Britain. I make
a reference in this connection to the other colonies, and my object
in so doing is partly because in England it is frequently the case
that Canada and the other dependencies ofthe Empire arc spoken of
collectively, to our disadvantage. I think it will therefore be impor-
tant to show what their expenditure per head of the population is,
for the further reason that the idea is sometimes encouraged in
this coutry that the charges on the population of Canada, in pro-
portion to its numbers, arc vastly greater than in any of the other
colonies ; whereas, I think I shall be able to show that, on the
contrary, they are generally very much less. Now, in Canada, I
have said that the total ordinary expenditure is 14s lOJ per head.
In New Brunswick it is 12s lOd. In Nova Scotia, ISs SJd. In
Newfoundland it is XI 8s 44d. And if we take the group of Aus-
tralian colonies, we shall find a considerable increase. In New
South Wales it is £4 lis lOJd ; in Victoria, £4 ISs 9\d ; Queens-
land, £6 lis 6H ; South Australia, £4 lis 6|d ; Tasmania, £6
13s 6|d ; and New Zealand £6 15s 2d. These are colonies
which partake in many respects of characteristics similar to our
own. They are self-governing, and the chief difference between
their circumstances and ours is that, unlike us, they have no
frontiers running parallel to a foreign country. To some extent,
it is true, their larger expenditures have been induced by the gold
discoveries ; but they have the advantage of us in respect to
defense ; and on the whole, as I have conclusively shewn, our
position as to taxation is far more favorable than that of our fellow-
subjects in Australia.

Referring, as 1 have done, to our relative position compared
with other countries, it may be proper now to advert a little more
fully to the position in which we stand at this moment. In this
respect, I have the advantage of being able to refer to the rt ont
census, and to place results before the House which have not /et
been made oublic, but which are in course of publication, show-
ing conclusively the great advances which have been made in
Canada during the past few years. — And first, I will advert to our
population, taken in connection with the debt of the country. The
population of Canada in 1852, which was the period of the last
census, was 1,842,265, and in 1861, it was 2,507,657, being an
annual increase of about 3.47 percent. I am now about to speak
of the average increase for each year, the average being taken on
the nine years. We have, then, the following results : — In 1862
our population was 1,842,265, and our debt $22,355,413, being an

amount per head of $12.13. In 1853, the popuk*5on was 1,906,-
191; the debt, |S9,992,752; amount per head $15.68. In 1854,
the population was 1,972,336, debt $38,851,833; amount per
head, $19.61. In 1856, the population was 2,040,776 ; debt, $45,-
855,217; amount per head $22.47. In 1856, the population
was 2,111,591 ; debt, $48,757,619; amount per head, $23.09.
In 1857, the population was 2,184,863; debt $52,334,911;
amount per iiead, $23. 97. In 1853, the population was 2,260,
677 ; debt, $54,892,405 ; amount per head $24 29. In 1859, the
population was 2,839, 123 ; debt, $54,142,044 ; amount per head,
$23 10. In I860, the population was $2,420,291 ; debt; $58,292,
469 ; amount per head, $24 08 ; and in 1861, the population was
2,507,657; debt, $58,326,478; amount per head, $23 21. In
quoting these figures my aim has been to show that during the
last five years the proportion of debt per head of the population
has not increased, but on the contrary, it has somewhat dimi-
nished during the past three years. Let us take the year 1868,
for instance. In that year the population was 2,260,677 ; the
interest on the debt was $3,030,899 ; and the amount per head,
$1 34. In 1861, the population was 2,507,657; the interest on
debt was $3,286,457 ; and the amount per head, $1 31. Conse-
quently, the interest paid on the debt for the year 1861 was less
by three cents per head than 1858. Again — and it is for the purpose
ot' makin" n j comparison complete that I draw the attention of the
Committee to the circumstance — the ordinary expenditure for
1858 was $8,939,809, being $3 95 per head ; and in 1861, the
ordinary expenditure was $9,318,180, being only $3 71 per head.
Talcing from these figures the expenditure required for the purpo-
ses of our public debt, we have left $2 61 per head as the charge
for the government of the country in 1858, against an expenditure in
186 1 of $2 40 per head for precisely similar purposes. The re-
sult is that there is a saving, taking the population as a basis, as
between the two years, of 24 cents per head — a saving which,
when it is compared with the population, represents no less an
amount than $601,837. Consequently the expenditure for 1861
was less by $601,837 than for 1858 on the relative number of popu-
lation. (Hear, hear.)

I now propose, Sir, to refer to a table showing the increase in
the population, wealth, and productiveness of the country between
the census of 1852 and that of 1861 ; and I think that the Com-
mittee will agree with me diat the progress of the country in pros-
perity during the past nine years has been most gratifying, and
i9uch as to entitle us to hope that it may continue in the same suc-

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cessful career. I will first take Canada West. In Canada West,
in 1852, the population was 952,004. In 1861 it was 1,396,091,
being pn increase of 46§ per eent. The lands held in 1862
amounted in acres to 9,825,915, and in 1861, to 13,354,907,
being an increase of 35|. The acres under cultivation in
1852 amounted to 3,702,788, and in 1861, to 6,051,619, being
an increase of 63 .J per cent. It will be observed that the
population increased 46 per cent, and the acres under cultiva-
tion 63 per cent., proving that the ratio of increase of acres brought
under cultivation was larger than the increase of the population.
Sir, there are returns, which I shall presently lay before the Com-
mittee of a still more gratifying character. Unfortunately, in the
census of 1852 the value of property was not taken, as in
1861. Thus, there are no exact means of knowing what the
value of property in the rural parl.*i of the country was
in 1852. Therefore, it is not in my power to make a com-
parison of the figure!^ on this head between the two periods, liut
it will be most satisfactory to the Committee to know that the
value of the farms in Upper Canada in 1861, irrespective of the
cities, towns and villages, was no less than ^295,162,315. The
value of live stock in Upper Canada the same year wa.s
$53,227,516 ; whilst the quantities of wheat and other grains
raised at the two periods of 1852 and 1861 — and which shew
more than anything else the greater wealth of the country in
the latter year- — were as follows : — In 1852 there were grown
12,082,550 bushels, and in 1861, there were 24,540,425, being an
increase of 103^- per cent. The statistics of olher grains may be
stated briefly. In 1852 there w^ere 17,732,169 bushels raised,
against 38,122,340 bushels in 1861, being 115 per cent. In flax,
the increase has been from 59,680 lbs (almost a cypher) in 1862,
to 1,225,937 in 1862, or 1954 per cent. Allow me to recapitulate.
While within the past nine years Upper Canada increased 46 per
cent in population, the number of acres under cultivation has
aug \ented by 63^ per cent, and the produce of the country has
Increased, noi simply in proportion to the average brought under
cultivation, but tothe extent of 103 per cent in the case of wheat, and
115 per cent, in regard to other grains. These figures go to prove
that greater skill has been brought to bear on the cultivation of
the lands of Upper Canada, and the gratifying result is obtained
that two bushels of wheat and grain are now grown where one w^as
raised in 1852. (Hear, hear.) Nor, I am happy to say, has LoWer
Canada failed to make good use of her opportunities. Her pro-
gress, perhaps, has not been so great as that of Upper Canada, but
it has been su^ciently encouraging to stimulate our Lower Cana-

dian fellow subjects to continue in the laudable course on
which they have entered. In Canada East, the population in
1862 was 890,261, and in 1861, it was 1,111,566, being an
increase of 25 per cent. The lands held were 8,113,408 acres
in 1852, as against 10,223,959, in 1861, being an increase
of 27| per cent. The acres under cultivation, in 1852, were
3,606,167, and in 1861, 4,678,900, being an increase of 29|
per cent, or rather over the increased percentage of lands
held. The cash value of farms in Lower Canada in 1861 was
$168,432,646, and of live stock, ^24,572,124. The bushels of
wheat raised in 1852 where 3,073,943, and in 1861, 2,563,114,
shewing a decrease of 16 per cent. But it is well known that the
farmers in Lower Canada have of late turned their attention more
particularly to the raising of other grains, and the falling off in
wheat has, in this way, been more than compensated for. In
other grains the number of bushels raised in Lower Canada whk
in 1852, 12,147,070, iw.d in 1861, 23,534,703, giving an in-
crease of 93| per cent, or nearly the same result os was attained
in Upper Canada. The proportionate increase in the growth of
flax in Lower Canada, during the same two periods, was also
very great. In 1852, the product was 145,755 lbs., against
976,495 lbs. in 1861, giving a percentage in favour of the latter
year of 670 per cent. The figures quoted in regard to the growth
of flax make it clear that our farmers are giving great attention to
this most important staple product. The results for the whole
Province are that we havo an increased population of 36 per cent,
over 1852, an increase in the number of acres of lands held of
31^ per cent., in lands under cultivation of 46f per cent., in
bushels of wheat raised 79 per cent., in bushels of other grains
raised of 106| per cent., and in pounds of flux grown of 972 per
cent. Subtracting from the total population, in 1861, the figures
returned by the enumerators specially appointed for cities and
towns, namely, Canada East, 153,389; Cnnada West, 103,885 —
together, 257,273 — we have for the rural population of Canada
East, 958,177; ol Canada West, 1,299,207— of all Canada,
2,250,384 — giving as the cash value of the farms per head of the
rural population — men, women and chiKlveii — in Canada East •
$176|; in Canada West, $228^, 'n United Canada, $206, exclusive
of the value of live slock. These estimates aie given of the rural
districts irrespective of the chirfi and towns. The statement is
not quite fair to Lower Canada, because if the cities were
brought in, it is certain that Lower Canada would compare far
more favorably with Upper Canada in wealth and numbers.
(Hear.) I endeavoured to obtain the returns for the cities, but i'

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m that the
ition more
ling off in
;d for. In
lada was,
ig an in-
? attained
growth oi"
was also

•)

against

the latter

he growth

tention to

the wbgle

i per cent.

[Is held of

cent., in

ler grains

972 per

figures

ities and

03,885—

Canada

Canada,

dof the

la East-

xelusive

the rural

ement h

es were

npare far

lumbers,

!S, but i'

^was impossible to have them completed In time for my present

[statement. It must be gratifying, however, to most of us to know,

[and particularly gratifying to the Lower Canadians themselves to

ffind, that even from the incompicto returns I have already made

use of, the disparity in the wealth, numbers, and industry of the

ftwo sections of the country is by no means so great as is generjilly

i supposed — (hear, hear,) — and as has been very often asserted by

Honorable gentlemen interested in pressing the extreme views of

Clipper Canada. (Hear, hear.)

I There is another point connected with the statement I have just
f given, which, I think, it may be as well to state to the Committee.

