■MAGE EVALUATION TEST TARGET (fA\ 3) f / O c^' 1.0 I.I 1.25 128 M 2.2 1^ 1^ I'o mil 2.0 U ill 1.6 V] <^ /i A 7 >«« ^s CIHM/ICMH Microfiche Series. CIHIVI/ICIVIH 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 origina' copy available for filming. Physical features of this copy which may alter any of the images in the reproduction are checked below. n D n Coloured covers/ Couvertures de couleur Coloured maps/ Cartes gdographiques en couleur Pages discoloured, stained or foxed/ Pages dicolordes, tachetdes ou piqudes Tight binding (may cause shadows or distortion along 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 ue procurer. 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The following diagrams illustrate the method: L'exemplaire filmd fut reproduit grAce 6 la g6n6rositd de I'dtablissement prdteur suivant : La bibliothdque des Archives publiques du Canada Les cartes ou les planches trop grandes pour dtre reproduites en un seul cliche sont filmdes 6 partir de Tangle sup6rieure gauche, de gauche d droite et de haut en bas, en prenant le nombre d'images n^cessaire. Le diagramme suivant illustre la mdthode : 1 2 3 1 2 3 4 5 6 /I V THE EXPORT OF SAW LOGS A BKIEF STATEMENT OF THE ' ONTARIO GOVERN. IHENT'S POSITION IN THIS MATTER. The changes made in the law affecting Crown timber at the recent session of the Ontario Legislature are important. By the first all future timber sales will be subject to the condition that the timber on the berths sold shall be sawn in Canada. By the second, the timber licenses now current, all of which expire on the 30th April next, will, on renewal, be subject to the foregoing condition, viz. : that timber cut under their authority shall be sawn in Canada. The first change takes away from the Govern- ment of the day that discretion which it formerly exercised of imposing or omitting the sawing condition as seemed expedient. The second change makes it imperative that all timber cut on lands of the Crown, under authority of license or permit, shall be sawn in Canada, whether the sale at which they were dis- posed of contained this condition or not. The circumstances which led to the above changes are mattem of public notoriety. The agitation, the deputations to the Gov- ernment and the newspaper controversy are still fresh in the public mind, and there is hardly an elector who has not had an opportunity of hearing both sides and forming an opinion. The action of the Government and the amendments appear to have- met popular expectation and to be generally approved. There has been some criticism, but only one debatable objection. The criticisms are confined to the Op))osition members of the Houae, and are, briefly, that the action of the Government is in- consistent because not taken before. It is stealing the OppoHi- tion's policy. The objection is that the amendment does uoi cover cutting done under licenses which issued nearly a year a,'<> 7n-*A^/>^ /^ "^ f 2 The charpres of inconsistency and adopting the Oppositions policy, even if well-founded, would not, considering the maorni- tude of the interests involved, affect or even arrest public atten- tion ; but, as a matter of fact, it will be seen that there has been no iiiconsiistency and that the Government has always been guid- ed by the logic of the situation in imposing or omitting the con- dition. The objection that the condition does not apply to the present winter's cut — and this is the only serious criticism — was given its quietus in the Legislature by the largest majority which the Govt rnment had during last Sebsion, proving that the great BQojority in that House are jealous of the honour and engage- ments of the Crown and are not disposed to trail them in the dust for party purposes. Now that the condition of sawing in the country has become law and will soon go into operation, and in order to make plain the course of the Government in the pa^fc, it may be intere^Jng to trace the history of our relations with the United States in respect of sawn lumber and timber. CONDITIONS OF LUMBER TRADE WITH THE UNITED STATES. It is well to remember that the United States has been our larpfest, our best, almost our only market for sawn lumber ; that we have for years seut to them annually from seven to ten nul- lion dollars' worth, and that free entry of our lumber into the United States market has been regarded as the greatest boon the lumber trade could obtain. • In 1854 the Reciprocity Treaty was entered into, under which Canadian lumbermen had the same rights, privileges and advan- tages in the markets of the United States as American lumber- men, and under this condition of affairs they made money and the trade flourished. In 1866 that Treaty was abrogated and the United States imposed an import duty of 20 per cent, ad valorem on sawn lumber, and Canada imposed an export duty of SI per •ihousand feet board measure on sawlogs. This state of things continued until 1872, when the U.S. duty was changed to a Bpecific one of $2 per thousand feet, without respect to the quality of the lumber. Culls had to pay he same rate as clear luinWr. The result was that ajl our lower grades were shut out, and our home market for these being limited, they could not be sold. Consequently, the faulty, rough and top logs were left in the woods either to go to waste or add to any fire that mighi take place, and even the percentage of rough cull lumber that in-l/ evitably came to the mills was sawn up and either left