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Pruented to both Houies of Parliament by Command of Her Majesty. 1862. <\ ^ LONDON; FBINTID BY UAHRISON AND lOHB. ■ '^^Hj 'ii B|l ^Bl9 w^ 1 Despatch from Lord Lyons respecting the Reciprocity Treaty. UHd Lord Lyons to Earl Rusxell. — {Received March 15.) (Extract.) Washington, Febrvary 2'*, 1862. I HAVE tho honour to inclose a copy of the Report of the Committee of the House of Representatives on the Reciprocity Treaty. 37th Congress, 2nd Session.] Inclosurc. House of Rkprkskntatives. [Report No. 22, Reciprocity Treaty with Great Britain. MR. WARD, from the Committee on Commerce, made the following Report : — The Committee on Commerce, to whom were referred the concurrent Resolution.s of the Legislature of the Htate of New York in relation to the Treaty between the United States and Great Britain, commonly known as the " Reciprocity Treaty," report as follows : — The subject of our commercial relations with the British provinces and i)Os»ur present intercourse with Canada, subversive [165] B 2 ,'*'\ l,U-i' w If: 1;^ of the true intpnt of flic Treaty, owinp to the subsequent legislation of Canada; and whereas the first eflerts of a system of retjiliution or reprisal wouKI injure that portion of (Janada known as the I'pjter Province, wiio.se people have never failed in their eiTorts to sceurc a pcrmnnent niul just policy for their own country and ourselves, in accordance with the desire otficinlly expressed by l^ord Nnpier when Hritish Minister nt Washington, for the ' confirmation and expansion of free commercial relations l)Gt>vcco the United Htatcsand British Provinces:' Theref<»re — " Hrtoked. That the Senators and Uepresciitatives in Congress for ihc State of New York are re(jue»ted to take such steps, either by the appointment of Commissioners to confer \rith persons properly appointed on behalf of Canada, or by such other means as may seem most expedient, to protect the interests of the United States from the said unc(|ual and unjust system of commerce now existing, and to regulate the commerce and navigation between ' Ilcr Majesty's Possessions in North America and United States in such manner as to render the same reciprocally beceficial and satisfactory,' as was intended and expressed by the Treaty. And '■ Resolved. That the foregoing preamble and Resolutions be transmitted to our Senators and Representatives in Congress, with a request that they be presented to both Houses thereof." The chief jwints for consideration are the extent, population, position, and resources of the British North American Provinces and Possessions; the present co-called "Reci- ])rocity Treaty;" the existing condition of our commercial and fiscal relations with Canada, and the line of policy most conducive to the interest and welfare of both countries ; the tendencies of modern inventions and civilization on the intercourse of nations, including the leading principles of the German Commercial Union or Zollverein, and their applicability to the United States and the co-terminous or adjacent British Provinces and Possessions ; the mutual relations of Great Britain and Canada, and the Colonics, so far as they affect the United States ; and a method of negotiation for the removal of existing difficulties. m Jli m M m m m Extent, Character, Resonrees, Sfc, of the British North American Provinces and Possessions, and Climate of the Interior. The great and practical value of the British North American Provinces and Posses, sions is seldom appreciated. Stretching from the Atlantic to the Pacific Ocean, they contain an area of at least 3,478,380 square .miles — more than is owned by the United States, and not much less than the whole of Europe, with its family of nations. No small portion of these British territories consists of barren and inhospitable regions in the extreme north; but, as a recompense, the arid plains extending through Texas, and thence northward beyond the limits of the United States, are comparatively insignificant as they enter the British Possessions, where the Rocky Mountains are less elevated, and have a more narrow base. The isothermal line of 60° for summer rises on the interior plains of tliis continent as high as the sixty-first parallel, its average position in Europe ; and a favourable comparison may also be traced for winter and the other seasons of the year. Spring opens almost simultaneously on the vast plains reaching from St. Paul's to the Mackenzie river — a distance northerly of about 1,200 miles. Westward from these regions— iiow scarcely inhabited, but of incalculable value in the future — are countries of yet milder climate, on the Pacific slope and in Vancouver's Island, whose relations to Califoi-nia are already important. On the eastward, but yet far distant from other abodes of civilization, are the small settlements enjoying the rich lands and pleasant climate of the Red River of the North, a stream capable of steamboat navigation for 400 miles. It is asserted by those who add personal knowledge of the subject to scientific investigation, that the habitable but undeveloped area of the British possessions westerly from Lake Superior and Hudson's Bay comprises sufficient territflfry to make twenty-five States equal in size to Illinois. Bold as this assertion is, it meets with confirmation in the isothcrcial charts of Blodgett, the testimony of Richardson, Simpson, Mackenzie, the mops published by the Government of Canada, and the recent explorations of Professor Hind of Toronto. North of a line drawn from the northern limit of Lake Superior to the coast at the southern limit of Labrador exists a vast region, possessing in its best parts a climate