IMAGE EVALUATION TEST TARGET (MT-3) 1.0 1.1 lu Ui 12.2 I!? liu ■" lit I lU I u »«. w 140 II.25 IIII.4 ■ 2.0 1.6 Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. 14SS0 (716) •72-4503 ^1i^ '^.V^ ■^ CIHM/ICMH Microfiche Series. CIHM/ICMH Collection de microfiches. Canadian Institute for Historical Microreproductions / Institut Canadian de microreproductions historiques Tachnical ond Bibliographic NoUt/Notas tachniquat at bibliographiquat Tha Inttituta haa attamptad to obtain tha bast original copy availabia for filming. Faaturaa of thia copy which may ba bihliographicuMy uniqua, which may altar any of tha imagat in tha rapruduction, or which may significantly changa tha usual mathod of filming, ara chackad balow. L'Institut a microfilmA la maillaur exemplaire qu'il lui a AtA possibia da sa procurer. Les details da cat examplaira qui sont paut-Atre uniques du point de vue bibliographique, qui peuvent modifier una image raproduite, ou qui peuvent exiger une modification dans la mAthode normale de filmage sonl indiquAs ci-dessous. — "1 Coloured covers/ 2vil Couverture de couleur □ Coloured pages/ Pages de couleur I I Covers damaged/ Couverture eodommagia y Pages damaged/ Pages endommagies ^ D D D D Covers restored and/or laminated/ Couverture restaur6a et/ou pelliculAe Cover title missing/ Le titre de couverture manque □ Coloured maps/ Cartes g^ographiquas en couleur Coloured ink (i.e. other than blue or black)/ Encre de couleur (i.e. autre que bleue ou noire) Coloured plates and/or illustrations/ Planches et/ou illustrations en couleur Bound with other material/ Relii avac d'autres documents D n Pages restored and/or laminated/ Pages restauries et/ou peiliculies Pages discoloured, stained or foxed/ Pages ddcolordes, tachetdes ou piqu^es Pages detached/ Pages d6tach6es Showthrough/ Transparence Quality of print varies/ Qualit^ ndgale de ('impression Includes supplementary material/ Comprend du materiel supplementaire n D Tight binding may cause shadows or distortion along interior margin/ La reliure serr^e peut causer de I'ombre ou de la distortion le long de la marge intdrieure Blank leaves added during restoration may appear within the text. Whenever possible, these have been omitted from filming/ II se peut que certainas pages blanches ajoutias lors d'une restauration apparaissent dans la texte, mais, lorsque cela 6tait possibia. ces pages n'ont pas 6t6 film^as. □ Only edition available/ Seule Edition disponible D Pages wholiy or partially obscured by errata slips, ti!«sues, etc., have been refilmed to ensure the best possible image/ Les pages totalement ou partiellement obscurcies par un feuillet d'errata, une pelure, etc., ont 6t6 film6es d nouveau de fapon d obtenir la meilleure image possible. D Additional comments:/ Commentairas supplimantaires; This item is filmed at the reduction ratio checked below/ Ce document e:t film6 au taux da reduction indiqu6 ci-dessous 10X 14X 18X 22X 26X 30X / 12X 1SX 20X 24X 28X 32X ails du difier une iage The copy filmed her* has been reproduced thanks to the generosity of: Thomas Fiihsr Rart Book Library, Uni vanity of Toronto Library 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. L'exemplaire film* fut reproduit grice k la gtnirosit* do: Thomai Flihar Rars Book Library, Univanity of Toronto Library Les images suivantes ont AtA reproduces avec le plus grand soin, compte tonu do la condition at de la nettet* de l'exemplaire film*, et en conformity avec les conditions du confat de filmage. Original copies In printed paper covers are filmed beginning with the front cover and ending on the last page with a printed or illustrated impres* sion. or the back cover when appropriate. All other original copies are filmed beginning on the first page with a printed or illustrated impres- sion, and ending on the last page with a printed or illustrated impression. Les exemplaires originaux dont la couverture *.i papier est ImprimAe sont filmis en commen^ant par le premier plat et on terminant soit par la derniAre page qui comporte une empreinte d'impression ou d'illustration, soit par le second plat, selon le cos. Tous les autres exemplaires originaux sont filmte en nommen^ant pa/ la premiere page qui comporte une empreinte d'impression ou d'illustration et en terminant par la dernlAre page qui comporte une telle emprjinte. The last recorded frame on each microfiche shall contain the symbol — ^> (meaning "CON- TINUED "), or the symbol V (meaning "END"}, whichever applies. Un des symboies suivants apparattra sur la derniire imase de cheque microfiche, selon le cas: le sym'jole — ► signifie "A SUIVRE", le symbole Y signifie "FIN". Maps, plates, charts, etc., may be filmed at different reduction ratios. Those 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: .83 cirtes, planches, tableaux, etc., peuvent Atre fiimts A des taux de riduction diffirents. Lorsque le document est trop grand pour Atre reproduit en un soul c'^i^hi, 11 est film* d partir de Tangle sup4rieur gauche, de gauche A droite, et de haut en bas, en prenant le nombre d'images n^cessaire. Les diagrammes suivants illustrent la m^thode. rata D >elure. J 32X 1 2 3 1 2 3 4 5 6 I • S S A Y S IS I 1 1 K l-iNAXiiAi- History OF Canada IIY I AM 1-S A. M. LI' A.M. A.M ( 'iiiri i /'i.'/iTi' III /Wi/I !(.' ■'■•I'll' nMI r ' KW l-i TAIi I lAl 1 1 1 lll.MKN 1 i>l- TIIK Kl '^ I'lKl'-MKNIM 1 ■■!< 1 III'. llK.I.KKl' 'F L)0( TOK I'llll.KOl HV IN 1 UK I'mVKH^I lY Kai 1 I 1 V .11 T'll 1 I 1..AI Si ll-.N' K, COI VMHIA t'iM.I HI COLUMHI A COLLKGK .\'/:n' It; A' A'. irx- ESSAYS — IN THE- Financial History of Canada -<*(!l BY JAMES A. McLHAN, A.M, University Fellow in Politieal Scitnet. SUIM1.T«D IN FAHT.AI. riM.KILM.NT Of THB HKQUIRBMBNTS FOR THB DkOREB OK DoCTOR or Phii-osophv in ths Univkhsitv Faculty of Political SCIKNCI, COIUMBIA COLI.HCK, I. 1 COLUMBIA COLLICGE NEW YORK. 1894. « k •r J 1 < fc- / .«» -^^1 rif*^' TAIilJ- OF CONTENTS. I » PAOB. I. Ihe Provincinl Revenues during the French Period • II. Ihe Puhlic Domain* III. The Crown Revenues 3, IV. Customs Duties ,, V. Direct Taxation .y VI. The Financial Uasis of Confederation 59 * 7'Aisf Essays art in mainisaipt. s r o f .V /' III. '1*111'. Ckown Kkvfnuks.* Ill this essay wr shall try to sec to what oxtciu ihr dlfticultifis iKtwccn (ircai Hritain and her North Am«'rii:an colonics iluriii^ the second (luarter of this century may be regarch-il a ; a dispute over the control of certain nrveinu^s arising in tlu; provinces ; and to what <:\tent the granting of responsible government in 1S47 was inciilent to the surr(Muler by Great Britain of all claim to that control. Until the decade from 1845 to 1855 in all the British North American provinces there existed a distinction, more or less clearly recognized, between the revenues which were at the disposal of the local legislatures and those which were under the exclusive control of the Lords of the Treasury in England or their subordinate officers, the Governors in Council in the di.iferent provinces. The former were expended upon local improvements and in payment of the ofitic( rs of the legislature, the latter for the support of the executive. This, at any rate, was the theory^ But in practice the two funds were received and p.'ad out by the same official and were thus very o.'ten confused. In each of the colonies, there- fore, the Crown Revenues formed a fund by which • Chrislic's " History of Lower Canada" contains a goore.it Mritniri