in the'.: pile to rot, or went into the burner. These conditions increased > the co»t of lumbering, narrowed the market and seriously reduced position 8 le magni- lic atten- has been een guid- the con- ly to the sm — was ty which lie great engage- rn in the iwing in ion, and ihe pasfc, ns with 'ATES. »een our ir; that ben n>il- into the oon the r which ad van - tumber- and the ind the alorem SI per things ed to a to the LS clear ut out, not be left m niighl hat in-L/ in the', reased't iduced 8 profits. The export duty of $1 per thousand imposed by the Government of Canada on sawlogs had no eHei t one way or the other, as at that time no sawloga were exported to the United States. THE MATTER IN CHARGE OF DOMINION GOVERNMENT. Prior to Confederation, trade and commerce.as well as the control of timber lands and the making of regulations iitttciing then), were in charge of the same Government, but when Conlederation took place, all matters pertaining to trade and commerce, the fostering and regulating of them, the imposition and collection of iiiiporl and export duties, etc., were relegated to the Federal Govern- ment, while Crown lands and timber became the properly of the Pi evinces. The lumber trade, in commf>n with other interests, was still anxious to get freer trade with the United States, and, as is well known, efforts were made from time to time by the Government of Canada to obtain a renewal of the Reciprocity Treaty, or more favourable conditions of some sort, but nothing could be done. Until the year 18S6 there whs no change in the situation. In 188G it was- pointed out to the Government of Canada that there was springing up on the north shore of Lake Huron an export of savvlogs to Michigan; that as our lumber, was charged $2 per thousand on entering their market, while we charged only $1 per thousand export duty on sawlogs, the Ara-j erican mill owner had an advantage of $1 per thousand to tow bis logs to Michigan. Although the export at thrtt time had not assumed any serious proportions, the Federal Government, as charged with matters pertaining to trade and commerce, took action and passed legislation authorizing the Government of Canada to charge $2 per thousand export duty, and to increase it by Order in Council to $3, if they thought that in the public, interest. By Act of Parliament of the Session of 188S the Govr ernment was authorized either to reduce or remove the export duty when it appeared to be proper to do so. By Order in Coun-: cil of the 13th November, 1888, the duty was increased from $2 to $3 per thousand, and by Order in Council of the 5th July, 1889, it wjis reduced from S3 to $2 per thousand. This was! done in view of a probable understanding being leached with the . I/uitod States for more favourable duties on our sawed luml»eT. . It will be observed that down to this period the Dominion Government had been looked to and recognized bj* everyone as the proper authority in regulating the export of log^, and it had; done so, using it as a lever to obtain better trade relations. ^In the fall of 1890 the Ontario Government purposed huldioigi a timber sale. The negotiations with the United States, before referred to, had not reached a concl*:uion. Some of the berths to be Hold were tributary to Lakes Huron and Superior ; some of them were in the Rainy River District, where the rivers on which the logs would be driven were the boundary line between Canada and the United States. As in line with the policy of the Government of Canada, and as a proper policy under the existing curoumstances, the Government of Ontario inserted a condition in that sale requiring the logs to be sawn in Canada. FREE LOOS FOR $1 DUTY. Shortly afterwards the negotiations reached a point of agree- ment, and Sir John Macdonald, with whose knowledge and ap- proval they had been carried on, was a.^ked to give the Govern- ment's formal aasent. It was given by understanding with Sir John in this way. Mr. White, M.P., of Renfrew, late Speaker of the House of Commons, asked the following question, per Mr. Bryson : See Hansard, 1890, volume 2, page 4662 : — " Whether, in the event of the United States Congress reduc- ing the import duty on sawn lumber to $1 per thousand feet board measure, the Government of Canada will remove the ex- port duty on pine and spruce logs '< It is very important that this question should be answered at the present moment." Reply by Sir John Macdonald : — . "I will answer that question. In the event of the United States Congress reducing the import duty on sawn lumber, the Government will remove the export duty on pine and spruce logs. I will take the opportunity of conveying that decision to the proper quarters." * The proper quarter was the Government at Washington. The information was conveyed, with the result that the import duty on sawn lumber was reduced to $1 per thousand, and five days later, viz., on the 11th November, 1890, the Government of Canada, by Order-in-Council, removed the export duty. It is unnecessary to say that the agreement reached was ap- proved by business men generally, and lumbermen in particular^ as it gave larger access to what was considered our test market and made lumbering more profitable. THE ONTARIO SALE OF 1892. • During all thiis time there had been no agitation or desire on the part of those interested that the Ontario Government should interfere in what was being so well and carefully managed in the interests of trade and