I I have set forth the resuhs presented by the Census during the
I past nine years. But there is another way in which those results
*may be considered. We know from these returns that fixed
I property, and also the productive power of the country have
I augmented to a large extent — to an extent far beyond the increase
f in population, large as that has been. Now, it is important the

Committee sliould be reminded, that owing to the completion of
^ our canal and railway system, the value of the produce raised in
the country has also been greatly increased. I have here a return
^^ shewing the price of Wheat during a number of years past, and
without desiring to trouble the Committee with the figures — for I
I fear I have already dwelt too long on these points already — (Cries
I of " No ! no !") — I may state the result, which is an average
I increase on the past ten or twelve years of about 20 per cent.,
' comparing Toronto with New York. That is to say, there has
? been an advance of 20 per cent, on the comparative price obtained
■ twelve years ago, relatively to what it is now. I have no doubt
? the honorable member for West York (Mr. Howland) will cor-
roborate this statement. The price of grain in Toronto now bears
a much nearer relation to the price of grain in New York than
was the case before these improvements were made. It is thus
clear, if the productive power of the country has been largely
developed, and the fruits of the soil realize better prices, the public
improvements we have undertaken have been of the greatest
' possible benefit to the country. (Hear.) If, putting at the mo-
derate figure of 10 per cent, the permanent increased value given
to our products by reason of these improvements, it is evident
that the country gels every year in return at least six times as
much of the annual cost of the improvements. (Hear.) It is well
that this should be fully understood by the country. It is too
often supposed that our canals and railways and other public
improvements cost much and yield nothing to the public

■

exchequer ; consequently, that they are heavy, unproductive
burthens. Sir, there never was a greater fallacy, ft is those
improvements which, in a great measure, have been the source of
the progress of the country. (Hear, hear.) We find ourselves
to-day, thanks to the policy which has been pursued in these
respects, very much richer as> a Province than we were at
any previous period of our history. We have a smaller burthen
per head to carry than we had five years ago, and we are in a
position of greater ability to carry it. If it were not so, I should
certainly have cause for apprehension in approaching the subjects
to which I shall have presently to advert. The improvement I
have noted, I feel, and we must all feel, is not of a temporary or
delusive character. It is a permanent improvement, and there is
no section of the country which has not been benefited by it.
Knowing, then, as I do, that the material strength of the country
is greater than it has ever been before, I can approach, and do
approach without hesitation the difficult circumstances in which I
am now about to address the Committee. I am cheered by the
assurance that we are not without a fair side to oppose to the
dark one. We have had, it is true, to encounter during the year
a diminished revenue, and increased charges on our finances.
But there are redeeming features in our position — ^features which
should induce us to look forward with hope that the causes which
have already placed us where we how stand may help us still
further forward. They are operating very strongly to direct
immigration in this direction from the United States. And
whatever burthens we may have imposed on the people, they
bear no comparison whatever to the sacrifices which our
friends and neighbors to the South have, by reason of their
unfortunate quarrel, been compelled to undergo. We may
have, as a moasure of protection, to make sacrifices to a cer-
tain extent for our protection, but we have the satisfaction of
knowing that, unlike our Southern neighbors, our fields are not
desolated by war, our industry is not diverted from its proper
channels — that our laborers are still busy in their fields, and our
mechanics in their workshops. The trade we have enjoyed with
our neighbcKTS has no doubt fallen off, but the injury to that trade
has not affected us to the extent that it has been felt by them. It
is to immigration we have to look as the chief source of our
wealth ; and amongst the causes which operate to induce it, I
may mention the certainty of law and order being preserved,
while the burdens of the people are light, and they possess
freedom of action and thought. Fortunately for us, in all these
respects we are in a better position than the people of the United

States. And I do hope that the recommendations <rf' the Com-
mittee so ably presided over by my hon. friend from Montreal
West, (Mr. McGee,) supported as they will be by all the infinenee
which can be given by the members on this side of the House,
will have the effect of causing a marked improvement in the
extent of immigration which now seeks our shores. (Hear, hear.)

I will now, sir, proceed to address the Committee on the state
of the finances for 1862. It is self-evident that any system of
taxation which may be now adopted, cannot take effect for more
than about six months of the year, and that we are now suffering
in many respects from the evils of a state of war, although we
are not engaged in hostilities. I find that our revenue has been
falling off very seriously, and if we had a. difficulty in meeting
our engagements last year, that difficulty must necessarily be
eatly enhanced during the present year. I have no hesitation in
in view of the fact that any proposed taxation of the
-country will not produce more than a six months' revenue against
a twelve months' deficiency, that it will be impossible to make
adequate provision through taxation for the wants of 1862. Jt
will be my duty, presently, to state what those wants will be, and
to state also, as nearly as I can, what it is expected the revenue
will be. I will then proceed to indicate the serious difference

existing

between those two amounts, and to state to the Com-

mittee the mode in which I propose to meet it. ft will be my
duty afterwards to refer generally to the financial condition of the
country, and to endeavour to point out that, in my opinion, the
time has arrived when it is desirable so to arrange the finaneee< of
the Province, that we may not be subjected in the future to the
same consequences which have overtaken us in the past,

On this occasion, Mr. Chairman, in addition to the ordinary
requirements to meet the interest on the public debt and to main-
tain the civil government of the country, we have to make provi-
sion, or rather to ask the House to make provision, for the Militia.
The expenditure for the Militia service may be stated in round
fig^ures as $860,000. That is the amount which will be required,
if armories are constructed and clothing is provided for 30,000
men, as is proposed by the Government. Only $370,000 of this
amount, however, will fall as a charge upon the ordinary revenue
of the year. Still, amongst the requirements of 1862, we have to
consider that the whole amount is to be raised. And we have
also to consider of the sum required for the Ottawa Buildings.
(Hear, hear.) The statement would not be complete if I omitted

this iniporlant subject. (Hear, hear.) I will take this opportunity
of stating the amount which the Government propose to recommend
the House to grant for the Ottawa Buildings. That amount is
$700,000. (Hear, hear.) 1 have also to call the attention of the
Committee to the fact that the cadastres for the Seignorial Tenure
will be completed at an early period, and that provision must be
made for payment to the parties entitled to it of the amount of the
fund wich is applicable for their payment. That fund will amount
iu round numbers — for it is impossible to stale it accurately till
the cadastres are completed — to about $800,000. That is the
appropriation that was made in 1854. It is the capital, not the
interest. When that amount is expended, it will have wiped off
so much of the claim. It is the amount which will be found in
the Public Accounts carried from one year to another under the
head of Seignorial Indemnity Fund. It becomes due on the
completion of the cadastres^ showing the proportion in which it is
to be distributed. The remainder of the fund consists of perper',
tual annuities, which have not to be redeemed, or if redeemed can
only be done with the joint consent of the Government and the
holders of them at 25 per cent, discount. Besides these items
which I have mentioned, we have to redeem the balance out-
standing of the Consolidated Municipal Loan Fund Bonds, of
$399,030. That of course is a redemption of the Public Debt to
that extent. Still it is an amount for which we have to make
provision, and it is therefore properly included in the sum total of
the amounts to be raised in the year 1862. I shall now, with
your permission, recapitulate the sums which are estimated to
form the total expenditure of the Province for the year 1862. The
amount of the estimates as brought down, is $'7,132,528. The
Militia, $850,000. Ottawa Buildings, $700,000.

Mr. McGee— Not $850,000 for the Militia this year.

Hon. Mr. Galt — Yes ; that sura has to be provided, but covers
the armories and other permanent expenditure. I will afterwards
make the distribution between the permanent and the other ex-

f)enditure. I am now stating to the Committee the whole amount
or which funds will have to be provided, and it will afterwards
be my duty to shew how the expenditure is to be met.

Hon. Mr. Foley— Does the $700,000 complete the Ottawa
Buildings ?

Hon. Mr. Galt — ^The government believe it will be sufficient to
enable us to meet in the Parliament Buildings. [Hear hear.] It

lortunity
)nimend
nount is
m of the

Tenure
must be
ntofthe

amount
itely till
t is the
, not the
riped off
bund in
tider the

on the
ich it is
f perpe-rV,.
ned can
and the
se items
ice out-
ands, of

Debt to
o make

total of
V, with
nated to
2. The
?. The

t covers
jrwards
her ex-
araount
jrwards

Ottawa

cient to
ir.] It

is not the intention of the Government to ask any thing further till
Parliament is there. No doubt after we are there some further
sums will be required for ornamenting the grounds, &c. [Hear,
hear.]

Mr. Rankin — Will any of that amount be applicable to paying
what is now due on the Buildings ?

Hon. Mr. Galt — I will enter into details when that item of
supply comes up. The next item is, other Public Works, com-
prising the ordinary public works, light-houses, roads and bridges,
and all that class of work. The appropriations for these come
down in the Supplementary Estimates, and sometimes a portion
of them in the ordinary estimates. The final estimates of the
Board of Works in regard to some of them are not yet comj)leted,
and I shall therefore state an amount which will abundantly
cover them. The estimate then for light- houses, coast service,
roads and bridges, &c., and the construction of Court Houses and
Gaols in Lower Canada — the whole outlay of the Board of Works
beyond that on the Parliamentary Buildings — ^is $639,000. The
Ocean and river steam service will require, according to the
existing contracts, $436,000. The redemption of the Seignorial
Rights, as I have already stated, requires a provision in capital of
$800,000, and for interest and the expenses of the commission,
$160,000, making under that head, $960,000. [Hear, hear.]
The townships indemnity fund, connected with the Seignorial
Tenure, I estimate will require only about $40,000 this year.
The redemption of the Public Debt, consisting of outstanding
Municipal Loan Fund bonds — some of which may not come in,
but I assume they will all come in, because they are no\^
receiving no interest — will require $399,030 — making a total of
$11,156,558. But in addition to that I have to add the cost of
collection of the revenue, of the maintenance of Public Works, and
of the Crown Land service, making an addition of $1,370,500.
Consequently the total outlay of the year is estimated at a sum
not exceeding $12,527,058. [Hear, hear.] But I think 1 may
venture to say that the sums I have named are outside sums, and
that I have not been in any way desirous to understate the amounts
that will be required.

