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Un dee symboles suivants apparaftra sur la darnlAre image de cheque microfiche, seion le cas: le symbols -^ signifie "A SUIVRE", le symbols V signifie "FIN". ly/laps, plates, charts, etc., may be filmed at different reduction ratios. Those too large to be entirely included in one exposure are filmed beginning ^ . ? ;: \ » ■! ! :' * ••' I •■ '•{■', ^ f I '; ;.' O f/ y, {') 'j. f SPEECH ON THE BUDGET. . v) '''■■:' "I'i »"■ HOUSE OF COMMONS, OTTAWA, . ' ' • . i .y. i: r m;.-« Ol r; FRIDAY, 7th May, 1869. " The Hon. JOHN ^OSE, Minister of FiDaD()e, addressed the House as follows : . j; r; , ., ' . -, 1. Mr. Speaker : — In moviug that you do now leave the chair for the House to go into Committee of Ways and Moans, I should do great Tiolence to my feelings if I did not acknowledge the indulgence and support I have hitherto received from my friends, and the generous for- bearance I have met with at the hands of honorable f;,entlemen opposite. I feel, however, that the time for craving indulgence is now past, and that it would not be a healthy sign of the state of public sentiment, if, after having been for eighteen months in office, I were to reckon any longer on the forbearance of friends or opponents, and I readily admit that the Minister of l^inance ought now to be held to a strict accountability for the important trust which has devolved upon him. (Itear.) I ought, however, to say, that I am afraid I shall have to trespass somewhat upon the indulgence and patience of the House in this, that I shall have to go over a good deal of ground— the period of .time which I shall necessarily have to review including no less than three fiscal years. I shall then first endeavor to state to the House the ascertained results of the first year of Confederation, namely, the year ending 30th June last. I think it will be convenient that I should in the second place advert to the probable and all but ascertained results of the current year, ending 30th June, 1869. It will then be advisable, before I proceed to state what are my anticipations for the following year, that I should refer very briefly to some of the legislation of last session, and its effect upon the fiscal and financial position of the country. And lastly, I will place the House in possession of the estimates of revenue and expend.iture for the coming year, 1869-70. I shall thus endeavor to divide my observations into these four parts — first, the results of last year ; second, the probable results of the current year ; third, a brief review of the effects of recent financial legislation on the circumstances of the country ; and iburth, the anticipations of revenue and expenditure for the year 1869-70. (Hear). In entering on the first of these divisions, I ought perhaps to say, although the House must be well aware of the fact, that the first year of Confederation was a year of very considerable difficulty, in so far at least as its finanoial administration, exooutively, was concerned. Wo had not only to keep the accounts of the Dominion, but we had the difficulty that, in the first place, all its transactions were necessarily involved with the oo- count£ of the old Province of Canada— because the new machinery of the Provincas of Ontario and Quebec was not then in efficient operation for the performance of their own services — and, secondly, that we had to receive and to disburse very lurgo sums of money on account of the four separate Provinces. The amount of business which devolved upon the Department, arising from the necessary complication of the accounts during the first year of Confederation, was, therefore, very serious indeed. The Dominion had to receive various sums of money which belonged to the se- parate Provinces, and of course it had to account to those Provinces for them. It had also to pay for services which did not fairly belong to the Dominion, but which properly appertained to the four Provinces, and of course it had to charge the Provinces with the amounts so paid. In making a statement, however, of the results of the first year, I shall not complicate it by a reference to all these details, but shall confine myself to a statement of the exact receipts and expenditures of the Dominion, as they have been ascertained, after eliminating from the gross receipts those moneys which were received on account of the Provmoes, and from the gross payments those which were made on account of the Provinces. It will be remembered that lost year — and I now refer to the estimates which were laid before the House, in the month of April, 1868 — that the estimated receipts were stated to be $14,6'j5,000. This included some of the arrears to which the old Province of Canada was entitled. It was, in other wovds, the gross amount of the sums which the Dominion expected to receive during the year. I shall now state what were the actual receipts. Eliminating from the gross receipts those which have been found, on subsequent examination, to belong to the Provinces, the result is this, that there was received, on account of the Dominion proper $13,835,460 There was also received, after 1st July, 1867, what was ascer- tained, on examination, to belong to the one Province or the other, the further sum of 485,645 U . Making the total receipts fo? the year 1817-8 $14,321,105 Against the estimated receipts of 14,695,000 Showing that there had been an over-estimate of receipts for the year of. $ 373,895 This short-coming in the receipts is to be accounted for .in this way. The falling o£f in the Customs duties became very rapid in the months of April, May and June of laf t year. The actual Customs receipts for those months fell short of the estimate by $345,000. The falling off in miscel- laneous Revenue during the same period was about $28,000 ; these two sums making up the,$373,000 by which the actual receipts fell short of the an- y^-'." :■' tioipated reoeiptfl of the year 1867-8. Now, as regards the ascertained ex- penditure of the same year, it will be seen, on referring to the statemprt made to this House in the month of April, 1868, that the estimated expenditure, including of course everything which the T>ominion could be called upon to pay, either for itself or for the Province.s, ros 914,321,360 The ascertained result is that the expenditure of the Dominion proper was $12,973,211 And the expenditure on account of the Provinces, with which the Provinces have been since charged, was (i72,794 Making a total expenditure of. 913,546,005 So that the actual fell short of the estimated expenditure by 9 775,355 An amount which is represented by lapsed appropriations and pay- ments running into the following year. Let me now place the House in possession of the actual results, brought down to a Dominion standard or basis — leaving out on both sides the receipts and payments which have been found to appertain to the various Provinces. The ordinary revenues of the Dominion proper amounted to $13,835,460 While the ordinary expenditure of the Dominion proper, was 12,973,212 Shewing an apparent surplus on the transactions of the first ^^ year of Confederation, of $ 862,248 But I should state to the House that this does not afford a true test of the real surplus. The House must not infer that this apparent surplus was altogether an actual one, for you will observe that, during the first year of Confederation, none of the services which under ordinary circum- stances are rendered in a preceding year, and the payments of which ran into the subsequent one, swelling its expenditure — none of such services were chargeable to the expenditure of the Union. In ordinary years, the p&yment of arrears forms a certain proportion of the outlay. But there were no arrears to come into the first year of Confederation, all being chargeable to the several Provinces, whereas, on the other hand, many of the services of 1867-8, although they were actually performed in that year, and war- rants were issued for them, would :>nly appear in the accounts of 1868 9, when the warrants were cashed. I m^e this explanation, that th'j House may not suppose that the actual results of 1867-8 were as favorable as the declared balance would apparently shew them to be. The explanation is briefly this, that none of the services of the previous year came into the first year of Confederation, whereas some of the services which belonged to the first year of our present state of existence were postponed to 1868-9. I directed the proper officer to make an estimate of what should be deducted, on account of the probable amount of arrears. The Auditor accordingly went carefully over the items of 1867-8 with the view of ascer- taining how much was postponed to 1868-9, and he reports that $300,000 G would fairly cover the amount. Tliis being deducted, we would have 8&62,000 Icfl aH the surplus of 1867-8. I think it better, however, to take off a little more — and I do so for this reason : that, with regard to thu items which I have jast mentioned as charged to the different ProvinooH, though we have endeavored to act with the utmost fairness in sorutinizin^j; those accounts, it is possible our iViends fVom Ontario and Quebec may take exception to some of the items with which they have been charged as not belonging to their several Provinces. Instead of limiting the reduction there- fore ^o $800,000, 1 should be disposed to make it $600,000. And I feel persuaded that, deducting this $500,000 from the $862,000 of apparent (surplus, wo have an honest surplus on the first year of Confederation of over ^350,000 — which is very near the estimate made in the month of April last, when it was stated at $374,140. (Hear, hear.) I think it will be needless to take up the time of the House by any more minute reference to the ascertained resulto of the first