h.iil conditioni'il iti KurrciitUM ol tho laat niciitiuriuii rvvcnuvit. Nova Scotia rt'crivt'd a re>pr<'s«'ntaiive asHfinhly in I7SH, Ntrw lirimsw'ici< in 17^4, and lI|M>fr and LoW(!r Canada in I7(>i. In all of thcst; colonie-s the Crown r«'V<'iun's wirre at first init;(|iial to tin? ex- jmnditiirt* lor civil j^ovt-rnnifnt. As th«' colonial j^ovt!rnors wv.rv. at the lu;ad of a military as wt:ll as a civil rstal)lislnncnt, tin- d< ricicncy, though often ttinporarily siipplird from the strictly provincial rcviMUies, was itt most casrs finally mad' up l)y drafts upon the army and navy «;stimat(!s at home. Until 1826 Upper Canada rccoived aid from the lm|)(!rial Treasury, Nova Sc)tia, imiil 1H31, atul Prince lulvvard Islanil until 1H51. Some of thr. early j4ovt,'rnors are found even rccommendinjf that the pi:o|)le be not askeil to levy taxes on themselves for fear that they mij^hi desire to control the revenues arising from them. So long as the revenues were insufficient to meet the e'xpentlitures, the governor was willingly left to 'live of his own' — assisted by grants from the government at home. ihe colonists were in no hurry to raise the (juestion of constitutit)nal principle. In Lower Canada they seem for a number of years to have overlooked the unauthorized appropriation of revenues strictly provincial. In Upper Canada an occasional burst of loyal feeling might induce them to grant something " in aid of His Majesty's re- venues " But in no case were the colonists eager to / / <"' / 24 THK CROWN REVENUES. assume the whole charge of civil j^ovcrnnieni when that would mean an increase in the burden of tax- ation. But the very first year(r8io) in which the returns showed an excess of receipts from all sourc(;s over expenditure, we find the assembly of Lower Canada drafting a petition " that the Legislature may be allowed to assume the charge of the civil govern- ment of this Province " ; which of course meant nothing else than that all the public funds — the Crown revenues as well as the Provincial — should be placed under the Legislature's control. The war of 1812-15 postponed the question Am* a time, and it is not until 1817 that it comes up again. The Crown revenues of Lower Canada of themselves were still insufficient. The war office objected to more expenditure for civil purposes in the colonies. The governor, therefore, turned to the legislature and asked them to make good their offer of 18 10, and to supply the deficiency by a grant from the pro- vincial revenues. The legislature complied, but upon the demand of a much larger sum the following year, before consenting to vote the supplies they insisted upon receiving from the executive a satisfac- tory account of the expenditure not only of the Provincial but also of the Crown revenues. It would seem that the governor was in an awl:- ward position. The Crown revenues were insutti- cient, and the Legislature would not vote more unless the whole budget was handed over to it. But on the other hand, the Crown revenues formed THK CUOVVN REVENUES. 25 n a sufficiently large part of the whole budget to support the more important items in the expenses of civil government, the salaries of the executive and the judiciary ; and if the Legislature cut off the supplies they would be depriving their constituents of roads and bridges, and the lucrative employment incidental to their construction. The Legislative Council could be depended on to throw out any supply bill which jirovided for the constituents with- out providing for the executive, or for reducing the permanent appropriations alread)' made. The two parties to the contest cingaged in much legal fencing and quibbling. If the assembly voted a lump sum 'out of all the revenues arising in the Province,' the Council would reject the bill as "assuming a control over the revenues of the Crown." If they voted a sum without specifying the source from which it was to be drawn, the governor assumed that it was granted out of Provincial revenues, and would thank them for their liberal supply in aid of funds "already appropriated by law." In any case the governor could get along somehow with the Crown revenues alone, or if he were bold enough, could appropriate the Provincial revenues without any authority at all. But at last the protests of the assembly became so loud that they obtained a hearing in England. The first point in dispute was the question of control over the duties levied under the Act of 1774. This was previous to the Declaratory Act, in which Eng- land renounced the right of taxing the colonists for revenue purposes. But this latter act had not >Wiii II -f«=- / 1 26 THE CROWN REVENUES. repealed the earlier one under which the tluties were at the disposal of the Lords of the 'IVeasury. Yet the colonists ventured to dispute their legal authority to exercise such control, r.nd by resolution of the Lower Canadian Assembly in 1826, it was declared "that the statute of 18 Geo. III. c. 12, had not conferred any new rights upon the inhabitants of the British Colonies, but is a declaratory act, the enactments whereof recognize and consecrate the constitutional maxim, that the colonies having a representation, have an inalienable right not to be taxed without the consent of their representatives, and that to the Legislature alone appertains the right of distributing all moneys received in the colonies." But the Law Officers of the Crown in England gave it as their opinion that neither the Act of 1778 nor the Constitutional Act of 1791 had worked a repeal of the Act of 1774 and that " these duties having been imposed by Parliament at a time when it was competent for Parliament to impose them they cannot be repealed or the appropriation of them in any way varied except by the same authority." The colonists no doubt were legally in the wrong, but the strength of their case lay in their argument that it was at any rate contrary to the intention and spirit of the Declaratory Act that these duties should not be placed under the control of the Provincial Legislature and that " even supposing that they had no right to interfere yet when those revenues were not sufficient they had a right to attach to sup- THE CkcnVN KKVKNUES. V j)lt'mentary grants any conditions and limitations {i,e., as to the ap[>ropriation of the Crown Revenues) which the interest of the country appeared to them to require." The justice of their claim was recognized in 1828 by the committee of Parliament on Canadian affairs. Art(;r some negotiation with the Legislatures for a permanent provision in return in aid of the still unsurrendered revenues, the Hritish Parliani'^nt in 1832 passed an Act handing over the Crown duties amounting for both provinces to about ^44,000 to Provincial control. The Lower Canadians accepted the concession without making any return ; but in Upper Canada where the struggle had been less bitter and less complicated with other issues a small permanent grant was provided for. Thus in regard to the Crown duties under the Act of 1774 the assemblies had come off victorious and the struggle entered on the second stage. The only funds now remaining at the disposal of the governor were the hereditary, or casual and territorial, revenues of the Crown. In Lower Canada these accrued from the rent of the king's posts, the rent of the forges of St. Maurice, the quint, the lods et ventes, the timber licenses, the Seigniory of Lauzon and the