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Mr. QALT rose and said : — Mr. Speaker, there aro circumstancea under which every one must feel a certain degree of embarasament, but thero aro no circumstances under which I could be expected to feel greater embarragBment than in addressing the House on the present occasion. I have, however, this consolation, that in endeavoritag to perform a duty which I owe to the GoTernment and the House in the position I occupy, I am sure in the performance of that duty I shall receive every indulgence at,the hands of the House (Hear, bear). I am sura I will meet with kind sup- port from the House. (Hear, hear.) I do not desire on this occasion, in fact it would not be proper for me to introduce into my statement anything of the nature of criticism or censure on the conduct of other Governments preceding this one. It shall be my duty to state to the House, us far as in my power, what the Govern- ment deem to be the financial position of the country, and how I intend to meet its expendi- ture. In performing the duty laid before me, I shall endeavor to make it as plain as lies in my power, and shall try to convey aa fully as jiossiblo the position in which I conceive the flaancial nn'alrs of the country to stand. I am sure the House will bear with me, if I do not in my first address convey that full information to which, I acknowledge, it is entitled — infor- mation which, in the multiplicity of details, con- nected with a financial statement, a Finance Minister may sometimes omit to give as fully as might be desired. I shall proceed briefly to ad- vert to the ])osition of tho country during the past year. It is not necessary to refer to tho eitpendiliuo and revenue for the past year ; it is not necessary for mo, because tho accounts have long been in tlie hands of members, and because I know that the able gentleman who preceded me in offi.ie will himself give tho fullest infor- mation with regard to any point on which the House may desire to make Inquiry. Sir, I may be permitted to advert with great satisfaction to tho statements brought down in the Trade and Navigation Ileturna ; I think, considering the circumstances under which wo are now placed, this ought to be a subject of congratu- lation, for tho prosperity of the country and the advancement of its material interests are not subjects affected by party considerations. — Wliatever may bo our views as to the proper persons, or the best policy, I think that when we aro able to mark an improve- ment in the industrial pursuits of the Pro- vince, we ought all to unite In expressing our satisfaction. (Hear, hear.) And therefore I have great pleasure in referring to the intro- ductory remarks in the Trade and Navigation Returns brought do tvn by my hon. friend tho member for Chateauguay. By these returns it would appear that the trade of the country for the past year, notwithstanding the vast war raging on our Southern frontier, is, in a very high degre", satisfactory. I will give, ia very few words, a snyopsis of those Trade Returns. In 18G3, the Imports were set down at $46,- 964,000. Excluding coin and bullion, I find the imports for 1863 to amount to $41,313,310. The total amount of Exports is $41,831,312, and deducting coin and bullion, $40,146,000, which may be said fairly to balance the Imports. If we examine the exports of the country, they will be found to indicate an improvement in the Lumber Trade in a very large degree ; and that they are largely in ex- cess of the previous year. The increase has been from $9,000,000 to 13,000,000. Another most important Interest is one which imme- diately concerns the City of Quebec, more, perhaps, than any other — I mean the ship- building interest, which affords employment to thousands of mechanics for a long season of the year, and certainly is a source of great im- portance to tho Ottawa lumber trade. Wo find that tho increaso was from $988,000, in IBG:?, to $2,287,000 in 1803. The increase last year over the previous year was $1,290,000, or rather more'.than 131 per cent. This is a sub- ject on which wo surely ought to congratulate ourselves. We como to the agricultural inter- est ; and, though looking at the statement of exports, there would appear to be a falling off in that most important interest. Such is not the case. It appears by tho return that there is a falling off in tho exports of $l,57d,000 ; yet. . 1 2 when wo tako tho iraporij uuder ibo Uscipro- city Treaty, tbo imports from tho United Btatua in 1863 were leas than in 1802 by ?.!,090,(iUO. Thus wo export our own (igrisuUiinil iiroduco to nn amount much ciceoding tliu dilVorcnco. In addressing the IIoubp, 1 umy truly congratu- late them on the fact that our industry, in its most important branches, iigricultural, tiio lumber trade, and tho ship-building interests, has, in every one of them, exhibited a marluul improvement. 