IMAGE EVALUATION TEST TARGET (MT-3) 1.0 ^KS IM I.I 11.25 ^ 1^ 12.2 u I 40 2,0 1.8 lA mil 1.6 <1? V 'ii CIHM/ICMH Microfiche Series. CIHM/ICMH Collection de microfiches. Canadian Institute for Historical Microreproductions institut Canadian de microreproductions historiques 1980 Technical Notes / Notes techniques The Institute has attempted to obtain the best original copy available for filming. Physical features of this copy which may alcer any of the images in the reproduction are checked below. n D Coloured covers/ Couvertures de couleur Coloured maps/ Cartes g^ographiques en couleur Pages discoloured, stained or foxed/ Pages ddcolories, tachetdes ou piqu6es Tight binding (may cause shadows or distortion a^ong interior margin)/ Reliure serrd (peut causer de I'ombre ou de la distortion le long de la marge intdrieure) L'Institut a microfilm^ le meilleur exemplaire qu'il lui a 6t6 possible de se procurer. 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The following diagrams illustrate the method: Les cartes ou les planches trop grandes pour §tre reproduites en un seul clich6 sont filmdes 6 partir de Tangle supdrieure gauche, de gauche d droite et de haut en bas, en prenant le nombre d'images ndcessaire. Le diagramme suivant iliustre la mdthode : 1 No. 8. INFORMATION FOR THE ELECTORS R'l^l DIRECT TAXATION .VK -^aS There is one obstacle at which the Liberals always balk in their advocacy of unrestricted reciprocity— the revenue question. How under the proposed policy can the public revenue be raised otherwise than by direct taxation, is a question the Liberals have never been able to answer and which they endeavor most stu- diously to evade. But the question is one which eveiv elector should propound to the disciples of unrestricted reciprocity, and should insist upon a straightforward answer, because if the tax- gatherer is to go about every year among the farmers and work- ing classes and levy tribute upon them to meet the expenses of government, the "fad" will have small chanwes of surviving the shock with the ballot-box. There is no difficulty whatever in ascertaining almost to a dollar how much revenue will be lost under the Wiman- Cartwright trade policy. We will certainly lose every dollar of duties now collected on imports into Canada from the United States, because the proposition is to throw down the Customs wall between the two countries. Then along the seaboard Canada is to impose the United States' tariff, not a tariff of our own making, mind you, but such duties as the American Congress enacts, to wit, that symbol of protection-run-mad, the McKinley r m: •^ ' ' 2 tariff. Being thus placed on identically the same plane as our neighbours in the matter of a tariff against the rest of the world, it follows as certainly as that water will find its own level, that the per capita import trade of the two countries will become equalized. What that implies to Canada in the way of loss of revenue a few figures will serve to illustrate. v^jti aro ;.?■ The value of imports into the United States, except coin and bullion was, in 1888, $723,880,000 ; last year it was $800,000,000, which, for a population of 63,000,000, represents $12.70 per head. The value of imports into the Dominion last year was $121,860,- 000, or, on the basis of a population of 5,200,000, $23.40 per head. Our foreign trade, therefore, is very nearly double that of the United States, relatively to population, and if we are to be put under the same fiscal conditions as that country, the consequence must be an immediate shrinkage of nearly 50 per cent in our import trade. Take the case of our import trade from Great Britain. In 1880 it amounted to $43,390,240, or $8.30 per head; in 1889 it was $42,317,390, or $8.25 per head; and in 1888 it was $39,298,700, or about $8 per head. On the other hand, the United States imports from Great Britain only to the value of from $2.75 to $3.00 per head. Under unrestricted reciprocity, therefore, our purchases from the Mother Country would immediately decline to less than one half their present dimensions, with a corresponding loss of Customs revenue. Another source of loss has to be faced, viz., the duties on sugar, which under the McKinley bill are to be removed from the after January 1, 1892, and which, therefore, would necessarily disappear in Canada if free trade between the two countries prevailed. We may, therefore, sum up this approximate loss of revenue under unrestricted reciprocity as follows : — ' REVENUE LOSS. '.';'.'''.' ' > -■ Duties on imports from United States.. ..