Jesuits' estates ; in Upper Canada from timber licenses, the crown land reserves, fines, etc.; in Nova Scotia from quit rents, fees and royalties on mines, and from similar sources in New Bruns- wick. In addition to this the policy of free grants of 38 TIIK CROWN KKVENUKS. Crown lands had been given up in 1826 and the pf)licy of sale adopted. In Upper Canada a tract of 2,000,000 acres was sold to the Canada Company for an annual payment of ;^20,ooo lor seventeen years. In Lower Canada the British American Land Com- pany received a smaller tract, while a company tor similar purposes was organized in New Brunswick and Nova Scotia. Over these casual and territorial revenues the Houses of Assembly now wished to obtain control. The view which the Imi^erial Government took of the matter may be seen from the words of the message in 1 83 I, in which the crown duties were surrendered. " These revenues stand upon a different fooling from taxes properly so called. They are enjoyed by the Crown by virtue of the royal prerogative, and are neither more nor less than the proceeds of landed property which legally and constitutionally belongs to the sovereign upon the throne ; " and still more plainly by the words of Charles Buller in his report on the Crown lands of Canada in 1838: — "The waste lands of the colonies are the property not merely of the colony but of the empire, and ought to be administered for imperial not merely for colonial purposes." But the colonists took a different view of the matter. They looked upon themselves as a political society having corporate rights of property in the public domain which was not yet granted to individual owners. In 1835, the assembly of Lower Canada declared by address to His Majesty "that your petitioners have reason to believe that your II THK CROWN KKVKNUKS. 29 n J, Majesty's Government have sold to the individuals aforesaid (the British American Land Company) extensive tracts of land belon^^ing to thh Province and thereby have taxed this colony contrary to the most important and indisputable rights of British subjects." In the same year the assembly of Upper Canada claimed that "the declaratory Act of 1778 was a pledge from the British nation, that the B. N. A. Provinces with the reservation only of commercial restrictions might impose their own taxes and direct the appropriation of them. The danger and mis- chief are just as great whether the uncontrolled expenditure of such moneys is derived from the sale of public lands or direct taxation," They argued that the constitutional Act ot 1791 by reserving one- seventh of the public lands of the Province to be disposed of by the Crown implied a surrender of the other six-sevenths to be disposed of by the Legisla- ture of the Province. Resolutions to the same purport were passed in Nova Scotia Assembly under the leadership of Joseph Howe. In this question of the hereditary revenues of the Crown as in the case of the Crown Duties already discussed, the colonists were legally in the wrong. The public lands were at law undoubtedly the property of the Sovereign. The real question was of a political nature, viz., whether the King or his Representative in his administration of these lands should be guided by the advice of a ministry responsible to the British Parliament or by one responsible to the Provincial Legislature. Indeed, I) ' 30 Till-: CUOWN KKVKNUES. the relation between the British Government and the Legislatures of the colonies was in this matter strictly analogous to the relation existing in I*!nglanci in regard to the hereditary revenues between the King and the Parliament. At the accession of each Sovereign these revenues are surrendered to the public use in return for a permanent provision, known as the Civil List, for the support of the royal household and the leading offic'-rs of the executive aiul judiciary. Before surrendering the hereditary revenues of the Crown arising in the colonies, the iiritish Govern- ment wished to make a similar arrangement for the support ol a colonial Civil List. But the requests were generally refused as too exorbitant, and nothing was done until the settlement of the constitution of the Canadas in 1840. By the Union Act the casual and territorial revenues were to be paid into the Consolidated Revenue Fund of the united provinc*;, but upon three very important conditions. 1. That money votes should ojiginate in the executive. I'hus one of the most important features of the system of cabinet government was introduced as a condition to the surrender of the territorial revenues. 2. That the control should not extend to the gross revenues but only to the net. 3. That the Legislature should guarantee a fixed and somewhat large appropriation for the support of a civil list. These provisions were for Upper and Lower Canada incorporated into the Union Act of 1840. It was with some reluctance, and only after some THE CROWN Rl'VKNUKS. 31 i modifications, that they were accepted by the Lower Provinces. 3. A third step was therefore still to be taken before the provinces could be said to enjoy free control of the public revenues. The entire tt^rritorial revenues must be handed over to the officers of the Legislature and the permanent appropriation of ^'75,000 a yiar made by the Union Act must be repealed and made to rest solely upon provincial enactment. Almost immediately after the Union the Civil List was brought up for discussion. In 1843 the Assembly of Canada passed a series of resolutions declaring " I. That no appropriation of public money ought to be made without the consent of the Assembly. 2. That the appropriation of ^"7 5,000 by the Union Act for the administration of justice and the support of government, however expedient it may have been under the peculiar circumstances of the Canadas at the time of the passing of the Act, is unsatisfactory to the people of this province as tending to create abuses in the misapplication of public moneys. 3. That the repeal of that appropriation would tend to produce contentment and cement the union with the parent state. 5. That the existing charges upon the Civil List are generally exorbitant and ought tO' be reduced. 6. That this house is prepared to make a suitable provision for the Civil List upon the repeal of the appropriation made by the Union Act." By an Act in the year 1 846 the Canadian Parliament made a permanent provision for the support of the Governor and the Judiciary and a provision during the life and 32 THE CROWN KKVKNUKS. five years thereafter for the salaries of executive officers, pensions etc., " provided always that the same shall be acctipted and taken by Her Majesty by way of a Civil List inst«:ad of all territorial and )th( thi It otner reveniuis arising m tnese provnices now ; the disposal of the Crown." These j^ross revenues were to be paid over to thtr Consolidated luind of the Province and tlu; Act was to take efft.'ct only upon the repeal by the Uritish I'arliaint^ni of the appropriation claus(?s of the Union Act. '1 he Mritish Parliament accepted the offer ; and the usual barjjjain, the transfer of hereditary revenues, in return for a permanent Civil List, which is made in Britain between the Parliament and each Sovereign upon ascending the throne, took in this case the form of a compact between the Canadian Legislature anti the British Parliament in the Imperial Act of 1847 meeting and confirming the Provincial Act of the previous