1 am glad to bo able to make these statcmunls in onltring on the discussion ot tliociucationg I fool it my duty to lay before tho House, i am nmal certain that no matter who may bo Kiiiauco Miniisti^r, when ho Unds himself called ujion toniako pro- vision by increased taxation for tho wiints of tho country, that ho will be gratified that those interests on which it is rciiuir('. That change necessitates in tho prejiaiaiion of the estimates the arrangeniout of :iH ili'uis (hat can be required to lie inserted iu li.o riildic Accounts during 'uhe six months ending the :!OtU June. The elVect of the chango niaUcH it necessary to bring into the Accountti a vnrioly of items that would otherwidu remant to Iho .list Uecombor. Thecxpoiuliture uiiir.tbe exli- mated for the lull half year, and I tliink it is a correct view that the osliniatoa uf llio expenditure should tie franicd under tlio aa- aumption that all that can coiue in lor tho lialf year should bo brought down to the iiotli Jiiae. In comparison with the e.Kperiouco of tho pre- vious six mouths of \Hi:<:', willi that uf 1864, 1 find practically that many items for payment must he postponed until ;if'cr the Ist July. In view of bringing before the House fully and fairly a stalemout of all liabilities that mature within tho six months, it is my duty to eslinuite for all monioB as if tjpent «luring the six montlis, so that the sum of $GDO,000, last year, though it fell within the expenditure of tho year, did not fall with- in the expenditure for the month of Juno. I may state that though the estimates are formed on that basis ; though instructions are given to all accountants to render accounts up to the 30th June, in point of fact the whole amount of the estimates will not bo payable in cash [at that day. The principle adoi)ted in framing the estimates, and which tho Government have iu view in submitting them, is that they aro framed necessarily on tho ex- penditure that was going on under Iho provioua Administration. IJtnlor the instructions of tho honorable meml)er for Chateaugnay, cer- tain eslinuiles were in preparation to be brought down to tho House ; these estimateei, 1 think, had not tho advantage of Ilia revision. 1 much regret not having seen or known what ho intended bringing down to the House. I must oiler my apologies to tho House if I am wanting in convoying to it that knowladge of details that I would with pleasure lay be- fore it, had I been sulliciently long in ollico to master those unmifold details. The princi- ple, aa I said before, that tho Government luivo in viow in ]iro]ioaing tha estimates la to base them uii the expenditure going on in Iho country under the lato Govern mcnt. There is no increase under the various charges of oalarios — no increase in tho esti- mates on this account, beyond a mere triOing one in my own department, for extra duties en- tailed on two gentlemen, to tho amount of $320. Tho whole of tho salaries are based on tho i>ay list of tho quarter ending tho 31st March. In regard to estimates for works in progress, I uniy take this opportunity to state that the policy of the Government is not to lecommend an increase of liabilities in connec- tion with public works, until tho equilibrium between revenue and expenditure iH established. (Ulioers.) This is tho generrd principle in- tondcd to be pursued, namely, that unless where tho faith of the country is pledged, and wlioro the reports from the Chief Engineer of the lloanl of VV'orkii aro to thecfloct that certain improvements and repairs are absolutely iie- eesaary, tho endeavor of the Government will bo to exclude from consideration the subject of any now grant. I may advert to tho fact that wliilo in )ircparation of these estimates the (iovernmcut have been obliged to statu full amount;!, it is not, by any means, their inteu- lioii to proceed to the exlroino limit. It is tho liojio of tho (iovernment that sncli retrench- nieut will bo made in theexpemliture, and such reduetion in tho outlay, as will materially all'cot future results next session. The con- lomiilatod removal of the (iovernment to Ot- tawa all'urils, ill the opiiiionof the (liovernment, an op|iorlniiily for lovisiiig, in a large degree, Iho whole oxjiensc^ of the civil Administra tion, including thoso of tho Iiogislalure. (Hoar, hear.) It is the iiilontion of tho (iovern- iiiout to place in the hands of a committee ot llieir own body a complete roviaion of all de- partments of tho Government, and in connec- tion with the Commilleo on Contingencies of both branches of the llouso, to ascertain to what extent a material reduction may be made. (t!licing.) In regard to the esliniatea (or the