% ^ ^ /a w '/ IMAGE EVALUATrON TEST TARGET (MT-3) 1.0 ■^ 12.8 I 2.5 2.2 I.I lU 1^ 2.0 1.25 U III 1.6 A 4. CIHM/ICMH Microfiche Series. CIHM/ICMH Collection de microfiches. Canadian Institute for Historical Microreproductions Institut Canadian de microreproductions historiques 1980 Technical Notes / Notes techniques The Institute has attempted to obtain the best original copy available for filming. Physical features of this copy which may alter any of the images in the reproduction are checked below. L'Institut a microfilm^ le meilleur exemplaire qu'il lui a 6t6 possible de se procurer. Certains difauts susceptibles de nuire d la quality de la reproduction sont not6s ci-dessous. D Coloured covers/ Couvertures de couleur D Coloured pages/ Pages de ^ouleur D D n Coloured maps/ Cartes gdographiques en couleur Pages discoloured, stained or foxed/ Pages d6color6es, tachetdes ou piqu6es 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 int^rieure) D D D Coloured plates/ Planches en couleur Show through/ Transparence Pages damaged/ Pages endommagdes D Additional comments/ Commentaires suppldmentaires Bibliographic Notes / Notes bibliographiques D D Only edition available/ Seule Edition disponible Bound with other material/ Reli6 avec d'autres documents D D Pagination incorrect/ Erreurs de pagination Pages missing/ Des pages manquent D Cover title missing/ Le titre de couverture manque D Maps missing/ Des cartes gdographiques manquent D Plates missing/ Des planches manquent D Additional comments/ Commentaires suppldmentaires The images appearing here are the best quality possible considering the condition and legibility of the original copy and in keeping with the filming contract specifications. Les images suivantes ont 4t6 reproduites avec le plus grand soin, compte tanu de la condition et de la nettet^ de Texemplaira fllmi, et en conformity avec les conditions du contrat de fllmage. The last recorded frame on each microfiche shall contain the symbol —►(meaning CONTINUED"), or the symbol V (meaning "END"), whichever applies. Un des symboles suivants apparaftra sur la der- niire image de cheque microiflche, selon le cas: le symbole — ► signlfie "A SUIVRE", le symbole V signlfie "FIN". The original copy was borrowed from, and filmed with, the kind consent of the following institution: Library of the Public Archives of Canada Maps or plates too large to be entirely included in one exposure are filmed beginning in the upper left hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: L'exemplaire filmi fut reproduit grdce A la g6n6rosit6 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 clich6 sont filmdes d partir de Tangle sup6rieure gauche, de gauche d droite et de haut en bas, en prenant le nombre d'images n6cessaire. Le diagramme suivant illustre la mithode : 1 2 3 1 2 3 4 5 6 The Bonding Privilege. x The Honorable the Chairman Committee on Interstate Commerce, United States Senate. Sir: — In acodnlaiicf witli your riHiucst 1 l^^' to stibniit the follow iiij^ iiieiuoraiuluin rospt'ctiiiff the working of the Bonding privilege, taken in the main from the Miie hooks of tlie Canadian Ciovernnient and the hooks of tin; ('nnadian rail- ways which make use of tiie privilege 1. In the treaty of amity, eommerec and na\i- gation between the I'nited States and iMigland in 17!I4., it was provided that "no duties shall lie payable on any goods whieh shall merely he carried over any of the portages or carrying places on either side" of the boundary between the TJnited States and Canada, "for the purpose of being immediately re-embarked and carried to some other ]ilnce." This was the gci'in of tlic Bonding system as it now exists, 'i'he American on Lake Ontario who wished to convey pro(hicts to Lake Erie made use of the port.'iges of the Niagara peninsula within British territory with- out having to pay duty; and British sulijects in Canada made use of the Anieriean shore of the St. Lawrence River. 2. As tlie development of th(> two eimntries went on. the system grew mor«! intricate. Until the Canadian Confederation was establishe'l in I8fi7, British North America, consisted of Upper and Lower (Canada, united politicallv for a while and officially known as Canada, Nova Scotia. New Brunswick. Prince. Kdwaril Island and New- foundland, each separate ( 'olonies Manitoba and the North-West Territories were hunting grounds ruled by the Hudson's Bay Company, and British Columbia was a separate colony. Upper and Lower ('nnada, now known as Ontario and Quebec, had access in summer to the Atlantic hy the St. Lawrence ports of Montreal and Quebec, but in winter were entirely cut off. In lgdena- hurg, and to bring i^oods from Europe and fnm the Eastern States in tin; sanu; way. This helped to pay the miming expenses