year. In the Maritime Provinces the development was somewhat similar. Though in these Provinces the revenues arising under acts passed prior to 18 Geo. III. were not very large, and the different stages of the dispute are not so sharply defined, the nature of the struggle was the same, and the conditions attached to the surrender of the revenues were the same, as was also the final solution. It vould seem also that many of the distinctive features of the histories of these provinces can best be explained from the point of view suggested by a close compari- son of the Crown and the Provincial Revenues. r^ IV. Customs Duties. In the present essay we shall try to indicate some- thing of the part played by customs duties in the revenue systems of the provinces and see \Vhether this brings any litth; light to the reading of their political and financial history. The most noteworthy features of the tax systems of the provinces before confederation as compared with those of the Commonwealths of the Uniteil States are the jjrominence of the i)art assigned to customs and the absence of the general properly tax. The reasons for this, i)erhaps, are partly political and partly economic. The provincial governments retained the power to levy customs iluties. surrendered by the States in I 789, until their confederation almost a century later. Their relations with England also freed them from the necessity of incurring any large national expendi- tures for defence. Thus it was possible for them to meet their small ordinary expenses by levying duties on imports, supplemented by excise and minor duties and the revenues arising from the public lands. Even if a direct tax on property had been levied for provincial purposes there was no adequate local machinery in the then feebly organized municipalities 10 collect it. 33 34 I! I .USTOMS DUIIKS. com I Lonl Durham complaiiu'tl in 1S38 that it was im- possible to fiiul a county officer, even to arrest a criminal at the commaiul of the Executive (iovern- mcnt. liesicl es, owm^ to tl IC IH'.UCt ful conditions o f the early settlements and to the land policy ol the ^ovrrnmcnt, the settlers wvrv. so widely scattereil that it would have been difficult even for a stronj;^ executive with a sufficient machinery to atlminister a general property tax, and the early executives in he [)rovinces were not stron;,^ To these reasons may perhaps be added the economic. The lands wv.rc only partly cleared pre- vious to 1840, and of littlo value, money was scarce, there was little accumulated wealth of any kind, antl consequently no basis for a productive general property tax. Llndi-r these circumstances it is not surprising that the preference was given to Customs duties which were fairly easy to collect and were paid without protest, and on the whole perhaps pressed pretty 'venly on a people in this sMge of economic de/elopment. Up to Confederation then, customs duties were the mainstay in the Provincial revenue systems as they have been in the Dominion system since that time. There were other revenues, and in Canada very important ones, arising from excise duties on tobacco and spirits, public lands, and an impost on banks, but little will be lost by omitting these and confining ourselves to the central feature of the systems — the customs. i t CUSTOMS DUTIKS. 35 Thrsi; customs tlutitrs are to he diviiUnl into two classes: — I. The Iiiiperial tluties levicnl imder the acts passed by the l''n^;hsh Parliament for the regulation of trade, and 2. IVovincial dutie* levied untlt^r the revenue acts passed by the I.e'^islatures of the I'rovinctrs. I'he small rtrvenues arisinj; under acts of the first class were (,'X|)end(;d under the authority of the l^njj;lish Lords of tht; 'I'r- merce and British i.ianufactures, and the provincial revenues arising therefrom were merely incidental to their general protective policy. Although for the most part incidental, the r«*venues arising under Imperial Acts were still very consiiler- able, varying from one-fifth to three-fifths of the whole Customs revenue, and to this extent the revenue systems of the Provinces wen? not under their own control. The discrimination against importations from foreign countries was not very great, varying gener- ally in the ad valorem duties from 5 to 15%, and it would seem that the colonists received a sufficient counterpoise in the discriminations in the English tariffs in favor of colonial products, particularly timber anu grain. The Imperial duties, however, and the restrictions on trade met with a good deal of criti- cism in the colonies, particularly in 1835, and although a good deal of anxiety was felt when England adopted nrrrrs. j^r free tr.uir, ;i rt-Hfilution it) the C anadian Hounc of AHHPmhIy in the session ol 1H47, "That ihe ah.iiulonmt'Mt of the protrctivp policy of Knj^land towar«ls hrr colonifs cannot opcrai*' othrrwisf than injuriously on ihf trade and (otninrrci- thrrrof with- out atfordinj,' a corrcHpoudin^^ benefit to our fellow .Hul)je( ts of Cin-at iiritain, " wan lost. My the introduction of I'rre Trade in 1S4O. and the great relaxation in the Navigation Laws in 1H48, the imperial protective system was broken up, colonial |)roducts were placetl on the same joolinj^ an articles of fon-ij^n production in l''-nj,dish tariffs, and the Provinces were given control of their own tariffs and were allowed to remove the iliscriminations in favor of the Knglish manufacturers, the Imperial custom house officials wen; withdrawn and the colonies were given largely increased powers in the regulation of iiavigution. But it was no part of Fngland's plan that the colonies should takt; up the policy of protection which she was abandoning and for the next ten years wv. find recently converted Hngland trying to bring the colonists over to the new faith. Although sht," was surremlering the advantage which her matui- factures had enjoyed in the markets of the colonies, she was by no means willing that they should be placed at an absolute disadvantage under the colonial tariffs which began to appear after [846. In a dispatch of March 13, 1848, Lord Grey writes, '* Her Majesty's Government readily acknowledges 38 CUSIOMS DUTIES. i ! I the propriety of leaving to the colonists the task of raising the revenue which they may require by such methods of taxation as may seem expedient — but if any of the duties comprised in the tariff have been imposed not for purposes of revenue but with a view to protecting the interest of the Canadian manu- facturer, Her Majesty's Government are clearly of the opinion thai such a course is injurious alike to the interests of the mother country and to those of the cf)lony," and the Canadian tariff was modified accordingly to meet the objections of the Colonial office. When, however, the financial difficulties of the years 1857 and 1858 had caused the Canadian finance ministers to propose an increase of duties in the tariffs of 1858 and 1859, and the Duke of New- casde in the Colonial office, on the petition of the Sheffield manufacturers, protested against the pro- tective features of this legislation and mentioned the possibility of disallowance, a somewhat spirited reply in defence of his policy was called forth from Sir A. T. Gait. "The government of Canada cannot," hr said, " in any manner waive or diminish the right of the people of Canada to decide for themselves both as to the mode and extent to which taxation shall be imposed," and in this view the British government seem to have acquiesced. The Difficulties of Upper Canada in Collecting her Revenue. — When the Province of Quebec was divided into the provinces of Upper and Lower CUSTOMS DUTIES. 