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5]^ «SC?.

SPEECH ON THE BUDGET

BY THE

X*^~N-,. Q^

HON. SIR FRANCIS HINCKS, f

% MINISTER OF FINANCE, CANADA,

I
I

DELIVERED IN THE

HOUSE OF COMMONS, OTTAWA,

7tii AriiiL; 1870.

OTTAWA : v

PRINTED BY HUNTER, ROSE & COMPANY.

U70.

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SPEECH ON THE BUDGET

BY THE

HON. SIR FRANCIS HINCKS,

MINISTER OF FINANCE, CANADA,

DELIVERED IN THE

HOUSE OF COMMONS, OTTAWA,

7th April, 1870.

OTTAWA :
PRINTED BY HUNTER, ROSE & COMPANY.

1870.

SPEECH ON THE BUDGET.

HOUSE OF COMMONS, OTTAWA,

Thursday, 1th May, 1870.

The House having resolved itself into Committee of Ways and Means,
Col. Gray in the chair,

Sm FRANCIS HINCKS, Minister of Finance, addressed the Committee
as follows : —

Col. Gray, — Before proceeding to discharge the duty which devolves
upon me of submitting to this Committee an exposition of the financial
state of the Dominion, I think it necessary to advert very briefly to what
I may almost call an irregularity, at all events a peculiarity, of the position
in which I am placed in having to go into Committee of Ways and Means
and making my financial statement in this particular way. I believe it is
in accox'dance with strictly constitutional usage in England for the Chan-
cellor of the Exchequer to make his financial statement after the House
has been for some time in Committee of Supply, and after the supplies
have been in great part voted. I have no doubt the hon, member for
Chateauguay (Hon. Mr. Holton) knows that to be the pnictice. Well,
Sir, unfortunately, considerable delay took place this year, as hon. members
are perfectly aware and as I was frequently reminded, in bringing down
the public accounts. I have no cause of complaint against hon. gentlemen
opposite who expressed great anxiety about the public accounts for the
year and found fault because they were not ready. I readily admit that
they ought to have been ready earlier— that they should have been in the
hands of hon. members on the opening of the session. I regret that
they were not ready. I cannot charge myself, however, with any laxity in
endeavoring to have them ready, nor can I charge it as a fault to the
officers of the Department over which I preside, for considerable delay took
place in the outside departments and the accounts were not ready as they
ought to have been. That involved delay in the preparation of the esti-
mates, and it was not thought desirable to bring them down until they were
complete. Now, a practice has prevailed here which is contrary to the
English practice, and which I think it expedient should be altered, namely,
to delay bringing down the estimates until all of them, coverin<'- every
branch of the public service, are ready, though it has hocn usual— nnd I
dare say the usage will not be departed from — to bring down a supplemen-
tary estimate. (Hear, hear). There are many reasons which render

it impofisiblc to brin;:; down the entire estimates early in the
session. I think it would be Ibund nioro convenient, more conducive to
the speedy despatch of the business of the House, to adopt the English
practice not to wait till all of them are completed, but to brinj^ them down
as they may be ready, so as to j^o into Committee of Supply at the earliest
possible period in the session. I have thought it necessary, 8ir, to make this
explanation. lion, gentlemen oi)posito for some time past have been en-
(juiring when the financial statement would be made, and I am considerably
indebted to them for allowing'me to take several motions pro furma, thus
enabling me to explain sooner than I otherwise would have been able to do
the financial position of the country . I have thought it advisable to make
these fe^v observations in explanation of the cause of the delay that has
occurred in making this statement, and of the cause also why I now proceed
to make it in Connnittee of Ways and Means without having taken any
votes in Committee of Supply — tliat is, any votes of importance.

It hjui been usual, Sir, on occasions of this kind, I find on looking
back, for the Finance . Minister, in the course of his explanations, to
review the general condition of the country. 1 do not propose
to occupy the time of the Committee with any lengthy remarks
upon that subject. I believe there is no reason to doubt that the
country is in a state of prosperity and that it is amply able to
meet ail its obligations ; and I would hardly have adverted to the sub-
ject at all were it not that on many occasions during the present session
hon. reicmbers have made remarks which 1 very much regretted and which
Bcemecl to indicate a doubt as to the ability of the Dominion to meet its
engagements, and have spoken as if there were a constant deficit of revenue
as compared with the expenditure, and as if the country was in a very
bad financial position. I believe, Sir, nothing of the kind. I believe
the country is in a state of prosperity, perfectly able to meet all its obliga-
tions, and that there is no cause of complaint of excessive taxation. With
reference to this question of deficits T would like to call attention to some
observations made in his speech last sesstion by the hon. gentleman who
preceded me in my present office. He said :

" We all know how serious, in the past, was the eflFect of the deficits
" which arose in the old Province of Canada for some years previous to the
" Union : and, in adverting to them, I am far from seeking to throw any
" reflection or blame on those who occupied in those years the position I
" now do, or to seek, by contrast, to laud the present Government at tb*)
" expense of their predecessors. I know the peculiar difficulties in which
♦< former Finance Ministers found themselves. Neither my honorable friend
"opposite (Hon. Mr. Holton), nor my honorable friend, the member for
"Sherbrooke (Hon. Mr. Gait) had that amount of support in the House
" or the country which would have enabled them to bring down thoee
" measures of taxation wliich would have been necessary under such cir-
" cumstances. Parties were so equally balanced, that to have carried the
" measures necessary to equalise the revenue and expenditure would have
<' been found a peculiarly difficult task."

Now, I do not pretend to way — it would not be proper for mo to eay, not
having been in the country at the time — whether that iaa correct statement
of the cane, or whether the true cause for those deficits has been assigned;
but that is the statement with reference to the past made by my
predecessor in office. I do not intend to trouble myself or the
Committee by adverting to anything that took place prior to the
union of the Provinces ; but I apprehend that it was then chiefly
that those deficits occurred to which reference has been made on
more than one occasion during the present session. But with regard
to the means of the country,— with regard to its ability to discharge all
its liabilities — and with regard to its taxation, I would desire to say a few
words, and to institute a compari.son between its condition and the con-
dition ot other countries with which we are acquainted. I find, Sir, if
we take Great Britain, that the debt of that country is about $135 per
head of the population. The debt of the United States is about $60 per
head. 1 may here observe that although the ratio of debt is lower in the
case of the (Jnited States than in that of Great Britain, it would be unfair
to estimate the burdens of the people according to the same ratio, for it is
pertectly well known that the debt of England carries a very small rate of
interest, while the debt of the United States carries a large rate. Now,
Sir, wliile the debt of those countries is what I have stated, the debt of
Canada is about $22.50 per head of the population. (Hear, hear.) Then,
again, taxation in Great Britain is at the rate of about $10 per head, and
in the United States about $9.25, while in Canada it is only about $3.50.
I do not think, bearing these figures in mind, that we need be afraid of
any sliglit increase of taxation which it may be necessary to impose upon
the pcoj)lc in order that there shall not be the least cause to apprehend
deficits in the future. (Hear, hear.) I find, too, that if we take
the Customs Revenue of the United States, it is about $4.50 per
head of the population, while the Customs Kevcnue of Canada is about $2t
I may be permitted to draw attention to the reuiarkable point, that
although our customs contributions appear to be large in proportion to
those of the United States, hon. gentlemen will see just now, when I
draw a comparison between the internal revenue of the two countries, that
the revenue from customs approaches more nearly, although still very far
below that of the United States, than the internal revenue does.
And the reason of that is obvious. The United States have such high
protective duties upon everything imported, that importations are much
reduced, and the customs revenue per head does not come up as in Canada,
where on leading articles the duties are much lower. The internal
revenue of the United States is about $4 per head of the population,
whereas in Canada the excise revenue is only about 67 cents per head.