half-year, I would rotor to another point. It will le found that Chore is nothing devot(Ml to hoaiiitais and charitioa of a private character. The whole iif those payments are made alter the ;joth day of Juno, consequently, to iiH'hido them in these .lix months, would bo to make them a present of a half-yearly allow- ance. They will receive the same amount, but it will be for 18i;5, instead of receiving the al- lowance for 180 I. A very important question nrisos iu rofereuee to this point. A considera- tion of tho rolurns ordered by Parliament to be made by those charities, Bccms to con- voy the impression that, in some respects, donations yiren for benevolent purposes, /2lHy and inteuded to supplonioiit prirnlo char- itiea, havo quito a r itrary elloct. — That was not tbo intonlioti of rurhtiinuiit. Howorer much mou might l)u (liapo.-iud touii iLo indigent, it ia a qiicstiou liow iUr Farliiiiueiit- bry grants should go. In some roapccts this syatom may havo led to abusoa. I do not bu- liere that >f Parliament knew this was tlio caac, it^wouldldeiire to continue thogntnts. (Olicers) I take this opportunity of staling, that every one of those ostablishments roquircH lliat nu investigation should bo hold as to its ullhirH bo- fore any future grants be made — and that audi enquiry will be instituted. (Hear, hoar.) In regard *o the details of the estimates, it is not proper for mo on this occasion to delay tiio House by going into every particular detail, aa every item wiM be submitted in aBcparato reso- lution ; therefore, I may be permitted to draw the attention of the House to one or two points only. With rogt.rd to tho Militia, the oslirnated expenditure is 15'iU0,0O() ; the vote required $112,000. Under the circumstances, whicli my friends of the lato (JoTornment could not con- trol, ihe payment to tho Imperial (Jovernuicnt provided for in the previous year did not then come on, but did so in the first quarter of this year, and swelled the amount by $liiO,ooo. 1 now proceed to state the expenditure for tho ■iz months, and the income for the corresponil- ing period. To one point, however, I lieg to draw tho attention of tlie House — that isi, llio sinking fund of tho Canada Loan . (»b,>crvo, that within tho six monliis, !? 175,000, tho item required, is inserted — that ia, the sinking fiiiid for the year beginning the first of January, and ending on tho ;5lst of December, I.4r,4. Tliis was properly payable in the early pari of the year, and of course it became necessary l.o put the samo amount into tlio esliraatea, which end on the 30th of Juno also, and thus tho six months have got to bear tho charge of tho whole year. I may remark tliat arrangements have been made for the purchase of the bonds required to represent tho sinking fund. The total amount of the expenditure, by tlio esti- matea, as brought down, i.-j $8,019, 7oi), in- cluding the redemption of tho public debt. — Then there is the sum of $2,790,000, tiiat being the portion of the Imperial (}iiarauteeil Loan paid, and which was paid under the instruct- ions of the Hon. Mr. Uolton ; that reduces tlio estimates to $5,223,700. I estimate the receipts to be $7,413,500, or less the India bonds $4,477,500, leaving to be provided for tho sum of $449,200. It must be satinfactory to the House to learn the basis on which the statement is made. I am happy to inform tho Hoiir^e thit in consequence of tlie very marked increaso in the trade of the country for the first (juarter, the Customs and Kxciso show an increaso of $590,000. (Cheers.) But this Increaso ia udl such as will justify us, aa far as relates to tho whole year, in anticipating a corresponding in- crease. For instance, on referring to April, wo see a decrease of $30,000. In prepai-ing tho es- timates for the remainder of the year, I did not think it prudent to depend on any continued increase. We have the receipts of every item of revenue for four months ; therefore wo esti- mate it only for two mouths. In estimating for the revenue from tho Customs and Hxciso for tho remaining two monl'n, it is more prudent to assume aa a basis the rttceipts of iaat year rather than mako vaguo eslimatoa. If tho importations during the last two montba of thia half-year should fall short of those for tho curroai)onding months of Isst year, wo havo still a good margin to fall back upon, and conseiiuently, my calculations will not bo niateriilly aflecled. I shall now come to another great branch of our revenue — tho terri- torial. This ruveuuo will produce $300,000 for tho half year, which is $75,000 above that of tho correapoiiding period of last year. It ia pro))cr 1 should state a few facta with regard regard to tho Ocean I'oslago ; and tho concluaioiia at which tho (lovernment havo arrived. When the lato Poatmaster