39 Canada in 1791, the act of 14 Geo. III., levying duties on liquors, sugar and molasses to the amount of about ;^ 1 0,000 a year, was still in force, and the legislatures of both parliaments in their first session levied small duties on spirits in order to pay the incidental expenses of the legislature. But as Upper Canada had no seaport, and as owing to the great extent of her border it was thought to be impossible to collect the duties and to pre- vent fraud;; on the revenue, an agreement with the lower province was entered into by which " The legislature of Upper Canada should not impose any duties upon goods imported into Lower Canada and passing into the upper country, but should allow the legislature of Lower Canada to imi)Ose such reasonable duties on such goods as they might judge expedient for the purpose of raising a revenue for the province of Lower Canada, and that of the net produce of these duties Upper Canada should receive one-eighth, the other seven-eighths remaining for the use of Lower Canada." In one form or another this customs pool was continued till the union of the two provinces in 1841. A new agreement was concluded in 1797 under which an attempt was made to ascertain the actual consumption of Upper Canada, and the amount of drawbacks due by stationing an inspector, at Coteau du Lac, to report all dutiable goods passing from the lower province up the St. Lawrence. Before 181 7 difficulties had arisen. The Legislature of Lower Canada had levied new duties without reporting the fact to the inspector, T 40 CUSTOMS DUTIKS. and also goods were beginning to find their way into Upper Canada by different routes. The commissioners of the province then went back to the original plan, and after estimating the population and probable consumption of the two provinces, decided that Upper Canada should in future receive one-fifth of all duties levied by Lower Canada on goods imported by sea. This agreement terminated in 18 19. By this time differences had arisen between the Governor of Lower Canada and his House of Assembly and the Legislatures neglect- ed to provide in the sessions of 18 19 and 1820 either for the appointment of new commissioners or for the payment to Upper Canada of her share of the revenue, so that four-fifths of the entire revenue of that province was thus locked up. When com- missioners were at last appointed it was found that those from Lower Canada had no power to treat concerning the claims to Upper Canada for arrears arising under the agreement of 1 797, and no decision could be arrived at. Upper Canada's representatives pointed out that that the just claims of their province to a part of the duties had been neglected, that the Treasury was empty and her officials serving without pay. Lower Canada replied that "these things must be when one province is dependent on another for the collection of its revenue." Upper Canada accepted the situation and did the only thing possible under the circumstances — appealed to England and succeeded in securing the passage of the Canada Trade Act by which it was made impossible for « • « a r I J T CUSTOMS DUTIES. 4» « ■ w I \l Lower Canada to alter existing duties except with the consent of Upper Canada or the Imperial Parlia- ment and by which a machinery was provided for the apportionment of the revenues arising from Customs. This solved the question for the time; but it turned out that revenues which were sufficient for Lower Canada were quite inadequate for the more pro- gressive Upper Province. Before 1840 by building the Welland Canal, the Cornwall Canal, and num- erous public roads, bridges and harbors, Upper Canada had incurred a debt of over a million pounds, and the whole revenue of /'6o,ooo was hardly ade- quate to pay the interest. Unwilling to resort to direct taxation, and unable, as she professed herself, to administer an independent system of indirect taxation. Upper Canada had a distinct financial interest in the un'On of the two Provinces in 1841^ by which the debt of the Upper Province was assumed by the united Province of Canada, and the revenues combined into a Consolidated Fund. A part also of the hostility of Quebec to the Act of Union may be ascribed to a very natural objection to assuming debts which she had not incurred. Another result may perhaps be ascribed to the situation of Upper Canada in regard to the collec- tion of her customs revenue. As we have seen, Upper Canada was dependent for the greater part of her revenues upon duties levied under imperial acts or by Lower Canada, and though these were insufficient they could not be increased. Upper / ' 42 CUSTOMS DUTIES. Canada was on that account unable to build the main roads by provincial grants as was done in Nova Scotia and New Brunswick. The govern- ments of the municipalities on the other hand, admin- istered by irresponsible boards of justices of the peace were unable to undertake the burden. To fill up the gap then between a weak provincial revenue system and a weak municipal system all sorts of bridge companies, harbor companies, toll gate companies, and boards of road trustees, were introduced to undertake the public works. Under this policy the country was dotted with toll-gates and incurred a debt of ^300,000 without receiving very much benefit from the expenditure. Finally Upper Canada was obliged to strengthen the government of the municipalities and to transfer to them the burden of maintaining local public works. Apart from this it would seem to be hard to account for the earlier and more vigorous growth of muni- cipal institutions in that Province, and the strong and rapid rooting of municipal direct taxation. It would seem then that the situation of Upper Canada in regard to the collection of her customs revenue has furnished a reason for the proposed union of the provinces in 1822, the repeated proposals for the annexation of Montreal, the union of 1 84 1, and finally, since it was impossible to go backward, the larger union of 186;, for which Ontario and Quebec had had some preliminary training in the shape of a long drill in the management of a customs pool. It also seems to afford a partial CUSTOMS DUTIKS. 