I have now to examine the means which will be at the disposal
of the Government, under existing laws, for the purpose of meeting
these liabilities. I have an estimate here of the various items of
revenue, and I may add that I did not print the estimates of revenue,
because the important changes, which it will be my duty,

16^

before I sit down, to announce to the Committee as recommended
for their consideration, will make so much difference in the results
to be obtained under the two heads of Customs and Excise, that
any estimate I could have oft'ered unaccompanied by an expla-
naticHi of what was proposed to be done with these items, would
have been wholly delusive. In the estimate of other items, beside?
Customs and Excise, there is nothing unusual. Some of them are
a little more, some a little less than last year. The whole of them
together, beginning with Post Office and ending with Miscel-
laneous, amount to ^3,131,900. These are the ordinary items
of revenue, besides customs and excise. In proceeding to refer
to the revenue from Customs I have to ask the attention of the
committee to the way in which it has already been affected by the
war in the States, and the probable results that are likely to follow
during the year, assuming the customs laws to remain as they
are. The revenue from customs for the first three months of the
year stood thus. In 1861, during the first quarter of the year, we
had an importation of $5,873,769 of duty paying goods, yielding
a revenue of $1,174,370. In 1862, for the corresponding period
we had an importation of only $4,256,570 of duly paying goods
yielding a revenue of $785,829-— the result being for the first three
months of this year a diminution from Customs Revenue alone
amounting to $388,441, being as nearly as may be a loss of 33
per cent as compared with last year. (Hear, hoar.) Perhpps no
stronger evidence could be given of the influence which recent
difficulties in the United States have had upon the trade of the
country. I might say present difficulties, but my belief is that that
return was injuriously afiected by the occurence of the Trent aiiair
just at the very end of the year, which no doubt prevented a great
many orders being sent to Europe, and that it was this which
caused so very marked a falling off on the first quarter. 1 now
propose to state to the committee the result to the 13th of May,
that is three days ago.

The customs receipts from the 1st January to the 13ih May,
1861, were $1,858,297, and in 1862 they were $1,362,442— being
a decrease on the duties for 1862 to the ISth May of $495,854.
But in stating these figures to the committee — and in doing so I
believe I only comply with my duty in bringing down the statement
to the latest day I could — I have the satisfaction of drawing their
attention to the very decided improvement which has taken
place, due to the effect of returning confidence. The first period
to which I referred gave a loss of no less than 33 per cent. But
since the close of that period to the 13th May, the loss has been

(inly 15 pur cent. (Hoar, hear.) The loss has been going on
sinco the 1st April at tlie rate of 15 per cent, while for the first
three months of the year it was at 1 lie rate of 33 per cent, the
average having been a loss of 2G per cent. Now 1 think, unless
some new disturbing inlluenee comes into operation, wc may
assume, with some degree of accuracy, that the remainder of the
year will tiot be worse than the last six weeks have been. I
think it safe to make that estimate, because the last six weeks com-
mencing with a loss going on at rate of 33 per cent, ended with
a loss at the rate of 15 per cent for that period. ' think it
safe therefore to assume the diminution of rocei. ts froiu Customs
for the remainder of this year at 15 per cent, as cjmparedwith
last year. The loss already has been "^495,854, a loss of 15 per
cent on the returns for the balance cf the year, will be $437,400 —
making a diminution of revenue from this one source of not less for
the whole year than $933,254. (Hear, hear.) Consequently, unless
some means is found for obtaining more revenue from customs'
duties, the income on revenue for the year from that source will be
only $3,840,746. With respect to Excise, there is no estimated
deficiency. We received a somewhat larger amount than usual for
the early part of the year, and we have no reason to suppose that
the amount for the whole year will be diminished. I have also to
state, with reference to the Excise, that it will be my duty to
submit a more efficient system for its collection, and from that I
anticipate an increase will be obtained, apart from that derived
from any increase of duty which the Government may recommend
this House to adopt. Tlic amount estimated to be derived from
Excise and Licenses is placed at $403,404. This is under the
law as it stands, but with th(; improved system of collection for
the next six months. Under the present laws then, the estimated
receipts from Excise are $402,404 — from Customs, $3,840,746 —
and from other sources, f^^3,131,901 — making a total of $7,375,050,
which is the amount <xpected to bo derived from the ordinary
sources of revenue during the present year, and which, it is plain,
unless ]irovisioti is made by Parliament for supplying additional
means, is all that would be at the disposal of the Government to
meet the charges I have previously enumerated. It is true that
the Government have now the power, derived from this House, to
issue a considerable amount, about $3,000,000 of Debentures, but
it is clear that the effect of issuing those would be just the same
as asking the House now, as I propose to do for the means of
meeting these liabilities otherwise.

The liabilities for the year I have stated at $12,527,058, and
the revenue at $7,375,050. — Consequently the amount of money
2

to be provided beyond what we expect to get from existing sourcotk
of revenue, is no less than $5,152,050. (Hear, hear.) Now, Sir,
I propose to state what portion of that amount of $5,152,050 may
be considered as distinguished from the ordinary expenditure of
the country, and therefore a fit subject to apply to Parliament for
power to raise money by loan. In the first place tl.ere are the
militia armories $240,000 ; then there is the advance for clothing,
which will cover the next four years, but the whole has to be paid
this year, amounting to $240,000— making altogether $480,000
out of the item of militia. Then there arc the Ottawa Buildings,
$700,000. The next item is the Seignorial Tenure $800,000. The
next is the Redemption of Municipal Bonds, $399,030. The total
of these items is $2,379,030, for which I do not think any member
of this committee will question the propriety of making provision,
as permanent expenditure, or which any one would seek to make
a charge upon the ordinary revenue, and particularly as regards
the expenditure on the Ottawa Buildings and the provision to be
made for the Seignorial Tenure, any other mode of treating them
would convey a very improper and erroneous view of what are
the charges upon the country for the current year. Consequently
the deficit for 1862, under the existing laws, will be, or is anti-
cipated to be, $2,772,978. That is the difference between the
ordinary subjects of expenditure within the year and the
ordinary sources of revenue ; against that is an estimate of
certain new taxes and new sources of revenue which it is pro-
posed to create, and which it is anticipated will, within the
course of the present year, yield an amount of $1,340,668. I mean
to state, as nearly as I can, and as fully as I can, the means
whereby it is expected this amount is to be raised. But, if the
committee will indulge me for a moment, at this particular stage
of my explanations, I will only state the amount which is expected
to be raised during the present year, without giving the particulars.
The object of this will readily be seen in the course of my remarks.
As I have said, I anticipate that the receipts from the new sources
of revenue which it is proposed to create, will be $1,340,658, and
consequently the deficit of ordinary income beneath the ordinary
expenditure will be reduced to $1,438,320, and there will require
to be raised by credit for objects of permanent outlay, as I have
already stated, the sum of $2,379,030— making a totalof $3,81 1,350,
which will have to be provided for the wants of 1862, permanent
and ordinary, exclusive of the additional taxes to which I have
referred. I shall now proceed to state the mode in which I pro-
pose to ask the sanction of the committee for the raising of this
amount.

Mr. Macdougall — Are the Comuiitlee to underHtand that idip
new taxes will produce ^1,340,658 or tho balance of this year.

Hon. Mr. Galt — Yes ; that i« the estimate for the balance of the
year. I shall give the estimate for the whole year, bye and bye..
The mode* we have adopted for a great many years past of raising
means to meet deficiencies, or the amount required i'or Public
Works, has been to dispose of our Bonds either in Canada or in
London. More recently we have sought to transfer the whole of
our debt to the London money market, and to reduce the rate of
interest upon it to one more corresponding to the rate of interest in
England — the interest which our bonds bear there being five per
cent. I have found a good deal of difficulty existing in this country,
in obtaining the means of making investmonts here. We have
withdrawn from circulation the whole of the Municipal Loan
Fund Bonds. We have withdrawn almost tlie whole cf the original
Canada six per cent currency bonds. And scarcely a week passes
without application being made to myself, or to my honorable
friend, the Receiver General, with regard to the means of making
investments in Canada. That such a means of investment should
exist is an object highly desirable, as regards some of the Savings'
Banks — and may be made very useful for many of the ordinary
mercantile institutions of the country. Now, the mode by which
1 propose to ask authority to raise this amount of nearly four mil-
lions of debt is this : I propose to constitute a Colonial Provincial
debt,-(Hear, hear,)— and to ask the authority of the House to do so to
the extent of $4,000,000, bearing a rate of interest not exceeding 5
percent., and that the form in which it should be issued should be
that adopted by the English Government, viz : Kxclieijuer
Bills. (Hear, hear.) Of course the details of the measure
1 shall lay hereafter before the Committee. At present it is only
necessary to state further that, while these Exchequer bills wJil
be payable at two years' date, I propose in connection with this
to introduce a new feature, one calculated, I think, to give them
much greater currency, f propose that these bills should be
redeemable on ten day's notice, that is to say, if any bank or
party holding them desires to have them cashed by the Govern-
ment, they may have it done on giving ten day's notice. The
result of this, I think, will be that the bills will always maintain
themselves at par, unless in the improbable event of the country
being placed in such a condition, that its credit would perma-
nently suffer. If they are maintained at par, as I think they will
be, they will pass from hand to hand, and no demand will be
made on the Government till the expiration of the two yeais,
2*

when the position will bo, not ho much tliatllie holdcis willdesiiv
to get the money, an tluit llie Govj-rnnient will have to consider
whether it will be luMtrr to redeem IJjcni, or to fund lliem, or to
issue other bills in their stead at a lower rate of interest. I shall
ask the House to give me authority to issue an amount not
CKceeding $1^000,000 of Exchequer Bills of the character I have
mentioned. I am satislied, from the experience I have had
during the iusl few yeary, that the proposition will be favorably
received by the wiiole mercantile and monied community, and
that they will consider it a great boon to have this amount of
Provincial currency circulated in Canada. (Hear, hear.) It is
not my intention, therefore, to propose any increase of the ordinary
Provincial debt during this year. I think it is very desirable and
will be found a source of security to any Government, that the
subjects of a Government should have a personal interest in its
maintenance and in the prevention of disorder within the coun-
try. It is also desirable that we should put an end, so far as wc
can, to the large drain there is upon our resources, in remitting to
England the interest on our debt. (Hear, hear.) We have for-
tunately now arrived at that period when parlies ari^ willing to
lend us mouviy in Canada at 5 per cent., just as willingly as a few
years ago it was lent at 6 per cent, and there is not likely to be
more diflicuhy in disposing of the one security in Canada now,
than there was then in disposing of the other. (Hear, hear.) The
amount then that I propose to raise in 18()2 hy means of new
taxes is ^1,341,000, and by the issue of Exeheciuer Bills, $3,811,-
000 or such smaller amount as may be suliicicnl to meet the total
deficiency for the year which I have estimated iU |5, 152,008.