of the Canadian canals and gave the West comparatively cheap rates for half the year. In 18')(), with the construction of American railways running to the international frontier in coimection with the Grand Trunk and other Canadian lines, the transit of goods in bond by rail from United Stat use of each others territory at tht; diffei-ent points named either because it affords the nearen Canada and foreii^n countries in this hemisphere, <'.q., the Wc-st Indies, .ArLicntine ami Brazil, carried on throujjb American ports, as well as traflic between Canada and Au.stralia; together with tratlic via, Canada lietwiMMi the United States and such coiuitries as China and Japan, and ))etwcen Canada and China and Japan via the United States. The Domestic transit trade etnl)races tlie States-to-States traffic carried In' rail or water tlironjjh Canada, and the Province-to-Provincn traffic carried throuffh American territory. t»l The Tre.ity of Washiu'jton of IH7i Ltnaranteed both the l''orei.;n and the Domestic transit trade for certain periods. According' to the ( 'anadian interpretation the i,Miarantee .still apjjlic to the Foreiijn. bu, lias ceased in the case of the Donu;.sti •, wlrch is carrieil on simply by virtue of let^islation ,)as,se(l l)y the two countries prior to the treaty. 5. Th(! Canadian Statistical Year Book for IS!>+ (which I send you) ;,nves tie;ures, derived in part from \Vashin;,fton returns, purportine- to show the valui- of the Foreign! transit trade, but they are not complete It ajJi^ears that from 1868 to I8!t4 inclusive, the value of the ^' ids sent to and received by Canada from counti'ies other than the Cnited States via American porta amounted to .*S()0.(i()(),(H)() an averajjeof .>?:W.(K)0,- 000 a year. It is not possible to ijet at the ton- nage. The Canadian Covernment returns do not show the value or tonnage of tbe;;oodssent toand n^ceived l)v the (Tnited States from foreie-n coun- trii's other than Caiuida by way of Canadian ports .\11 they show is tin; value of the .Ameri- ca!) ;^nods jjassin^ throuf^b the port of Montreal in lioml for lOui-ope oi- elsewliere. which since 1 8S(1 has averae-ed is, Thomson, Beaver and lleail lines. As said, there are no returns of any kind showinfif the totuia^^e of the Kuropean or other rner- ch-.ndise import(Ml by the United States vifl .'anidian p irts. whether Atlantic. St Lawrence or Pacific ports Th(> value of sucli imports into th" C'lited States via Canada may be pi'tl ered after a fashion from the United States im])ort returns, thou^rli not with anythine: like accuracv, because tlm import returns do not distinguish lietween im|>orts the produce of Can- ada and imports merely enterinij throueh Canada. From the information at hand it seems to be beyond doubt that the F\ireit" tlio ton coiisuiiicd in tlid I'nitod 8tatt's. With rospoct to tliis brancli of tlio question, littlo cuii he gleaned from the otiicial fitfurea The United StateH import returns for ISiii-ii make it appear tliat "iH.S.OOO pounds of tea reached the Unitt'd States from (Janadian ports, inchidinj; tliose of British Coluiul)ia, out of a total importation into tlie United States of 9;{,!)98,000 jKiunds. Cana.la, iii direct importations when the tea is not warehoused and does not chancre owners at such j)orts. Ae('ordin<( to the Canadian returns, 20,200,000 j)ounds wen; imported direct for home consumption in l89o-ti,ineludinij importations by way of Amt.'rican ports, wdiile .'JTO.OOO came in under the 10 per cent, duty, of which :{1 0,000 were hnjuj^ht from the United States, Tlie con Huniption of tea in Cmaila is gieater per head than in the United. States ; outside the cities comparatively little coHee is used. Th«'se fitjures, such as they are, do not hear out the asserti(jn that the Canadian Pacific ti^a traffic with the United States is excessivt; in proportion to that done by American steam- ships and railways. The case is presented in a clearer light by the official customs returns at the Japantsse ports of Yokohama and Kube showing the (|uantities of Japan tea sliipped to all points in the United States and Canada during the season, April 15, 1895, to April 10, 189G. I append a summary (marked A) of these returns, the totals bearinu; on the point during diseu.ssion being as follows : — By Caimdiiiii Piiuilic stuaiiiera r.mniiii to Vimciiuvin' r>,()04,!)l(i Ky (). It. iV N. Co. to Portliinil, Orugon 4,7"i5,42i! By P. M. iiiul (). & O. stuaiiieis i to Sivii Francisco I 7, 1'A 106 By Sailiiii; Vc.snoI.s | to S.iii Fi-ancisoo [ 1 8S0,2T8 By N. P. S. S. ("o. f to Tacoinii I 13,411, Oa.') By Sailing N'ossels j to TacmiH 1, ll,8(;.H,:f87 By Suoz .steamiirs 4,.'528,()i;{ By SuikUv .Ship.s 114, 147 ■18,552,394 These totals ivlate to .shipments cjf tea from Japan. I am unable to obtain official Hgures showing the shipments from China, but it is said the proportions shipped to the ports named would be about the si me as those oi the Japan trade. The (^madian Pacific steamers ruiniing to China and Japan are passenger steamers with a limited freight capacity. 