43 ■explanation for somt: peculiar features in the history of that province. Provincial Tariffs. — Beginning with the Union, the Parliament of the united Canadas by an Act of 1 8th SeptemlKT, 1841, levied specific duties on wine, spirits, sugar, coffee, tea, molasses, salt and tobacco and an ad valorem duty of 5% on general merchandise. These duties, although the)' show a considerable increase on those i)reviously levied, were still very small, amounting to 1014% of the value of the total imports. In 1843 duties on agricultural produce and live stock were added, notably a duty of 3 shillings a quarter on wheat as a condition of obtaining a discrimination in favour of Canadian wheat in the English tariff. On May 17th, 1845, a general Act was passed extending the specifics but retaining the 5% ad valorem for the unenumera- ated articles. In the next year a discrimination in favor of leather and leather manufactures imported by sea was introduced. But no very important change was made until the change in the policy of England. Under the author- ity of the Imperial Act, the Imperial duties were abolished and the 5% unenumerated list was raised to 12^%, the specific duties increased, and a 2jt^% list, including untanned leather and bar iron, added. The Act of 22nd April, 1853, reduced the duty on sugar and molasses, repealed the duties on salt, levied a uniform duty of 6% per gallon and 30% ad. val., on wines, and shortened the 2^% list. H 44 ClJSTt)MR DUTIES. leaving the 12^% list, from which the greater part of the revenue was derived, untouched. Under the pressure of increasing expenses on May i6th, 1856, the i2^y4 per cents were raised to 15%, leather and india rubber mar.afactures were raised to 20% and a 5% list was added. The depression of the year 1857 was marked by a grea*^ decrease in tiie revenue, and to meet tiie deficit the number of enumerated articles under specific duties was very much increased by the tariff of 1858 ; a duty of 15% was levied on the un- enumenited goods, 20% on a large list of manu- factured goods, including woollens and agricultural implements, 25% on leather, boots and shoes, harness, saddlery and clothing, and 5% on a list of raw materials and half-manufactured articles. This was^ the most notable advance in the direction of pro- tection. The changes were chiefly due, however, to the need for larger revenues. In 1859 a still further increase was rendered necessary by the fact that the interest on an indirect public debt of $7,630,643 became a charge upon the revenue in 1858, con- sequently the specific duties were done away with and ad valorem duties were levied of 100% on spirits, 30 to 40% on wines, tobaccos, cigars and spices, 15 to 30% on tea, sugar and molasses, 15% on. leather and partially manufactured goods, 25% on goods manufactured from the 15 per cents and 20% on 41% of the imports paying 61% of the duties. The duties levied under this act during the first ! CUSTOMS DUTIE)). 4S nine months of the year amounted to 13^% of the total value of the im[>orts or 19% of the total value of the imports paying duty. The character of the measure may best be learned from a letter of the Finance Minister to the Colonial office, dated March 20th, 1859, "The policy of the present govern- ment in re-adjusting the tariff has been in the first place to obtain sufficient revenue for the public wants — but it will undoubtedly be a source of grati- fication to the government if they find that the duties absolutely recjuiretl to meet their engagements should incidentally benefit and encourage the pro- duction in the country of many of these articles which we now import. Hut the government has no expectation that the moderate duties imposed by Canada can produce any considerable development of manufacturing industry." The next important Tariff Act was that of 1866, passed with a view to assimilate the Tariff of Canada to that of the maritime provinces before entering confederation. The 25 per cents, and the 20 per cents, were combined in a 15% list, so that what may be called the 20% Tariff of 1859 became a 15% Tariff in 1866. From this slight sketch of tariff changes in Canada between 1840 and 1867 it may be gathered that previous to 1840 provincial duties were levied for revenue purposes only, chiefly on liquors, tea, sugar, molasses etc., that between 1847 and 1859 the increasing expenses of the country caused an SSEaa 46 CUSTOMS DUTIES. increase in the duty on unenumeratcd articles from 5^ to 20/^, with a rorrespoiulinj^ increase in the ainf)unt of incidental proti.'ction afforded, and that the lowerinj^ of tiie chities in 1866 was (hu: to a ilesire to brinj^^ them nearer the 12^ per cent, level of the maritinu; provinces. In the maritime provinces a sonK-vvhat similar development took place. There, as in Canada, from thr(;e-t"ifths to four-liflhsof the provincial revenue was dc;ri\ed from customs duti(;s and increased expendi- tur(-'s were m(;t hy raising the tariff schedules. 'IMie ciiief points of differences are that the early tariffs of the maritime provinces show much more fre(|uent discriminations in favor of English products than those of Upper and Lower Canada, that the principle of pro- tection received only a very slight recognition in the maritime provinces between 1846 and 1867, and that although on account of the greater consumption of foreign products, the amounts ot the duties paid were generally higher per head, the duties themselves scaled from 5 to 10% lower than those of Canada, and that until the period of railway building the Hivenues arising under them seem to have been quite sufficient for all provincial expenses. V. DiuKCT Taxation.* U(> to Coiife'iU'ration then the Provinces did not find it necessary to resort to dirixt taxation to any ^r(!at (!xtent. Tiiere seems to have been some general property taxes tor |)rovincial piirp()S(;s in Nova Scotia before I l other (c)unty purposes, aiul the tax was levi«'il l»y tht; court ol cpiarler sessions. If the graiul jury nej{hrt«'tl lo make preseiuineiu, and in Upper and Low(*r Can.ula in the lirst instance, ilu* jiistitt's in ([iiarler sessions w«'r«' empowered to amerce the comity. Under this systeni ol irr«'sp«»nsil)le l«ical govern- ment, taxation was never dev«lop«il lo .my ^;reai extent. .Sonu'how or other liu; C'anadi.ui s(|uire «hd not thrive Wkv. his sturdier I'.n^lish prototype. .\p- pointeil hy an irresponsihle and impopnl.ir executive, he frt:(|uenily Iack<'il the (lualilications fo; piiMic office, and olien camir to !)«• re^j;ar«l<'d as the incom- pele'il aj^ent ol a mon- or less incompetent executive. Hut apart I'rom tiiis, In; himself vv.is not responsil)l«! to the people, nor to the people's re|)resent.»ti\'<'S, and it was (|uite natural that ht; should not he « n- trustt'd with the collection and e.\|)eMditure ol ihe sums necessary for lar|L;c im|)r()Vi'MU;nts. " Tiu' p(;()ple desired l.u'j^e improvjincnts, Init lIu-) would not entrust the maj^ustratcs with the sums necessary for duin^ lh(; work." The maxinuiin rate was j^^ener.dly fixed at a piMM)' in the pouiul. Ihe ^ross amount of all local taxi:s in Upper Canada in 1811, was ^"4, 13^^; in 1SJ5. ;^ 1 0,235, Ol* Jihout 30 cents i)er h(.'ad on the popula- tion ; anil in i«S47, under the District Councils, ;^86,058, or about 40 cents per head. Or better, the amount raised by direct taxation on the whole lUKK.c r TAXATION. 51 Provincr in 1840 was U*ss than DiU'Hixiiflh part of tlu' atiuuint levied in i8(;j, or al>oiU ('([iial to the antount levied in that year un the city o( Torunto alone. Where numii:i|>al government was ho weak the I.e^islatiireH wer«' ohli^eil to .kSHiime local hiirdens and to build and maintain these roads and l>rid^rc•s which could not he leli to Htatutc labour. I his practice «)l)taine«l in N'trw lirunswick and Nova Scotia «'ven up to Conleiler.ition. UetWM-en iSo.pmd iH^^i.the Le^dslalure of lJpp«T Canada vote-d altoui /"ido.ooo to he expended hy connnisHion' idow land, 20s.; every acre of uncultivated land, 4s.; every to • lot situated in the towns hereinafter mentioned, to wit : York, King- ston, Niagara and Queenstown, ;^5o, Cornv/all, Sandwich, Johnstown and Belleville ;^2 5 . . . every house built with timlier scjuared or hewed on two sides, one storey in height and not two storeys, with not more than two fire-places, ;!