year of Confederation, because the Public Accounts will soon be in the hands of hon. members, and, ^hen wo are in Committee of Supply, of course those Accounts will all bo subject to criticism. I therefore content myself now with merely stat- ing the general results, in figures, of the first year of our united existence. I next come to the current year, 1868-9, of which ten months have already elapsed. A statement ot the receipts and expenditure for the fivst nine months of the present financial year has been placed in the hands of honorable members. But, before adverting to that and to the results or the conclusions which may be deduced from it, let roe recall the attention of the House to the estimate which I made in Apiil, 1868, at the time of the last financial statement, of the jirobable receipts and expenditure of the current year. The estimate at that time of the receipts from the three great sources of revenue — Customs, Excise, and Miscel- laneous — if the last named can still be included among tho great sources of revenue, for the miscellaneous receipts are now smaller than they formerly were — was are follows : — From Customs $ 9,100,000 While the actual yield — judging by the results of the first nine months and estimating for the other three — will not much exceed, and, I believe, will not fall much short of. 8.102,236 Shewing a deficiency in tue receipts of Customs of. $997,764 compared with what we estimated them at fourteen months ago. I shall not at this stage refer to the grounds on which this estimate is based, because I think it will be more convenient for the House that I should in the first place give the figures, and then state the reasons for filling in the figures as I have done. The estimated revenue, then, from Customs, for the current year, — $8,102,236-«>is $997,764 short of what we anticipated, fourteen months ago. > The revenue we estimated from Excise was $ 3,514,000 And the actual yield from this Bourco, oa now in f;rcat part oaccrtainod, and partly eatimatod, in 2,004,594 Shewing as the falling off, below what wo estimated $609,406 The Misoellanoous Reooipta wore OBtimated at $ 2,500,000 And the yield, aa now foreie«n, is 2,716,769 Shewing on that item an oxoesB, of. $216,769 The result of these various figures is, that while, last year, wo estimated oiir ^otal revenue for the current year at $15,114,000 The real revenue, as now calculated, with the experience of the first nine months of the year to guide us will bo 13,744,656 Showing a gross falling off, in receipts, below the estimate, of $ 1,369,344 Well, Mr. Speaker, when the government found thut the revenue was falling short, that it did not come up to anticipation, that the recciptn of one month after another were below of tho^o ui the corresponding month of the previous year, they certainly felt that a very serious and difficult duty might bo entailed upon them, for I believe, if there is any sentiment stronger than another in the minds of the people of this country, a.s represented not only by supporters of the government on this side of the House, but by hon. gentlemen on that side, it is ^at we shall not permit any more dei. 'M to arise, but if the ordinary revenue falls short of the expenditure, w must manfully look the difficulty in the face, and bo prepared, by exceptional taxation, if need be, to supplement the deficiency. We cannot but feel it to be one of our first dutio so to equalise the revenue and expenditure that our credit abroad shall not be injured by its being supposed that we are willing to allow deficiencies to arise, without being ready to impose upon ourselvers a sufficient burden to meet then. We all know how serious, in the past, was the effect of the deficits which arose in the old Province of Canada for some years previous to the Union : and, in adverting to them, I am far from seeking to throw any reflection or blame on those who occupied in those years the position I no^ do, or to seek, by contrast, to laud the present Government at the expense of their predecessors. I know the peculiar difficulties in which former Finance Ministers found themselves. Neither my honorable friend opposite (Hon. Mr. Holton), nor my honorable friend, the member for Sherbrooke (Hon. Mr. Gait) had that amount of support in the House or the country which would have enabled them to bring down those measures of taxation which would have been necessary under such circumstances. Parties were sc equally balanced, that to have carried the measures necessary to equalise the revenue and expenditore would have been found a peculiarly difficult task. The present government would however be very recreant to its duty, if, strong in the majority in this House, and strong, I believe, in tiie confidence which the country 8 reposes in us, we slioald permit it to go abroad, tliatwe would allow a deficit to arise in any year, without being prepared for that year to submit to the House such further measures of taxation, exceptional and special if need be, as would enable us to supply the void. (Hear, hear.) I make these remarks, in order to shew the House what were the considerations which necessirily forced themselves on the attention of the Gbvemment, and the coQolupion to which they were driven, that any real defi- ciency must be supplemented by fresh sources of revenue. Thoy believed indeed that, no matter who occupied this position, any body of men enjoying the confidence of the people of this country, would be pre- pared to propoise such measures, in the belief that they would be sustained by the House and the country. But, while entertaining these views, the Government of course felt it was their duty to exhaust every means by which a deficiency could be avoided. They saw month by month that the revenue was falling short, that there had been excessive importations in previous years, and that these w«;re being followed by a corresponding contraction, and they felt it u) be their duty from the out- set, at all events to try whether by practising the most rigid eco- nomy it was not possible to avoid the threatened deficit. (Hear, hear.) The House will remember tho votes which were placed at the disposal of the Government last year, and the results which are to be found in the Statement I have just placed in the hands of hon. members, will «hew, I think, that, wherever it was possible to practice economy, wherever it was possible, without undue damdge to the public interest, to for^o the per- formance of a service for which provr venunent. (Hear, hear.) Hay- 16 iag said bo much in reply to the objection that the loan was premature, let me now say a word with reference to the objection about ita being for too large a sum. There are two answers to that. Firstly : — A loan must be of considerable magnitude before it will attract much attention in the money market. If you bring out a loan for a few hundred thousand pounds, and oifer it to public tender, you will simplv be laughed at. In order to make a loan by public tender at all successful, it must be of suffi- cient magnitude to induce capitalists to compote for it. Secondly : — It is desirable that the holder of the loan should nave an interest in seeing that the next instalment, when placed on the market, should not go for a less sum than was given for the first instalment. The men who took up this loan are the among greatest capitaliEts in the world, and it is not to bo supposed that they will allow the next two millions to go at a loss ruto than the first two ; it will be for their interest to prevent the value of the securities they already hold being thus lessened. We therefore obtainedl this, by issuing half the loan at once, that influential capitalists bought our bonds, and we placed them in the position of having an interest to see that our next loan brings at least as good a price. Hon. Mb. HOLTON. — Only half a million of the the amount consists of our bonds. The rest is an Imperial loan. Hon. Mb. ROSE. — No. We borrowed the two millions on the bonds of Canada — $1,500,000 of the amount, however, bearing the endorsement of the Imperial Qovemment. Mb. MACKENZIE. — ^Would not the same argument as to the holders of the first bonds not being willing to let the subsequent issue go at a smaller premium, equally apply, if only one million had oeen issued ? Hon. Mb. ROSE.— Certainly not. They might find it to be for their interest to let the value of one million be lessened, for the sake of getting the other three at a cheap rate. But we have now half the loan in the hands of men, whose interest it is not to permit any reduction of rates when the second half is issued. (Hear, hear.) I now come to the point — and perhaps the only point on which any very serious stress is laid — and that is, with reference to the temporary employment of the money. I do not complain that the Government should be held to a strict account for this. I value at a high rate a jealous vigilance on the part of the country, shown in criticising the action of the Government in such a matter. It demonstrates the existence of a wholesome state of public opinion, and a proper feeling on the part of the country, that when the Government borrows money for a given purpose, it should be in a position to see that it is certainly forthcoming, when wan'.ied. And when I ask the consideration of the House to the explanations I hav? to offer, it is not by way of apologizing for what has been done, but in ample justification of the course the Government has taken. I shall endeavor to shew that they would have been censurable in the extreme if they had not taken that course ; if they had wantonly allowed this mcney to lie idle, and n^leoted to save the country the very lai^ amount of interest it would otherwise be paying. Let me first psk if it woul'l have beon a misapplication of these funds if we had invested them in English consols, or if we had left them in the I ■# hands '^f the Bank of England at a fixed rate of interest ? Would it hare oeen u xsapplioation of these funds if we had purchased Exchequer Bills with them in England ; if we had placed the money out at undoubted security at the ordinary rate of interest ; or if we had used it in purchas- ing up our own debentures in anticipation of payments we have to make in them ? Had we taken any one of those courses, could it havo been said that the money was in the slightest degree diverted from tho purposes for which it was borrowed ? Now, what is the course the Government actually took ? In the first instance wo applied to our agents in Englandl to get the best interest they could for the whole amount left in their^ hands and we entrusted a considerable portion of tho money to the Messrs. Barings & Glyns, requesting them to see that it was lent out on the best security compatible with immediate convertibility. Finding that could not be done with advantage, we invested a portion of it in our own Bonds issued in England many years ago — in anticipation of what we had to pay on account of the Sinking Fund. We next invested a portion of it in India Bonds, guaranteed by the Imperial Government at five per cent, interest. Hon. Mr. HOLTON.