I now propose to oiler a ft' w remarks in vogard to the general
considerations which ought to weigh with the Committee in
adjusting the taxation of the people, and, before adverting at
greater length to this very important subject, I think it would be
well for a moment to recall the results which at an early stage
of my remarks I placed before you. I then stated that the bur-
den of taxation upon the people of Canada, in proportion to
the number of the population, had diminished instead of in-
creasing during the last four or five years. I also stated that
the interest upon our debt, relatively to our population, had
also decreased during the same period. I stated also that,
rapidly as the population had increased, the wealth of the coun-
try had grown at a vastly more rapid rate, and consequently
that the Province was never in a better position than it is now,
for considering the means of providing for its positive, absolute

outla^r, year by year, and though it nuxy appear as if i wtrc
selecting on this occasion a year when every thing was adverse,
for the purpose of making these changes, yet perhaps when the
subject is more clearly understood and more fully looked into, it
will be found tiuit this is precisely the year when those changes
ought to be made, when they can be made with the least deran-
gement to trade, and when we feel in reference to the position
of our neighbors in the South, that resources are now placed at
our disposal whi'*h w<ire before. Besides I do not think it would
be consistent with the maintenance of the credit of the country,
if we allowed a statement of our large liabilities for this year and
the diminishing revenue we have to meet, to go forth to thr world,
without indicating by our legislation our determination manfully
to assume the burden which the necessities of the country place
upon our shoulders. (Hear, hear.) I will refer for a few minuteg
to the past fiscal legislation of the country. I have hod a table
prepared which shews some very interesting facts in connection
with it. I do not propose to trouble the Committee with these at
any length, but 1 shall take care to place the tables to which I
have referred, in the hands of hon. members on an early occasion.
But, if we take the articles which formed the subject of taxation
heretofore, we will find the rule of political economy, that, as you
increase the duties you diminish the consumption, is almost
invariably applicable to the leading articles we import. In some
articles this has been very remarkable ; in others it has not been
so marked, but with reference to these, it will always be found
there was some othor influence which tendctl to picvent it.
(Hear, hear.)

The past fiscal legislation of Canada has necessarily been
governed to a very great extent by the policy of the United States
with regard to their tarifl'. The United States' tariff must, on
account of our long frontier, necessarily affect very greatly our
ability to raise ours. If we impose taxation on articles on which
they impose no taxation, and raise our duties to a certain point,
the very object for Vv^hich the duty is imposed will be defeated by
illicit trade. We have consequently never heen able to impose
duties on many of those articles which in other countries are
regarded as the most fit subjects for revenue. But the urfortunale
circumstances in which the United States are now placed have
obliged them to tax almost »'very article we receive from thein.
There is scarcely any thing which is not already, or will not very
soon, be subject to very heavy duties in the United States. This,
then, I take it, is the best lime for us to review our whole system

of Customs Duties and £xcisc, and to see if we can so adjust
thosp duties as at the same time to obtain the necessary revenue,
and to do so without dis* irbing the industry of the country, or
throwing back any of the interests which now exist amongst us.
(Hear, hear.)

I have regarded the year 1862 as an exceptional year. For
the future we may hope this exceptional state will have passed
away, and we shall have returned to what I trust is our normal
state of peace and prosperity. It is therefore well to see how
much we arc likely to require one year with another after 1862.
Assuming the militia expense about $500,000, the ordinary
expenditure may be stated at 1^10,000,000, and the ordinary
revenue at $8,000,000. Consequently, what we would have to
provide for as the deficiency in future years is about $2,000,000,
which, however, would no doubt be reduced from year to year by
the increase of population and consequent increase of revenue.
But starting from the point we are at now, — I consider it would
not do to recommend measures to this House that would have for
their object to add to the revenue of future years a less amount
than $2,000,000. Consequently the measures which I shall pre-
sently state to the House, are intended to have the effect of
raising the revenue from $8,000,000 to $10,000,000. (Hear,
hear.)

{

There can be no question that, in establishing the taxation ot a
coiintry, it is desirable that we should be governed by just prin-
ciples, that we should endeavour to avoid as much as possible
any thing approaching to class legislation, that we should
distribute the burdens on the members of the community as
equally as possible, and that we should not offer any inducements
or advantages to one class of our fellow subjects over another. It
is desirable, in considering the principles of taxation, that we
should take those taxes which can be most readily collected,
which are least likely to run counter to the moral sense of the
community, and which can be collected at the least expense. If
these general principles are admitted, it will not be disputed that
spirits, beer, and tabacco form fit subjects for taxation to any
reasonable extent to which it can be carried. (Hear, hear.) The
limit of taxation upon spirits I take to be the ability we have
to collect a revenue. The excise duty on spirits at present
amounts to 6 cents a gallon, and there having been no excise duty
in the United Slates, a good deal of whiskey lias been, I believe.

gallr

duty as is proposed in the
gallon, which would make
barrel. I have further to
their character, when they

smuggled into this country and disposed of. It has been found
that an excise duty of even 6 cents per gallon was rather higher
than could be advantageously collected. But that arose from
the fact that the United States imposed no excise duty. — Now
that state of things is about to change, if it has not already changed,
and I think that, in dealing with the article of spirits, wo ought
to be governed by the amount we can raise, in view of the duties
which are about to be imposed in the United States. The Bill
which is before Congress proposes to levy 15 cents a gallon, and
1 understand that, before it finally passes, it will be 20 cents.
And I propose, Mr. Chairman, to put a resolution in your hands
this evening, imposing an additional duty of 14 cents a gallon
on all proof spirits manufactured in Canada. (Hear, hear.) 1
propose also to attack a somewhat similar object of consumption,
beer. The excise duty upon beer is one cent a gall* -^. now,
and I propose to adopt the same
United States, namelv, 3 cents a
the whole duty equal to $1 per
propose that when spirits change

are rectified, or when they are transformed into some other
liquor than whiskey, that process shall be subjected to duty
also, and that parties who are engaged in the business shall be
compelled to take out licenses and be subject to the supervision of
the Revenue Officers. (Hear, hear.) The amount [ propose to ask
the Committee to place on rectified sprits is 10 cents a gallon addi-
tional. Those changes in the excise law are calculated to yield the
following amounts per annum — not for the present year, but per
annum — Beer will yield an additional revenue of ^1 10,960 ;
spirits, an additional revenue of $591,296 ; rectified spirits, an
additional amount of $84,530. I propose, also, to put an excise
duty of 3 cents per pound on tobacco, an(l to oblige the manufac-
turers of tobacco to take out a license. The duty, it is estimated,
will yield $57,030, and the licenses ift1,500. Unmanufactured
tobacco is exempt from duty under the Reciprocity Treaty, and it
is impossible, therefore, to impose upon that article any customs
duty. At the same time I have always thought that tobacco was
as fair a subject for taxation as could be selected. The duty in
the United States is very small, and it is clear that, if we imposed
a much larger duty than they impose, the result would be that the
whole of our sufjply would be smuggled. That has been the
result of imposing a high duty before. I propose to make it 2
cents more than it is at present ; and I think it likely unmanufac-
tured tobacco will come in here and be manufactured, and we
w ill thus save a certain amount on the manufacture. These

c i'
k I.

l^>

items that I have gone over are estimated lo yield for one year
from the 1st of June, 1862, to the 1st of June, 1863, an addition to
the present revenue of !|845,316 — of which I think we niiy fairly
estimate ont^half, or ^422,658, as likely to come in within this
year, because we have seven months' instead of ^;Ix in which to
collect it.

I now come to the alterations that I propose to make in the
customs' laws, and as they are of a very important character, I
entreat the attention of the Committee for a few minutes while 1
endeavour to er-cplain them clearly. It is plain, Sir, that in the
circumstances in which we are placed, revenue is certainly the
object we are first bound lo obtain. It is not by tampering with
or increasing the duties on a great variety of smail articles that we
are likely to secure the object of creating a large revenue. If our
wants are great, we must undoubtedly approach thos<} articles that
enter largely into the general consumption vof the people. There
is no way by which we are so sure of obtaining the amount we
require. I therefore believe it will be necessary, in addition to the
duties on spirits and beer, to apply to the leading articles of con-
sumption of the whole people, in order to sustain our revenue and
arrest the great falling olF that has already taken place. From
what I have said on this point, 1 know that the articles to which 1
advert, have already suggested themselves to the minds of many
members of the Committee. Now, 1 believe it will be found
that tea and sugar an^ the articles which are the steadiest as to the
amount consumed in the country, which are the most generally
consumed, which are not very high in price, and the levying of a
duty on which is the easiest and least objectionable approach to a
direct tax that could be made. If it were necessary to apply those
taxes permanently it might be objectionable ; but it must be borne
in mind that we are precisely in the position of a people who have
to impose war taxes. We are suffering in many respects the dis-
advantages and evils of war, though we are free from its miseries
and horrors.

As I said before, Sir, we must obtain additional revenue, and
] have made up my mind that in order to obtain that revenue and
uphold the credit of the country, it is absolutely indispensable to
call upon Parliament to levy additional duties on tea, sugar,
molasses and coffee. (Hear, hear.) It may be well to revert for
a moment to the duties at present imposed on these articles, in
order that the committee may understand exactly what the effect
of the proposed additions will be. The duty on refined sugar

was 36 per cent from 1st July, 18G0, to 1st July, 18(3 L It was*
25 per cent from 1st July, 1861, to 30th June, 1862. It is still
paying 25 per cent, and from 1st July this year it will l.c subject
to a duty of 15 per cent. Raw sui^ar was subject to a duty of 25
per cent from 1st July, 1860, to 30th June, 1861, of 15 per cent to
30th June, 1862, which duty it is now paying, and 10 per cient
afterwards. Tea and coflee were liable to a duty of 15 per cent
from Ist January, I860, to 31st December, 1861 ; 10 per cent from
1st January, 1862, to 31st December, 1862; and to 6 per cent
thereafter. Conse(iuently the rate of duty which may be said
praciical.'y to exist on these articles from 1st July next is, on raw
sugar 10 per cent, refined sugar 15 per cent, and after the end of
the yeai 5 per cont on tea and coflee. These duties, i think the
committee will ;;gree with me in sayirjsr, are light. In the United
States they impose a duty of 2\ cents per lb. on raw sugar. Now
our present duty on raw sugar will amount to about four-tenths of
a cent. It is my intention to ask the committee to grant for a
period of two years — and I may state here that the duties I
propose on tea, coffee and sugar will be for a period of only two
pears — a duty of 2 cents per lbs. on sugar — both raw and refined.
In this connection I would like to revert for a moment to a table
showing what the duty on these articles has been before, because
it may be thought that the proposed imposts arc higher than ever
made in Canada. In 1852 refined sugar paid a duty of 53 per
cent of its value ; in 1853, 40 per cent ; and in 1854, 39 per cent.
Raw sugar paid in 1852, 50| per cent, in 1853, 40^ ; and in
1854, 39 per cent. I have here a table showing in regard to raw
sugar that it was in 1850 subjected to a specific duty of 9s. per
cwt., and 12^ per cent ad valorem. The duty 1 propose now is
10s. per cwt., and 10 per cent ad valorem ; in 1853, it was 6s. and
12 J per cent ; in 1855, 8s. and 6s. 6d. specific duties ; and since
that period it has been going down. But I wish the committee
to observe that the rate of duty in 1850 was very nearly as is now
proposed. Now, with regard to molasses, it has necessarily to
follow the rate on sugar, and it is proposed to apply a specific
duty of 3 cents per gallon; on tobacco an additional duty of 2
cents per lb., on coffee 3 cents, and on tea 10 cents. (Hear,
hear.) This is the duty that will be asked for a period of
two years. I prefer making the duty on tliis occasion spe-
cific, though my general views have not changed in any res-
pect as regards the correctness of the ad valorem principle.
But when I find myself in the position in which I am now placed
I think I am bound to apply duty in that way which I think most
likely to produce the result I desire, an augmentation of the revc-

nue. When peace prevailed in the United States and there was
no duty on tea, it was impossible for us to levy a high duty
without the danger of smugglini?, or the moral certainty that we
would be unable to collect it. There can be no smuggling in tea
unless our duty is higher than theirs, and that brings me to the
point I propose to come to. The American duty is now 20 cents
per lb. on all descriptions of tea.