General brought down his Mail Bill, it was slated Dial a certain amount was due by tlio American Government and a correspondence was going on with reference to its payment. Tho American Government claimed it had a right, to pay the Government of Canada in the same description of money that it is obliged to receive ; ami held that Canada ought not to expect to bo paid at a dill'erenl rate from other countries f;airying tlio mails. This Government felt it due to llie American Government and the general interest of the country that the queaiion should bo setiled on these terms. We shall have thus to sull'er an annual loss in pro- jiortion to the depreciation of their currency. Wo eatiniato that tho claim realised will atford us $rjO,000. Willi regard to tho sinking fund for the Imperial Loan, I may say that the in- tcroat oil iiivestiiieiils, and the premium on dia- coiiiil, are two itoius ueceasarily affected by Iransactiiins ro.jpeclin^- it. .\.3 that sinking fund ia rciluceil, the iiilerestoii it neceasarily (iimiuiMiie.'!, and llie premium and diaconnt de- pend wholly oil th(i amount realized within liny particular period. Tlio amount realised uniiei' till! inalructions of the lale Government givo 113 $1 iri,0O0 (luring tho ciirient half year. There will be a furtiier sum falling witbiu the year. The amount of the Impsrial Loan, not actually redeemed, is only some X"340,000, against which we hold India Stock for i;358,000. We shall have to provide in tho catimatea of the expenditure lor the half year, for a deficit in the sum of $140,000. With regard to the provisions for that amount, I do not feel that I shall be called upon to usi; the House for any particular .athority. 1 may state that the mode in which I propodo to meet lliirf deficit is by tho reduction of our cash balances. 1 may mention that under an arrangement mado by Hon. Mr. Holton, a sum of Ijil 10,(100 due by the Bank of Upper Canada will be availab'.o in the month of June, and tho remainder will bo taken from tho cash balances. With regard to the estimates for the year beginning on ,the 1st July, I will havo to refer again to tho Imperial Loan. I whifii amounted to .t 1,500,000 stg. Of this ."••louni, there was redeemed, in 1.^03, £600,- 000 Ktfr, leaviiisrlliesuiii outstanding i.'!)00,000; in iHiJl, .t;511,H.S8 was paid. I had better iiipulion that the Finance agents of the Pro- vince, will! the ooncurreuco of tho late Govern- ment, tliougiit it advisable, seeing our Indian bonds wero at a consider.ablo premium, and, probably, doubting if they could bo maintain- ed at that ligiirc in the event of war, to mako arraiignments for anticipating the payment of a portion of our debt by means of thoso bonds. Under IhU arrangement, the ,ium of £200,000 was anticipated, and paid off within the current six mouths, and tho whole balance now out- C Bt&nding wr,9 as follows :— Due on tlio l3t Jan., 18G5, X:joo,000 ; on let Jan., IHGD, tho final balance of jC140,000; aj^ainst which we liolil, of five per cent, securitioa, X'358,C11. Lot us sum up the result : Wo hi>,ve sold bonds to thu amount of £1,141,888, for which wo had re- ceived a profit, in 18C3, of £30,102, and in 180 J, of £19,958, or an aggregare of £50,000 stg., in round numbers. (Cheers.) We must consider the premium wo pay for those securities. We bought, of four per cent. Indian bonds, £174,- .''lOO at 94, and tho balance at 2) prem. Tho amount rceived for the salo of thoso stocks has been £50,120. Wo havo to put against this payments wo have mado to the wxteut of £21,- 584, tho result being that wo have made a profit of $108,000, and wo hold £18,011 of 5 per cent. Indian bonds beyond tho amount of the Imperial loan for which wo are liable. I will state that wo disposed of tho r> per cent. Canada bonds at 07} for tho purchase of the India bonds ; and, had we now been obliged to meet our engagements, it would, manifestly, have entailed serious loss to us — a loss far beyond the amount which I wat then charged with having unwisely incurred. (Jlear, hear.) When the Imperial loan is paid, there will be a reduction of our liabilities in vwo ways — both as regards the principal of the debt, and the interest upon it. Under the ar- rangements cfTected by mo at that time, and subsequently, as the public accounts show, £31,500,000 of the public debt wos con- consolidated ; and the sinlcing fund in tho esti- mates now brought down would amount to $175,000 for the six months, and $180,000 for the succeeding twelve. I shall now call at- tention to the estimates of expenditure for tho year ending 30th June, 1805, which reach tho sum of $11,080,800. In reference to tho do- tails, I do not desiro to trouble tho House, tho principle on which they are made being tho same as that of tho estimates for the half