^2o ; for every additional fire-place, ^£4. ; every dwelling-house built of squared or flaked timber on two sides, of two storeys in height, witii not more than two fire-places, ;i^3o ; and for every additional fire-place, ;^8 ; every framed house under two storeys in height, with not more than two fire-places, ;£;i^ ; and for every additional fire-place, ;^s ; every brick or stone hoube of one storey in height and not more than two fire-places, ,£40 ; and for every additional fire-place, £10; every brick or stone house of one s'orey in heiglit and not more than two fire-places, £40 ; and for every additional fire-place, £10 ; every frame, brick or stone house of two storeys in height and not more than two fire-p aces, £60 ; and for every additional fire-place, .£10; every grist-mill wrought by water with 14 DIRECT TAXATION. 55 one pair of stones, .£150; every additional pair, X50 ; every saw- mill, £100 ; every merchant's shop, £200 ; every storehouse owned and occupied for forwarding goods, wares or merchandise for hire or gain, £199 ; every horse of the age of four years and upwards per head, £4; milch cows, per head, £3 ; horned cattle from the age of two to four years, 20s.; every close carriage with four wheels kept for pleasure only, X25 ; every cariole, gig or other carriage With two wheels kept for pleasure only, £20; every wagon kept for pleasure only, £15." All this sounds quaint enough but it gives a fairly f^ood picture of the economic and social condition of the [)eo|)le fc whom it was intended, and the fact that "the grand list" figured in Ui)per Canadian assessments for over half a century under a repre- sentative House of Assembly, goes to show that it must have served its purpose fairly well. Looking at it to-day, there seems to be only this one good feature in the tax, viz., that while the value of un- cultivated land was very much greater than its assessed value, that of cultivated land showed a still greater excess, and this tended to discourage specu- lation in wild lands. In other respects the tax seems crude enough. In 1850 Ontario adopted the general property tax, and with the addition of certain incomes " real and personal property ap- praised at its actual cash value," is still made the basis for all county, township, city, town and village rates. Nova Scotia received a representative House of Assembly in 1758. By 3 and 4 Geo. HI. c. vii., it was enacted that : 56 DIRECT TAXATION. k I. " The freeholders of any township where there are 50 or more famiHes .... shall choose 12 inhabitants of the said township, who arc hcrehy empow.'red to as.sess the iniiabitants of the said township for such sum as shall be granted by the .said freeholders for the relief of the poor .... in just and eciual |)roportion, as near as may be, for the moneys voted as aforesaid, and eiic/i person being assessed according, to his ktiown estate, either real or personal, for the purpose aforesaid." So that from the first Nova Scotia has had the general property tax for her township tax. The county rate was levied for a few years "In the justest manner which the justices may devise," but it soon was brought to a general property basis, where it remains to-day. In New Brunswick between 1784 and 1837, the asses.sors were allowed to assess property " in the justest measure they can devise," and the result was that the taxes were levied in many different ways. In i'^j7, a law was passed by which one-eighth of the taxes was to be raised as a poll tax, and the balance was derived from a tax on real and personal estate and income, real and personal property being assessed at 20 per cent, of their value, while income was entered at its full amount. But irregularities crept in and the income tax became something of a farce, and in 1875 it was decided that property should be assessed at its actual value. This gave New Bruns- wick the general property tax, supplemented by an income tax and a capitation tax. The assessment act of 1888 enacts : " That for all purposes for which local and direct taxes may be levied, all land and all such personal ])roperty and income as is DIRECT TAXATION. J7 defined in the Act shall be liable to taxation," and that " one- (oiirth, and no more, of all local and direct taxes shall be l«>^vied and assessed by an equal rate as a poll tax on all male persons living within the district and the other three-fourths shall be assessed upon r^al and personal property and income." The assessment acts of Manitoba and British Columbia present some distinctive features. In Manitoba (K. S., uSqo. s. 24) all lands in munici- palities improved for farming or gardening purposes are assessed at their unimproved value, and under the act of April 2olh, 1892, live stock and farming implements to the value of $1500 are exempt from taxation. In British Columbia there are differ- ences in the rate imposed on real estate and personal estate, wild lands and improved lands, property and income, and under the Act of 1892 the munici- palities are not allowed to assess improvements at more than one-half their real value. In the cities the general property tax, supple- mented in some cases by income and capitation taxes^ still holds. There are, however, three important exce[)tions. In 1892 the revenues of the city of Que- bec were derived from a tax of 75% on the assessed value, or 15% of the rental value, of real estate, a business tax of 12^/^% upon the rental value of busi- ness premises, a corporation tax, and a capitation tax of $2 per head. Neither personal property nor income was taxed. In 1892, 56% of the revenues of the city of Mont- real were derived from an assessment of 1°/ for muni- /o cipal purposes, and two-tenths % for school purposes J8 DIKKCT TAXATION. on the assessed value of the city real estate, io% from a business tax of 7^% on the rental value of business premises, 25% (rom water rates of 7}4% on the assessed values of occupied houses, and 9% from markets, police licenses, the recorder's court, and miscellaneous sources, and these proportions have been roughly maintained ever since iSSo. No attempt is made to tax personal property or income. In Winnipeg, too, under an Act of the Manitoba Legislature, passed March iith, 1893. p^-rsonal estate has been exempted from taxation, and busi- ness taxes and taxes on corporations provided for. Following the line of development, then, of municipal taxation for Ontario, we find approxima- tions to the general property tax in the class tax and the "grand list" tax, then a general property tax and finally a general property tax supplemented by an income tax. The tax systems of Winnipeg, Quebec and Montreal, on the other hand, show attempts to reach in other ways the personalty that is escaping from the assessment rolls and present possible lines of future development for the tax systems of the other cities. VI. The Financial Masis ok Conkkdkkation.* Thcrfi is at least one clause in the British North America Act that seems to have had no friends. It reads : Sec. ii8. The following sums shall be contributed by Canada to thn several provinces Cor the sujjport of their government and legislatures : Ontario, I'liglity Thousand l>ollars; Quebec, Seventy Thousaiul Dollars ; Nova Scotia, Sixty Thousand Dollars ; New Brunswick, Kifty 'I'housand Dollars; and an annual grant in aid of cac-h jjrovince shall be made eciual to eighty cents ])er head of the pojuilation as ascertained by the census of i86t, and in the case of Nova Scotia and New Bruns- wick, by each subse(]uent decennial census until the poi)ulation of rovincc' sht)iild be obhi^nd to me«'t its own local e.