Hon. J. S. Macdonald— You have not explained whether yon
intend to abolish the present duly.

Hon. Mr. Galt — I do not inlcnd to disturb the present law,
because other sources of revenue and the general progress of the
country will, I confidently expect and believe, enable i^s at the
end of two years to dispense with these duties.

Mr, HowLAND. — The same principle applies to all other articles?

Hon. Mr. Galt — Yes ; sugar, molasses, coffee and tea.
Mr. HowLAND — The ad valorem remains, then ?

Hon. Mr. Galt — Yes ; as I said before, these I propose are
special duties to carry us through the crisis in which we are placed
. by the American war. There is. Sir, a trifling article of confec-
Honery, the duty on which will have to be assimilated to that on
refined sugar. It is a small article and I propose to put 5 per cent
'ipon it. The result I anticipate to be derived from these imposts
is as follows, taking the importations of last year as a guide. — On
refined sugar, $13,580 ; raw sugar, $808,510 ; molasses, $38,757 ;
tobacco (manufactured), $50,896 ; coffee, $20,220; tea 474,510;
confectionery, $2,100 — making a total of $1,408,573. It is per-
fectly clear that the imposition of these taxes will tend to diminish
the consumption of the articles taxed. I therefore assume that
instead of yielding half of what we would receive for the whole
year, the gross amount that will accrue during the remainder of
1862, will be about $600,000.

Now, Sir, in addition to the sources of revenue I have already
indicated to the committee, I think it is desirable that provision
should be made for obtaining from the general business transac-
tions of the country some contribution to the revenue. (Hear
hear.) It is quite clear that when a great proportion of the revenue
is derived from only one or two articles, the income is liable to be

deranged at any moment. It is betler, if we can, to distribute
the taxation over the various branches of business, so that if one
suffers, the whole revenue will not suffer with it, but be able to
maintain itself. Asa general rule, when we come to consider the
sources from which our revenue is to be derived, 1 think it desir-
able to make the distribution equal over all branches of business.
With this view, 1 think the committee should consider the propriety
of imposing a small stamp duty. (Hear, hear.) It is a source of
revenue extremely lucrative, and is besides one of the surest. On
this continent I know there is a prejudice against a stamp act, but
I think there is no duty likely to interfere so little with the ordinary
course of trade or business, so easily collected, or upon which the
cost of collection is so small. I do not propose to ask the com-
mittee to impose a heavy stamp duty ; but I do think that upon
this occasion, when we are obliged to look around in every
direction for revenue, we should introduce it into our financial
system. I therefore propose to limit the imposition of stamps to
sums over ^20. — all receipts exceeding that amount to bear 1 cent
duty. I also propose that every cheque drawn upon a bank should
bear a cent stamp, irrespective of the amount. On every promis-
sory note or bill of exchange not exceeding ^20, I propose a 1 cent
stamp; exceeding ^20 and less than $40, 2 cents ; exceeding ^40
and less thi^n $100, 5 cents ; exceeding $100 and less than $200,
10 cents ; exceeding $200 and less than $500, 20 cents ; exceed-
ing $500 and less than $1,000, 30 cents; exceeding $1,000 and
less than $2,000, 50 cents ; exceeding $2,000 and less than $5,000,
$1 ; and on all bills exceeding $5,000, $2 stamp. The amount,
it will be readily seen, is so inconsiderable that it cannot by any
possibility affect injuriously the business transactions of the
country, while it will give us a very considerable revenue, but the
amount of which i'rom the limited data in my possession I am
unable accurately to estimate.

Mr. Patrick — Do you mean that to apply to every note dis-
counted at the bank.s ?

Hon. Mr. Galt — It will apply to every promissory note or
cheque over £5.

Mr. Ferguson — Does that apply to every merchant's account ?
Will his receipts have to be stamped ?

Hon. Mr. Galt — If tluty are over £5. ll is also proposed. Sir, to
require a cent stamp to be applied to receipts for any sum paid over
$ 30, except on rec(>ipts by public oflicers for money paid to them

on public account, if deposit receipts for money paid to bankers to
the credit of the depositor, are granted not exceeding ^50, 1 cent,
and exceeding $50, 2 cents. That is the whole extent to which
I propose to apply stamps to mercantile transactions and no
further, and at the proper time I will enter inio my reasons for it.
It is proposed to require copies of det^ds or instruments attested as
copies by any public officer having executed the original or having
copies thereof attested under seal as true copies of the original, to
have u stamp of 25 cents ; to each notarial deed or instrument
given under seal, 25 cents ; to each letter of proof executed in this
Province, 25 cents ; to each discharge of a mortgage, one-half the
duty which the deed itself would bear. I find I have omitted to
slate, with reference to the transfer of real property, that on
each deed or instrument of conveyance, it is also proposed to
impose u small stamp duty, as^ follows: On each deed or
instrument, notarial or under seal, by which any real or immo-
veable property in th(^ Province is conveyed, mortgaged, incum-
bered or hypoihceaUMi, ibr or in consideration of any sum
of money not exceeding ijfjlOO, 25cts; exceeding ^100 but not
exceeding ^500, 50cts ; exceeding 500 but not exceeding
!|^1,000, $1 ; exceeding ^1,000 but not exceeding ^2,000, $2;
and for every additional $1,000 an additional sumof50cts. It
is further proposed — and the reason for it is obvious — to require
the imposition of a small stamp of 3 cents on telegraph messages.
The telegraph entf^rs into competition with the Post Office, and
largely diminishes the revenue from that service, and there can
be no reason why those who use the telegraph should not contri-
bute to the revenue. The plan has been proposed in the United
States, and in the discussions which have taiven place in the f.e-
gislature of that country, I have not iieard a word against it. When
we consider the number of messages annually sent, and the com-
petition the telegraph oilers to the Post Office, I do not think there
could be a fairer subject of taxation. The duty will, of course,
fall upon those who use the telegraph. The amount of value of
any estimates whicii can be made of the st'imp duties is nec<'s-
sarily very vague indcuxi. By the amount of notes discounted at
the banks we probably find an approximation to the mercantile
transactions of the country ; l>.it it is evidc^nt that a great many
ransactions take place between individuals where a note nev<?r
«:oes into the bank at all. However, if we take the average
iration of notes in the banks at three months, we can make a
guess at the number that pass through their hands ; but at
the same time any estimate we might make would be far
from accurate because we cannot tell the amounts of the notes.

1 ;

lik

and

ike a
111 at
fur

I am told that in u large proportion of iheni the amount is smalJ,
probably under £50. It is also didienlt to arrive at any thing
like an accurate estimate of llu; number of transactions that
lake })!ace in property. We mny, it is true, make an appro-
ximation by reference to the registry offices of the country, but
oven then the result is any thing but certain. I therefore have
great diflidence in ofl'ering the estimates I have formed upon such
information as was within my reach. I think the amount we may
expect to raise from stamps may be set down at ^400,000. It may
be something more ; I do not think it will be much less.

I now propose, sir, to revert to another subject. It is well
known — indeed, within the knowledge of every member of the
committee — that the bank charters contain a clause requiring them
to hold ten per cent, of their capital in government securities. It
is probably known to most members that the clause was inserted
when it was thought desirable by the administration of the Hon.
Mr. Hincks to make a market for the Municipal Loan Fund bonds,
and also with a view of rendering more secure the moneyed ins-
titutions of the country. There is this advantage to the banks,
that it saves them the circulation tax to the amount of government
securities they hold ; but there is also a disadvantage in that they
arc obliged to leave a large part of their capital in securities
which now yield thorn only 5 per cent, interest. And seeing there
is really no security to the public by holding tliese bonds ; that it
is tying up the capital of the banks which might be usefully em-
ployed in the country, the Government have come to the conclusion
that it is not desirable to retain the clause. They think that it is
better that the banks should have the disposal of the whole of
their capital ; and that we should seek in other clauses that secu-
rity which has been sought in the 10 per cent, clause. Therefore
I propose that that clause should be repealed, which will give us
a revenue of $36,000 on the amount of the securities they now
hold. (Hear, hear.)

1 have now fulfilled the disagreeable duly of indicating to
the committee the various sources of revenue which the Gov-
ernment propose to ask the committee to create. I felt that
I was going through a difficult, I might say a very painful
task, to have to indicate that the requirements of the country
are such as to necessitate the placing of all these burdens upon it.
But I may remark, that I do not see the imposition of a stamp
duty is a thing to be regretted. On the contrary, it is a matter
of some gratification. (Opposition laughter.) And the reason

why 1 make the remark is, that it will enable us to deal with the
other articles of customs in a manner different from that in which
I have been able to do up to this moment. I have, at considerable
length, stated the articles on which we could depend most for
yielding a revenue ; and the result of the changes will bring into
the treasury, according to my estimate, a sum of about two and
a half millions annually. I will now give to the Committee as
close an approximation as I can make of the effect of all the pro-
posed aherations in the year 1863. I take the ordinary Customs
Duties at ^4,000,000, and special increase in customs at $1,200,-
000 ; increased trade $750,000; stamps, $400,000 ; excise, 1,250,-

000 ; ordinary revenue, $3,131,900 ; bank tax, $36,000 ;—making
a total revenue, if the changes I propose are carried into law, of
$10,767,000. The expenditure for the same year will be —
ordinary estimates, $7,250,000 ; militia, $500,000 ; public works
$600,000 ; ocean and river steam service, $436,000 ; seignorial
interest, $160,00C ; township indemnity, $30,000 ; collection of
revenue, $1,370,500— making a total of $10,246,500. This will
leave a balance of receipts over expenditure of $52l,000--that is to
say, if the calculations I have formed prove correct on the
average. The result would be a taxation of $521,000 more than
our necessities required, and that brings me down to the point I
now desire to touch upon. As 1 said before, it is my duty to
recommend additional taxation upon the several leading articles
which enter into general consumption, tea, sugar, coffee, &c. I
now have to state to the Committee that I think the time has
arrived when, taking advantage of the new taxation imposed
across the line, we may re-consider the general rate of customs
duties on manufactured goods imported into this country ; and