year. The first figure to which I would draw atten- tion is the reduction which has taken place in the charge for the Ocean Mail Service, and which amounts to $208,000 ; and also to a re- duction of about $111,000 in tlio item for the Public debt. With regard to tho redemption of tho Lake St. Peter debentures, it is the intention of tho Govern- ment to bring down a bill to transfer the works for which wo havo been paying for the last throe years, once more to tho control of tho Board of Works. I may mention tliat under the late Government the Provincial steamers were offered for sale, tenders were received, and one was accepted. I rogret to say that up to this period tho person whose tender was accepted has not made his appearance. Tho Government has to consider what would be the result of the steamers continuing on its hands. In the preparation of the estimates for the year I deviated from the plan of the late Finance Minister. After a con- sultation with tho Auditor, I came to the con- clusion that it would be the better for us to estimate for the whole expenditure, and to es- timate for tho whole receipts on the other side. (Hoar, hear.) Another point of great interest I would like to lay before the House Gentlemen will find an item to continue the survey of the Intercolonial Railway, by Mr. Fleming, the very nblo engineer iirosocuting the work. Ho had .itated to the Government as his opinion that the sum of $30,000 would be required ; and althougli $10,000 wore voted last year, the survey cannot nocoasarily bo complet- ed for a less sura than $20/)00. Another item which will certainly bo very interesting to tho IIouso, is the removal to CHtav^a. That removal must take place within tho iictual year, and within tho financial year of 180t-(;5. Tho esti- mate is framed to a certain oxteut — necessarily to a great extent — on the expenses of tho remo- val from Toronto to Quebec; and since that time, like many other families, we have gather- ed a good deal of additional uiaterlal, which will cost more in removal than was incurred from tho last seat of Government to this city. Wo. think it better to|mako tho estimate fur the removal a little beyond tho sum it will probab- ly cost, and put it down at $150,000. We find, on reforonce to the transactions of last year, that the deficiency, including all items except redemption of debt, was $982,000. IJefoio going into details of the estimate of receipts, I consider the duty of the Government is to slate the measures they intend to bring down to make provision for deficiencies ; and 1 think it much more desirable that if we err at all, it is better to do so in favor of having too much rather than too little. Instead of meeting here session after session to make up deficiencies, I think it very much better to take Much steps as will place the finances in proper condition. I think a Finance Minister sliould not be actuat- ed so much by considerations of what might be pleasing in regard to the matter of taxation, as by tho conviction of the necessity of doing hia best to provide sufficiently for all financial re- quirements. (Cheers.) It is perfectly clear that'our credit must seriously aulTer if we do not adopt steps of this nature. Uur credit has already suffered very materially, and this state of things may certainly be attributed to tho in- sufficient provision made by tho Legislature for the financial wants of the country. It may bo from other causes also ; but it is not necessary for me to mention them, nor do I de3iro to do so in this dis- cussion. Ii is quite plain, however, that the circumstance of having an insufficient re- venue must ultimately injure the credit and in- dependence of the country. (Hear, hear.) It is high time the people of Canada should meet the deficiency in the revenue and put an end to it. If the House will put an end to these de- ficiencies we may reasonably hopu tliat in future years it will have to deal with a much more agreeable subject, viz : that of diapenwing with surplus revenue, and reducing taxation rather than, session after session, Imvinfr the diaagrco- able duty of going before our constiluitnts and telling them that wo are compelled to impose additional taxation. (Hour, Iicftr.) There is another subject to which I ilircct the attention of the House. I refer to ihvi development of the North-West, and the importance of extend- ing our communications by rail with tho Lower Provinces. Wo ma; bo unable to-day to bring down to the House any rocommondation for a large appropriation for these objects, but there is an appropriation for the North-Wost Terri- tory which I presume would have boon brought down by tho gentlemen opposite had they been in office still. It is now my duly to slato the measures the Government intend to submit for