I have thought it advisable. Sir, to preface the statement I am about
to make in reference to the opeiations of the year now some months ter-
minated, with tliesc general remarks with regard to the position of the
country and its financial condition, its ability to meet all its obligations,

■iHplM*^^^^^

and with regard to the burdens imposed upon the people as compared
with the burdens borne by tlio public in the countries to which I have
referred. I mij:;ht add while ppeakin^ of other countries, that I have
lately resided in a colony where certainly the people, taking them alto-
gether, do not in any way compare in wealth, intelligence or skilled
industry, with the people of this country ; and yet the people of that
colony — the colony of British Guiana — which enjoys a great degree of
prosperity, pay taxes at considerably more than double the rate per head
paid in Canada, and they pay it cheerfully and without the slightest diffi-
culty. (Hear, hear.)

I will now proceed to stuto the result of the operations of the last
financial year — I refer, of course, to the year 1868-G9. But first I will
draw the attention of the committee to the previous year, ending on the
30th of June, 1808. which was referred to in his speech last session by
Sir John Rose ; and I do so merely to make a comparison between the
results of that and of the subsequent year. The revenue of 1808 was
$i;},83r),400, but in estimating the revenue of the following year, Sir
John Kose put it at 815.114,000, of which he calculated the customs
would contribute $1), 100,000, and the excise 85,114,000.

Last session, aiter several months of the year had elapsed, when he came
to make his estimates, he found the estimate of revenue had been excessive,
and that there was likely to be a very considerable deficiency ; but he stated
to the House that when he became aware of the fact that there was likely
to be a very great deficiency every effort had been made by the Government
to reduce expenditure in all the departments, fo as to provide that the
expenditure should not be in excess of the revenue. When he made the
revised estimate of revenue for 1809, instead of taking the old estimate
which was ?1 5, 114,000, he estimated it at 81o,744,0fj6. In this esti-
mate, it may be observed, he included items which I shall probably, in my
subsequent remarks have occasion to allude to — items which 1 have no
doubt were not calculated at the time of the original estimate. If, how-
ever, the $500,000 received from the Great Western Railway were not
to be treated as revenue- there would be a very considerable difference
in the result.

Hon. Mr. HOLTON.— Hear, hear.
• Sir FUANCIS HINrKS.-Wy hon. friend calls 'hear, hear," and
no doubt he will be prepared to shew at the proper time that this item
ought not to be considered in the revenue of the year. But I don't know
if I can take a better opportunity than the present for disposing of the
qustion I took the trouble to lock up a precedent, and I hold in my
hand an authority — for the transaction to which I am about to refer was
of a very similar kind. The authority, I am sure must, be satisfactory to
all gentlemen on the other side of the House, as it be to those on this — it
is no less an authority than the present Prime Minister of England. There
was an occasion in 1860. when he was in trouble with regard to the Budget,
and found himself likely to be short, and he announced to the House that

.«

doliveranoo had como from a quarter not expected, for the Spaniards had
remitted a debt of £500,000. I think that the doliveranoo which Mr. Glad-
stone was so happy to rcooivo in the payment of this debt, is very analo-
gous to the deliverance of my predecessor by the Groat Western Hallway
when the revenue had fallen very short indeed, and he found he was
likely to receive this amount. Many other precedents might be ad-
duced of moneys which cannot bo calculated as part of ordinary re venue
of the year, being paid in and nevertheless treated as available ways and
means.

Hon. Mb. HOLTON.— Oh yes, but still it is not revenue.

Sir F. HINCKS. — In the revenue which appears in Sir John Rose's
revised estimates is included, of course, the Great Western Railway's mo-
ney, the sum was $13,744,650, the actual receipts ^14J485,139, from
which I deduct an amount arising from the transactions in the Interco-
lonial Railway Loan, 8551,082, leaving a surplus of 8189,401.57

Mr. MACKENZIE.— This is taking credit also for the Great Western
amount ?

Hon. Mr. HOLTON. — The hon. gentleman does not mean the actual
surplus, but the surplus upon Sir John Rose's revised estimates.

Sir FRANCIS HINCKS.— I have no desire to keep anything back,
but perhaps it would be better if the hon. gentlemen opposite would let me
finish the whole statement, taking of course the amount of the Great Wes-
tern money, for Sir John Rose calculated on this as part of his ways and
means— we find a gross surplus of $390,333, viz. : on Customs, 8208,517,
and miscellaneous, $128,416, while the loss on Excise must bo deducted,
80 that the net surplus on Mr. Rose's calculations was $210,258. There
appears to have been some omission of figures in his reported speech, for
the exact surplus was 8189,401. Wo have now to consider the expendi-
ture of the same year. I have shewn that the revenue of my predecessor
was in excess of his calculations, but I am sorry I cannot say that his
expenditure was as low as he calculated upon. But it must be borne
in mind, and it is only fair to put this strongly before the Committee —
that we are dealing now with what we may call his revised esti-
mated expenditure, and not with the estimates that were voted by
Parliament the previous session — and in the revised estimates he
had gone over all the departments and done his utmost to bring down
the expenditure to the lowest possible point. I am afraid it is a
very difficult thing indeed for a Finance Minister to accomplish so large a
saving in expenditure as my predecessor thought he was able to do. The
expenditure, according to the original estimates, was $14,032,756 ; while
the revised estimates stated it at $13,470,624; making an estimated
saving of $562,131. The actual expenditure was $14,144,029 ; but from
that, however, I have to deduct what honorable gentlemen will say I am
justified in doing — namely, the specific charge on the Intercolonial Railway
Loan, $170,641, and that being deducted, we have an actual expenditure
of $13,973,408, shewing an excess of $502,783 on the revised estimate.

The final result is :—

Actual revenue $13,934,057 57

Expenditure 13,973,408 00

Shewing a deficiency of. 39,350 43

But wo have a gain on the Intercolonial transaction of... 551,082 00
Less management 170,641 00

Surplus 8 380,441 00

From which deduct the deficiency, and the final result

is a surplus of. 341,090 57

There is another fact which I want to point out, namely, that in the
returns of the transactions of that year, to which I have no doubt from
what I heard in another place, exception will be taken, it seems we have
items which are included in the Public Works account, but which have
not been charged to the ordinary expenditure of the year.

Hon. Mr. HOLTON anJl Mr. M ACKENZIE— (Hear, hear.)

The question of classifying Public Works into those chargeable to
ordinary revenue and those to capital account has always been one of very
considerable difficulty. There are a great many services which really are
of a debateable character, but for my own part I think it exceedingly
desirable that it should always be clearly understood when the estimates
are being voted what services are to be charged to the ordinary revenue
of the year, and what to construction account, and which may be provided
for from other sources. There are certain services about which there can
be no diffierence of opinion. For instance, no one would for a moment
imagine that this country would undertake to construct such works as the
Intercolonial Railway, the Welland Canal, and many other works of that
kind, out of the ordinary revenue of the country. On the other hand no
one would pretend to charge to construction account, or to any other than
the ordinary revenue, a great variety of services that come under the head
of Public Works. But there are a number of services of a doubtful
character.

Hon. Mb. HOLTON. — Salaries, for instance.

Sir FRANCIS HINCKS.— The salaries to which my hon. friend
adverts are, I think, salaries in connection with the construction of works
properly chargeable to capital account.

Mr. MACKENZIE.-No.

Hon. Mr. HOLTON.— The Welland Canal ?

Sir FRANCIS HINCKS.— Yes, the Welland Canal. I speak under
correction from the Minister of Public Works,|but I think that the works
connected with lowering the Welland Canal to the level of Lake Erie
are properly chargeable to capital.