commerce by the Dominion Qovernmeat It is true that Mr. Meredith had suggested that in future sales a condition of manufacture in the country should be inserted. That condition had been put in the sale of 1890, when affairs' were uncertain and unsatisfactory to the business of the country. Now that matters had been satisfactorily arranged, would it be continued by the Ontario Government ? Then came the Ontario timber sale of 1892. The Government had to consider what should be done. The position was this : An agreement had been made under which our trade in sawn lumber had expanded and had become more profitable ; should that position be disturbed and the whole question re-opened ? What was the area to be sold, and from what proportion of it could logs be exported ? It was found that the bulk of the area was tributary to the Ottawa and other streams from which export was sure not to take place. The Government, therefore, concluded not to re-open so large a question for such a small and doubtful benefit, and did not insert the condition. The sale was held, and although an increase of 25 per cent, was made in the timber dues, the largest prices ever obtained were paid as bonus, and out of the 633 miles sold only 78 miles went to Americans, and from these 78 miles down to this day not one log has been cut for exportation. One Cana- dian who purchased a four-mile limit has sold five millions of feet for export, and this is the entire quantity which has gone out of territory included in the timber sale of 1892. Surely the Government pursued the wise course on that occasion. MR. MISCAMPBELL's MOTION. In the Session of 1893, the last Session of the Ontario Legis- lature previous to the general election of 1894, the question of inserting the condition in future sales was raised in a motion by Mr. Miscampbell, M.P.P. for East Siracoe. The motion was made in Committee of Supply, and so could not be amended : — " That all the words after * That ' be struck out and the fol- lowing substituted: 'This House disapproves of the policy of disposing of the timber reserves of the province without its ap- proval being first obtained, and is of opinion that the right to cut timber upon the present reserves should be sold under such conditions as will ensure the manufacture of the lumber cut therefrom within the province, and more effectually guard against the unnecessary cutting and destruction of small timber growing in such reserves.' " I It will be seen that this motion dealt with two distinct quea- tions. It condemned the sale of timber lands without a previous vote of the Legislature, and it proposed that, in future sales, the condition of manufacture in the Province of Ontario should be inserled. It mixed up two matters which had nothing to do with each other. Fires frequently occur which render prompt sale of the damaged timber npccssary, otherwise it gk as though ere long all the American mill-owners, having limits here, would saw their logs in Ontario. But even if this were not so, there was nothing to be gained by interference; on the contrary, there was danger, because by the Wilson Bill it was provided that if any country or dependency should impose export duties or discriminate against the free export of logs, then the import duty on lumber was to be re-imposed. The markets that were opened up for our coarser grades of lumber were now enor- mous. Limits that were culled over and abandoned were again the scenes of active industry. Everything in the nature of a sawlog, no matter how rough or fault}', came out, and its yu-oduct, if at all sound, was sold at a profit. Lumbering was cheapened and a greater yield per acre than ever before was obtained, raw mateiial that had been valueless became valuable, more labour was employed, and the revenue of the Province from timber dues was materially increased. The situation was satisfactory, no practical business man de- sired anything further. The Ontario Opposition went to sleep, and although a doctor and a lawyer, who thought they had a mission, brought the matter up occasionally in the Dominion House, they were listened to with impatience, and no change was dreamed of. Had this position of affairs remained down to 8 the present day it is nothing more than truth to say that every- body would still bo satisfied, and no appeal would be made for hofitile movement by either Ontario or the Dominion. THE HOSTILE DINGLEY BILL. Matters remained in this state until the Democratic party was beaten, and a Republican President came in with a Congress and Senate in political accord with him They immediately pro- ceeded to frame a protectionist tariff, known as the Dingley Bill, one clause of which provided for an import duty on Cana- dian sawn lumber. The Dominion Government, still recognizing its responsibility in the premises, passed an Act for the imposi- tion of an export duty on sawlogs and nickel and copper ores, in the event of an import duty being imposed on Canadian lumber. Strong efforts were put forth by American holders of Ontario timber limits to keep lumber free, and, failing that, to keep the duty down to $1 per thousand ; all the lumbermen being practi- cally agreed that in view of the favorable prospects and the im- portance of the United States market it would not be wise to re- taliate in any way if the import duties were not raised above $1. It was generally understood that they would not be raised above this figure when the agitation ceased, and