7. It is worth while to observe that, large as it is, the Foreign transit trade done by Canada through American territory is not so great, rela- tively to the total foreign trade of the country, as it used to be. The completion of the Canadian Pacific in 18H.') gave Manitubn, whicli up to that time had been entiiely iltspendent on American routes to the Kcaboard, direct eoiniection by rail, and by water in sununer from the head of Lake Superior, with the Atlantic seaboanl. The completion of the Intercoloniid in 187(5 furnishi'd the iidnnd provinces with an all- Canadian winter route to Kurope, lait the excessive length of the rail haul militated against it until a shorter route to St. John and Halifax through the State of Maine was built by the Canadian Pacific The Government statistician at Ottawa says, (Year Book, 1894), that the Foreign transit trade of <'anada through the United States declined in 188M and 1889 in con- secpience of the threatened repeal of the Bonding pi-ivilege during the controversy that arose over the Fishery (piestion: " the merchants of Canada decided to run no risks, and, there- fore, to receive and des])atch their goods vi& Canadian jiorts." However this may be, that trade has certainly been nffectc^d by the high tariff" which the Dominion adopted in 187!> and which has kept down the importation of Jiritish goods. The Canadian tariff treats British goods precisely as it treats American and other foreii;n goods; in fact, as they are for the most part manufactures, British exports to Canada pay a hi;4:lier average rate of duty than American, which consist to a considerable extent of raw material like coal, cotton, corn and othei- breail stuflTs, etc The imports forconsumptionfromClreat Britain into Canada for the five years, 1873-77, averaged !?54,,')00,000 a j'ear. For the five yeai-s 1891-95, the average was only S;!9,000,000. For the same periods the imi)orts from the United States averaged S50.000.000 and §54.000,000 nspectively. Allowing for the fall in values, imports from the United States have increased very considerably. This is due, first, to the in- creased im])ortation of raw material from the United States, and, second, to the fall in the price of American factory goods since 1877, which has led to larger purcha^^es by Canada, American goods having supplanted British in some lines. The extension of railways within Canada, with the better facilities for trading which they have created, has helped materially to increase pur- chases from the United States, which for many years have exceeded Canadian sale-; to the United States. Between 18G8 and 1882 the B'oreign transit of Canada done throuyh the United States constituted from 12 to 22 per cent, of the total foreign trade of the Dominion. Since 1882, with some ups and downs, it has receiled to IS per cent. The traffic is certain to increase, however, with the development of Manitoba, the North-West Territories and British Colombia. Already the Northern Pacific carries a good deal of Manitoba wheat over its Manitoba lines to Duluth, whence m it, is lorw.inlf.i hy vi'ssci ti» ISutliilit nml \ 53.'), 000 l,01(i,"iO ) 1S91 054,000 075,010 i8!)2 C4I ,000 nn.">,ono 18!);$ C3L',< 00 1 ,205,000 1894 502,(00 1,0118,0(0 The States to States tratlic tlius constitutes a considerable jiroportion of the whole traflic. Over 200,000 tons of corn, barley, oats, peas, rye, and wheat are conveyed annually through the Welland from western points in the United States to eastern. The cargoes from east to west con- sist principally of coal and merchandise. At present the grain toll on the Welland is ten cents per ton, wiiich entitles vessels bound east to Montreal to free passage through the canals below Kingston. Hiil there is no longer discrimination against .Vmerican lake ports like ( )gdensburg. Canada ha.s Nj)ent upwanis of !?r)(),OtM).