1 think we may now very properly endeavor to cheapen them to
the general consumer. (Hear, hear.) If on the one hand I
recommend an increase of certain duties, on the other I
recommend a reduction. 1 think in fact that it is absolutely
necessary this reduction should be made, because I find
from the experience of past years that as the duly has
been augmented the consumption has diminished. I may
mention the case of one article as particularly illustrative
of the fact I have mentioned — it is that of leather. In
that article the importations ran up from $185,000 in value in
1852, to $614,000 in 1857 — the duty having been in the previous
year 14 and in that year 15 per cent. It was then increased and
now bears a duty of 20 per cent, — so that instead of $514,000
worth being imported as in 1857, the value last year was only
$981,000, and we absolutely suffered a considerable loss to the

revenue. Then, again, the same is the caso with manufactured
goods, such as boots and shoes. In 1852, the importations of the8e
articles reached $230,000, and in 1855, $765,000. The duty wan
then increased, and is now 25 per cent ; and the importation^!
decreased in the same ratio, till last year they -wcrv only $280,000.
In these cases, I take it, the figures most conclusively show that
not only have we lost in duty but we have compelled the people
to pay a higher price than before for articles that are of prime
necessity. If it were not too late I might adduce many more
illustrations in regard to this point. But it is not so much to the
effect upon the revenue that I would draw attention as to the fact
that we have now an opportunity of reinvigorating our trade by
reducing the duty on foreign goods. (Hear.) I propose making
a reduction of the 20 per cent list to 15 per cent, and of the 10 per
cent, to 7^. (Hear, hear). That is to say, I propose a reduction
on all manufactured goods imported and quasi raw material, such
as iron, steel, &c., of twenty-five per cent on the present duties. I
also propose to replace, in what I take to be their proper position*,
some articles that are now on the list of goods paying 30 and 25 per
cent. I think the time has come when it will be found advantageous
to our revenue to aim directly at one object in the alterations
we propose — we must seek to get the utmost amount we can,
coupled with unrestrained and unembarassed trade. Now, if oh the
one hand we get increased trade by a low tariff of customs, it is
equally clear on the other that every article made in the country
will be decreased in value to the consumer by the reduced amount
of duly imposed upon that particular article at the custom-house, h
is not merely on the quantity of imports and articles taxed that the
price is raised, but every similar article consumed in the country is
increased in price tantamount to the duty imposed. Therefore I
say the reduction of duty on the whole of the foreign goods
imported is a boon equivalent, or nearly so, to the burden
imposed upon the people by the increase on those articles of
general consumption, such as tea, sugar and cofTee. And
I will give the estimated result to show this to be the case.
The reductions I have mentioned in the duties on the reduced
importations of this year would amount to no less than $800,000,
which in ordinary years when there would be no falling off in the
imports, would be increased by $200,000 more, — making a total
reduction of $1,000,000. Now, as I have already said, the
increased duties on tea, sugar, &c., amount to $1,275,000.
Consequently, the reduction on the articles I have indicated is
equal, or very nearly equal, to the increase on tea and sugar. I
think, Sir, no one disputes that it would be to the advantage of

tiaa country lallinr that the duty shall bo levied on these two
lirticles than that very nunnerous articles should be subjected to a
higher rate of duly than that at present imposed. And this brings
lue to the consideration of another subject.

We cannot avoid seeing that one of the causes which will operate
against the Unit(;d States, both in retaining their present inhabitants
and in attracting additional population is found in the very high du-
ties they have been eoinpelled 1o impose. If our duties are less than
theirs, we may reasonably hope that a large amount of immigration
may be attracted to our shores. ' I think, also, it will be found
that a very considerable increase in our trade will be the result of
ihc mode I propose to adopt in the imposition of duties. It is
quite within the knowledge of every member of the Committee
that, justly or unjuLtly, strong opinions are held not only in
England but in the United Stales iis to what they are plet^scd to call
our very high customs' duties. They have never taken into
account the circumstances which have compelled the imposition
of those duties, for there never was a time before in which the
Legislature could consider such a method of raising the revenue
as is now proposed. Never before were wo able to raise the
revenue of the country in any other way than by comparatively heavy
duties on imported goods, and there has hitherto prevailed great
ignorane<? of the circumstances under which our financial
legislation has previously taken place. We are now permitted by
circumstances to reconsider this legislation, and to place it on a
footing which will be more consistent with sound political
economy, and consequently more conducive to the prosperity of
the people. In addition to the; causes which I have already
mentioned as being of a nature that may well lead us to consider
the propriety of reducing our duties, it must also be remembered
that it is very desirable, when wo are engaged in the consideration
of the question of the defence of the country, that wo should do our
best to deprive the only party in Great Britain who arc opposed
to the maintenance of the connection with the mother country — of
which we are so proud and to which we are- all so devoted — of
the sole crn:.so of complaint which they can bring against us.
(Hear.) Again, in the case of the United States, it is evident that
the ground upon which they have endeavoured to set up an
agitation upon the subject of the Reciprocity Treaty, rests pre-
cisely on the same footing as the complaints made in the mother
country. There they have endeavored to arouse the selfish feel-
ings of the New England manufacturers and to yoke that interest
with the forwarding interest of the State of New York, so as to
foment an agitation against the treaty for their own unworthy

objects. If we can do »o with advantage to ourselves and
without detriment to the revenue, it should be an object with us
to endeavor to satisfy parties with whom we have such large
commercial transactions. (Hear.) It is, too, undesirable that
the trade of the Province should be confined to two markets. At
present there are practically but two markets to which our pro-
duce goes, and from which we can obtain supplies. One of
these is Great Britain ; the other, the United States. Now the
cau 'e of the suffering in this country at the present time, has
arisen from one of those markets being closed to our trade. How
is it, on the other hand, that under circumstances hitherto unpar-
ralled in regard to the want of the staple article of cotton. Great
Britain has maintained her position during the past winter ? It
is this, that although she is dependent on the United States for an
article important to her manufacturers, the various branches of
her industry are so diversified, and her connexion with other
countries is so intimate, that when one channel of trade is closed
another opens and she is not depressed to any thing like the
extent we ourselves arc. We are suffering from the loss of a
market in the United States, and we ought to try and open other
markets to our trade. We ought to endeavour to seek such com-
mercial relations with other countries, as will not place our mer-
chants entirely at the mercy of one or two countries. And this
recalls to my mind the liberal treatment we have received from
the Government of France. The French Government have, with
the utmost liberality, admitted all Canadian produce almost free
into their markets, and they have also extended to our shipping
the same advantages which they have conferred on that of Eng-
land. They have given to Canada boons such as they have not
given to any other colony, and such also as are only enjoyed by
Great Britain herself. A year ago we reduced to a certain
extent the duties on French goods. We were immediately
met by liberal corresponding action on the part of France,
which met us more than half way. (Hear, hear.) The
French market being thus opened to us, we ought to do
all in our power to encourage trade with that country.
Such trade can only be carried on in one way — by shipping our
produce to that country and receiving its goods in return. If you
hope to send timber and grain, you must expect to get back
French wines and other French products in their stead ; and
therefore, when imposing our duties, we ought to be particularly
cautious that we do nothing we can avoid to militate against
that trade. I am satisfied that the adoption of the measures for
the reduction of our duties which I shall have the honor to sub-
3

mit on a future occasion, will do more to encourage our trade
with France and to develop our trade with England and the
United States than any other measuren which this Committee
could adopt.

Mr. McGee — Will the Finance Minister inform the House
whether there has been any correspondence between the Govern-
tnent of this country and that of France ?

Hon. Mr. Galt — I may slate to my hon. friend that no official
correspondence could take place between a Colonial Government
and the Government of a foreign country. The French Govern-
ment, however, have in the person of their consul here, the Baron
Boilleau, a gentleman of great intelligence and of almost universal
knowledge — (hear, hear.) — who has aided us in the development
of our trade with France to such an extent as must make him
and the country he represents worthy of the warmest thanks of
every Canadian. (Hear, hear.)

Mr. McGee — My object in putting the question was to elicit
the manner in which this desirable state of things has been brought
about. The inference I draw from the Finance Minister's
remarks is that communication must have been had with some
one connected with France, so as to have produced the corres-
ponding action of which he has spoken.

Hon. Mr. Galt — The inference was a correct one. Although
no official correspondence can take place, fortunately the distin-
guished gentleman to whom I have referred has seen the impor-
tance of developing the trade of this country with France, and has
pressed his Government to extend those facilities to our trade
\vhicli had previously by treaty been extended to the trade of
England. (Hear, hear.)

I have now. Sir, very nearly completeu the task which I
imposed upon myself when I first rose to a Idress the Committee.
I have endeavoured frankly to place before you the state in which
the finances of the country will in my opinion be, in the year 1862.
I have stated what provision I considered ought to be made for
those necessities in this year, and the mode in which that provi-
sion might be made. I have also gone further, and indicated
that I thought the time had arrived when circumstances were
favourable to the reconsideration of our customs and excise
duties. 1 have also slated to the Committee the sources from
which I expect to derive the revenue for the year. — I have said
that I regard the consumption of the country in other articles as

equally entitled to be relieved from chariE ■> as the consumption of
sugar and tea, 'while the articles last named poHScss the singular
advantage, that the duty is readily obtained, being levied at one
or two points, with the least possible expense and the greatest
possible certainty. The consumption of manufactured goods
necessarily varies as to amount with the circumstances of the
people, but the consumption of tea and sugar does not vary in the
same proportion. It is much more settled, and there is much more
certainty of obtaining from them a specific amount of revenue
within a given time. I have already explained that the duties
which are proposed to be placed upon tea and sugar and the
other articles ara each and all of them lower than the duties on
the corresponding articles which it is proposed to impose in the
United States. In connection with this, 1 should like to
state for the information of the committee the duties upon some
of the leading articles in the United States and in Canada. I
am the more desirous of doing so now because I think a good deal
of misapprehension exists or at least did exist, on the subject of
the American and Canadian Tariflfs, because at this moment the
impression has become general that the American tariff has
largely increased. But that is not the fact. The las^t increase was
that introduced by what is known as the Morrill Tarifli*, passed in
March, 1861.