\p«'ni!iliirt: by resoriin)^^ todinct taxation. This meant the adoption of the j^eneral property tax as a provincial lax an innovation even tor I'ppcr Canada, and out of the «|ii<'siion for tilt; other three provinces vvh<'re the mimicipaiities still Ksined heavily on tile proxincial treasury, and direct taxation had been \'ery slii^hliy d(n'eloped. So the plan b\' uliith the pro\inces woulil havt: been obliged lo fall back on ilirect taxation and dev<;lop tin; jjjeiier.d property tax as the Stales had done alter i 7S9 was abandoned. It was then proposed that iIk; revenues lo he raised by the IJominion by excise duties on tobacco and spirits should be re-conveyed to the us(;s of the pro- vince on which they were levied. By this arrange- ment it was hoped to retain a local basis ant! a measure of indt^pemience for the revenue systems of the provinces. In the Canadas the revenues arising from these sources w(;re more than sufficient for the support of the provincial governments, but in iIk; maritime provinces, where the peopU: did not manufacture spirits to any great extent, the excise duties were not productive, and thus this plan also, the last which would give a local character to tii<_ revenue systems of the province, was given uj). TIIK riNAN I )oniiiiion should pay over to the provinces a lixt;il annual suhsidy lor purpost's of j^ovt-rnincnt. Thfrt: was stronj^ opposition l)oih to the principle and on matters of detail, " agrtuMnent seenud hopc- l(;ss, .uul on or aljout the tenth morning after tht; convention met the conviction was ^enttral that it must break uj) without coming to any conclusion. The terms of mutual conci^ssion and cicmand had been drawn to their extntnurst tension and silence was all arouml. At last a projtosition was made that the convention should iuljouni for a day and that in the meantimi; finance ministers of tlu; si;veral provinces should meet, discuss th(! matter amon^r themselves, and see; if they could not aj^ree upon someihinj;. On the followiii^^ mc.rninj,' they n-porled the conclusions at which they had arriv(;d. I lu;sc with souk; modilications were; ultimately adopted by the conv(Mition, reduced to resolutions, and the 'financial crisis' passed away." The tinance ministers had ;^one to work !))■ dividing' up the tiebt of Canada into five millions of local ilebt connected with local assets to be retained by the Province, and sixty-two and a half millions of jj^en- <;ral debt to Ih: assumed by the Dominion, together vr-ith all assets connected therewith. This last amounted to about $25 a head on the people of ;*V A ^ riir. FINANCIAL UASIH OV CONKKDKHATIUN. 6$ Canada, ami thr cIcIjih of the othrr Provincos were levrllrd dp ((> that avcTa^r ; Nova Scotia Ix-in^ allowtrd to hrin^ in cij^ht tnillions, and New hrun!i- wick, Mi'V(*n inillions of debt. The ttHtiiu.itc: for thr annual Huhsidy was founded on th«: wants of Nova Scotia. Aftttr scalinj^ down the local ( x|i' 55-39 83,107.88 Prince Edward Island 9,148.68 182,973.78 (, THF-: riNANClAf, [JASIS OF CONFEDKRATION. 75 \ i hy the act of ajrd May, 1893, it was provided that Now llrunsvvick receive an additional annual subsidy of $1 subsidy of $150,000 on fdudiiion that all provincial duties on lumber exported from tliat province be repealed. The Dominion Act of 1870 erecting the new province of Manitoba provided — i. that as the province was witliout debt it should be entitled to receive interest from the I )oii>inion at five per ( ont. on the sum of $47^,090, that is, should be allowed to bring in a nominal debt estimated at $27.77 P^-t hea of the |)opulation, thus placing her upon the same footing as Nova Scotia and New Urunswick. 2. That an annual lump sum of $30,000 and .m annual grant of eighty cents per head, increasing with population until this should reach 400.000, should be |)aid by the Dominion for the sui)port of '.he (lovernment and Legislature. This was declared to be "in full and final settlement of all future claims upon Canada." Hy an Act of 1876 an additional annual grant of $26,746,96 was allowed Manitoba for six years, raising the total subsidy to $90,000 a year. My an Act of 1879 another additional grant of $15,653.04 was allowed for two years. An .Act of iSS-* ef. . :ted a 'omplete rearrangement of the financial relations between Manitoba and the Dominion. A lum|) sum of $50,000, a grant of eighty cents per head on a population of 150,000 ($120,000) and, as the Dominion had retained under her own control the public lands of Manitoba, the sum of $45,000 a year in lieu of revenue therefrom, were to be paid to Manitoba, for the period of ten years. Before this period elapsed the act of 1885 explained by that of 1886 provided that the indemnity in lieu of public lands should be increased to $100,000 per annum. 'l"he lumj) sum of $50,000 a year was to continue. The per capita allowance of eighty cents pel head on a minimum population of 1 50,000 was to be increased every five years proportionately to population until this should reach 400,000. The nominal debt upon which Manitoba was to receive interest from Canada was to be calculated on a population of 125,000 instead of 17,000 as provided in ihj act of 1870. These sums were once more "to be in full settlement of all questions and claims discussed between the Dominion and Provincial Governments «/ fo 1883." 7<5 rUF. FINANCIAL HASIS OF C Oil FKDr.kATiDW. li ii In 1871, Hritifih (.'oluml)i.-i entered the union under an aK''t*'*'^ incnt — I. That the debt nllowanre be $a7.77 on 11 population of 60,000. 3. That nn unnual Nubtiidy of $35,000 und an unnuati ^rnnt of 80 cents per head on a {M)])iilation ol 60,000 be paid by the hiiiiiinion in support of itx government and legiHlature, nu< h grant to increase as in tim caHcs of Nova Scotia and New HruiiH- wick. 3, That in return for the public landH to Ik conveyed by the piovincc in aid of the construction of the Canadian Pacific Railway, an additional annual subsidy of $100,000 be piid by the Dominion. In 1873 Prince ICdward Island entered Confederation under an agreement, i. Tiuit the debt allowance be $50 per head on the population of 1871 or $4,701,050. 2. That the Dominion pay a subsidy in support of government of $30,000 annually and an annual grant equal to 80 cents per he.id on the |)opulalion of 1871, such gr.mt to increase witii increase of population, as in the cases of Nova Scotia and New Urunswick. 3. That in the absence of provincial revenues arising from public lands an additional annual subsidy of $45,000 be paid by the I)r)minion. The act of June 23rd, 1887 provided that I'rince Kdward Island should receive an additional annual subsidy of $20,000. from the Dominion. The followinjT i^< a Htatcmint of the etlucational insti- tutions attended and the defrrcen, etc. received by the writer ^^'^^ The Collegiate Institute. Strathrny, Ontario; rSSS-i.Sf,2 University Colk-pfe, Torr)nto ; 1S92- 1S94 Coliiinbia ColJcjfe, New York. r892 11 A. University of Toronto; iSSS-i8()2 The (Jovcrnor General's Medals for proficiency in the Dep- artments of ClassicH and Political Science in the Univer- sity of Toronto ; Mlake Scholarships in Political Science, Prizeman in History; 1S92 and 1S93 Kellowshii) in Jurisprudence. Cohiiidjia Collcn^e. New York; 1S93 AM. Columbia CoIlc;re; 1894 Ivvaminersliip in Constitutional History in the University of Toronto.