I hold in my hand the Estimates for the present year. I shall not do
more than just glance at them. In making them up there has been an

endeavor to separate the two classes of works to which I have alluded —
works which in the opinion of the Government ought to be chargeable to
construction, and works the expenditure on which ought to be defrayed
out of ordinary revenue. The Government believe it desirable to limit as
much as possible expenditure on public works not chargeable to the ordinary
revenue, and are prepared to co-operate with the House in providing for
the construction, out of ordinary revenue, of all the public works that could
rerjonably be so charged. On the other hand, however, I am scarcely
prepared to go the length in this direction of my honorable friend who
preceded me. He went into the subject very carefully and treated it on
the whole very fairly. He says :

" We have endeavored to scrutinise every item of expenditure
" which could possibly be subject to reduction ; and to-night I would
" appeal to the magnanimity, forbearance and patriotism of my friends
" around me not to ask for any expenditure on any particular works and
" services which, however advantageous or useful in themselves, can possi-
** bly be postponed. These works cannot be gone on with this year, unless
" we resort to increased taxation, or borrow money for the purpose. In
" regard to such works as the renewal or extension of wharves, harbors,
" piers, light-houses, &c., I think we ought not to borrow money for that;
" as for the opening up of the North- West, that is not in the same cate-
" gory ; the cost of that territory may be fairly charged on posterity, the
" money necessary to pay for it ought to be borrowed, as also a furtiier
" sum towards opening up a communication with it, for once we h<ave it
" in possession we must take efficient and energetic means of getting at it.
" And the charge for those great works may, I think, be fairly entailed on
" posterity ; but ordinary works, such as custom houses, post offices, and
*' the others I have mentioned, do not come under the same category.
" If a man's house is too small for his present position, or if he wants any
" alteration in the interior arrangement of the rooms, such a work ought
" to be paid for out of his ordinjiry income or not undertaken at all until
" his income will bear it, and so it is with respect to these local works."

I am not quite prepared to go that length, because, when I find public
works of considerable importance are really absolutely necessary, I am not
prepared to say that we are to postpone them for an indefinite period
simply because we have not ordinary revenue enough to meet the expense,
even if it were at a time when it would probably be necessary to find in-
creased revenue for carrying on the services of the country, especially if it
were at a time when the ways and means can be found to meet the expen-
diture on these works without Dressing in any way heavily upon the
people. For instance, we have been talking about opening up the great
Western Territory, I venture to say that no one would deem the ezpen
diture connected with that undertaking chargeable to ordinary revenue.
The same may be said of certain works of a permanent character of the
class which are glanced at by Mr. Rose in the passage which I have just
read from his speech of last sessi')n.
2

Hon. Me. HOLTON. — My hon. friend was kind enough to permit
interruptions in the course of iiis statement. Whenever he finds inter-
ruptions inconvenient, I shall refrain from them promptly on intimation
from him. Before passing from his reference to the financial movement
of the year 1868, I think it is desirable that he should show the actual
surplus or deficit of that year, and not merely the variations in Mr. Rose's
estimates and the actual results. That may be very interesting, but not
by any means so interesting as a Ktutcment of the result of the financial
movement of the year ending 30th June last — whether there was a deficit
or a surplus, and the amount of such deficit or surplus.

Sir FRANCIS HINCKS.— W cU, Sir, that depends altogether upon the
way that you treat the account.

Hon. Mr. HOLTON.— According to your own way.
Sir FRANCIS HINCKS. — According to my calculation there is a
surplus of $341,090, including, I wish the Committee to understand, the
Great "Western Railway debt, and the profits arising from the the Interco-
lonial Railway Loan. The premium obtained on that loan was consi-
derable. With regard to this item, I may just say that it has always been
the custom to include items of that nature in the ordinary revenue. No
change whatever has been made in the manner of keeping that account.
But it so happened that in this case, the transaction being unusually large,
the profits arising from it were also unusually large, which, as in the case
of other transactions of a similar character, went to the credit of the
Government as ordinary revenue, There has always been an account for
premium and discount, and this account is credited with all the money
gained in transactions of this kind, and debited with all the costs. Of
course, it would be very unfair to charge against the management all the
expenses connected with the loan, and at the same time refuse to give
credit for the amount which was gained by the transaction, which really
and truly ought to be considered as a profit, less the charges which were
incurred in carrying out the transaction. The total amount of premium

on the loan was $551,082

Less charges , *170,641

Leaving a net profit on the transaction of $380,441

Calculating this amount as part of ordinary revenue, there was

a surplus last year of. 341,090

But leaving that amount out of the calculation altogether — for
I am perfectly willing that hon. gentleman should under-
stand how the account wi.l thus stand — there was a deficit of. $ 39,350
Hon. Mr. HOLTON.— That leaves the Board of Works untouched.
Sir FRANCIS HINCKS.— Yes.
Mr. MACKENZIE.— Including the .salaries of the toll-collector on

the Welland Canal, and offices of a similar character.
Sir FRANCIS HINCKS.— Including whatever is found under that

head.

all the
to give
h really

Mr. MACKENZIE.— Which amounts to «555,000.

Sir FRANCIS HINCKS.— My honorable friend must bear in mind
that there are a good many items under that head about which there can
be no possible dispute ; no one would deny that they should be charged
to construction. Among these items my lion, friend will find one of
money expended on the Intercolonial Railway.

Mr. MACKENZIE. — Yes, of course, and the Fort William Road too.

Sir FRANCIS HINCKS.— It will not be contended that these expenses
should be charged to ordinary revenue. I am not prepared to say that
there may not be some items under the head of Public Works, if they
were all analyzed, which miglit properly be charged as ordinary ex-
penditure. 1 am strongly of opinion i lat as many of this kind of items
as possible should be charged as ordinary expenditure. 1 am prepared —
and I know my colleagues in the Go Vermont are equally prepared — to
go strongly in that direction. ]3ut while there may be items under the
head of Public Works which are perhaps more properly chargeable as
ordinary expenditure, 1 say the great bulk of them could not reasonably
be expected to be defrayed out of the ordinary revenue of the country.

Then, I consider there is no great reason to be dissatisfied with the
condition of aflFairs during the year 18G*:<-I) — which was a year of deficient
revenue — at all events as compared with the estimated revenue upon which
the Minister of Finance relied when he brought down his financial scheme.
On the whole, there is no cause of despondency with respect to the finances
of that year ; though there was a very small deficit, it was covered, as I
have already stated, by the profits connected with the Intercolonial
Railway Loan.

It being six o'clock the House rose. After recess,

Sir FRANCIS HINCKS resumed and said—

At six o'clock, Mr. Chairman, \ had just arrived at that stage of my
remarks which had reference to the Revenue and Expenditure of the cur-
rent year. A statement of the Receipts and Expenditure up to 28th
February, is in the possession of hon. members, and I will call their
attention to it.

Sir, I am gratified in finding that there is every reasonable ground for
believing that the Revenue for Customs will quite reach the estimate of
my honorable predecessor. The estimate was taken at §8,600,000. On
the 28th of February there had been received ^100,000 less than the
average. Taking it for each month, the average, is 8j per cent, per
month, and there had been received up to that time 66^ per cent, of the
revenue. Well now. Sir, we had four months left of the year. Since
that statement wjis laid before the House, I have been able to get the
Returns for March, and these Returns have reached 10 per cent,, being
something over the average ; but it is to be observed that we have gone
through two or three of the worst months of the year for revenue, and
that the months to come are generally over the average. Therefore, I
think, we may fairly anticipate that the Customs Revenue will be equal
to the estimates.