()00 on tim Welland and St Lawrenct! canals. They do not pay operating expenses, and tolls are levied because tlietiovernment cannot very well atlbrd to dis|)ense with them. The Canadian ercentage is carried from United States points toC'anadan ports anil for- warded thence in bond to the TTnited States by rail, but there are no orticial returns fnmi whii h its tonnage or value may be computed. The Canadian Government is now engaged in deepeiiing the canals below Kingston to 14 feet, the depth of the Welland. The Welland at that dej)th is unable to accommodate the large American ves- sels now lieiuij built on the Upper Tjakes, and public opinion in Canada is in favor of deejH'uing it and the lower canals to '20 feet so as to permit the largest steamers to ply without break bi^twecn Duluth and Kort William .and Oswego, Ogdens- burg and Montreal. This would mat(>rially reduce the cost of ship])ing grain from the Western prairies to iMU'ope The Liberal Government at Ottawa oilers to ])erfoi'm tla^ work Joijitly with the Unit(!d States ami to ()'ace the whole route, with the American and Canadian canals upon it, un ier the management of a joint com- mission. ( 'anada cannot atibrd to do the work wholly at hi.'r own expense. 9. By Article ;}0 of the Washington treaty it was {irovid -d that British subjects " may carry in British vessels, without payment of duty, goods, wares or merclmndise from one port or place within the territory of the United States upon the St. Lawrence, the great lakes and the rivers connecting, the same, to another port or place within the territory of the Uniteil States as aforissaiil ; provided that a j)ortion of such transportation is made thr lUgli the Dominion of Candida by land carriages aiul in bond under such rules and regulations as may be agi-eed upon be- tween tlie (invemment of Her Britannic Majesty and the CJovernment of the United States" A corresponding privilege was allowed to American vessel owners of conveying freight from one Canadian port to another provided a portion of the transportation was made by bonded land carriage through United States ter- ritory. This article was abrogated in 1885. While it remained in force, Canadian vessels conveyed grain from Chicago and other points in the Western States to Canadian ports on the^ m (ifuij,'imi l>ii\ wlitif it Wilis put nil liciinl cms ftiiil forwiiplt'il iill-riiil to nnll'iilo or ( (swcjjo or flsf by rail to Ijikr Oiitiirio mid tlniicf liv ('miiiilimi Vfssi'l to the I'liitol Stalt-s, Hy Aiticlr 27 of thi- tivnty, tlif Piiito.! StntcH (Jovonnni lit covi'muitfil, in nliiiii lor tlir use of the ('miiidimi i-miiils l)y Aincnmii citi/t'iis on terms of iMni.ility with ( 'mmiliiuis, to ;;rmit to CaiiiiilimiH tile tisi' on ('i|iial terms of the St. Cluii- Fliits ciuiiil mill " to ur;;r iipoii tlu' Stiite Govormiu'iits to scciiri' to tlic snlijcctH of Her Britaiinic Miij( sty the use of tliu M«ivt'ral State canals connccti'd witli tlu- na\ i^^ation of the lakes or rivers traversed hy or conti^juoiis to tlie bouiidury line." vJanadimis enjoy the iirc of th»> St. (Mail- l''lats and also of the Aiiu'riean eanal at the Sanit Thoy coiniilain, liowi^ver, that tlie Erie and ( 'haniplain canals Lave not been thrown oiien to them on e(|iial terms; they aro coiiti<;vious to tiie iMUindary and in direct connection with Canadian waterways. On the other hand, they still enjoy the free navii,'ation of Lake Miehijjaii eoneeded for a terminalile peiiiHJ by Article iK 10. Tiie Domestic transit trade carried on by rail exceeds that done by water, Imt, an said, the otHcial returns of l)oth countries relative to it are exceedin^dy niea;,'re. A return showiiifr the number of cars containini; States to-States freiii;lit carriiMl over Canadian railways durinj; n certain period of years was submitted to Con- gress by the Secretary of the Treasury in 1H!)4. The number is iriven annually in the re<;ular Treasury statements. Mut there is no record of the tonnatje. Tlie Canailian (lo\-ernifient has no returns whatever of this [larticular traffic beyond those su[)plie(l annually t<» the liailway Dejiart- mentby the Michigan Central ((Canada Southern), the tonnage liauled east and west through f Canada Ity that road being assumed to be for the most part States-to-Stfites traffic. fts recent returns are as follows: — Tons. i8!ti ;{,!)2r),()(>o 1892 ;i,174,(l(K) 18!)3 ;!,027,00() 1894 2,r.4r),0(M) 189.T 2.8<15,0()0 In the controvers}' that has tak<'n plac(^ lately over the Bonding privilege, this large Sta.t(,'s-to- States tonnagi^ has been put down jus hauled by Canadian I'ailways when^as the Canadian rail- ways proper have no hand or ])art in hauling it. Canadian territory serves as a firidge to the Michigan Central between Niagara Falls and Detroit, and that is all the benefit Canada can be said to derive from the traffic. The ('anadian railways make returns an- nually to the (»ovornmetit, but in their tonnage returns do not distinguish States-to-Stfites traffic from local traffic or from traffic going in bond to the American seaboard. I am indebted to the managers of the Grand Trunk ami Canadian I'acitic, which practiciUly ilo all the States-to- States business, for Uie following tfibles showing the tonnage of State s- to Htiites freight hauled by each in the years named : — CANADIAN I'ACIUC. Not Torm. 1M»4 :I02,H11 lS!»r) 2HS,i.7l iHim :)a^,i:r) .... ;«)2,i(;i 18!».