— How much ? Hon. Mr. ROSE. — I will give you the figures presently— 'a portion of the remainder we invested in Exchequer Bills of Canaaa, a security which I can and will shew to tho House is undoubted, because I am quite willing to admit this, that it was the duty of the Government to see that the proceeds of the loan were placed in safety, beyond the reach of any peradventure whatever, that they were made just as secure as if invested in English Exchequer Bonds, in the Bank of England, or left in the hands of Messrs Barings and Glyns. I am willing indeed to let the issue be tried by that test. If, as has been suggested, we had made the issue of the In- tercolonial Loan merely a pretext for raising money to meet our various engagements, in that case I admit tho Government would have been ex- tremely censurable. But although we did owe a considerable amount of money to various creditors, we were not in the position of being pressed for Uij payments. We owed the Government of Ontario half a million of dollars. Did not my hon. friend, the Treasurer of that Province, urge us eagerly to let the amount remain in our hands ? Would not the Bank of Montreal have been disposed to remain our creditors ? The holders of our maturing 7 per cent. Bonds were ofiering to take in lieu of them Dominion Stock at S per cent., and were anxious to get it. In short, our creditors were anxious to remain our creditors, and in no way whatever was the GK>vemment pressed for payment of its obligations. (Hear, hear.) \|When we applied the portion of the lo.^n invested in our own Exchequer rBills to meeting these obligations, it was simply because it was a fiaan- oial operation which we considered desirable. And when I oome to state to the House what has actually been done with the money, I have no fear that those who are most jealous and sensitive as to the honour of the coun- trj, will feel that its honor has not been in any way sullied. The whole qi^estion turns upon this— if you admit we might properly have left the money in the Bank of England, or invested it in Consols, or left it 8 18 . . ,v in the hands of the Barings & Olyns, or placed it with any of the bankers here, then yon hare only to enquire whether the securities in which we actually did invest it weje such as give the most ample guarantee that the money will be forthcoming when wanted for the progress of the railroad works. If we had been embarrassed, and had raised this money for the purpose of relieving ourselves from embarrassment, I quite admit that our conduct would have been open to censure. But wo wore under no embarrassment. Our position was this— that, by the result of an operation which I think the House will now admit was not premature, and was not on too large u scale, wo found ourselves in possession of a largo amount of money, anj'wa thought it our duty, as your faithful servants, whom you entrust with th J management of your a£fairs, to see that the money was faithfully and pro-^ fitably employed. (Hear, hear.) There is one other objection which may be urged, viz : — Why did you not postpone the payment of the instalments on this loan fo^ one or two years, so that they would come in as you re- quired them? I would reply— that no man in London will subscribe for a loan, unless he has the opportunity of paying it up within a reasonable period ; he will not consent to postpone his obligation to pay his subscrip- tions for a number of months or a number of years, because in that time there may be such a change in the money market as may upset all his cal- culations. (Hear, hear.) We have then to consider the whole proceeds of this loan, amounting to $10,283,003, as being at the disposal of the Government on the 13th April last. We invested in the Intercolonial Sinking Fund at six per cent— thus reducing our debt by so much, I 270,500 We paid off the old Imperial Loan for the building of the Canals, bearing 4 per cent interest 681,333 We paid off our advances from the Messrs. Barings & Glyns, bearing 5 per cent interest 983,562 We paid off the Bank of Montreal, bearing 7 per cent interest 2,500,000 We paid the balance which we owed the Ontario Government, bearing 5 per cent interest 500,000 And wo redeemed the 7 per cent Debentures, which we issued aoonple of years ago 873,200 Making a total amount employed in the redemption of debt... $ 5,808,595 Which bore an annual interest of. $353,785 Of ihe balance, there is temporarily invested in the Bank of Montreal, at 4 per cent $ 1,500,000 I And there is still in the hands of the agents in London about 2,974,408 $10,283,003 Let the House now consider what has been the result of the operation. Would it have wished us to eontioue to pay the $353,785 a year upon the loans I have just enumerated, as well as the interest upon the Interco- lonial Loan ? The Financial Agents in London told us that, upon the con- ditions we laid down — immediate convertibility and perfect security — 19 ' ! ifi6y coutd not got moro than one per oviit per annum. Does the House think it would have been a good arrungoment that we should have been content with that one per cent., and gone on paying the $353,785 on the obligations now rodoemcd, in addition to the interest on the loan ? (No, no.) The character of the operation may bo tested in another way : The interest on the debts redeemed was $ 353,'785 while the interest which the loan cost us, on the $5,808,595, the amount employed for redemption purposes, was 227,174 So that, estimated in that way, there is an actual gain per , annum of S 126,611 But we may bo oslccd, what wo shall do when it becomes necessary to recoup this loan ; in what position shall we bo, if bud times should come, and wo should then have to go to the Bank of Montreal, or to the Barings and Glyns, and ask for a ro-loan of the luoney ? I will show the House what wo have available for that purposes — what the Government has specially set aside to re-coup the loan. As I have said, the total proceeds of, the loan were $10,283,003 Deduct what has been expended on the Sinking Fund for its redemption $ 270,500 and ontheBoad 132,299 402,799 , Leaving $9,880,204 Againit this we have available in the hands of the Financial Agents $2,850,587 We have in India bonds, eztimated at 10 pm. (I believe they arc now higher) 749,466 We have the Great Western debt, in bonds speci- ally set apart for its payment, and now forming . J^ i ' an unquestionable security beyond any possible -1^' "' , peradventure ! 3,264,901 We have certain to be received within 18 months - been received to this date from twenty counties in Ontario. The returns are now in course of examination, and the results may be suMect to some corrections, but comparing these twenty returns for 1868, with returns from the same counties for 1867, I find they shew an increase in one year in the value of — Cattle $386,050 Sheep 156,975 Horses 458,440 $1,000,485 They shew afalling off in the value of swine of about 242,Q00 And thus indicate an increase in the value of the live stock owned by farmers of $757.