Then, with regard to the Excise Revenue, my friend beside me, the
Minister of Inland Revenue, assures me that wc can rely on a surplus of
$115,000. From the Returns, as far as we can judge, there will be an

increase in the revenue from tobacco of , $115,000

And an increase in the revenue from petroleum of 85,000

a very considerable increase, indeed, over the estimate, which
was only $120,000. These give a total increase of 200,000

But there is an estimated decrease in the revenue from malt
of 85,000

The revenue from Spirits will be about equal to the estimates,
so that we expect an increase under the head of Inland Re-
venue of $115,000

On the other hand there is a probability that the miscellaneous revenue
will hardly equal the estimates, but I Icel very sanguine that on the
whole the receipts for the current year will fully eciual the estimates.
Hon. Mr. HOLTON. — What was the total estimated revenue ?
Sir. FRANCIS HINCKS.— The total estimate was $14,050,000.
Now, Sir, it will be recollected that my hon. friend and predecessor anti-
cipated a surplus revenue on the year. He says in his statement : " This
leaves a very small, but, I believe, a very certain balance of $308,786 on
the right side of our account." We may have some supolementary esti-
mates to bring down, not to any large amount, and 1 feel quite satisfied
that on the transactions of the present year, wc may be perfectly sure that
the expenditure will not exceed the estimates always, providing — and I
wish this distinctly understood, — that there are not any extraordinary
votes required which no one could anticipate, and which under existing
circumstances we may have to bring down. But to that I will r efer on
another oscasion. At present we are dealing with ordinary circumstances.
Hon. Mr. HOLTON.— Then, there is a possible deficit ?
Sir franc rS HINCKS.— No, no. I have every reason to believe
that the revenue will be equal to anticipations. That I stated most dis-
tinctly. There was this surplus. There is a slight excess in the
expenditure for subsidies of $5,000, but that is the only excess at pre-
sent ; and I think that, keeping out of view anything extraordinary
that could not have been anticipated at the time, that there is no reason
whatever to doubt that there will be the surplus expected by my prede-
cessor.

Hon. Mr. HOLTON. — I must explain that I understood the hon.
gentleman to say that the revenue would prove equal to the expenditure,
thus admitting that there was no surplus. I now understand him to say
that the surplus of Mr. Rose will be realised.

Sir FRANCIS HINCKS.— Yes. I do not think it is necessary to
make any further observations with regard to the traoBactious of the cur-
rent yoar.

I now approach the present year, the estimates tor which are
already suhmitted to the House. These estimates amount to §28,915,917.
Of these, there are public works and buildings chargeable to capital
account, $8,486,700. Of course they are not yet brought under the con-
sideration of the House. There are, of course, included in this, a variety
of works of a public character, and all I can say is that there is a con-
siderable number of these that the Government will at once say that they
must have other means of providing for them than the ordinary revenue
of the year. Then, for the present deducting, as proposed by the
Government, the amount of public works, $8,486,700, deducting also
certain railway subsidies, chargeable to the provinces, and also the amount,
$322,000, which is for redemption of debt on the year, and which is not
of course a charge against the ordinary revenue, and you have the actual
amount of estimated expenditure very close upon S15,000,000.

I shall glance at a few among these items in which an excess appears
over the estimates of the preceding year. One of these to which I shall
advert, is the amount for the census, which in round figures is

about $150,000

There is an increased amount for emigration of. 36,000

The public works chargeable agdinst ordinary revenue is 42,000

beyond what it was last year.
There is an increase under the head of Militia of. 182,000

but it will be borne in mind that great pressure v as brought

to bear upon my hon. friend, the Minister of Militia, a3

admitted by Mr. Hose— very great pressure to reduce the

estimates under the exceptional circumstances of last year, to

the lowest possible point.
Under the head of Fisheries, there is. 60,000

a portion of which is caused by the necessity of protecting our

fisheries.
Then there is an increase in the item of Subsidies, over the

former estimate of. 75,000

The increase on Light-houses is 118,000

On Penitentiaries 10,000

On Marine Hospitals 5,000

On Administration of Justice , 9,000

These items, in round figures, come to about 700,000

Making the t hole estimate about..... $15,000,000

There will however probably be — in fact, there is no doubt whatever that
there will be— an additional amount required, as supplementary estimate,
of at least $150,000, exclusive of a special vote of credit, which, under
existing conditions, there was ground to believe would be necessary.

Hon. Mr. HOLTON.— The hon. gentleman wa.s going to give us the
aggregate amount ?

Sir FllANCIS HINCKS.— I have said about $700,000. Now, Sir,
under these circuuistauces, I will first of all — before stating the measures
which the government propose to adopt for providing means for the services
of the year— deal with the question of the ordinary services. I think that
we are sale in takiu"^ the e.-itiinate of revenue under head of customs at
what it was last year. Tln^re may be souiu doubt whether it is safe to take
it at that, but I think upon the whole, wo may put it at $8,600,000.
The excise revenue I take : —

Spirits at §2,375,000

Malt at 200,000

Tobacco 630,000

Petroleum 170,000

With rega rd to this item, I am sorry to say that the government canuot
accede to the very strong wishes that were expressed by many persons
who arc interested to repeal the tax on petroleum which has been very
productive ; I do not think that it will be safe iu the present state of affaire
to do so. Then there are

Stamps, at $135,000

and small sources of internal revenue, such as License

fees, &c., which are taken at 50,000

giving a total of : 3,560,000

There are besides that various miscellaneous sources of
revenue such as Post Office and Public Works, which

I estimate at 2,500,000

giving an aggregate of. 14,660,000

Well, Sir, it is the opinion of the government that it is absolutely ne-
cessary at this time to provide additional revenue, and it ought certainly
to be some consolation to one who has to propose to increase the burthens
of the people— it is some consolation to find that there has been a very
general expression of opinion from all parts of the country that taxation
ought to bo increased. (Hear, hear, and laughter) 1 am bound to say
that it is not often that a Pinauce Minister is placed in the position of
being besieged from all parts of the country with demands to increase tax-
ation. (Hear, hear.) It has been my duty, Sir, to consider most carefully
the whole subject and to advise the best mode of raising that revenue which
we consider to be absolutely necessary to obtain, in a manner which would
press the least upon the people. (Hear, hear.)

I think. Sir, that one may fairly assume that any one who is placed in
the position of requiring to obtain additional revenue naturally would look
in the first place to those articles which are admitted into the country free
of duty. (Hear.) That is the first class of articles that he would endea-
vour to obtain revenue from.

I think that perhaps the most convenient way of announcing the views
of the government with regard to these duties would b« to take in order
the articles which are on the free list and on which we propose to ask the

House to consent to impose duties, and then to state the amount of duties
which it is proposed to put on.

Well, Sir, first of all I will name floar. We propose to put a duty of
25 cents a barrel on flour (hoar, hear) ; — we proposu' to put a duty of 15
cents on Indian meal and oat meal ; four cents a bushel on wheat, and upon
all other grain — such a3 b;irley, rye, oats, Indian corn, — three cents a
bushel. These duties aic certainly not excessive duties, and 1 uelieve that
thoUj.h frjm some of them no considerable revenue will be obtained, yet I
think uiere is no doubt whatever that there will be an increase.

I will speak by-and-bye of the anticipations with rej^ard to revenue which
I have made from these chanjijes. Then, Sir, upon coal and coke —

Hon. Mr. HOLTON. — Perhaps the hon. gentleman would tell us what
he calculates to obtain upon these ?

Sir G. E. CAllTIEll.— By-and-bye. It will come up presently, and
then he will state.

Sir FRANCIS HINCKS.— Then with regard to coal and coke— we
propose to put a duty on coal of 50 cents a ton, — (hear) — and upon salt
of 5 cents a bushel. (Hear, hear, and cheeri'.)