-. 1W,2)7 .... 225,424 .... 28s,671 |H!)(1 ti:i,()82 .... 2ti7,7 7,:{(i!»,t)27, .mj that its Slates-to- States tnitlic is over .'{() i)er cent, of its entire business within Canada. II. The Province-to- Province, freight curried by American roads from ISfJS to IH!I4. is valued by the Government statistician at Uttjiwa at S202,- .500,000. an average of alxnit S7,5O0,0O() a year. The tonnage is not given nor is there any way of estimating it. He calculates that the value of the traffic has been as much as iJMt.aOO.OOO in a .single vear. With the completion of the Canadian Pacific and intercolonial. Canada has now un- broken railroa'l connection from Cape Breton in the east to \'ancouvei- in tlu; west, a distance of 4,000 miles within her own tei-ritory, so that for interprovincial trade she is not as dependent on American lines as formerly. This is par- ticularly true of the older pi'ovinces. The ship- per in Ontario, for instance, who u.sed to employ American roads to carry Hour or factory goods to Boston, whence they wen; forwarded by water to Halifax or St. .John, now sends thein either by Grand Trunk and intercolonial, or, more likely, by the Canadian Pacific tlu'ough Maine. At the same tinu- American roads do a good Prov- ince-to-Province business from east to west. The Great Northern, Northern Pacific and others have agencies in the older provinces and take freight for .shipment to most points in Manitoba, the North- West Territories and British Columbia in competition with the Canadian Pacific. Under Canadian law they are at liberty to carry this [6] Canadian fix'ijrht from tlinir Pacific Coast tfiiiiini to V^uieonvcr or Victoria in vesHels flyiniil',ith i'ailway, nn independent Canadian rua.j, is Ilea .ing i'or iJiduth. The Alberta Railway runs fi'om Lethfiridge in tlie t'anadian North West Territories across the frt)ntier to Great Falls. .Mont., oil the (ireat Northern. On the other hand, t!ie Northern Pacific owns railway lines with a mileage of -HI') miles within Canadian teri'itory, which have reci.'i veil a subsidy from the Manitoba Government; a lint^ built and con- trolled by Americans I'uns from Spokane Falls, its junction with the Great Northern, into the Kootenay district of British tVilumbia, the richest mineral region in Canada ; and the Great North- ern enters British Columbia as far as New West- minister by the line from Seattle. In coiu'se of time other American roads are suri' to penetrate northward into Canadian territory west of the Great Lakes. The gold mines in British Colund)ia are being developed largely by American enterprise and capital, and the nearest and best markets for the iiiiuiii^ cunipa nro just south within thu UnitcM] Stdtos iiitiuT tlmn at Viiiumjuvcc or Vic- toria or at rcinotor points in (-'anadu liko Winni- peg. Toronto or Montreal. The prineipal Anieriean lines west of the Great Lakes wliieli run up to the international Frontier hut onding west oi the Ureat Lakes when the Treaty of Washington dealt with the iJond- ing privilege, beyond the i^xjiort in bond of a poi'tion of tin- ainuial fur catch of ti. ■ Hudson's Bay t'om))any to the eastern provinces of Canada and to iMnojH- by w.iy of the Red River and the nearest Anieiican railways. That treaty was signed on May tt instuDoe. ItH HU'timship line from Vancouver to China and Japan receiveK £fi(),0()() a year from the British (iovernment for the transportation of British mails aeross tlie I'acitic Ocean; this includes their transportation across the conti- nent hy I'ail as well. The Canadian (iovernment contrihuteM a portion of this sum hut the Canad- ian I'acitic Railway does not know it in the transaction. This is the only payment c(jntri- buteii to the company by the Britisli ( Jovernment, which, in return, rein, ires it, when callecl on, to allow its steamers to he employed as ships of war — ii condition imposed on mail steamship lines rtyinj,^ the British tla;^ in other parts of the worl'l. A line of steamers owned in San Francisco runs between there and Victoria, B.C., and receives a subsidy of i?l7,(i4() a ^car from the Canadian (Joverinnent. It is used by (he Canadian Pacific for the transjjort.