$QP The assessed value of real estate shews an increase of $1,716^745 G-iving a total increase in the value of farms, homesteads and farm stock in 20 counties of , $2,474,545 Applying the same proportion to the whole of Ontario — that is, making an estimate for the whole Province in the same proportion which the returns of previous year|shew these twenty counties to bear to the whole — ^we should haYe an increase for the remaining counties of $1,113,545, and a total increase^ in the assessed value of property in one Province of the Dominion in one year, of $3,588,090. (Hear, hear.) Now, though I do not say we can pin our faith absolutely to conclusions drawn from figures of this kind — yet, so far as we can judge from the facts before us, so. far as the indicia to which I haYe referred afford any evidence of the actual condition of this country-r-I think we may infer that, though some interests may have been languishing, the country generally is substantially in a sound condition. (Cheers). Let us also, in addition to all this, look at the estimate which uie world abroad has formed of our condition, as shewn by the rise in the value of our securitieB daring the last %;ee years. The sai^e six per cents., whioh • 24 in May, 1866, were worth 97, are worth 105 in May, 1869. Ovr tire per cents, which in 1866 were worth 84^, readily bring 95 in 1868. This, I think, may be taken as pretty good evidence that we are not con- sidered abroad as going too fast, or that our couutry is in an unsound con- dition. Let us also compare the value of oui securities with that of the securities of the iicighbounng Republic. We know that during this year their six per cents have ranged from 79 to 83,' while ours, as I have stated, are worth 106 ; and their fives have ranged from 73 to 79 ; those uven of the State of MassachuL^etts, which is especially jealous of its credit, having gone for 76, while ours, as I have shown, have almost come up to par. More than this. Sir, if you examine the stock-lists of the English money market, you will find that the securities of this country stand in a position of proud ]^e-eminence over those of many uf the European countries. (Hear, hear.) Well, Sir, we know now that last year and the year before, we were pre- suming a little too much upon our high state of prosperity, and on the volume of trade which had been coming to us. Various causes had con- tributed to swell it for some time unusually. The great war which had been going on for some years on the other side of the line had created a vacuum in many departments of trade, and that vacuum was to some extent filled from this country, not only in the matter of agricultural pro- ducts, but in importations of dry goods, teas, groceries, &o., which crossed the border from Canada. In consequence of the impetus thus given to our trade for two or three years, the imports from abroad into this country went on grov'ing in a much greater proportion than either the increased population or Ine increased consumption of the country would have warranted, and I have no doubt that we have been presuming a little too much during the last year or two on the supposition that this condition of things would last. Our imports of dry goods, which in 1859 were about $10,000,000, had risen in 1866-7 to $21,000,000. During the last two years of this period our total imports which in 1864-5 were $39,800,000, had risen in 1866-7 to $52,600,000 — while during the same period the imports of dry goods had increased from $13,500,000 to $21,500,000. Now, Sir, the ordinary consumption of the country could not possibly have justified that enormous increase in the importation of dry goods, so out of proportion to the total volume of trade. We know that during the American war, the trade and industry of our neighbors were paralyzed, and a considerable portion of our imports accordingly found their way to the United States. But since the war, the vacuum it created has been rabidly filliiig up, and the indus- ^ of the country has been returning to its ordinary normal condition. We found, therefore, that in the latter part of the fiscal year 1867-8, our Customs revenue b^an to fall oS, principally in cottons woollens, and linens. I will Just give the percentages, by which those three large classes forming tbe great bulk of our imports, have fallen off. I have endeavoured to analyse the figures, and I may state here that we hope in the course of next year to be able to have our commercial statistics in such a condition that there will be less difficulty than at present in giving to the House and the public full and accurate information with re- gard to the commercial operations of the country. At the present time, d^ re B. a- 1- le ir h e ■i . V, it is a work of immenBe laW and detail to collect and prepare these statistics for the old Province of Canada, while the Provinces of New Brunswick and Nova Scotia have each separate jystems. I consider it is one of the most important works to which we can address ourselves, to see that we have a uniform and as nearly as can be a perfect system of com- mercial statistics, for the information of Government, of Parliament, and of the country at large. (Hear, hear). Well, Sir, it has been found that the decrease * the percentage of customs duties received during last year, 1867-8, as compared with the previous year, was no less than 25^ per cent in woollens, 16f per cent in cottons and 24 per cent in linens. Almost the only class of articles in which there was an increase, and for that we have to thank the ladies, was fancy goods and millinery — (laughter) — on which there was an increase in the duties received of 11 per cent. To be sure, however, there is a compensating increase in another branch, for which the other sex is responsiole, there having been an increase in the duties on liquors in much the same Sroportion. (Laughter.) Without wearying the House with further etails, on this part of the subject, let me state, with regard to the first nine months of 1868-9, as compared with the corresponding p^od of 1 867-8, that there has been a decline in duties In the old Province of Canada of $450,000 or nearly 9 per cent. In New Brunswick of 101,000 or 15 per cent. In Nova Scotia ,...of 321,000 or 37pf>rcent. Being for the whole Dominion, a decrease of $870,000, or about 13 per cent of the total receipts of the corresponding months of the previous year. Me. D. a. MACDONALD (Glengary.)— Our Nova Scotia friends will make that another argument xbr repeal. (Laughter). Hon. Mb. ROSE.— The falling oS has been principally in the three articles I have mentioned — ^woollens, cottons, and linens — and is explained to a great extent by the circumstimces to which I a little ago adverted. As regards one article, however, — woollens — our own production has no doubt considerably increased. Mr. MACKENZIE.—Is not the falling off partly accounted for by the fall in the prices of leading articles ? Hon. Ma. ROSE. — No doubt it is, but our tables are founded on value^ and unfortunately do not shew quantities. The English returns however shew the quantities as well as the values. The values have fallen very much. I might give the quantities exported to British America, accord' ing to the English Trade Returns, but I do not wioh to weary the House by going too much into detail. My impression is that the quantities imported--especially as regards cottons, feU short, although not iii the pro- portion which the values did. Now, Sir, before offering any estimate of the revenue of the coming year, I have felt it to be my duty to state clearly to the House the groun«ls on which I relied for our income, both from Cutiwms and Excise. I felt that it would not do to jump at the conclu- sion, that we should have nine millions or ten millions of revenue, withcmt resorting in. the most oarefiil manner to every means at the diq)osal2,906,184 In AprU, 1869 3,117,336 An increase of $211,000, but the latter sum falls short of the customary amount in bond at this priod of the year. The duty on the amount of goods in bond in 1868, would be $775,655; while the dutv on the amount in bond in 1869 would be $1,021,141. Then the next object of enquiry was to ascertain what amount of goods had gone out of the Custom-House and was now in the hands of merchants. By making application to various points where large stocks are ordinary held, we endeavored to ascertain how much the stocks in the hands of nerchants exceed.ed or fell short of the stocks in hand at this season last year. The result of those enquiries, which were addressed in each locality to the parties understood to be the most intelligent and the most likely to give correct information, was as follows : — The number of replies received was 23. Of those, 7 stated that the stocks were about the same this year as last ; 6 said the stocks were larger , while 10, and these from some of the most important places, said the stocks were considerably smaller, except in one or two articles. Enquiries were also addressed to the various localities, with regard to the prospects of im- portation during the coming season. Of the returns on this point, 11 said the importations would exceed those of last year ; 7 said theywould equal them ; and 5 said tha^ they would be less tiian last year. Wel\ Sir, the result of the year's opKerations must depend in a great measure on the har- vest with which Providence may bless us, but I think that there are ah%adv symptoms that trade is recovering from the partial crisis through which it has gone. I have no wish that there should be a very lai^ importation, in order to bring in lai^ returns to the Exchequer in the way of Customs duties. Idoubtwhetiaeritwould be for theinterestof the public, that we^Aiouldhave the same large importations for this year that we had some years ago. I would much prefer that the (ikivemment should have imposed upon them the troublesome and iaboriouu duty of practicing economy, and that they should rather have some difficulty in makinf; both ends meet, than that the country should import in excess of its real and proper wants. W^ shall all be glad, however, to find healthy trade revive, of which, as I have said, tliere are abeady symptoms. For I find that *he Ottstonu during 27 the first four months of this year show an increase of 2i per cent, over the receipts for the corresponding months of last year, while the month of April shows an increase of 8f per cent over April 1868. I think, therefore, we may reasonably anticipate that the Customs Revenue of the coming year, instead of falling short of the revenue of the past vear, will rather exceed it. The same remark will apply to Excise. In that department of reve- nue the first four months of ^is year show an increase of two per cent over the corresponding period of 1868 ; and one of the months shows an in- crease of 892,000. I think then it may fairly be inferred, both from our general knowledge of the circumstances of the country, and from the facts I have mentioned, that any depression of trade wMch is now ex- perienced, is not owing to any inherent, deep-rooted, deep-seated distress m the country, but is due merely or mainly to the over-importation of cer- tain articles. (Hear, hear). And now let me advert to another cause, tc which