tho consideration of the House — measures tbey have in view to restore an equilibrium between the expenditure and the revenue. Rntering upon tbia subject, I am aware tlie House will acknowledge that it ia one surrounded with a threat many diflicultiea. The Uovornmont will try to achieve thia object with all the energy which they posaess. We have endeavored to eatabliah thia equilibrium in such n way aa that the increased taxation may fall in the lightest possible manner on the iadustry of the country. The mode we intend to pursue will press very lightly. At present there ia a subject which has long engross- ed the attention of political economists in England and the United States, that ia, the raising of revenue by a stamp duty. This la a duty collected with the smalleat possible expense ; it is one which is readily paid, and the aum ia ao amall that nobody will feel it. A tax on atampa does not press seriously on any branch of industry. These duties have for a long time existed in Kngland, and have lately been imposed in the United States. I have not heard a single murmur against them ; for that reason we may fairly consider that the intro- duction of n stamp tax into this country will be immediately advantageous. The introduc- tion of that system will enable us hereafter, if circumstances should unfortunately require it, to increase taxation to secure a larger amount of revenue. I have the advantage of posses- sing the information collected by the lion. Mr. Ilolton on thia important aubject. I have given ray best attention to the statistical re- sults ; and also to the reports submitted by Mr. Langton. There appeared to mo one of two courses to take : cither stamps must be attached to every document in the country, or we must limit them to commorcial docu- ments. I did not s«e my way otherwise than to draw a lino between commercial transac- tions and the general system of stamps. Look- ing into the whole question, I came to the conclusion I will forthwith have the honor to submit. AH commercial transactions iu Eng'- land and the United States are now subjected to taxes. I propose to submit a law to bear less heavily than iu England or the United States. Hon. Mr. IIOLTON — Do you confine your system to commercial transactions? lion. Mr. GALT— Yes. The American Con- gress imposes this tax of stamps on every draft or order not exceeding $103. The stump duty is live cents on each draft; for every $100, or a fraction beyond that, live cents additional are imposed ; in the casi^ of bills when drawn in setts of three, two cents each are impost'd ; for every additional §100 two cents additional are imposed. My scheme imposes only three cents for every §100, in- stead of five cents, as by the American systoni. I Hear, hear. 1 It. is to be remniked tluit it \.* not intended that stuinps should bo required for any promissory note under $20. Upon every promissory note not exceeding the sum of $100 there shall be imposed a stamp duty of three cents, and for triplicates of 1 ills of ex- change, one cent on each. I estimate, from the returns of the I inks, that the sum of $9 1,- IVl) will accrue to the revenue from the im- position of these stamps. No doubt a certain amount of revenue, thouOtli Juno will bo considerably augmented, but will not aifect tbo question of re- venue for tho whole succeeding year. Every gallon of spirits will be taken out of bond a very short lime after the an- nouncement of the doubling of excise, and thoreforo I cannot venture to estimate tbo re- ceipts at any very great sum. Hon. Mr. HOLTUN— Tho House can assist you in putting on tbo duty on spirits instantly. (Hear, hear.) Hon. Mr. GALT— I om very happy to hear that. I certaintly shall be delighted to be per- mitted by tho patriotic conduct of the gentle- men opposite to impose the duties at once. (Hear, hear.) There will be in this case a very considerable augmentation of revenue satis- factory to all. (Applause.) I estimate that the revenue to be produced from theimpoaitiou of 15 cents per gal. > extra on :J,'.!00,000, will bring in a revenue of $a(j0,00O. Beer will give us $IH0,000, and Tavern and Shop licences will give U8$l'20,000. Mr. DUNKIN — Could you not devise some substitute for shop licenses? Hon. Mr. GALT— They only yield $12,000 or §15,000 a year. Mr. DUNKIN — You might the more easily put an end to them. Hon. Mr. (}ALT — As the lion, gentleman has been kind enough to give assent to the imme- diate ini]ioRition of the spirits' duties, I will consult with the' other members of the Govern- ment on the subject. Mr. DUNKIN — It would a great boon to the Temperance Society, and the community. Hon. Mr. GALT — Tho total estimated reve- nue from spirits, beer and licenses for the year ending 30th June, 1SG5, under the proposed io- ciease in tho law, will bo $1,200,000. The in- crease estimated for the half year is $53,000. — I now conio to another subject, which I look upon — and it will approve itself to the public — as a fit subject for taxation. It is necessary to draw the attention of the House to the fall- ing oir that has taken place in the importation and manufacture of tobacco. The House i.