there were no suggestions nor demands for an export duty at Ottawa, or any restriction of export by the Province. Then came the sudden change of front at Washington at the last moment and the impo- sition of $2 on Canadian lumber passing into the United States, and the automatic clause under which whatever export duty was put on logs by Canada would be added to the import duties on lumber. For example, if Canada put an export duty of $2 on logs, then the duty on lumber going into the United States would be $2 plus $2, equals $4, per thousand feet, which would have the effect of shutting out of that market every Canadian board. INTOLERABLE CONDITIONS OF AMERICAN LEGISLATION. The lumber trade, and, indeed, the whole community, was in- dignant at this breach of faith, insult being added to injury, and the agitation commenced again. The position came to be recog- nized as this : that if the state of affairs were allowed to continue, Americans owning timber limits here would tow their logs across to be sawn in Michigan. Not only so, but it would pay the On- tario saw-mill man to dismantle his mill and move over to the United States, or sell h\8 logs to the Americans. It looked as though there would be an entire transference of the sawing of our logs to the United States, where our daw-mill employees would have to follow it if not shut out by the alien labor law. Here was an entirely new state of affairs. The Dominion Government could not impose an export duty, because if it did it meant the annihilation of our American market. Quebec and the other lumber-producing provinces did not export any logs. Indeed, it was only from the western part of Ontario that any logs were exported. No doubt the Dominion Government found that the great bulk of the lumber trade of Canada was opposed to an export duty, the position of all other parts of the Domin- ion being : " We can get all our upper grades of lumber into the United States even under the $2 duty. But we cannot get in at all against a $4- duty. We do not export any logs, there- fore the imposition of an export duty would not benefit us on the one hand, while it would ruin our American market on the other." MANUFACTURING CONDITIONS IMPOSED BY ONTABIO GOVERNMENT. Finding that the Dominion Government could not deal with the situation, the Ontario Government was appealed to, and Mr. Bertram, a leading Liberal, suggested the prohibition of the ex- port of logs from this Province. The idea took with the west- ern lumbermen and with the bulk of the people, whose sense of fair play revolted under the treatment and the dictation of the United States. Meetings were held and deputations appointed to laj' the matter before the Government. The Government heard those in favor of requiring the logs to be sawn in the country, and it also heard those opposed, although some people seem to think that only one side should have been heard ; but those op- posed to the condition being applied to all limits had invested hundreds of thousands of dollars in timber limits purchased from private owners, and which had been sold by the Crown, most of them 25 years ago, without any condition being attached, and they had always been led to expect that whatever policy might be adopted would be as to future sales, and not retroactive. lb seemed only proper that now when they were about to be dis- appointed in their large investn:ents they should be given an op- portunity of placing their views before the Government ere final action was determined upon. There was no haste, there was no need for haste. The Government allowed public opinion to make itself heard, and it listened to and weighed every argu- ment pro and con, and came to the conclusion that a change was requiiid to protect Ontario interests. Accordingly, in a letter 10 to Col. Davidson, written by the Premier on the 1 3th of October last, it was stated that " the question is one of such gravity and importance as regards both public interests and private ri;i:hts,that, instead of dealing with it by Order-in-Council.the Legislature at the approacliing Session should be asked by the Government to enact such legislation as the public interests may require and the exigencies of the situation may appear to demand, in which case the whole question may be fully and openly discussed be- fore any definite action is reached." Clevly, if there was no intention to change the law, there would have been nothing to refer to the Legislature, The Legislature was called and the Government brought down its policy, which was, that all future sales of limits should con- tain a condition requiring the timber to be sawn in the country,, and that, with the issuihg of the yearly licenses, after the SOth April next the timber on all limits, without respect to the date when they were sold, would be required to be sawn in the country. This policy is clean cut and nobody can misunderstand it, and it meets to the full the necessities of the situation. THE government's POLICY CONSLSTENT AND JUST. With respect to the charge of inconsistency, it may be said that it lacks the essential element. The Government has all along had an open mind on this question, being, as before stated, guided in its action by the logic of the situation. There have been three timber sales in seven years, one in 1890, one in 1892 and one in 1897. The sawing in the country condition has been in two of those sales and in one it was not, because it would be of no pos- sible