the stagnation of trade amongst us is generally attributed; and, in doing so, I shall put the House in possession of a few facts which I think will shew that the importance of that cause has been greatly over- rated — I allude to ourilosing the Reciprocity Treaty and being deprived of the free access we formerly enjoyed to the markets of the United States. Now, no man is a greater advocate for free commercial intercourse than I am. Bnt I must also say that I am far from despairing of our future, though it be denied us. In order to form a reliable estimate of the full value of our former intercourse with our neighbors, and guide us to a correct judgment of the extent to which the volume of our trade has been lessened since the abrogation of the Treaty, — and, further, to enable us to deter- mine whether or not the present deprei^ion of trade is due to this cause, — Ivrillquote you the facts as shown in official statistics whichl have obtained from the United States. I hope the House will bear with me for a moment, while I place before it a few facts with reference to the trade between Oanada and the States last year, as compared with the year pre- ceding the repeal of the Reciprocity Treaty, in order to show the extent to which the abrogation of that Treaty has operated on the interests of this country. We know that during the eight years previoas to the expir- ation of the Treaty, the volume of trade between the States and ourselvef? had increased to a large extent— swelling to some $35,000,000 or $40,000,- 000 a year,and I fear that one efiiect of our certain ready access to mai kets close at hand was to make us unduly dependent on them, discourage enterprise in the country, prevent our commercial men from seeking out the various other markets which, under other circumstances, had not most of our sur- plus products been absorbed at our doors, we should have found — (hear hear.) 1 do not for a moment deny that the position of isolation which the States have taken since the repeal ofthe Treaty has worked injuriously to the trade not only of this country, but of both countries, but I desire to show honorable gentlemen that the extent to which the staple products of this country have been prevented from finding access to the markets of the United States has been very much exaggerated. (Hear.) I wish to show the House clearly that the falling off in our principal articles of export to our neigh- bours has not been so lai^ as is generally supposed. (Hear, hear.) In the first place, I would call attention to the circumstanoes of our geographi- cal position. I am very glad to see the honorable member for Hochelaga, (Hon. Mr. Dorion) in his place, while I do so ; for this is a matter to which that honorable gentleman called attention a day or two ago. I am quite sure that the honorable gentleman is open to conviction, and, entertaining that belief, will proceed to show him that the fears he expressed on a recent occasion, respecting the effect of the abrogation of the Treaty, were altogether groundless. What is our geographical position in relation to the great consuming States of the Union ? We are situated at the head of tide-water, within 200 or 300 miles of the heart of the New England States — States which offer an^ver increasing market for agricultural products. The extent of the consumption of these products in New England is not, I believe, generally known on either side of the line ; — they draw very large supplies indeed from other sections of the States; — but the advantage of our position is this, that we are within a couple ofhundred miles of the great manufacturing section of the American Union, that every year the wheat growing area in that section is becoming smaller; that wheat raising is going more and moroi westward, while the facilities of communication not having increased proportionately, the expense of carriage to the consuming points has gone on increasing. Now the last report of the Commissioner of Agriculture for Ontario, a very excellent one, and for which the country is much indebted to mv hon. friend, shows that the average wheat product of that Province is larger than that of the State of New York ; and also that in other Agri- cultural products, Ontario produces a very laige surplus. There, as in Europe, farming is a science, while in the Western States it is far different, for the moment the virgin soil there is exhausted, the fanners move off further westward. They never attempt to carry on the raising of agricultural products in the same way as is done in Ontario. My ai^ument therefore with respect to this New England trade is, that considering how much more remote the regions of western wheat production are getting every year, Nat'ure has given us an advantage of which nothing can per- manently deprive us. (Cheers). Let me now state one or two facts to the House, with r^ard to this New England trade, and in doing so I will refer to an official document, issued by Governor Andrews, of Masaa- chussetts. From this it appears that in 1860, more than four times the entire yield of wheat in the New England States was sold in Boston market alone for domestic consumption, He sets down the product of these States at 1,077,285 bushels —estimated equal to about 226,000 barrels of flour — while in Boston alone 800,000 barrels of Western and Northern flour were sold. We know that the increase in this consuming population since that period would make the increased consumption at present proportionately greater, for the manufacturing population of New England has gone on increasing, while her agricultural area is being con- tracted ; towns now occupy spaces formerly used as farms, and, in all directions, the works of the manufacturer are usurping the place of quiet farmsteads. These Eastern States raise less yearly, while they are steadily inoreaeing their oonsamption. The census returns too bear this m m ,/ ont. In 1850, New Englaad produced 1,091,000 busheltf of wheat. Ten yeara afterwards she only produced 1,083,000, showing a falling off in production, while at the same time her population had in the interval mcreased from 2,728,116 to 3,135,283 ; and at the same rate of increase the population now should number 4,232,000 — showing increased con- suming capacity. It will easily be seen that with diminished production and increased consumption, their wants must now be pretty difficult to satisfy. The figures 1 have given, you must bear in mmd, refer only to wheat, leaving rye, Indian com, &o„ out of the question, in 1860, with a population of 3,135,283, they required to import 10,350,000 bushels of breadstuffs, such as these, and how much, with decreased productiouj will they require to import for a population estimated at 4,232,000 ? Let me now say a word or two as to a statement which is going the rounds of the newspapers, showing an enormoud falling off in our exports to the United States since the repeal of the Treaty. I have obtained an official statement from the United States Commissioner of Revenue, which shows that the gross imports into the United States during the last year of the Beciprocity Treaty, were valued at $36,000,000. Last year they were $28,000,000— showing an apparent falling off of $8,000,000. If we analyze this return, we shall I think see that it includes coin and bullion, which, I contend, should be excluded from both sides. Then the questiim of values enters largely into it. Gold in 1866 was at about 50 premium. Now it is at 35 premium, and this very sensibly affects the totals. The real result — taking coin and bullion from both sides — would show that under the last year of the Treaty, our exports to tl)e United States were 130,500,000, against $24,226,000 last year,— showing a decline of only $6,274,000. (Hear, hear.) It will be interesting on this point to specify some of the articles on which there has been a decrease or increase. In the article wheat, there has been an increase in our exports to the States in 1868, as compared with 1866, both in quantity and value. The value had increased $1,109,215. Hon. Me. HOLTON.—What are you quoting from? Hon. Mb. ROSE. — From the Official Returns of the Assistant Commis- sioner of the Revenue at Washington . I find there has also been an increase in the export of barley during the same period. The quantity has in- creased from 3,450,000 bushels in 1865-66 to 3,780,000 in 1867-68. In lumber and timber the increase in value has been no less than $2,078,689 in 1868 as compared with 1866. Other articles not enumerated have risen from a value of $6,249,503 to $7,130,117, showing an increase of $880,614. The decrease in our exports is lai^est in cetd, fish and flour. The milling interests of Canada under the present position of affairs, are doubtless such as to demand very serious consideration, the discriminating American duty against that article ha\ ing operated very seriously against an industry undeniably very large and important. The other items showing a decreased export are oats, wool and animals and their products. In reference to the latter it should not be foi^otten that during the last year of the treaty an exceptional demand prevaBed in the United States. There was an enor- mous export of animals £foui Canada that year to supply the void cireated by 80 the Amerioan war, and perhaps also to anticipate the dose of the treaty. It is a notorious fact that hundreds of farmers in the country, tetnpted by the great demand and high prices offered, largely over-sold themselves, and hbuco would not have been able to export so largely as usual even had the treaty continued in operation. (Hear, hear) As to oats, they were a failure last year, and would not in any event have counted for much in the exports. Takmg these returns in detail, we find that since the expiry of the treaty the increase