Now,with regard to salt I would desire to make a very few observations. We
propose to put a clause into the resolutions with regard to salt which [ will
read» It is that " salt from the United Kingdom and the British possesslcii?,
shall be free."

Hon. Mr. HOLTON.— Discriminating duties. (Hear, hear.)

Sir FRANCIS HINCKS.— Yes, Sir. I have too fully considered

the subject to fear the hon. gentleman interrupting me. (Cheers.) The

question of salt, I think, is a very peculiar one, and I shall not in the least

degree shrink from the discussion. (Hear.) It is not an ordinary case of

protecting a manufacture of the country. The article is one certainly which

every one desires to see admitted at the least possible price to the consumer.

(Hear.) There is no question about that, and especially as it is an article so

much used in our Fisheries. It is not an article which it is desirable to

tax ; but, Sir, we know perfectly well this fiict that we have an inexhaustible

supply of salt in this country; that there is ample competition in this

country with regard to this article of salt ; and that there is no danger

whatever of any thing at all approaching to a monopoly. And upon the

other hand, we know. Sir, this fact— and I am sure that every one who

has paid the least attention to this subject knows it — that there is a gigantic

tic monopoly on the other side of the line— (hear, hear) ; —and that it is

simply a question whether this infant manufacture of salt in this country

is to be put down by persons who— without any regard whatever to what

the cost of it may be — would crush in someway or other that manufacture,

(Cheers) I know, and have reason to believe, that these same monopolists

have determined if possible to possess themselves of these works — (hear

hear) — and then, Sir, if once they can succeed in doing that we should all

feel the consequences of extending the monopoly which already exists, and

under which this country suffered for a vast number of years until our

'U^m e —g:--.! J»»««. T i

own salt works were opened. (Hear, hear, and cheers) I say, we should
have that fastened upon us as an incubus which we should have to bear
for a great many years hereafter, (Hear) We know perfectly well, Sir,
what monopolists will do ; there are very fe»v of us I dare say who have
not had experience of what Htaf;c coach proprietors, what steamboat pro-
prietors will do— how they will suffer a loss in order to crush rivals who
are endeavoring to carry on business.

Hon. Mr. HOLTON.— SacriBce markets ? (Hear, hear.)

Sir FRANCIS HINCKS.— No it is not a question of sacrifice markets—
it is another question altogether. There is no doubt that occasions do arise
— that there may be a surplus of goods which must be sent abroad
to be disposed of ; but it is not a probable thing, and I do not believe that
such a case has occurred where manufacturers in the United States or
any other country have .sent goods with the deliberate intention of crushing
out manufacturers in this or any other country. They simply wish to
get rid of surplus .stock, but in the case of salt from all the inquiries I
have been able to make — and 1 have done my best to make myself acqainted
with the facts — I believe that there is a deliberate intention of trying to
cru.sh our salt interests. If that be the case it must be dealt with except-
ionally. (Hear, hear.) It is not the first time that articles have been
admitted under discriminating duties in favour of British manufacturers,
and most unquestionably we must all feel that it is quite impossible to
impose duties upon salt for the use of our Maritime Provinces imported
from England and the British possessions. But I feel satisfied that no
feeling will arise from the manner in which we propose to levy the duties.

Then there is the article of hops upon which we put five cent3 per pound.
We propose to repeal the specific duties at present upon animals of all
kinds, which have existed and which were made specific for the purpose
of meeting the case of animals imported for stock, to put them in the
class embracing a variety of other articles, and specially exempting from
the duty upon animals, animals imported for the improvement of stock
under regulations. (Hear, hear,) My hon. friend the hon. member for
London, has been pressing this point as well as other hon. members, and I
think it desirable that an alteration should be made in the tariff. I propose to
put an ad valorem duty upon animals of all kinds, making this exception
in favour of animals imported for the improvement of stock. I will just
read the articles upon which it is pro^'osed to put this duty of ten per cent.
ad valorem : Animals of all kinds, except such as shall be im-
ported for the improvement of Stock, which shall be admitted free
of duty, under regulations to be made by the Treasury Board, and
approved by the Governor in Council : Fruits of all kinds, Hay,
Straw, Bran, Seeds not classed as cereal, Grease and Grease Scraps,
Vegetables including potatoes and other roots, Trees, and Shrubs. ^ <<

There is one other article I will advert to here, which I propose
taking from the enumerated articles in which it has been classed for some
time, and placing it at a specific rate of duty. It is the article of rice,

! I

we should
ve to bear
r well, Sir,
' who have
oboat pro-
rivals who

markets —
ins do arise
jnt abroad
believe that
i States or
of crushing
ily wish to
inquiries I
ilfacqainted
[' trying to
ivith except-
have been
nufacturers,
apossible to
es imported
ied that no
[ the duties,
[3 per pound,
imals of all
the purpose
;hem in the
aipting from
nt of stock
member for
aibers, and I
1 propose to
lis exception
I will just
ten per cent,
lall be im-
Imitted free
Board, and
kinds, Hay,
ease Scraps,
rubs.

h I propose
ised for some
rticle of rice,

and it is proposed to place the duty at a cent a pound. It will be under-
stood that all ♦hcBC articles, except rice, will pay ten per cent.

Now, . 'r, having gone throuu,h that class of articles, which, having
been free of duty, or at very low duties, we propose to subject to duty, we
will next fully consider what is the fairest way of getting a considerable
revenue without unduly pre.-sing upou tlio consumers, tmd dealing quite
fairly with all classes. I think taking it aUogothcr, that the tariff is, on
the whole as fair and as well devised as we are likely to nmke it, though
of course there is room for some improvements. Therefore, I propose to
put five per cent additional upon all duties, and in order to explain
clearly what I propose to do, so that there may be no misunder-
standing or no misapprehension, I will read the 13th resolution :

'• That it is expedient to increase all the duties of Customs imposed
by the said Act, as amended by the preceding llesolutions, by five per cent.,
that is to say, by adding to the amount of the duty wliicli would be payable
on any such articles under the said A(!t and preceding Resolutions, five
per cent, of such amount, such increase and addition being made as well to
any ad valorem duty as to auy npecitic duty payable on such articles."

lion, gentlemen will sec that it is not five per cent of the value of the
article but five per cent of all the duties, that is to be added. That there
may be no possible misunderstanding, I will state the practical effect of
that addition upon one class of duties. The practical effect upon all arti-
cles that pay fifieen per cent, ad valorem will be that they will now pay J
per cent additional n<l valormi.

Hon, Mr. HOLTON. — Is the addition upon the excise also ?

Sir FRANCIS IJ TNCKS.— No. The resolution declares-" That it
is expedient to increase all the Duties of Customs inqjosed by said Act, as
amended by the preceding resolutions, by five per cent, that is to say, by
adding to the amount of the duty wliich would be payable on any such
articles under the said Act and the preceding resolutions, five per cent of
such amount, such increase and addition being made as well to our ad
valorem duty as to any specific duty payable on such articles."