benefit and might have caused disturbance of a satisfactory state of affairs. With respect to the objection that the condition does not apply to the licenses issued nearly a year ago, it is to be said in the first place that any change in a lease during its continuance would be a new departure and contrary to all previous practice. It must be borne in ujind that licenses to cut timber on Crown land.s are issued for one year only, such licen.'ies exj)iring on the SOth of April each year, and renewable thereafter if all the regulations and conditions have been complied with by the license holder. Heretofore, when any serious change has been made either in in- creasing the dues or the ground rent, or with respect to the with- drawal of lots from license, the change has been made just about the end of the license year, and did not take effect until the new licenses wore issued. Not only so, but American owners of limits, not anticipating any change, had made contracts with Canadian I 11 lumbermen to take off their limits a certain quantity of logs per annum, these contracts extending over a number of years. If they could not export lou^s they could not continue to take them out, and they would have lo arrange with their contractors for an abandonment. Ontario owners of timber limits who had no mills had enteied into contracts with mill owners in the United States to supply them with certain quantities of loi^s f'r annum, and they, too, would be unable to carry out the contracts they had made and would be liable for damages, nobody having foreseen that there would ho such a change in the law as has now been made. Under these conditions, it appeared only fair that the licenses which had been issued, and under which cutting had commenced, should be free from the condition until their expiry in April next EXCESSIVE CUXriNQ THIS WINTER NOT PERMITTED. It having been stated that the people who exported would take advantage of this winter to cut and take enormous quantities of logs under the authority of existing licenses, the Government had to consider how an attempt of this kind should be met. There was only one straightforward way of dealing with the situation, and that was to • ve notice to these license holders that no extraordinary or abnormal cutting would be tolerated, that the Department would take notice of any such thing and deal with it, to invite them to send in a state- ment of the quantities they proposed to get out in order that it might bo compared with their cutting of previous years, and to supply the forest rangers with information which would enable them to see how faith was being kept with the Government. Clearly, if intimation was not given to a man that he must not cut an excessive quantity, and he was allowed to go on unwarn- ed, it could not well be said to him afterwards, " You have cut too much." He ought to h ive notice in advance. These statements from lumbermen were received, and when the forest rangers were put in the field they were requested to visit each shanty and see how many men and teams were em- ployed therein, and to report what quantity of logs in their opinion would be taken out in each, and it may be lemarked that a man of experience who is accustomed to lumbering, seeing the number of men who are cutting, and the immber of teams era- ployed, is able to give a pretty accurate estimate of what the output of any particular shanty will be. The rangers reported the quantities they estimated would be cut. These were com- pared with the estimates of the lumbermen, and they were found 12 not to differ in any great extent. In some cases they were above and in some below, but approximately there was no difference in the total quantity. Then, after the cutting operations had been pretty well finished, as they usually are in the early part of January when the snow gets deep, the rangers were wired to re- port again if there was any excessive cutting, and their reports demonstrated that instead of an increased export of logs this year there will be a considerable falling off. Since then further reports have been received, all of which bear out the estimates given by the lumbermen themselves, and the figures previously « sent in by the rangers. Of course it is an easy thing for anybody who desires to do so to say that there is going to be an enormous output, but there is no man or body of men who have the close and accurate in- formation about the cutting which the Department of Crown Lands has. Every winter it is its practice to obtain just in this way estimates of the output of the Province, and these estimates, furnished by the rangers, have always come pretty close to the actual cut. As the estimates obtained this winter are based on the same sort of inforniation as in previous years there is no reason to believe they will prove to be less accurate than here- tofore. If they should be, and an extensive cut has taken place, the Department will be in a stronger position to deal with it, because of the notice given to the licensees cutting for export. The export trade in sawlogs practically began in 1893, as pre- vious to that year the quantity exported was insignificant. Since then it has not increased ; on the contrary, the export for 1897 was considerably less than that for 1893, and was, in fact, smaller than any year since 1893, except 1894, The estimated export for 1898, based on the Department's forest rangers, Crown timber agents and ofiicers shows a material reduction even on the «xport of last year ; and if borne out by the event the export will be the smallest since it assumed any proportions. The quantities cleared for export by the Department of Crown Lands for the last five years were as follows, together with the estimated export for 1898 : 1893 236,432,802 feet board measure. 