in our exports of lumber has been 44 per cent. ; of min- erals 26 per cent. ; and of fresh fish such as salmon 41 per cent. The de- cline in the export of animals and their products is large, representing 46 per cent., and this decline will no doubt press severely upon those counties border- ing on the States, whose inhabitants will be most sensible of the want of a mar- ket so easy of access as was that of the neighboring Republic. But in the arti- cles of wheat, coarse grain and lumber— notwithstanding the high duties imposed — the effect of the repeal of the Treaty Las been to compel the American consumer to pay the duty, and not the producer. As to our wheat it must always command that market so long as its quality remains so high as at present. For what proportion of the entire harvest of the United States is exported ? Less than five percent of the entire yield leaves their shores for consumption in England or foreign markets — the remaining 95 per cent, being consumed by the people of the States them- selves. (Hear, hear.) It being now 6 o'clock the Speaker left the chair. After recess Hon. Mb. ROSE resumed and said — It must not be imagined by hon. gentlemen from my remarks with reference to the state of trade between ourselves and the United States that I attach too little importance to free commercial intercourse with our neighbors. No man can in truth attach greater importance to it than I do. I desire the renewal of unrestricted commercial intercourse, because i ^elieve it to be not only of commercial advantage, but also of national advantage. I desire to see two peoples having so many interests and feelings in common closely united by commercial ties. But I do noi at all thmk that exaggerating the effect produced on ourselves by the abolition of the Treaty will conduce to such an end. (Oheers.) Exaggerated statements with respect to the effect of the abolition on ourselves— setting forth that our trade has thereby become paralyzed and that ruin is staring us in the face— are very much more likely to interfere with the satisfactory conduct of nc^tiations for a new Treaty than to aid in its renewal. (Cheers.) I strongly deprecate them. I quoted from the tables I presented before the recess in order to ascertain the actual results of the abrogation of the Treaty. I desire to call attention to this fact that the table from which I made extracts embraces the whole Dom- inion — all the British North American Provinces. It is important to bear this in mind because the Province which has suffered most from theabrogationof the Treaty is Nova Scotia, that from which we hear at this moment the least outcry In the articles of coal and fish her exports have suffered a great decline, but she oertunly has made the least ado about it, and it is for that reason I referred more particularly to official tablos in order that there should not be an exaggerated imprennon formed as to the effect on our trade. Let me, before passing Arom this topic, say a word with reference to another branch of the subject. Distinguishing the exports from the Provinces of Ontario and Quebec, we find that during the last year of the Reciprocity Treaty, the exports of Canada (deducting coin and bullion) amounted to $21,340,350; and in 1868 they reached $20,061,000, — showing a decline of a little over 5 per cent between 1865 and 1868. We find that in the following articles, the product of Canada proper, there was an increase : — in lumber of 44 per cent ; in minerals 26 po" cent ; in animals and the produce of animals there had been a decrease of 46 per cent ; but were it not for the unusual export of animals during the last year of the Treaty, the falling off would not appear so large. In the great products of agriculture, as a whole, we find a decrease of about 2 per cent. , the great falling, off being in the article of flour. In other articleg there was a similar decrease, which, however, only amounted to $'^00,000. So that we have the fact that, since the repeal of the treaty, our exports of lumber have increased 44 per cent., while the decline in agricultural pro- ducts is represented by 2 per cent. Thes« returns certainly teach us not to undervalue our forests and their products. Sir, we must husband the wealth of our forests. Every one acquainted with the present position of affairs in the United States, must be aware that all the section north of Mary- land is mainly dependent on Canadian lumber. We know that the forests in Maine are exhausted ; and for the supplies in Michigan a new and extensive market has been opened up by the Pacific Railway. The Eastern States must therefore continue to depend for their supplies of lumber on Canadian forests. Notwithstanding the enormously increased duties since the abrogation of the Treaty, our exports to the United States have 'xpve on increasing in a large ratio ; and not only has this been the case, but a considerable number of Americans themselves have come in here, engaged in lumbering and sawing enterprises, and trade directly with foreign markets. The increase of this branch of commerce is remarkable. Tbis year no less than eleven cargoes have gone to Montevideo, four to Buenos Ayres, one to Valparaiso, and one to Australia. This is chiefly the en- terprise of Americans now resident amongst us, who send from Canada in this way an article formerly sent from the United States. Let me say, in conclu^ng this point, that as far as regards this article of lumber, — forming one of the most essential and important under the Reciprocity Treaty — ^whether we look at the sources of future supply or our contiguity to American markets — it will be felt that we have little to fear from any policy that may be pursued in the States. We have the raw material, that raw material is re(|uired by the Eastern States, and they cannot get enough elsewhere to satisfy the demand. (Hear, hear). I must here say a word or two with reference to our own internal trade — aad show its condi- tion since the Provinces became united. With reference to the Trade and Navigation returns, which bave been placed in the hands of honorable members, I would here remark that they do not supply this information riiich it is specially valuable for us to get. We desire to know the course of the inter-provincial trade— how much Ontario and Quebec sent 02 to New BniDSwiok and Nova Sooiia, and how maoh tho latter Provinoon sent in exohange, and I have been compoUod to resort to other ohannols of information in order to ascertain the course and extent of this trade. The information laokinc in the Trade and Navigation Returns, I have, how- ever, obtained from other sourccjs— from the variouH Railways, from the Boards of Trade, and from tho chief Collectors of Customs. The first year of Confederation, 1866-67, the flour sent from Canada to tho two Provinces Nova Sooti.' and New Brunswick, by the Grand Trunk Railway, by tho St. Lawrence, and by Suspension Bridge, is thus stated and compared with 1867.68 :~ 1866-67 1867-68 By G. T. Railway, (brls.) 228,345 328,204 " the St. Lawrence River 99,367 111,081 « the Suspension Bridge. 31,300 4,000 349,092 443,286 This shows an excess in favor of last year of 94,193 barrels of flour, or about 33 per cent. I regret very much that it is not in my power to give the Houee as much information as I could desire with reference to the increase of oar trade with the Lower Provinces in other particulars. But with reference to coal I may mention that last year our imports increased about 15 percent over the previous year, and this year, I understand, tho percentage is likely to be still more favorable, instead of depending on English coal, we can now get our supplies from Pictou and other ports in Nova Scotia ; we can buy it cheaper at the pit's mouth there, and the cost of freight thence to any place east of Kingston is considerably less than it would be if brought from the other side of the Atlantic. (Hear) Before finally quitting this subject of our trade relations internally and with the United States, I hope I may be permitted to state that I think our course smoe the abrogation of the Reciprocity Treaty has been a correct one. We may now fairly say to our neighbours : ** We do not complain of the " abrogation of that Treaty. We have no fault to find with you for your " action. We know what your financial difficulties were when that action " was taken. We know the state of public opinion in your land, which, very " unfairly to us, arose against us in consequence ".f events for which the " Qevemment and people of this country were not] to* blame. We know " how much this directed public attention at the time to the trade and « commercial relations between Canada and the United States ; and we " know how much it had to do with the repeal of the Treaty. We know, "however, that since that period, your internal taxation on your own peo- " pie has been lessened, we believe that you have now juster impres- " sions of our conduct during the war, and that the acrimony of feeling ''which once existed has long since passed away, while the mutual loss " arising from restricted commercial intercourse continues to be felt. We " have hitherto refrained from retaliation ; we have continued to " accord you freely all the advantages you possessed durirg the operation " of the Treaty, and have made every allowance for the exceptional cir- 38 " oumitanoes under whioh you abolished it. We have waited patieutljr " and quietly, giving you meanwhile every advantage you enjoyed before. " We have allowed your vegsels the fVee navigation of our oanalaand riverM « though you do not allow similar privilesos to ours. We have allowed you " to fish in our waters at a mere nominallioenso, though our fish is heavily " taxed on entering your markets. Wo have not sought to interfere with the *< transit of