Well, Sir, the next proposition to which I will advert is the alteration
m the clause, — re])caling the clause and substituting a new clause for
the old one — with regard to the manner of assessing the duties upon
invoices, and in that respect we have adopted nlniost lurhathn the system
which is enforced in the United States, from which country we are pretty
large importers, and wo thought it was desirable to adopt exactly the practice
they have witli regard to their mode of calculating their duties. I merely
intend to read the Resolution, which explains itself better than I can in
any way : —

" 12. That it is expedient to repeal Section Eight of the said Act
" (respecting packages), and to substitute for it the following Section : —

" ' 8. The value for duty of goods, on which an ad valorem Duty of
Customs is imposed, imported into Canada by sea, shall be the actual
value of such goods on ship-board at the last place of their shipmeat to

f ;

Canada ; and tho value of such goods for duty if imported from the
United States by land or inland navigation, shall be the actual value of
such goods at the place at which they arc purchased for importation into
Canada, and whence they arc directly conveyed, without change of pack-
i^e, to Canada ; and such value shall be ascertained by adding to tho
value of such goods at the place of growth, production, or manufacture,
the cost of transportation, whether by land or water, and of shipment and
transhipment, with all expenses included, from the place of growth, pro-
duction or manufacture, to the vessel in which the shipment thereof is
made to Canada, or to tho place where the goods are purchased in tho
United States, and whence they are directly conveyed to Canada as afore-
said, and including also the value of any box, case, sack, package, or
covering of any kind in whicli such goods are contained, and all export
duties on such goods, and all costs and charges incurred in placing such
goods on shipboard, or in the vessel, cars, or carriage, in which they are
conveyed to Canada.' "

That is provided that there are no reductions made on the face of the
invoice, and the full value of the goods shall be assessed. This includes
everything that is in the invoice.

Hon. Mr. HOLTON. — Then, British goods invoiced to New York
would be subject to all the charges of bringing them to New York, while
the same goods shipped directly from Liverpool, or other liritish port,
would be subject to all the inland revenue charges on British goods. 1
take it, that would be the effect of the hon. gentleman's proposition.

Sir FRANCIS HINCKS.— If goods were brought in bond, I presume
that would be the effeet.

The next proposition for additional revenue is on an article of very
general consumption and on which it is necessary at all events, in our
opinion, to make a material change in the manner of assessingthe duties.
I allude. Sir, to tobacco and the manufactures of tobacco. Now, Sir,
a great complaint has been made of the system of charging duties
upon tobacco and tobacco manufactures. All the tobacco manufacturers
have been dissatisfied, and in communications which I have had with
them — and of course, I do not wish hon. gentlemen to suppose for one
moment that in considering this subject I paid any great attention to the
persons who were engaged in a trade of that description, and who naturally
are influenced by their own interest, and who have no great regard for
the interest of the class of the people — upon whom the duty must ulti-
mately fall ; but certainly, as far as the manufacturers are concerned, I
am bound to say I did not find there was any aversion to an increase in
the revenue being obtained from tobacco. But they complained of the
manner in which the dutier are levied. By the present system the duty
on cigars is levied by the thousand. First of all there are cigars which are
rated at $10 a thousand ; then under $20 a thousand ; then under $30
a thousand, and $40 and so on, they are assessed at different rates by the
thousand. The manufacturers complained very much indeed, that large

im tho

nluo of
ion into
(f pack-
to the
facturc,
cut and
rth, pro-
icrcof is
d in tho
us afore-
Icapc, or
I export
ing such
they are

;e of the
includes

jw York
rk, while
tish port,
pods. 1
on.
[ presume

e of very
its, in our
he duties.
Now, Sir,
ng duties
ufacturers
had with
se for one
on to the
3 naturally
regard for
must ulti-
ncerned, I
increase in
ined of the
a the duty
8 which are
under $30
ites by the
, that large

quantities of German cigars which were invoiced at very low rates, and
come in under the lowest class of duties, while they are subject to a much
higher duty here upon cigars of tho same ([uality. Whether they made a
case or not, I have clotorniincd to adopt the English system which is to
levy the duty by the pound upon all cigars. This course has been taken
in England and 1 believe has been very satisfjictory. (Hear, hear.) Of
course 1 am dealing at present with duties on custon^s and not with excise
duties, we propose that the customs duty upon cigars shall bo 45 cents per
pound. (Hear, hear.)

Tiie only other articles that I am aware, I need refer to, are vinegar,
and acetic acid, which have been placed at 10 cents per gallon. Then,
Sir, with regard to tobacco and snuff, we propose to make the duty 12^
per cent, ad vnlorfm, and 20 cents per pound. I will now refer to —

Hon. Mr. HOLTON. — Do you intend to place a duty ou manufactured
tobacco alone, or on unmanufactured tobacco also ?

Sill FRANCIS HINCKS. — I intend to place duty on manufactured
tobacco, but not on unmanufactured. There are some little changes to be
made, but they are really mere matters of form, and are mere questions of the
mode of collecting the revenue. There will be an altera tion in the mode
of assessing the duties on spirits and strong waters ; but it is not proposed
to raise the duties upon them at present. But there are various articles
called perfumed spirits, and other articles containing alcohol, which are
imported and which do not pay duties imposed upon spirits. It is pro-
posed to make them pay a duty, but the alteration under that heading
is really of no material importance.

The only article that I have not adverted to, I believe, in the customs from
which we are trying to get an increase of revenue is wine. We propose to
increase the nd valorem duties on wine from 20 to 25 per cent, with a
specific duty of ten cents per gallon. I will now refer to other articles
that we propo.se to strike out of the free list, that I have not spoken of iu
the list of unenumerated articles.

Mk. MACKENZIE.— That is, to put them in the 15 per cent list.

Sir FRANCIS HINCKS. — Yes, amongst these articles are steam fire
engines on which there are special exceptbus, which" we do not propose to
continue.

Hon. Mr. HOLTON,— Hear, hear.

Sir FRANCIS HINCKS.— My hon. friend says " hear, hear," but he
will perhaps allow me to explain. There is an exception now on steam
fire engines when they are imported for the use of municipalities. I do
not see why that exception should continue. It does not seem altogether
fair that our own manufacturers, who are capable of producing quite as
good an article as can be imported from the United States, should be taxed
15 per cent, for the materials used in the construction of these steam
engines, when they are exposed to competition for the manufactured article
itself, by free importations from the United States. I can see no reason
why municipal corporations should not pay duty when they import such

articles, ^'or they can ^^ot thorn nmdc in this country ua well, and in a way
to };ivi! as much satiHliiction. \Vhcrii there have been exceptions on particu-
lar kinds of nmchincry, wo propose to strike those cxeeptioos out, and
place all niachiiicry on the siinio i'uotiiig.

Hon. Mr. IIOLTON. -We proposed that last year.

8iii FRANCIS illNCKS -There are a few other articles of a rather
tritiinf^ character, byit which still ouj^ht not to be continued on the free
list— ;^old and .>^ilver leaf, emery paper and emery cloth, sand pa|)er and
sand cloth, and platers' leaf. Then there are a few articles which it is
proposed to insert in the free list, that have hitherto been subject to a
duty, and one or two articles upon which it is proposed to allow a draw-
buck. We propose to allow a drawback upon iron used in the construc-
tion of composite ships. — (Hear, hear.) We also propo.se to allow a
drawback of duty on tin used in packaj^es for exportation. Tin is u.scd
pretty extensively in the several ex{X)rtiu«; trades, just an in point of fact
iron is used in the composite ships built here and sent ai)road. It is used
largely in packages in which petroleum and preserved fish are exported,
and it is scarcely fair that it should be subject to a duty, and when
exported afterwards that there should not be a drawback upon it. Of
course no duty would be collected if it were imported in bond for re-ex-
portation, and it is only fair to allow a drawback when it is exported in
the way I have mentioned.

Mr. workman. — The hou. ji;eutlcmau does not, of course, include
block tin ?

Sir FRANCIS HINCKS.— No, it is only tin in sheets.

Mr. workman.— That is tin plate, as it is called.

Sir FRANCIS HINCKS. — Yes, the tin imported in sheets, and used
in packin<j; iresh fish and other articles of that kind. 1 have now, Sir,
gone through the articles in regard to which we propose changes in the
tariflF of customs.

Sir ALEXANDER (JAliT.— The hou. gcntlcmau has not yet stated
what he proposes to put in the free list.