-ition of fi'eii;ht between N'ictoria anlo, 000.000 made by the Goveriunent of Upper and Lower Canada when tlie comj)aiiy was seriously embarras.sed forty years ago. The conditions on which the advance was made have proved onerous and costly to the road. It was obliged, amongst otlu-r things, to assume and build certain lines that have never paid expenses. The Gi'and Trunk has no steam- ships. The amounts paid bj' the Canadian post office department to the tirnnd Trunk and Canadian Pacific for carrying mails within the Dominion have been greatly overstated. In 1894-5 they were $S80,000 and SSOti.OOO respec- tively, which is much below the amount per mile paid to American roads for similar serv;c(\ This is a convenient place to cori-ect another misapprehension, namely, that the Canadian Pacific anil Grand Trunk are empowered by the Canadian Parliiimcnt (Claiise 22i\ f)f the General Railway Act) to adopt a classification for their States-to-8tates traffic different from tin* classifi- cation in vogue on American I'oads, this being done to give them an advantjige over American roads in competing for that ti-affic. Clause 226 reads: "The company, in fixing or ivgulating the tolls to be demanded and taken for the trans- portatif)n of goods .shall, except in respect to through traffic to or from the Cnited States, adopt and conform to any uniform cla,ssirication of freight which the Governor-in-C'ouncil, on the report of th< Minister, from time to time pre- scribes." The words excepting through traffic froiri the Goverrnnent clussiHcation were inserted in the Act at the .suggestion of the Canailian roads for the simj)le rea.son that they desired in handling through freight to conform to the cla.ssification of the Interstate ( 'onnnerce (>oiii- mission, wluMcas the Goveinment cla.ssification then propo-sed was, and still is, a cliussific.ation peculiar to Canasidiary lines from Minneapolis and Duluth have .soirietiines taken the lead in cutting rates, the C'anadian Pacific replies that it is scarcely fair to hold it responsible for everything that is done by those lines, which as sc^parate and distinct corporations possess an autonomy of their own ; but wherever rates have been cut it has been dfjiie openly and to meet secret reduc- tions by competing lines. In a reciuit case atlectiiig St. Paul and Minneapolis the cour.se of the Saidt line has been severely criticized and it is said to have cut rates without rhyme or rea.son 'J'he answer furnished to me is this : — The seaboard rates to Mississippi River points b(!tween St. Louis and Dubuque, inclusive, have for years been regulatiid by the rates from the .seaboard to Chicago, the rates to those points being based on a fixeil percentage above the Chicago rates, while the rates between the sea- board and St. Paul and MinnoMpolis have bt-en the rates for the time being from the seaboard to Chicago pluf< an arbitrary rate from Chicago onward. The stand taken by the Sault line is that the rates from the seaboard to St. Paul and Minneapolis shall be based on a fixed percentage in relation to Chicago rates, as is the case with the rates to other Mississippi River pointa Tims the matter resolves itself into a question of principle rather than a question of rates. 15. It has been sviggested that frauort, unless tliey have Hrst paid a tonnage tax to the Dominion treasury. As the matter is one liaving an imjjortant bear- ing on the equities of the Bonding .system, it may be well to state the facts briefly. By tlie Treaty of 1818 (Article 1) between Great Britain and the United States it was agreed that American fishernien sliould be at liberty to enter Canadian ports f(jr wood, water, .shelter and repairs, "and for no other purpose whatever." Between 1818 and 18.i2fifty-one American vessels were seized by British ships of war for entering Canadian ports for purposes other than those named, for fishing or preparing to fish within the three-mile limit, or for hovering in Canadian bays and harbors without being in need of shelter, repairs, wood or water. Twenty five of these vessels were condemned and tlie rest released. From 1854, when the Marcy-Elgin Reciprocity treaty was signed, till 1866, when it was ab- rogated by Congress, there was " free fish for free fishing.' and Airierican vesf/ds \vere at liberty to use (.'auadian ports for every iegitiiiiate jjurpose. On the termination of the treaty the ( 'ana'lian Goverruncnt adopted the expedient of i.ssuing season licenses to Americans at a tonnage rate of 50 cents \wi' ton, which was sul)se(|uently increased tnt American fishing ves.sels on a better footing in Canadian j)orts than American mei-- chant vessels, which at that time wen- drhani d from entering tliein for any purpose whatever: — "Prior to 1818 no AuKirican vessel. wh(>thei- employed in fishing o)' in connncrce, had the rigiit to enter a Hiitish-Ameriean port. Tliey could tish on the fisliery groinids where the inhabitants of both countrii's used to fish. They could go on the shore and dry lish. Hut they could buy nothing or sell nothing. They coultl not I'efit or ship a ci'ew, or go into the interior, oi- go home by laml Now everything stipulated in their behalf in the Treaty of 181^ was a clear gain. It favored the tisherman, so far, above all vessels whatever. It enabled him to get his bearings, and shelter, and water and fuel. T1h> jioliey of England, wincli to all otiier eonunerce was as ferocious as that of tlie cannibal of tlie South Seas, relaxed towards the fishermen almost to the dim and faint courtesy of her savage High- lander :—' Stranger, what dost thou re(juire ? Rest, and a guide, and food, and tire.' " Mr. Hoar quotes from John Quincy Adams to show that th(!se privileges, allowed to no other [10] pi.'rsons, Were secin-ed by the treaty to American Hsherinen : whereas by the Canadian interpreta- tion those tishei-men an> now treated as if they had no part "in the humane and liiieral polieie.