your goods in bond across the peninsula of Ontario, though you *< have coupled with onerous conditions a similar privilege to us. For it mav " not be generally known that though the rignt to pass goods in transit *' through American territory is not denied, it'is accompanied by condi- " tions of a vexatious and costly character. (Hear, hear) We have allowed " your coal to come in free, though you charge a heavy duty on ours. We " allow your flour, grain, hops and salt, and other articles to be imported <' free, while yon not only do not reciprocate, but you specially discriminate « against our millers by charging more on flour than on grain. This " state of things," wc might fairly add, " has gone on for three or four « years, but you must understand it cannot continue. (Hear, hear.) " The time may soon come when we may require to have a nation- " al policy of our own, no matter whether that national policy may « sin against this or that theory of political economv. (Hear, hear.) For " we must be guided chiefly, if not solely, by considerations afiecting our- " selves, and we may have to consult our self-interest without consideration « for others." (Loudoheers.) Should the United States show any disposition to negotiate, we are bound to receive them cordially and meet them halfway; the Kepublio> is the greater power, and it becomes us to respond cordially to her invitation. But it must be distinctly and unmistakably understood as the opinion of this country that no matter how much the United States may hamper our commercial intercourse with them, we are not disposed to barter our constitutional rights, to give up our associations, or our hopes of national existence, for mere commercial considerations. (Cheers.) It must be distinctly understood that we are not, and never will be, disposed to give up our connection with and our allegiance to the British Crown, as the price of admission to the markets of the Republic. (Cheers.) liet them not conuuit the mistake of deferiing negotiations in this hope. (Cheers.) We oqnld find other markets for our produce, even if we bad sufiiered more seriously than we have done, and I believe that the fact of our having to seek other markets has rallied us from that temporary lassitude into which we were cast by the long continuance of the Treaty. It was with us as with England some years since. It was supposed that she would be utterly ruined if she did not get her supplies of American cotton from the Southern States. But when the war stopped thosa sup- plies, other markets soon opened up ; and to-day the United States suppy less than 40 per cent, of the cotton imported into England. India, Egypt, Brazil and other places now lai^ly share that trade. (Hear.) I do not desire to say more with reference to this subject; but merely reiterate my conviction that we ought not to exaggerate the injury to the trade of the country at large, whioh has been caused by the temporary suspension of fi'ee intercourse between ourselves and the States. But, 5 34 Sir, allow me to add, that the time maj oomo when the exceptional intereata to which I have alluded, which are now suffering with special severity, will have to be considered in this House. (Cheers,) But I do not think that the tiraor to do UiIh is when wo may bo on the eve of opening up negotiations on the whole question. Wo know that a resolution to commence negotiations for a new Treaty has been unani- mously adopted in the House of KeproHcntatives, and I presume thtit nothing but the extreme urgency of national affairs has prevented those negotiations fVom being actually opened. (Hear, hear.) I must now ask the attention of the House for a few minutes to the con- sideration of our own prospects for 1869-70. The estimates which I have already laid before the House, and others yet to come, have been prepared with every desire to show fViUy the cost and organization of the several departments of the public service. Our effort htA been to reduce the expenditure under this head to the lowest limits competent with efficiency. We have endeav'>red to scrutinise every item of expenditure which could possibly be subject to reduction ; and to-night I would appeal to the magnanimity, forbearance and patriotism of my Ariends around me not to ask for any expenditure on any particular works and services which, how- ever advantageous or useful in themselves, can possibly be postponed. These works cannot be gone on with this year, unless we resort to increased taxation, or borrow money for the purpose. In regard to such works as the renewal or extension of wharves, harbors, piers, light-houses, &o., I think we ought not to borrow money for that. As for the openbg up of ihe i.voHh West, that is not in the same cat^ory: the {cost of that bviritory may fairly be charged on posterity ; the money necessary to pay Hir it ought to be borrowed, as also a further sum towards opening up a communication with it, for once we have it in possession we must take efficient and energetic means to get at it. (Cheers.) We must not be dribblers in this matter. The opening up of that territory must be aooomplished in a large and comprehensive way. When we have made up our minds as to the best way of getting there, the next duty is to perform the work with as little delay as may be. (Cheers.) And the charge for those great works may, I think, be fairlv entailed on posterity ; butovdinary works, such as Custom Houses, Post Offices, and the others I have mentioned, do not come under the same category. If a man's house is too small for his present position, or if he wants any alteration in the interior arrangement of the rooms, such a work ought to be paid for out of his ordinary income or not undertaken at all until his income will bear it ; and so it is with respect to these local works. Instead, therefore, of asking the House to impose new taxation on the people, or to authorize the Qovemment to borrow money for these works, X prefer to appeal to the patriotism of my friends not to ask for any money for local improvements this year, except such aa are absolutely necessary to carry on the public service. Ajid I do not believe this appeal will be aisr^arded, but that on the contrary our friends will rather com- mend us for taking so firm a stand. However desirable or commendable the object, if it can stand over, it had better do so until the revenue is in a more flourishing condition. (Hear, hear.) We are now recovering from S5 tho roaotion occasioned by tho largo development of our trade under ex- ceptional ciroumstancoA. Wo are about building a long railway in the Eaat — Hiniilar worlcH are being undertaken from private resources in the West — and those onterpriHOH muHt stimulate the proRperity of the country. We shall not then have to wait lung for incroasca revenue before under- taking local works of tho class to which I have adverted. (Hear.) It is with these sentiments that tho estimates to which I will to-day ask vour assent have been prepared. Tho question with us in all our oaloulattons, has been, " what expenditure can be avoided this year ?" and I have no fear but that the patriotism and good sense of honorable gentlemen will impel them to second our efforts in this direction. Ai I mentioned before the most important item of expenditure— the interest on the Public Deb — is not susceptible of any reduction. Tho securities for the Sinkin[ Funds, which have now annually to bo provided for, must also be pur- chased. Those two items amount to $&,219,000. Then we have tho subsidies to the various Provinces, $2,500,000, and there are the further ite'ns, for the Administration of Justice, Pensions, Seigniorial Indemnity, Post Office, and Public Works, which are also not susceptible of reduction ; and these in the aggregate amount to about $10,000,000. The means at our disi)08al for reducing expenditure are confined to but few services of importance. In the expenses of Civil Government, we have of course the means of making some reductions, and we have already done what we could. But it would be simply deceiving the House for me to say that we can do a great deal more than is shown in the estimates. Last year we made a very sensible reduction in this service ; and the Government are as desirous as any hon. gentlemen opposite can be that the public work should be performed, not only as well, but as economically as possible. But there IS a limit, and it is clearly in the public interest that these reductions should not be pushed too far. (Hear, hear.) Another expenditure in which the Government possesses discretionary powers, and has exercised them, is that for Militia purposes. (Hear, hear.) The hon. Baronet at the head of that Department has undoubtedly done great service to the country, not only in instilling a military spirit, but in maintaining his organization. That honorable gentleman, with his colleagues, has revised the estimates for militia service, and as the result, I am happy to be able to announce to the House that, without impairing the efficiency of the se*vice, he says he will reduce its cost by over a quarter of a million of dollars. (Loud cheers.) So that instead of raising $1,200,000 for this service, but $750,000 will be needed exclusive of re-votes for the current year. (Cheers.) The total estimated expenditure on all services for tho coming year we place at $17,834,- 199. But in that, let me mention for the information of the House, is included a sum of $2,000,000 for the Intercolonial Bailway — based on estimates furnished by the Commissioners when they had four sections under contract. Within the past two or three weeks some other sections have been put under contract, and it is quite impossible to form an estimate of the progress of the work. Still, be that what it may, it will not in any degree affect the sum which the House is called on now to vote. The money is in hand for the construction of the Ime, and with twenty-four 01 V .86 liours notice, wc can re-coup the whole of this Intercolonial money. (Hear, hear.) Therefore, no matter whether the amount be two millions of dollars or four millions— for negotiations as to sections which may or may not form part of the main line, arc going on, and may seriously afi'ect the amount — still, in any e^ent this amount will not affect the vote. As I said, in this estimate of $17,834,199, is included the sum of $2,000,- 000 for the Intercolonial Railway; also $1,492,385 more for railways in the Lower Provinces now being built and other works ot construction and for redemption — so that I deduct $3,492,385 from the total esti- mate, which leaves $14,331,814 as the normal expenditure for the year, lu that estimate I have included the subsidies, and have taken a liberal vote, in order to he able to rectify whatever amount we may have to pay on arbitration either to Ontario, Quebec, Nova Scotia or New Brunswick. I have estimated the amount for these services at $2,522,000. Mb. HOLTON.