Sir FRANCIS HINCKS.— Well, we propose first of all to strike out
in the free list certain words under the head of colors. There are eight
or ten of these articles of colors which are free under certain circumstances.
I will read the clause of the tariiF jcferring to them, and hon. gentlemen
will then see better the change proposed : —

" Colors and other articles, when imported by room-paper makers and
"stainers, to be used in their trade only: — Bichromate of Potash, Blue
•' Black, British Gum, Chinese Blue, Lakes, Scarlet and Morone, in pulp,
*' Paris and permanent Greens, Satin and fine-washed White, Sugar of
" Lead, Ultra Marine, Umber Raw."

We propose to strike out these qualifying words, " when imported by
" room-paper makers and stainers, to be used in their trade only," and al-
low those articles to be free under all circumstances. They arc not only
used by room-paper makers and stainers, but in other branches of manu-

iti
wl|

I"
al

fi;

i I (

I a way
particu-
)ut, aud

a rather
the free
ijKjr and

I it'll it M
ect to a
a draw-
jonat rue-
allow u
is used

it of fact

I I is used
exported,
and wheu
1 it. Of
for re-ex-
ported in

c, include

and used

now, Sir,

t;cs in the

yet stated

strike out
e are eight
umstances.

jientlemen

nakers and
)tash, Blue
ae, in pulp,
Sugar of

utiported by
ily," and al-
irc not only
les of manu-

facturea, and there is no reason why the duty should continue in one case
and not in the other. Then Ikokbindors' mill-boards and binders' cloth
are other articles on which there is a heavier duty than on books. It
aeenis to nu be a case of hardship to make bookbinders pay 15 per cent
on the raw materials used in their business, while books themselves in their
finished state arc admitted at 5 per cent. We propose to admit them
free, and add to the free list also iron wire, and brass in stripes. Then
there is a verbal correction under thu head of iron which T will mention.
INIy hon. friend from iMoutroal (Mr. Workman) perhai)s knows that the
article of iron in blooms and billets reads as if they were puddled. I be-
lieve, as a matter of fact, that they never are puddled, and I propose to
add words that will prevent misconception. I have now, Sir, gone through
the classes of articles in regard to which we propose changes in the Customs,
and I will next refer to the Excise.

Mr. MACKENZIE.— There is no change in books.

Sir FRANCIS IIINCKS.— No, I propose no change in respect to
them. I think it is desirable to avoid as far a.s possible troublesome ques-
tions of that kind.

Mr. MACKENZIE.— Hear, hear.

Sir FRANCIS 11 INCKS. -Having changed the TariflF of Customs, it
is necessary to make corresponding changes in the Excise duties. The
first article in regard to which we propose a change is tobacco. There arc
two classes of tobacco on which duties arc charged — one upon which the
duty is 5 cents and the other 10 cents. We propose to put them at 10
and 15 cents respectively. Upon cigars we propose to place a duty of 30
cents per pound, this being about a fair equivalent for theCustonis duties.
Now, Sir, we calculate by this means on raising an additional revenue )l
$1,100,000.

Sir ALEXANDER GALT.-Youdo not alter the duties on spirits
or beer ?

Mr. MACKENZIE.— Or malt or petroleum ?

Sir FRANCIS IIINCKS.— No, we propose no changes. Although,
Sir, I may not go into (juite as much detail as the hon. member for
Chateauguay would like, — for I see ho is taking down very closely my
figures — I do not know that he is entitled exactly to tie me down to
every particular article ; but I will give him an estimate under the princi-
pal heads.

Hon. Mr. HOLTON. — I assure my hon. friend that I will not con-
sider him personally liable for failure in these estimates, I only want
the estimates thempelves. (Hear, hear.)

First of all I shall take the most important, although for convenience sake
it was not the first referred to. I shall set down under four different heads
what we anticipate. From the change with regard to the addition of five
per cent we anticipate ?4:25,000 ; from packages, $125,000 ; making
altogether under that head §550,000. From rice and wine, in round
figures, $25,000 each ; aud from tobacco aud cigars, taking them

lo^^cthor, OuHtoniH imd Kxci^i, wo oxpout ^.'{OO, ()()(>. l''rom till other nrti-
doH wliicli liiivo hwu in tlic l'w.v list. I dnn't voiiturii to aiiticiptitn ii liir^or
aiiiount ot'diitj tliiiii $2(10, 0(10. Tlwri! uni muH'. artictUis on which thorn
iH no vciry <i;rcat prohahility ol nuuiivinji- much duty, hut I have no douht
wo Hhall ;^«!t Honid duty from coal and Indian corn, though it in hardly
poHHihIo lo say wc will ^lit <luty J'ntm cvciry article wo put on tho list.
There \h a neccsHity (or dealing:; with all articles wo find ou tho I'roo
li.st, and I ima);,ine thcnt is ;io reason why wo should nut rcmovo many
articKis from it t'vou th()u<:;h not likely t(» h(! imported.

ITuN. Mil. IIOIi'l'ON. — Wo (h»n't import wheat, and wliy sliould wo
place a duty on it ?

Sill KKAN(!1S IIINCKS.-l dont say that we will not import wheat.

!h»N. Mh. llOi/rON.-VVhatas tooiits?

Sill f'M{AN('IS lilN(!KS.-l dont think there will bo a very hir^o
duty on that item. (Ilt^ar, hoar.) lint, as wo are not importorH of oats
thoro can ho no harm whatever, in allowing tliat item to rciuaiu on tho
tar ill". (Hear.)

Hon. Mh. IIOIiTON.— Will you allow nw to ask you u fow <jUciHtion«
lis to th(! articles on which you jiropose to impose duties ?

Sill FIIANCIS IIIN(!KS.— Ccitainly.

Hon. M. IIOIiTON.-— [ think th('y ant as follows— flour, meal, wheat,
coal, salt, ho])s, animals, fruits, roots, steam-iiii^ines — all articles whicdi
luivo hc(<n taken from the free list, and from wliich you cspoot to ^ot
$2()(K0(M( ; am I (correct in tho enumeration ?

Sill KKA.VCIS mN(.'KS.— You have named thorn correctly. My
lion, friend called attention let the words national policy. Well, my idea
is that W(! oufi;ht to do exactly what wo think Ih for our own int(:roHt ; and
several of those artichis wtirc allowed to ntmain on th(! free list herotoforo
simply heeanso mt^otiations were ^oin;; on from time tu time with tho
United States, with reference to the renewal of tho l{«tciprocity Treaty.

I canliot do better than state tho vitiww of my predecessor on this point.
Ifo says, in the course of Iiiu Financial Statomont last yuar, flpoakiuf^ to
tho Americans : —

" Wo have allowed your coal to coino in free, thou}.i;h you ehari;,o a
" heavy duty on ours. Wo allow your flour, ;;rain, hops and salt, and
" other articles to be imported free, while you nototdydo not reciprocate,
" but you specially <li.scriminate against our milliirs by charj:;ing more on
" flour than on u;rain. This state of thiuffs," w»! miuht fairly add, " lias
" fi;one on for tlinjo or four yt'.ars, but you must understand it <;annot
"continue. (Hour, I'.enr.) The time may soon con:o wlion wo may
" require to have a national policy of (»ur own, no matter whether that
" national policy lu'iy sin a;.fainst this or that theory of political economy.
" (Hoar, hoar.) V\n' wo must bo j^uidcd chiefly, if not solely, by con-
•* sidorations atrectinjjj ourselvoi, and wo may have to consult our self-
" intcrcBt without coiiHidoration for others."