^ aware that under tho Reciprocity Treaty, un- manufactured tobacco is ouo of the articles ad- mitted free. Wo cannot approach that by way of Customs duties. Let us take an example in the falling off of the importation of manufac- tured tobacco. In 1H5(), it was 3,493,453 lbs., valued at $574,943, and paying a duty of $171,090. In 18G0, there were 3,703,077 lbs., valued at $400,500, and paying a duty of $i:!9,908. In 1801, there were '2,544,800 lbs., valued at !i5315,G'20, and paying a duty of $90,975. In 1802, there were 1,1'2 1,907 lbs., valued at $'202,004, and paying a duty of $5.5,473. In 1803, there were 280,258 Iba., valued at $04,920, and paying a duty of $13,834. So here was a falling off from $171,090 duty paid iu 1859, to $1.3,804 duty paid in 18C:t. Of unmanufactured tobacco, there were imported in 1800, 1,987,433 lbs. ; iu 1H(!I, 1,901,045 lbs.; in 180'2, 0,372,441 lbs.; in 1803, there wero 8,801,900 Iba. Here the House can see that the imports of unmanufac- tured tobacco, paying no duty, has increased from 2,000,000 lbs. to 9,000,000 lbs, Tho to- bacco importod from tlio Unitoil Htatoo hna Kiven riso to a new branch of btisineaa, wliicli, I beliere, !a profltnblo. I would nut dosiro to propoan nny iiioafiiiro that would bu prtju- diciul to thobusincsa ; more pspocially whuit wo find, that iastaad uf Oanndn buing i\ contliiuiil importer 'if manufactiirod tobacco, alio in now u largo oxp 'ter. It is not dcsirablo to iiitor- furo to stop this export trade. Thoro- lorn, the manufacturer of exported tobacco will be allowed a drawback. Tlio export trade In tbia article, up to 1HC3, was nil.— hi this year it amounted to 1,177,000 Iba., valued at $343,000. Considering this ([ues- tion, as it relates to the export trade, it is im- portant to know where the tobacco ia »unt to. An examination of the Trade and Narigivtiou Ueturns shows us that 6 G-lGths only go to Great liritain, 9 C-lOths to the United States, and the remaining 1-lGlhsto the Lower Provinces. Con- sidering the quantity of tobacco grown in Canada, I am sorry to bu obliged to inform tiiu House that, though I have made enquiries in the census ollice, I could find no column for it. However, in 1861, the quantity grown in Up- per Canada was 777,000 lbs, and in Lower Canada, 443,000 lbs,, amounting, altogether, to about 1,200,000 lbs. My own belief is, that there has not since been much increase on this (igure. I prefer treating the product of Canada aa an unknown quantity, in order to leave a margin against any over-estimate of the amount which is now iu the country, and on which we propose to levy taxes. If wo impose excise duties on tobacco, wo must make allow- Hnce for falling olf in llie consumption of lo- liacco, and allow for frauds. Wo have in preparation a bill to prevent those fruiidd. The law will provide for what is manutaclured tobacco, and what is not. Tol)acco grown on a man's farm, for bis own use, will not be con- BJderud as manufactured tobacco. In t'ramiiig the excise on tobacco, we conaiilted the Amer- ican law, and think it desirable to adopt the sanie classiliuatiou. I will remark, in the first place, that manufacturers of tobacco will have to pay a license of $'iC>. Hon. Mr. HOI/l'ON— Will that be uniform? Hon. Mr. ALT — Yes; there are very few manufacturers — not many on a large scale. 1 would desire to collect Ibo duty on tobacco to- morrow, if possible ; but wo don't possosH the machinery. I propose to divide tobacco into four classes. The first class, which comprises four-fifths of that consumed in llio coiiulry, will be taxed 10 cents per jiouiul. The second class, which is the inferior kind, t cents ; snulV, 15 cents; and tobacco, fme-cut, audi as is used for chewing, l.