— For all the Provinces? Hon. Mr. ROSE. — There has been, I may explain, considerable negotiation between Ontario and Quebec as to what excess of debt we should be entitled to charge interest on — whether nine, ten or eleven millions of dollars. Therefore, I thought it best to make such an estimate for Aia service as would cover any contingency. I do not now propose to enter into any statement as to the excess of debt. The honorable gentle- man beside me, (the honorable member for Brome, Treasurer of the Pro- vince of Quebec,) and the honorable gentleman opposite, (member for the South Riding of Brant, Treasurer of the Province of Ontario,) may have something to say en this point by-and-bye. In the past, these negotiations have been carried on in a very good spirit, and if they ai'e continued in the same way, they will, I doubt not, result in benefit to the Dominion as well as the Provinces represented. Hon. Me. HOLTON.— Are we to infer that these subsidies to all the Provinces will be included in the vote ; and that no special vote will be asked? Hon. Me. ROSE — No vote is required. It is provided by statute.. Hon. Me. HOLTON. — What I wish to understand is, will a special vote be asked to increase the subsidy to Nova Scotia ? Hon. Me. ROSE.— Undoubtedly. A message will be brought down from His Excellency, embodying the resolutions and asking the House to vote the additional subsidy in accordance therewith. The resolutions are ready and printed, and only await Hon. Mr. Howe's arrival for presenta- tion to the House, as it is felt that full opportunity should be given for dis- cussing that question. I will not trouble the House further with details of the expenditure, as they will be submitted in a day or two. Now for the esti- mated revenue. In estimating this I do uot desire in any way to build on our future progress or prosperity. I prefer basing my conclusions rrther on the ^otual results of last year than on what might be expected this year, except in so far as concerns a small increase which we are fairly warranted in as- suming. Better in my opinion to under-estimate than over-estimate our revenues at this stage. We might this year perhaps fairly estimate a bet- ter state of things than I mean to assume, inasmuch as we have more re- i 37 liable information on which to base such a conclusion than we had last year. We can now trace the cause of the sudden decline which has mark- ed our iniports during the post season. We now know the con- dition of the country both as to the stocks held and its possible re- quirements, while we are enabled, in the light of the past year's experi- ence to form a more intelligont judgment as to the amount to be derived from excise on spirits, malt, petroleum and tobacco. We have placed our income considerably below what may perhaps be realised, at very much less than the average income of previous years in all the Provinces, whereas the consuming power of the country has not substantially declin- ed. We think we may with certainty calculate on the same amount of revenue as that which was raised last year, (as it was less than the aver- age of three years before) with an addition tnereto of five per cent for Cus- toms duties, and this is our estimate. If the results of the last three monthfi may be taken as a criterion of the whole year, it is clear that in this estimate we are below the mark, for according to these returns the proportion of increase will be in excess of five per cent. Knowing that the storms and freshets of this spring have very much retarded the forwarding of goods to the interior, I have endeavoured to get some data from vessel owners and the Grand Trunk Railway Company as to the amount of freight in transit, and I am led to the belief that a very large, I am afraid too large an amount of goods, has been purchased. I am afraid importers are committing the mistake they made some years ago, of importing more than the wants of the country require, which, though it may sensibly swell the revenue, will yet, I fear, prove injurious to the best interests of the country. From the fact that two or three extra steamers have been put on this spring to bring out goods to the St. Lawrence, and from other indications, I fear that it is to be a repetition, of the old system, each merchant thinking that his neighbours will import less, and that he will place himself in a favourable position as regards trade by importing more. To recur — we estimate the Customs revenue for the coming year at $8,600,000 ; the Excise at $3,300,000 ; and with regard to this latter estimate, I will state the calculation on- which it is based in order that hon. gentlemen may hereafter have an opportunity of judging of its correctness. We have had a report prepared by Messrs. Worthington find Brunei, of the Inland Revenue Department, who have gone into calculations as to the average consumption of spirits in Quebec and Ontario and in the Lower Provinces for a number of years back. In Quebec and Ontario the average of the last three years was taken, and in this way they estimated that the consumption of spirits in 1869-70 will reach 3,700,000 gallons. Mr. McKENZIE.— That is, excluding imports. Hon. Mr. ROSE. — Yes, and it is considerably less than the con- sumption of 1868, which reached 3,836,557 gallons. Then, as regards malt, the quantity malted last year was about 27,000,000 lbs. But the high price for barley led to the importation of three quarters of a million pounds, and this, of course, lessened the total. For 1869-70 we estimate there will be 28,000,000 lbs. of malt consumed. In estimating 8? for tobacco, we have had to take into account the largo stock on hand in the Maritime Provinces, and also that the machinery for collection of revenue there is not yet perfect. Hence we have set down the revenue from this source at only i$515,152, although believing it may exceed that figure. From petroleum, last year, we got *99,000 ; and this year, considering that the large stocks on hand when the duty was imposed, are now reduced, we have placed the estimate at $120,000. These three sums with afew minor items constitute the aggregate of $3,300,000 under the head of Excise. Then the third item of revenue. Miscellaneous, including the revenue from Public Works, the Post Office, Stamps, Inves 'net for we have now a considera- ble amount of money invested — we c a *>/ 82,750,600, making in all, as the House will perceive, an estimated revenue which has not we oe- lieve been exaggerated, and in which no allowance whatever has been made for the increased stimulus likely to be given to our import trade in con- sequence of the Public Works in progress and contemplation both in the East and in the West, of $14,650,600, against an estimated expenc^ture of $14,341,814. This leaves a very small, but, I believe, a very certain balance of $308,786 on the right side of our account. (Cheers.) Under these circumstances, in preparing the estimates, we felt economy to be one of our paramount duties, and we hav3 done what we could in that way. We now ask for certain sums to enable us to carry on the public service, and if the House does not vote them, the money cannot be spent. Should money at any time be expended in defiance of the wishes of this House, a return of that expenditure will be laid on the table within ten days after the opening of next Session, account to the House for it : and the Govemmeu but I believe that, this kind taking place, the Qovemment will be al^o Parliament to show an excess on the right side the revenue, and show somethinj; — even though .umi be prepared to I' • !• •fom anything of e ext meeting of 01 > ^ account. We within i/he estimated • What items compose our Miscellaneous believe we can keep the estimated expenditure it should be a small sum — to the good. (Loud cheers.) Hon. Mr. HOLTON revenue ? Hon. Ma. ROSE. — The Miscellaneous revenue is made up chiefly of thefoUowingitems:— Public Works, $890,000; Post Office, $570,000; Stamps, $130,000 ; Investments, $300,000. I may just mention by way of explanation, before I close, that the Hov je will perceive in the Estimates an item for the sinking fund, of $330 ] 1 I think it but right that the item should appear as charged against tht: mcome for the year, and should be put in the estimates of the year, but that sinking fund is partly provided for, and of course it lessens our present balances, for we have bought it in advance, having really more money than we otherwise knew what to do with. (Hear, hear.) In conclusion I must thank the House for the kindness with which it has listened to me, and for a continu- ance of the same general support which I have hitherto received at its hands. (Cheers.)