There have been changes with regard to tea and sugar and a
few other articles since, but the bulk of the articles are still under
the Morrill Tariff. I will occupy the time of the Committee for
a few minutes while I mention the duties on some of them. On
china and earthenware, the American duty is 30 per cent ; by our
tariff, it is 20 per cent ; I propose to make it 16. On clothes ready
made the duty is 30 per cent, in the States, 23 with us, and I pro-
pose to make it 15. On coffee green, the American duty is 6
cents a lb. equal to 42 per cent ; I propose to make it 2 cents a lb.
added to the 5 per cent, ad val. On cottons the duty varies from
60 to 30 per cent in the States ; here it is now 20 per cent, and I
propose to make it 1 6. On dried fruits, the duty in the United
States averages 6 cents a lb. equal to 83 per cent ; with us the
duty is 20 per cent, and I propose to leave it. On drugs and
medicines the American duty varies from 10 to 30 per cent ;
ours is 25 per cent, and I propose no change. On glass and glass
ware, the American duty is 30 per cent, ours is 20 per cent, and I
propose 15. On pig iron the duty in the States is $6 per ton, equal
to 76 per cent. ; with us it is now free and will remain so. Bar
and rolled iron, of the value of |30 per ton pays ^16, equal to 50
3*

■■i )

per cent, in the States ; with us it pays 10 per cent, and I propose
to make it 7^. On manufactured iron the duty in the States is
30 per cent ; with us it is partly 10 and partly 20 ; I propose to
make it partly 7| and partly 15. Sole and bend laather pays 30
per cent, in the States ; with as 20, and I propose that it shall be
12 J. Molasses, w^orth 20 cenvs a gallon, pays 6 cents a gallon or
30 per cent, in the States ; here it will be subject to a duty of 3
cents a gallon, in addition to the 10 per cent ad valorem. Salt is
subject to a charge of 18 or 12 cents per 100 lbs. in the States,
according as it is in bags or in bulk ; in Canada it is free. Silks,
satins and velvets pay from 30 to 40 per cent, in the States ; here
20, and I propose 15. Spices, cinnamon, cloves, &c., pay from 40
to 100 per cent, in the Stales ; with us, from 20 to 30. Refined
sugar pays 5 cents per lb., equal to 71 per cent, in the States ; the
rate that will be imposed here will be somewhere about 40 per
cent ; at present it is 25. Raw sugar pays 2^ cents per lb., or 45
per cent, in the States ; with us it will be little less. Tea pays
20 cents a lb. in the States ; at the present value of tea, our duty
V ould be 14 cents, making a difference of 6 cents less here than
in the States. Wo Jlens pay from 25 to 40 per cent, in the United
States ; with us 20, and I propose to make the duty 15.

Hon. Mr. Foley — A great boon to the woollen manufacturers !

Hon. Mr. Galt — I hope it will be a boon to the country at
large, and I do not think we are in circumstances to extend special
boons at present to any class of the community. I think we are
bound to endeavour at present to make our taxation apply to all
members of the community, irrespective of their particular avoca-
tions. It may be said that parties engaged in the woollen trade
for instance, may think themselves injured by our going back to
the duty as it was three years ago I do not know, however, that
they had any right to expect an increase in the duty, or that they
can sustain any injury by our going back to the former rate. But,
if the particular article they make is subjected to a lower rate of
duty when imported, it must be remembered that, as regards the
United Stales, the cost of the article has been greatly enhanced by
the taxation and the expenditure imposed upon it there, and that
in reality the cost in the United States will be larger than it was
a year ago. Consequently the difficulty the manufacturer there has
in competing with the manufacturers in this country, is equivalent
in my opinion to at least 5 per cent. (Hear, hear.) With regard to
cottons the case is still stronger. Ours is an ad valorem duty of
20 per cent., on cottons. Now, it is notorious that the price of
cottons has advanced from 60 to 100 per cent. Consequently the

>!'••

20 per cent, we are now charging is practically to the consumer
40 per cent , on the same amount of goods, the same number of
yards he uses — 40 per cent if the price has doubled, 30 per cent
if it has risen one half. These are considerations which must be
in the minds of the Committee when we are considering the
question of taxation. It is plain that, if we maintain the rate so
high that parties cannot obtain the goods at prices at which they
have previously obtained them, it will limit the consumption. If
we can, by reducing the duty on an article, enable persons to
obtain a larger quantity at the same price, it is clear we have pro-
moted the welfare of the country in so doing. The result of the
measure which I have had the honor to introduce this evening, if
it should receive the approval of the legislature, will, 1 think, be
in many respe'^ts beneficial to ihe country I think it will certainly
re-establish the credit of the country on a basis from which it
cannot be shaken. (Hear, hear.) I think it will encourage
immigration to the country by making as marked a difl'erence as
possible in our favor between the charges of living here and the
charges of living in the United States.

It is clear that if we were to cease our efforts for the settlement of
the country, if we were to put a stop at once to the various schemes
we have on hand at this moment for the purpose of promoting it —
if we were to do this, there is no doubt we might save a good
deal of money. But I do not believe that would be a sound course
to pursue. I do not think, because we have a temporary difficulty
to meet, we should abandon those plans for the general settlement
and improvement of the country which we have initiated. (Hear,
hear.) Therefore on this occasion, while I have felt the necessity
as far as possible of cutting down the outlay in every branch of the
public service, while I have felt that necessity as strongly as any
member of this House can feel it, at the same time I have not
hesitated to recommend in ths estimates which are in the hands
of members, a double grant for the settlement of the country and
the continuation of those Colonization Roads wiiich have done so
much good already. (Hear.) Notwithstanding that I feit the diffi-
culty in which I should be placed in coming before the House this
evening, notwithstanding that no one could understand better than I
did the effect of the statement I was to make, I have not hesitated to
iiicreasethat difficulty rather than to diminish it, by providing means
for objects whereby 1 hope to see the prosperity of the country pro-
moted. (Hear, hear.) And notwithstanding the temporary diffi-
culties in which we are placed, it is well to remember that, if the
House assents to every item of the taxation I have mentioned, the

amount per head of the population will not be so great as it was
five years ago. (Hear, hear.) 1 wish the House to remember
that the taxation, if carried out to the uttermost extent I have
indicated, will not place so heavy a burthen on the people as they
bore five years ago. It is otherwise distributed, but it will not
be larger per head. — It will be less. At the same time we have
not seen that the burden which the country carried five years ago
in any way retarded its progress. Nor do I believe that what we
now do will hereafter affect its settlement; the maintenance and
extension of our educational and judicial systems, are objects far
too valuable to be sacrificed on account of any temporary difficulty
we may feel in paying the taxation necessary to provide for
them. (Hear, hear.) I have no idea that the progress of Upper
Canada will be in any way arrested or impeded. 1 look forward
with perfect confidence that at the end of the next decade the
progress of that section of our country will be much greater than
it has been. I know that in the race of progress Upper Canada
will hold her own ; but I believe also, sir, that the next ten
years will see a great and marked change in Lower Canada.
(Hear, hear.) If we look back to ten years ago, we shall find
that the mind of Lower Canada was not awakened to the great
importance of the settlement of the country. But we now see the
intelligence of Lower Canada awake and active in the endeavor
to bring here the emigrant and the settler to fill its fertile fields
with industrious laborers. And I believe that if the progress of
Upper Canada continues as it has, the progress of Lower Canada
will be even better. (Hear.) I do hope, sir, that whatever may-
betide, whatever circumstances may arise, we shall see on all
sides, and in both sections, only generous emulation as to which
shall be first in the race of progress, first in intelligence, wnd
first in maintaining the honor and dignity of the country. (Hear,
hear.)

APPENDIX I.

TABULAR STATEMENTS OP MR. QALT'S FINANCIAL ESTIMATES.

((

Table I Expenditure for 1862.
•* IL Revenue for 1861L, under existing laws.

in. Estimated result of the proposed changes in the laws.

IV. Statement for 1862.

V. Statement for 1863.

VI. Memorandum.

APPENDIX II

lay
all

THE STATISTICAL TABLES ALLUDED TO BY MR. GALT.

Table I. Nat)pnal debts of several countries, &c.

'* 11. The annual expenditures of the same countries.

" ir The expenditures of several of the British Colonies.

** IT J relation between the population and debt of Canada for several

y- a .; pa.st.
" y. The increase in the population, wealth, &c., of Canada, between the

census of 1852 and 1861.
«< VI. The American and Canadian tariffs compared.

I Ml

:^'

11';

:...l

Appt:ivi>ix I.

I.— EXPENDITURE FOR 1862.

Total amount of Estimates, as brought down. S7132 528

Militia

850,000

Ottawa buildings. ........ 7001000

Other public works mcluding Court Houses and Gads, L. C 639,000

Ocean and River Steam Service , 436 000

Redemption ol Seignorial righU— '

Capital, say $800,000

Interest, say 160,000

Townships' Indemnity Fund, say.
Redemption of Public Debt

Collection of Revenue —

.., Customs $3f54,000

Excise. 50,000

Post Otfice 442,000

Public Works 250,000

Territorial 200,000

Fines and forfeitures 14,500

Special Funds 50,000

960,000

40,000

399,030

$11,156,558

1,370,600

Total $12,527,058

Revenue, as per other table .... 7^76,050

Jtftfw.— Total expenditure $12,533,658

Deduct— Extraordinary as per table. . 2,379,030

Ordinary expenditure, 1862 10,154,628

$5,152,008

II.— REVENUE FOR 1862, UNDER EXISTING LAWS.

Customs.

Note.—Our comparative loss up to April Ist., is 33 per cent of last year's revenue. Sinco
then, to May 13th.. our loss is but 15 per cent.
Total to May 13th., a loss of 26 per cent.

Revenue for 1S61 $4,774,000

Loss to May, 13th., 1862 $495,854

16 per cent on balance of year 437,400 933,254

Exc.sk. ^'>'''''''

Spirits $270,749

B^r 55,480

Licenses 76,175

402,404
Various items.— See estimates , 3,131,900

Total $7,375,050

•i

III.— ESTIMATED RESULT OF THE PROPOSED CHANGES IN THE TARIFF.
EXCISE, STAMPS, AND BANK TAX.

Customs.

Additions.
Sugar refined, 2 cents per lb.

$13,580

" raw, 2 « ... 808,610

Molasses, 3 cts. per gal. . . 38,757

Tobacco, man'd., 2 cts. per lb. . 50,>-96

Coflee, 2 cents per lb 20,220

T«a, 10 cents per lb 474,610

Confectionary, 5 per cent adl.. . 2,100

$1,408,573

For J year, say $600,000

Add gain from reductions in J
year $100,000

Total gain J year.. . . $700,000

Excise.

Beer, 2 cents per gal $110,960

Spirits 14 cents per gal 591,296

Kectified do. 10 cents ^4,530

Tobacco, 3 cents per lb 57,030

Licenses (Tobacco) 1,500

$845,310

Stamp Duty.

For the year $400,000

i year $200,000

Bank Tax.
Year. . . .
J year. , .