^ of later times" ^foreover in tho.so day.s the only imjior- tant fishery pursued by American tishermen in the Nortli Atlantic was the cod fishery, hence the [irivilege granted to them to land on (!ertain parts of the British Amerieiin (oast to dry and cure their lish. The situation today 's wholly changed The mackerel, halibut and herring fisheries have become valuable : the introduction of railroads and steamei's, enabling vessels to tranship their (!atch in a neigiiboring port ami hurry back to the fishing grounds with but little Io.ss of time, has done away with tin? necessity of going ashore to (\ry even such tish as cod ; Uw Canadian coasts almost without inhabitants in I8IS. are now dotteil with settlements which would benefit by the sale of bait, ice, and ship-stores to Ameri- cans a.s well as liy tlu? labor of tran.shipping their (•argoes and by sup])lying them with hanils to take the place of drowned oi- incapacitated crews. Hon David Mills, Professor of Constitutional and International Law in the University of Toronto, said in the Canadian Parliament (Debates, 188!», [.p. :{.S4-5) on this subject: "In the interpretation of every document you liavt' to recognize the changes that society under- goes, the progress that a community makes. When the Treaty of 1818 was made there were no railways, no telegraph lines. There is not a word in the treaty authorizing an American tish(>rman t(j land for the purpose of si'uding a telegram, anil you have the right, under strict C(jnstruction of the treaty, to say that no Ameri- can shipmaster shall land to send a telegram or make a report, ^"ou liave as much riglit to do that as to prevent them from tran.shipping their fish." So when Princi; Edward Island, prior to enter- ing the Canadian Confederation, refused to enforce the Canadian interpretation of Article 1 and admitted American tishermen to her harbors for all eMimiiercial purposi's free of charge, Mr (aft(M'wards Chief Justice) Palmer said in an opinion furnished to the Island Government (Journals, Legislative Council, Prince Edward Island, 1871.):— " Am(>rican fishing vessels being allowed to enter Britisli harbors for the purpos(> of shelter and of repairing damages, of purchasing wood and obtaining water, and ' for no other jmrpose what- ever,' these words must have a reasonable con- struction. 'He had just (juoted Grotitis on the fair and liberal interpretation of treaties.) I con- ceive they must be construed to mean purposes which are really injurious or prejudicial to the trade of the colony or to the interest of the inhabitants. If they were to be construed literally, an American tisl dug vessel could not venture to bring in and land a load of provisions if the inhabitants of the colony were in a state of famine, or a load of timber if the principal towns were burnt down and the inliabitants had no shelter ; or to bring in and land passengers which it might have rescued from a sinking .ship." With rfj,'ar(l to tmiiHliippiii^^ curyooH Mr P»liii«r said : — " In caHe an American lisliiii;,'-v('.sH«*l hIiduUI •nter ono of our ports for tin- purpoHo of tran- Bhippint; a car^jo of HhIi to ports in tin; Ihiited StatcH, such act, not hcitin; pi-(p\ iilcd for hy tlio treaty, could not bo exercised as a li'j,'al ri;^lit. But Hupposinj^ Hucli an entry to be made by an AnuM'ican \('.ssel for thr' pur])ose of landing and transhi|)pinj^ a car;^o of tish cawj^Iit or cured bonil fide outsider tlie tliriM* mile limit. I am of opinion that such an act \voul-el liable to ,sei/,ui'e and conliscation." Tlie fish which American fisliermen desire to tranship in bond in C'anadian ports are of neces- Hity tisli cnui^ht outside the thri'e-mile limit, that is on th(\ tishin',' ;j;roun'!s o])cn to the world, because to catch fi.sli within the three-mile linut would, of course, render them liable to seizure. IS Tlie British (lovernment, after considering the protest of Prince Kdward Island n|,')iiiist the Canadian interpretation of the treaty, informed the Lieutenant-Governor that "tlie transhipment of tish find the obtaining of supi)lies by I'nited States fishing vcshoIh in the ports of the colony cmnot be regarded as a substantial invasion of British rights"; ami shortly afterwards, when the Washington treaty negotiations were approach- ing, sent the following despatch to Ottawa iVi-h 16, 1871, Doiidnion Sessional Papers): — " The exclusion of Americnn tishermen from resorting to Canadian ports except for the pur- pose of slielter and rejiairing damages therein, of purchasing wood and obtaining water, might be warrant(>:l by the letter of the Treaty of 1818, and by the terms of the Imperial Act, 59 George III., cap. .'