*'..:f $ 8,220,-300 «* " " " Great Britain 4,788,500 ^* *' Sugai*, fruit, etc 3,000,900 - A $16,008,800 These figures are based on the official revenue returns for the year ended June 30th. 1890. They show, not a problematical or possible, but a certain, loss of income to the tune of $16,000,000 annually. How is this to be made up ? Some unthinking Liberals prattle that such economies in the general administration can be practised as will enable the reduced revenue to defray the charges on the treasury. Let us see as to that. The expenditure in 1890 was $35,994,000, but inasmuch as the year gave a surplus of nearly $4,000,000, or to be exact $3,885,893, it follows that a retrench- ment of say $12,000,000 in the expenditure would leave income and outgo about balanced, on the basis of last year's returns, under the operation of unrestricted reciprocity. But the fixed charges of the Dominion exceed the whole revenue possible to be derived by indirect taxation under the conditions of free trade with the United States. Look at the figures : — *fOq OS Eevenue, 1890 '..'.'. $39,880,000 JiH>^«0' oi-Ait h- Loss under U. Eeciprocity 16,000,000 '^i >sf^^' ,^- ' "^^ Balance of revenue.. ..t. ...?.:: $23,880,000 ' "'"* Against which the following fixed charges have to be put : — Interest on debt ..$9,887,250 ^' '- K'ii::,. Subsidies to provir.ces 3,905,000 ,tj.v..vrrT Sinking fund 1,887,230 ' Collection of revenue 9,183,000 «=^^'' .■■jf;:.i«;? tit- •- ••0 /.;:.«<' ,i:-:r'-ji' •"»■:/ "'''■''■<:■ liM «_____ nihj-> •■; oiU c;o-ii: Total $24,862,480 Already, therefore, there is a deficit of a million dollars annu- ally staring us in the face, and that without having made provi- sion to the extent of a single sixpence for such services as civil government, legislation, administration of justice, public works, militia, Indians, mounted police, lighthouse and coast service, ocean subsidies, agriculture, penitentiaries, and a host of other services absolutely indispensible. Why, if the Liberals cut down the expenditure for such items as these to the figure of 1876, namely, $8,570,000, there would still be a deficit of nearly ten millions in the revenue only to be overcome by direct taxation. '- il .li : 1 I 1 1/tll I 'I TESTIMONY OF A LIBEEAL. • Upon this point we have the testimony of a prominent Libe-' ral, long associated with the leaders of the party in the promul- gation of the doctrine of unrestricted reciprocity. We refer to lir. E. W. Thompson, for several years chief editorial writer on the Toronto Globe. Mr. John Charlton, M.P., having, in the couree of an address at Toronto last January, sought to make it appear that ample revenue can be had under unrestricted reci- city, without recourse to direct taxation, Mr. Thompson addressed a letter to the press, in which he said : — " May not the reverses of the Federal Opposition be due to the apparent indisposition of Sir Eichard and Mr. Charlton to nail Direct Taxation on a Great Scale to the masthead, when it flut- ters visibly enough ? Up to the moment of reading Mr. Charl- ton's demonstration, I liad supposed it safe to accept an estimate often editorially made by the Globe itself that the loss of revenue by unrestricted reciprocity would amount to fully $14,000,000. Perhaps you will be kind enough to state whether the Globe's calculation now agrees with Mr. Charlton's. He admits that over $7,000,000 annually collected on American importations would disappear. But he seems to ignore a consideration that the Globe used to say could not be honestly ignored, i.e., the dis- placement of British and other old world goods by American goods. If American goods, which now compete advantageously here with European goods, could enter free of customs taxes, while British and other European goods could not enter without paying 30 or 40 per cent., would not American goods displace all others to so great an extent, that other $7,000,000, or say $14,- 000,00 ' in all, would be lost to the Federal trejisury I I cannot think the Globe was wrong in that reckoning ; yet Mr. Charlton did not seem to agree with it in the fine figuring he did before the Young Liberals. It may be true that the private gains of Canadians from unrestiicted reciprocity would amount to vastly more than the loss of public revenue, but if $14,000,000, or, to split the difference between the Globe's and Mr. Charlton's esti- mates, even $10,000,000 would disappear from custom's income, what sense, to say nothing of honesty, could there be in asserting that Direct Taxation on a Great Scale would not be a necessary incident of unrestricted reciprocity." ,, The truth is direct taxation is as certain to follow immediately upon the adoption of unrestricted reciprocity as night is