Well, Sir. I bcliovo the tiuio bus gouo by wheo wu should coutiuue cutirely

Ill

other arti-

(1,0 a liir^nr
iivhich tluire
ret no tlouUt
it in hardly
on Iho list.
i)U tho I'rco
inovo many

If should wo

nport wheat.

a very larm'.
i-terH of oiitrt
main on tho

low (lUoMutns

nioal, wheat, j
irticlcs which
Lispoct to iLfit ]

irrcctly. My

WoU, iiiy »*1^'"'
intorcbt ; and
list horotolbro
inio with tho
ity Troaty.
on this point,
ir, spcakinp; to

you chttry;o a

and Halt, atid
lot reciprocate,
\Yy(u\y^ more on
irly add, " has
tand it (Minnot

when we may

whether that

litieal economy.

solely, hy con-
onHult (mr hoII'-

joutiuuc cutiroly

to exempt fronj duty those very artiiiltis to which referenoelmH hoen mado.
1 eertiiitdy do not think we can Ite (rharj^cMl witii proposin^^ any very exag-
f^orated taritF, or one that will (>xpos<i iis to any stronj^ oharf^e on the
Hcnre of hein^X proti;(dionislH. On tin; contrary I am V(!ry mu<!h afraid
that many of our friends who are HlrttM;i; a<lvocal('s of prolcotion will ho
very mueli dissatisfied with the propositions we have made. Me(^aus(t it Ih
pcirfeelly clear that tho tariir as a whole is slri(!tly a revenue larilV, and
as stieli I hope it will receive the 8U])port of the llons(>. (Hoar, hear.)
I have now only to thiuik the OommitttM^ for the attention with which tluty
have listened to me, and to apologise for havin;; taken up so much of their
time, ((/'hecrs. )

in reply to I Ton. Sir Alkx. (J.M/r,

Sim KUAN(MS 111 N('KS.— My hon friend has pointed out several short
oomin;;s on my part in his spe(u-h which ho has just mad*>. I stated at the
outset that 1 W(udd not follow tlur usual plan of j^oiiijj; into a lon^ »rucnswon
in r(!ference to tln^ state of the allnirs of llio (utuntry, hut that I would eon-
line myself to tlio suhjecjt more immediately hcfori! tho House. I really
do not fettl myself spet^ially (;all(>d upon to take up srn'n/im the ohjoetions
raistnl hy the lion. •.^cMithtman. I think that some of my colleagues are hot-
ter ahle at tho pro|HU' time to reply to the remarks which tlu; hon. i;(!ntl(>-
man states that he will hriiii; up at a futurt< sta^^c. He says I have p^iven
no ini'ormation on the suhjeot of Dcnninion Notes. I did not think it
necessary to fj;o fully into that suhject, IxM-ause I thou<:;ht it had hedi suili-
oiently explained when tho matter was unditr discussion that Ithero is no
prospect of our dc^rivin^ any nwenue from those notes this year.

The charter of tho Itank of Montreal (toes not expire till after the next
session of Parliament, and until the expiration of that (charter we have to
Ipay tho Hank of Montreal five per<!ent on tlw^ amount of notes circulated.

Sill A, 'l\ (lAliT. — Do I understand the hon. f;eiitleman to say that
he liank of Montreal shall continue to issin^ Dominion Notes until tho
ndof 1H71.

Ill FIIAN(US HIN('KS. — Certainly. 1 cm see no nwison otlua'wiHe.
y law thearran;;('ment ;>xists duriii;^ the existence of the charter.

Sill A. 'r. (JAI/r. — The law provi<les tliat you (niu ^ive them notice! or
ley can <^ive notice to you, that the arrangement shall \h\ closed at Iho
id of (I months.

Sill I<MIAN(MS HrN(M\S.— The hon. ^'entleman is mistaken.

Hon. Mr. HOLTON. — The lion. j:;entleman has statc<l in tlw^ coin-
ittee of i*uhlie Accounts that thcHO notiiH's have; hecn ^iven hy tho
overnni(M»t.

Sill KHANCrS HIN(^KS.— 1 did not say so. There is one ndtico
erely terminatinii; the aj;('ncy arr'injj;einciil. That iioticu^ docs not tor-
inate the claim of th(> Uank ol' iMoiitrcal to receive live jier cent upon
e amcmnt of their circulation. Tho notices which have heen given are
mply those :

■ ' r

To terminate the arran<!;emcnt by which the Government arc bound to
keep a specific deposit in the Bank of Montreal ;

Another notice to close the arrangement by which the Government are
bound not to deposit in any other Bank than the Bank of Montreal ;

And another, that the Government should employ the Agency of the
Bank of Montreal for redeeming their notes under a certain arranj^ament.

All these notices have been given, and the arrangements will terminate
in about six months.

Now, Sir, with regard to the Intercolonial Loan, I am not aware that the
position of matters was altered, it certainly was not altered recently. The
matter was very fully explained last 8et<sion, and there has been no mate-
rial alteration since then.

The payment of the £300,000 for the Red River territory has been
deposited, and is now practically beyond the control of the Government.

Sir a. T. GALT.— Then you paid the Intercolonial money for the
Red River territory ?

Sir FRANCIS HINCKS.— Not necessarily that money.

Hon. Mr. HOLTON. — Y'ou paid it from the pocket into which the
Intercolonial Loan went ?

Sir FRANCIS HINCKS.— Certainly, you can put it in that way if
you like.

Then with regard to the explanations which he said were necessary
regarding the state of the finances, as the Government did not require to
come to thi.? House for assistance in raising any further money than by
he mode spoken of. I did not think it was necessary for me to make any
statement on the subject. Other opportunities will be offered for making
any explanations necessary.

The Red River question is one of great seriousness, but at this hour of
the night I do net intend to enlarge upon it. I think I made it suffi-
ciently plain that there would be a demand for money, and that there
would be a supplementary estimate brought down. I did* not say exactly
in regard to Red River, but there is no other matter for which we could
have to ask for the money. With regard to fortifications, I may say that
correspondence is still going on with the Imperial Government on the sub-
ject, and I do not apprehend that there is any fear of difference with
the Imperial Government on that or any other subject. My hon. friend
charges me with not having come forward with any plan for reducing the
expenditure. I could not conscientiously do so ; I saw no prospect of re-
ducing the expenditure. He stated one mode through which he thought a
reduction could be made: it was with reference to the management of rail-
ways in the maritime Provinces, I did not come here this evening pre-
pared to discuss that (juestion, and I feel there are others of my colleagues
who are better able to discuss that subject when the proper time arrives.
Of course, if he refers to me as not having made any particular suggestions
on the subject of economy, it must be borne in mind that after all the Fi-

bound to

nment are
real ;

Qcy of the

anfgvjment.

terminate

ire that the
itly. The
m no mate-

•y has been
ernmcnt.

ey for the

uanco iMinistcr has very little to do with the spending departments of the
government. (Hear, hear.)

Sir a. T. GALT.— The remarks I made of that kind referred to the
spending departments. Far be it from me to make any reproach to the
hon. gentleman j I merely spoke of him as the mouth piece of the Govern-
ment.

Sir FRxVNCIS IIINCKS— The Finance Minister is in the unfortunate
position of having very little to do with the spending of the money for
which he has to ask the House. The hon. gentleman referred particularly
to the Mihtia department. All I can say in reference to that is this:
that although there is an increase over the revised estimate of last year,
yet it is to recollected that every effort was made at that time as the revenue
was falling short, to keep down the expenditure ; and the only way of
further reducing the expenditure was by not doing things that ought to be
done. (Hear, hear.)

which the
that way if

e necessary
, require to
ney than by

make any
. for making

this hour of
ade it suffi-

1 that there
, say exactly
ch we could
aiay say that
it on the sub-
'ercnce with
J hon. friend
reducing the
ospect of re-
he thought a

;ementofrail-
evening ppe-

my colleagues
time arrives.

ar suggestions

ber all the Fi-