!8 ; but Her ^bije-.ty's Govornnient feel bound to state that it S(H!ms to them an extreme measui'e, inconsistent with the general policy of the Empire; and tiiey ire dis])osed to concede this p.oint totlw; I'nited States (government, under such restrictions as may be nece-sary to pri'vent smuggling and (o guard against any suljstantial invasion of the exclusive rights of tishini,' wliich may be reserved foi- t^ritish sid)iects" Thus, as far back as 1871 tin iiiitisli Govern- ment tiirew overboard tin; interpretation from which American fishermen are suHering. About that time British men of- war eea>-ed to act against Americans and the " protection service" was left altogether to the cruisera of the Canadian Government. 10. One of the avoweil ol)jeets of the Canadian Govern>"^'?it in excluding American fisliermen is to prevent tliom from poaching upon the inshore fisheries, i.e., the fisheries within the three-mile limit, which it is .supposed tliey would do if on their way from the Banks or from other parts of the open ocean they were allowed to enter Canadian ports for transhipping and other com- mercial purposes The ca.se would be parallel or nearly so, if the United State-s were to refuse to allow tlie farmers and merchants of Ontario to use American .seaports on the plea that, pos- sibly, it enabled Canadian goods to be snmggled into the United States in the bonded cars. The mi main reasons which the late Government of Canada put forward were thus forcilily stated by lion. G K Foster in a report he made hn Minister of Marini', dime 14, 188(1, on certain conimiMiicalions with respect to seizures from Mr. Bayard to the British Government : — "Canadian fish is, by prohibitory duties, ex- cluded from the United Stiites niarket. The Anieiiciin lisheinien claiiKU- against the removal of these duties, and. in order to maintain a monopoly of the trade, continiu- against all law to force themselves into mil' waters ami harliorsand make our shores tlieii- base for supplies, especially of liait, which is neces.saiy to the successful iirosecu- tion of their business. They hope by this course tfj supply the di'iiiand for their home niJirket.aiid thus to make ('aiiada indirectly the means of injuring her own tra Aiiii'ricaiis is IxhiikI, siMincr nr Inti-r, ti) n-Hiilt iti t'ri'o lish fur ( 'miiidiutis .iiicl pcrlmps in rcripnicity in i'lirin productN to Ixiot So FuniH I know. Mr. Monr'N account of what the Treaty of 18 1 H did for American linhiu/,' vi^MwIs In jiuttin^ tlinn mi a fiivnn'aiiks fishery, iiotwithHtiuidiii^ that French dry cod, Ik iiij^ iMiunty -fed, undersell Canadiun and more parti- ciilai'ly Newfoundland cod in foreij;!i markets. It doe-s not seem to have occurred to that Admin- iHtration that iliere was anythinjj unfair in discri minatiii<^ in this way ai^ainst Aniericaii lishermen, not evei when its attention had been calletl to the fact that Canadian Hshermen are {^ranted commer- cial privilcfjesdncludine liberty to tnui.shij)curgoeB in bond) free of char>,'c in the ports of the United States as a matter of comity and humanity. Nor docH it appear to havo conHidered the denial of th«; transhipping' priviloifo to .Vim rican linhor- mun HN any infraction of the Hondin;>( arrant;H- l)utw()»ii th« two coiiritritLs. Yot, wliatovor the true yioHH of Article 1 may lie, there is no detiyiiiff that tlie interpretation put upon it by ( 'anada hafl the elleet of e.xcliidinjr American (i.shermeii from free participation in the eonveiiienccH and advan- taj^es of the Bonding HyHteiti wliich all othor classes of men on both sidcH of the iHiuiidary onjoy at will. 20. It is neccHHttry to add, in conclusion, that l«adin}( Canadian liilHTals, including Mr, Lauricr, now Premier of the llominion, have all along condemned the ro-tiictions imposed upon Amori- can (islieimen in Caiiailian ports. No doubt they will take steps before long to remove the griev- ance. When it is out of the way, the Honding HVHtein will be fairly administered from one end of the international frontier to the other, Tho maintenance of the system is ns advantageouH, I venture to think, to the interests of tlu; upper tier of States between tho Atlantic and the Pacific a;i to tho.so of ('anada; anri its inipair- m