to follow day. ; VJ i >■ )-..K ti t< n la di MR. BLAKE'S VIEW OF IT. J'. ■if^ ! ._ Exactly what the ex-leader of the Libei*al party thinks of the new trade policy, there is no means of knowing at the time of writing, he having preserved a studious silence on the subject. We do know, however, that he regards direct taxation as imprac- ticable in Canada, and the party advocating the system as utterly fatuous. Speaking~*at Malvern, Ontario, in January, 1887, Mr* Blake thus referred to [those fiscal policies, like free trade and mnrestricted reciprocity, which destroy the revenue from cus- (.. toms : — !tu: ■J ;1;'UiV' ni "i-'^'ai 'fiU'ji yhlvA ** No man, I care not how convinced an advocate of absolutely free trade for Canada he may be, has yet suggested : — no man, I believe, can suggest — a practicable plan whereby our great re- venue needs can be met otherwise than by the continued imposi- tion of very high duties on goods similar to those we make,or can make, within oui" bounds, or on the raw materials. I invite the most ardent free trader in public life to present a plausible solution of this problem, and I contend that he is bound to do so before he talks of free trade as practicable in Canada. I have not believed it soluble in my day, and any chance of its solubility, if any chance there were, has been destroyed by the vast increase of our yearly charge, and by the other conditions which have been created. The thing is removed from the domain of practical politics." In that utterance is a sweeping condemnation of the new fad, unrestricted reciprocity. 5 a challenge to its advocates to ex- plain how the necessary p :c revenue can be raised otherwise than by direct taxation — whicn Mr. Blake pronounces impractic- able — when the customs duties against American goods are swept away. '^^ ^^""'^,>^^; '''"' ^''' ' "^ '''^';' ^^ ' ''''' '( W)^- vl- '>^ OBJECTIONS TO DIRECT TAXATION. '^>i' -J*^ i> Free traders of the Cobden school favor the imposition of direct taxes, and perhaps the wealthy classes will not seriously object to that form of taxation, because universal experience has de- monstrated that the poor always sutler under it. The men of large means, of great jpaonied interest, never pay in anj^thing like due proportion, while the wage-earners, the farmei'S and If 11 I.M 6 mechanics, arc taxed to the full extent under the direct taxation system. The foUowiDg extract bearing upon the subject, is taken from the report of a Commission of the State of New York, appointed to enquire into the operation of the direct taxes, of which Commission Mr. David A. Wells was chairman : — " They would also recall the opinion authoritatively expressed in the constitutional convention of 1868, that thirty citizens of the State could be named whoso aggregate wealth (mainly personal) was very considerably in excess of the valuation for that year of all the personal property of the entire state. But without again entering into details, the Com'missionors would now say that another year's experience has led them to this general conclusion, that the authorities of the state, under a law (professedly execute ed) requiring the assessment of all personal property at its full value, do not, in fact, succeed in assessing a proportion equal to thirty per cent, of the recognized low valuation of the real estate ; or more than fifteen per cent, of the real and true value of all such property immediately located within the state, and as such subject to the state authority." Direct taxation prevails in the United States, and as a result the farmers are everywhere in revolt against the system. Not a year passes without the farmers of New York meeting in con- vention to devise means of removing the inequalities of taxation, which are found to press heavily and often ruinously upon the poorer classes, while the rich escape with a payment altogether insignificant in proportion to their wealth and income. If the policy of unrestricted reciprocity were to go into operation an army of tax-gatherers would almost immediately thereafter be appointed, whose salaries would greatly increase the public ex- penditure, and who would go about the country every year exact- ing a payment in hard cash from every male adult. The capi- talist with an income of 810,000 a year would not begrudge giving $50 out of it to the Government, but the farmer, the mechanic, and other wage-earners with an income of $400 or $500 a year, would be pcround into misery and distress if he had to pay $50 of his earnings into the public treasury. " U.l. "; ■•; -If. <.: :K »< '■'■-!> J vj;; V;.. 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