1894 174,503,845 1895 238,053,651 .. », 1896 248,746,314 1897 219,026,825 1898 166.750,000 i 13 Jd order that the public may have tlie fullest information in this matter the Act of last session is printed at length. An Act respecting the Manufacture of Pine cut on the Crown Domain. HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows : 1. All sales of pine timber limits or berths by the Commissioner of Crown Lands which shall be hereafter made, and all licenses or permits to cut pine timber on such limits or berths thereafter granted by the Commissioner, shall be so made or granted sub- ject to the condition set out in the first regulation of Schedule A 01 this Act, and it shall be sufficient if such condition be cited or mentioned as "The Manufacturing Condition ' in all notices, licenses and permits or agreements or other writing. 9. The regulations set out in Schedule A to this Act are hereby approved. 3. The Lieutenant-Governor in Council may make any further or additional regulations necessary to enable the Commissioner of Crown Lands to carry into effect the object and intent of the regulations contained in Schedule A. 4. Section 1 of this Act shall come into force on the passing hereof and the other parts of this Act shall come into force on the 29th day of April, 1898. SCHEDULE A. Crown Timber Regulations. Made by Order of His Honour the Lieutenant- Governor in Coun- cil, dated the Seventeenth day of December, 1897. (1) Every license or permit to cut pine timber on the ungranted lands of the Crown, or to cut pine timber reserved to the Crown on lands located, sold, granted, patented or leased by the Crown, which shall be issued on or after the 30th day of April, 1898, shall contain and be subject to the condition that all pine which may be cut into logs or otherwise under the authority or permis- sion of such license or permit shall, except as hereinaft^^r pro- vided, be manufactured into sawn lumber in Canada, that is to pay, into boards, deals, joists, lath, shingles, or other sawn lum- ber, or into waney board or square or other timber in Canada ; ■ I M W ." 14 and such condition shall be kept and observed by the holder or holdeis of any such license or ptrmifc, who shall cut or cause to be cut pine trees cr timber under the authority thereof, and by any other person or persons who shall cut or cause to be cut any of such pine trees or timber under the authority thereof, and all pine so cut into logs or otherwise, shall be manufactured in Canada as aforesaid. (2) ShouH ary holder of a timber license or permit, or any servant or agent of such holder, or any person acting for him, or under his authority or permission, vii»l;ite or refuse to keep and observe the condition mentioned in the preceding regulation, then and in such case the license or permit to cut pine timber on the berth, territory, lot or lots included in the license or per- mit, and on which or on any pnrt of which the pine was cut, and in respect of which or any part of which there jv&h a breach of such regulation or a refusal to observe or keep t'.ie same, shall be suspended and held in abeyance, and shall not be re-issued, nor shall a new license issue unless and until so divccted by the Lieu- tenant-Governor in Council, and then ordy upon such terms and conditions as the Lieutenant-Governor in Council may impose. (3) The Commissioner of Crown Lands, his officers, servants and agents may do all things necessary to prevent a breach of the aforesaid condition or regulation, and to secure compliance therewith, and may, for such purpose, take, seize, hold and detain all logs so cut as aforesaid, and which it is made to appear to the Commissioner of Crown Lands it is not the intention of the licensee, owner or holder, or person in possession of, to manufac- ture or cause to be manufactured as aforesaid in Canada, or to dispose of to others who will have the same so manufactured in Canada, until security shall be given to Her Majesty satisfactory to the Commissioner, that the said condition will be kept and ob- served, and that such logs will be manufactured in Canada aa aforesaid ; and in the event of refusal on the part of the licensee, owner or holder, or person in possession of such logs, to give such security within four weeks after notice of such seizure and de- mand of security by or on behalf of the Commissioner, then the Commissioner may sell or cause to be sold such logs by pub- lic auction after due advertisement to some person or persons who will give such secuiity to Her Majesty as the Commissioner may require that such logs shall be manufactured in Canada. The proceeds of such logs shall, after such sale, and after deduct- ing all expenses of such seizure and sale, and any sum due and owing to Her Majesty for or in respect of any timber dues, tres- pass dues, ground rent, or on account of the purchase of any i 15 timber or timber berths by the owner, licensee or holder of a permit, or other person who has cut or caused to be cut such logs, or who is the owner or holder of the same, L^ paid over to the person entitled to the same. (4) Provided, nevertheless, that nothir