*) cents. Aa regards cigars, I will propose a tax, |ier thousand, as follows : Over $10, and under $20, $2 per thousand ; over $20, and under $;)0, $3 per thousand ; over $30, and under $40, $4 ; and at $ tO per Ihou- siind, $5. I estimate, from all those sources of revenue, that I shall got $020,000. The changes Ml the resolutions on the anhjecl nf excise on spirits and tobacco, require that corresponding articles in the tariff of customs shall be dealt with in the way of increase. iiut looking at the matter with ihe fullest coiisidera- ilon, I am uf the imprL'8si(m that it is bi-tlur to impose specific duties on the various articles alt'octed by the in- crease of excise than deal with them iu any other way. (Hear, hear.) Id addition to the ml valorem duty on rum, cotdial, spirits of wine and alcohol, not whisky or brandy, I impose a duly of \H cents per gallon— I except ginger wine, which will pay 20 per cent, mi valorem, (linger wine is always used as a oor dial, and is uot to be considered as a spirit, there being very little alcohol in it. Constant coniplain'.s were made ou the subject of thero being 100 per cent, ml valuri m duty on ginger wine. I will do this li'iuor justice, and will tax it no higher than sh ^rry. (Applause and laughter.) In addition to the present duty upon brandy of 30 per cent, (ci valorem, and on whisky a furtlier specific duty of i5 conla per gallon, of the strength of proof. lion. Mr. HUWLAND— Do you propose ai> ndditiunal duty on wino 7 Hon. Mr. OALT — No. leatimatotho iiicrwase from whisky will bo $4,500 ; gin, $2-' 'lOO ; rum, S4,500 ; brandy, !iiil2,7.'iO, making a total of $17,250. On cigars tlie addiliomil duly will givo an increase of revenue of $20,000, making altogoliior about $07,250, assuming the present consumption not to bu materially disturbed. In regard to llie drawback ou ships, a very large amount of material passes through the Cnstoni House yearly, and upon this material a very largo sum in tlie amount of duty is re- funded every year. 1 believe the subject en gaged the attention of Hon. Mr. Ilolton, though I am not awaru of the conclusions at whicli \m arrived. In sumo cases fraudulent demands have biieii luado on llio Exchequer for draw- backs. Tliu amount gt drawbacks on vessels built ill .some ]iart3 of the Province is 74 cents per ton, while in tiuebuc it is H3 cents. I will now impose a payment of KO cents for all parts of the Province in lieu of all drawbacks. With regard to tbo (greater question of the change in lliu turilV of customs, I remain precisely of tliu same opinion I was in '802, and 1 believe, more- over ar vents us doing more than can be done except by an Order in Concil. Wo are pledged to maintain a certain policy for a certain time, and cannot with propriety, interfere with it. In reference to tho balance of $449,000, duo 30lh June next, we shall have absolutely the pay- ments from the Itank of Upper Canada com- ing in support of tho cash balances. At the beginning of the year there were, deducting unpaid warrants, upwards of $.300,000. Wo do not apprehend tkat tho arrangements Hon. Mr. irolton made at tho close of last year, will make it a matter of difliculty to meet the $449,000 assumed deficiency for this year ; part of this will bo met by the funds from tlio Bank of Upper Canada, and part from the cash balances. The large amount wo owe to the London agents is the groat Uiflicully. This arises from the fact that our securities are at such'a prlc Blink of Montreal. I do not see that wo could iibiain thrcf and a half millons on reasonablo Uh-im iu this country. We mual go for It to the great money mar- kets of tho world ; and, our necuritiea being depressed, I think it more desiruble, if necessary, to pay a higher rate of Interest, and make the loan for a much shorter term. No authority is neces- sary from the House to make provision for this sum, for the bonds in the hands of our agents were issued under the authority of Parliament. I think it may be necessary to ask the House, by resolution, to give power for substituting for bonds already Issued and not sold, bonds bearing a different rate of interest for a period not exceeding three years. It would be much more advantageous to pay six per cent, for two or three years than to attempt to sell our pre- sent bonds at a discount of 10 per cent, for a long period. (Applause.) I must now con- grutulnto ihi Hou^fl on tho slvte of our trade as shown by the returns of last year. I hope tliat witli the I'lossitig of a good harvest, we gluill bo iible ni'Xt yoar to congratulate our- selves on being in 'V still better position. I trust measures will be passed to augment the revenuH and restore our credit to lis proper posiliiJii- I think, sir, mis .'ouse will be satis- lied of ltd ability to meat the financial wants of the country by imposing a tax on objects, all of which are thoso that tho moral sense of the country will support llie Legislature in taxing. The duty of the Government »vill be to observe the strictest economy ; and I hope that before another year shall pass, the House will be in a position to deal in a different mode with the question of taxation from that foUoweU to- night ; that is to aay, that it will be able to approach taxation with a view tolls reduction. 8lr, I apologize to the House for having occu- pied it so long, ani for having omitted many matters in the statemeat I have laid before it. [The hon. gentleman resumed his seat amid loud and continued cheering. m