$36,000

Reductions in Duties.
Estimated at $800,000

For \ year, &ay 600,000

But increased imports, conse-
quent on reductions, will l)e
$4,000,000, on which 15 per
cent is $600,000

Shewing a gain by tarifl' reduc-
tions of $100,000

$18,000

Totals— HALF year.

Customs $700,000

Excise 422,658

Stamps 200,000

Bank Ta.\ 18,000

$1,340,658

IV.— STATEMENT FOR 1862.

Amount of provision required for 1862 , . , $5,152,008

Of which may be raised by loans, &c. :

Militia— Armories $240,000

« Clothing 240,000

$480,000

Ottawa Buildings 700,000

Sei^norial Tenure 800,000

Redemptiou M. L. F 399,030

2,379,030

Deficit for 1862— imder existing laws 2,n%fifJ6

Receipts from new taxes, \ year I,340f668

Deficit— 1862 $1,438,320

Acquired to be raised by credit : —

Permanent outlay $2,379^080

To be raised by the proposed Exchequer Bills •,.. $3,811,350

V.-STATEMENT FOR 1863, UNDER THE PROPOSED CHANGES.

Revenue :

Customs— Ordinary $4,000,000

Special increases 1,200,000

Increased Trade 750,000

Stamps 400,000

Excise— Ordinary and additional 1 ,250,000

Ordinary Kevenue, dEc 3,131,900

Bank Tax 36,000

$10,767,900

Erpenditure :

Ordinary estimates $7,250,000

Militia 600,000

PuWic Works 500,000

Ocean and River Service 436,000

Seignorial Interest 160,000

Townships do 30,000

Collection of Revenue 1,370,500

10,246,500

Margin $521,400

VI.— MEMORANDUM TO ACCOMPANY THE PRECEDING TABLES.

Adding to the population for 1861, viz : 2,507,657

3.47 per cent for increase for a year 87,015

We have as the population for 1862 2,594,672

Thus, betbre we exceed the debt and expenditure, per head, of 1858* when the
population was 2,260,677, we may increaw our Debt to. . $63,006,000

And Expenditure to. . $10,251,900

• See Statistical Tables.

APPIilVDIX II ,wmmContiniied.
TABLE siiowiNa the|Jnational dkiits of several European codntries and the

ANNUAL CHARGES DUE THERETO.

Mainly abridged from Maurice Block^s Statistiques de la France.

Country.

Year.

Capital of Debt.

Annual charge.

Per cent, of

all public

expenditure.

Charge for

each
inhabitant.

Great Britain

France •......•.

1857
u
It
t<
((
(t

.£796,614,000

333,370,000

186,041,666

36,337,500

94,010,416

26,916,666

£27,807,291
12,312,673
7,630,874
1,929,687
2,041,929
1,629,109

31.98
16.20
27.00
11.00
46.04
28.02

£0 19 m

6 9i

Austria

PniSiii-i

Holland

Belgium

4 Oi
1 Hi
12
6 5i

Canada

1861

.£11,665,295 Stg.

£657,291

35.87

£0 5 2i

United States

1862

[conjectural]
£200,000,000

£16,000,000

75.00

£0 16

The figures, having undergone several reductions, from francs to pounds, &c., may not
be exactly correct, though they are relatively so.

Table showing the Annual Expenditures of several of the European Countries.

Country.

Year.

Expenditure.

Per head, Stg.

Great Britain ....

1860

£72,578,632

francs. 1,825,854,379

florins. 386,047,100

thalers. 130,615,255

guilders. 86,535,264

francs. 191,225,990

£2 8 9

France [as per budget]

fr. 601=£1 19 1! J

Austria ....

fl. 11=£1 2 4i

Prussia .... ...............

th. 7J— £1 1 8i

Holland

gl. 243=£2 1 3
fr. 41— £1 12 5J

Belgium ....

Canada

1861

$9,318,180

$3 71=£0 14 lOi

This Table is calculated from figJires supplied by Mr. Horn, in his " Annuair* du
Credit PniliCi 1862.'* The British and Canadian expenditures are from official documents.
The Canadian expenditure is the " ordinary expenditure " for the year.

may not

Stg.

2 8

1 19 m

1 2

1 1

2 1

1 12

9 14 m

fp.

APPEllVDIX II .^Continued.

TABLE SHOWING THE EXPENDITURES OF SEVERAL OF THE BRITISH COLONIES.

Colony.

Canada

New Brunswick.
Novo Scotia. . . <
P. E. Island.. . .
Newfoundland . .

Population c

New South Wales .

Victoria

Queensland.. . . . .

South Australia. . .

Tasmania

New Zealand, whites.

Cape of Good Hope j ^,^,,j jg^'g^^ j

r«vi«n S White 4,857 )

'^•^y*'" } Col'd. 1,722,957 \

Mauritius l^X' ,!i^5|

u^«„ K-on,r < White 1,034^

Hong Kong.. . . . j ^.^j,^ gg^g^, ^

Bermudas

Bahamas.

J*™«'<=* SSu sets?!

Guiana

2,507,657

252,000

330,857

71,496

122,638

342,062

504,519

30,000

1 18,665

84,000
69,328

267,096

1,727,814

238,363

86,941

10,982
27,519

377,343

127,695

Expendi-
ture.

1861
ISGl
1861
1856
1857

1858
1858
1861
1858

1858
1858

1856

1858
1857
1859

1851

1844
1851

£
1,863,636

161,800

203,500

28,846

173,965

1,571,363

2,365,856

197,663

543,025

560,488
341,655

494,989

698,268

572,479

72,390

•

18,180
29,457

262,142

272,132

1861
1861
1861

1858
1858

1858
1858
1861

1858

1858
1858

Per head.

£ 8. d.

14 lOi Stg.

12 10

12 3^

8 Oi

1 S 4^

4 11 104
4 13 9i
6 11 6i

4 11 6i

6 13 5i

5 15 2

1858 1 17 Oi

1859
1859
1860

1859
1857

1859

1858

8 1

2 8 Oi

16 7J

1 13 l;'f

1 1 4^
13 lOJ

2 2 7i

This table is compiled from the « Colonial Office List, 1862, by Wm. C. Sargeaunt
and Arthur N. Rich, of the Colonial Oflice." The figures for Canada, New Brunswick and
Nova Scotia are from Official Statements.

;;l,

l'< il

APPEIVDIX II ,mmContinutd.

TABLE SHOWING TUE HELATION BETWEEN THE POPULATION AND DEBT OF CANADA f Oft

TEN YEARS PAST.

Population, as per census, lS&2 1,842,265.

Do. 1861 2,507,657.

This '} an annual increase of about 3.47 per. ct., and the population of the Country in each
year may be taken as under :

la 1862 1,842,265

Increase 63,926

In 1853 1,906,191

Increase 66,145

In 1854 1,972,336

Increase 68,440

In 1855 2,040,776

Increase 70,815

In 1856 2,111,591

Increase 73,292

In 1857 2,184,863

Increase 76^14

In 1858 2,260,677

Increase 78,446

In 1859 2,339,123

Increase • 81,168

In 1860 2,420,291

Increase 83,984

Accumulated errer 3,382

In 1861 3,607,667

Taking these figures, we have the following :

Year.

1852

1853

1854

1855

18C3

1857

1858.

1859

1860

1861

W I ■ ■ ■- ■IM.I — M

Year.

1858

1881

Year.

1858

1861

Population.
1,842,265
1,906,191
1,972,336
2,040,776
2,111,591
2,184,863
2,260,677
2,339,123
2,420,291
2,507,657

Debt.
$22,355,413
29,922,752
38,861,833
45,855,217
48,757,619
52,334,911
54,892,405
64,142,044
58,392,469
58,326,478

Population.
2,260,677
2,507,657

Interest on Debt. *

$3,030,899
3,286,467

per head.
$12 13
15 68
19 61

32 47

33 09

23 97

24 39

33 10

34 08
33 31

per head.

$1 34
1 31

Population. Expenditure, ordinary, per bead.f
2,260,677 $8,939,809 $3 96

2,507,657 9,318,180 3 71

it ■

* Charges taken from Auditor's Statements :
In 1861, to $3,130,988
Add, 155,469

$3,286,457

Unfunded.

t The saving of 24 cents per head on a population of 2,507,657 is equal to $601,837 68.

APPENDIX II .^Cotuinued.

lNaba rot

per head.

$12 13

16 68

19 61

22 47

23 09

23 97

24 39

23 10

24 08

23 21

per head.

$1 34

1 31

per head.f

$3 95

3 71

1 1

APPKIVDIX II ,'^C<mtuiued.

Tablx skowinq the Duties on tub i'ndermentioned Articles according to the

American and Canadian Tariffs.

Articles. — Values.

China and Earllienware

Clothe*, ready made •

Cofl'ee, greun, 12 cts. pur lb

Cottons

Dried fruits, average 6 ets

Drugs and Medicines

Glass and Glassware

iron, pi^, say $8 per ton

"■ l>ar nnit roileil, say $30

« innnufactured

Leather, sole and bend

Molasses, 20 cts. per gallon

Paints, [white and red lead,] 6 cts. . .

^".\Ztt.:::::.\:: ::::::

Silks, Satins, Velvets, ^c

Spices —

Cinnamon, say 20 cts

Cloves 10 '(

Ginger, root. .. 15 « . .

Nutmegs 40 "

Spirits

Sugar, refined, 7 cts. per lb
" raw, 5i «

Tea 34 ««

Wine

Woollens ,

American Taritl'.

30 p. c

5 ct. per lb ,

Varying from 30 to .

5 cts. per lb

Varying from 10 to ,

$6 per ton ,
$15 « ,

6 cts. per gallon . . .

2| cts. per lb

18 cts. per 100 lbs. .
12 cts. " « ..
Varying from 30 to.

=42

=83

=75

=50

=30

=36

20 cts,
8 "
3 «

25 «

per lb .

=100

=80

=20

=62

=71

=45

=59

25 per cent, and 12 cts. per lb.=40

6 eta. iMjr lb ,

20 cts,

Canadian.

20 per cent.

25 ««

10 «

20 «

25 average.

20 «
Free.

10 «
10&20"

20- «

|5 «

10 ««

Free.
20 «

51 1 average

25 ■

cc
ce

The American Tariff taken is the Morrill Tariff, as amended in August and December^
1S61. The Canadian duties are those now in force. The valuation of most of the articles
is from our own Trade and Navigation Returns.

Quebec : — Printed by S. Derbishire & G. Desbarats,

Printer to the Queea's Most Excellent Majesty.

TO THE

inadian.

per cent.
((

((
((

average.
((

e.
<(

c20«
((

((

((
\ average

I «
I «
I «

[)ecemberj
ho articles

A.TS,

1 -i