barely endurable, and reaching into the Arctic regions. This country, even more cold, desolate, and barren on the Atlantic coast than in the interior latitudes, becoming first known to travellers, has given character in public estimation to the whole north. Another line, drawn from the northern limit of Minnesota to that of Maine, includes U^'* inada; and hat portion heir efforts accordance rashington, the United ate of New ssioners to r means as m the said imerce and d States in y,' as was ted to our ted to both i resources ed "Reci- itions with countries ; >f nations, I, and their ivinces and nics, so far of existing '^ossesiions, nd PosseS' cean, they ;he United No small ms in the 'exas, and significant vated, and rior plains >pe; and a f the year, ul's to the rom these mntries of ilations to rom other 1 pleasant Ration for scientific s westerly wenty-five mation in enzie, the ■ Professor ttst at the ate barely , desolate, known to ), includes nearly all the inhabited portion of Canada, a l^orincc cxtoading op>Mwite the territory of Duota and States of MinncHuta, Wisconsin, Michigan, Ohio, Pcnn»^ ivania. New Vork, Vermont, New HampNhire, nnd Mnine, iMMscHsing u climate: identical with that of our Northern States. The " Maritiiuo Proviiifcs " on the Atlnntic- foast ini-lndv New Brunswick, Nova Scotia, Prince Fidwnrd's island, and Newfoundland. Geogrnpliicully they may be regnrdetl as a north-easterly |)rol<)ii<;iition oftiie New England system. Unitedly they include an area of at least 80.000 st|nare miles, and are capable of supporting a larger population than that ut present exi.^tinj;- in the United States or Great Britain. They are eqnol in extent to the united territory of Hojlnnii. (Jrcece. Belgium, Portugal, and Swit- zerland. New Brunswick is l',M) miles in length and I'lU in breadth. Its interests are inseparably connectetl with those of the adjacent State of Maine. It ban an area of 22,000,000 acres, and a sea-coast 400 milci^ in extent an«I abounding in harbours. Its population some years ago numbered •_' 10,000, whose chief occupations are connected wit h ship-building, the tiflhcrics, and the timber trade. Commissioners appointed by the Government of Great Britain atlirni that it is impossible to speak too highly of its climate, soil, and caimbilities. Few countries are so well wooded and watered. On its unreclaimc«l surface is an abundant stock of the finest timber ; beneath are coal-tlelds. The rivers, lakes, and sea-coast abound with fish. Nova Scotia, a long peninsula united to the American continent by an isthmus only fifteen miles wide, is 280 miles in length. The numerous indentations on it.« coast form harbours unsuq)assed in any part of the w orld. Including Cape Breton, it has an area of of 12,000,000 acres. Wheat and the usual cereals and fruits of the Northern States flourish in many parts of it. Its population in 18.)1 was declared by the Census to be 270,117. Besides possessing productive fisheries and agricultural resources it is rich in mineral wealth, having beneath its surface coal, iron, manganese, gypsum, and gold. The Province of Prince Edwards island is separated from New Brunswick and Nova Scotia by straits only nine miles in width. It is crescent-shaped, \-S0 miles in length, and at its broadest part is M miles wide. It is a level region, of a more moderate temperature than that of Lov.er Canada, and well adapted to agricultural purposes. Its population in 1848 was G2,G78. The Island of Ncwfoundlan ;'is a sea-coast 1,000 miles in extent. It has an area of 23,040,000 acres, of which onK r. small portion is cultivated. Its spring is late, its summer short, but the frost of wincer is less severe than in many parts of our own Northern States and territories. It is only l,UGo miles distant from Ireland, it possesses a large trade with various countries, including Spain, Portugal, Italy, the West Indies, 'md the Brazils. Thb chief wealth of Newfoundland and of the Labrador coast is to be found in their extensive and inexhaustible fisheries, va which the other Provinces also partake. The future products of these, when properly developed by human ingenuity and industry, defy human calculation. The Gulf Stream is met near the shores of Newfoundland by a current from the Polar basin, vast deposits arc formed by the meeting of the opposing waters, the great submarine islands known as "The Banks" are formed, and the rich pastures created in Ireland by the warm and humid influences of the Gulf Stream are compensated by the " rich sea-pastores of Newfoundland." The fishes of warm or tropical waters, inferior in quality, and scarcely capable of preservation, cannot form an article of commerce like those produced in ine^'hau6tible quantities in these cold and shallow seas. The abundance of these marine resources is unequalled in any other portion of the globe. Canada, rather a nation than a province, in any common acceptation of the term, includes not less than 346,863 square miles of territory, independently of its North- Western Possessions not yet open for settlement. It is three times as large as Great Britain and Ireland, and more than three times as large as Prussia. It intervenes between the great North-West and the Maritime Provinces, and consists chiefly of a vast territorial projection in the territory of the United States, although it po-ssesses a coast of nearly 1,000 miles on the River and Gulf of *hc St. Lawrence, where fisheries of cod, herring, mackerel, and salmon are carried on successfully. Valuable fisheries exist also in its lakes. It is rich in metallic ore and in the resources of its forests. Largcj portions of its territory are peculiarly favourable to the growth of wheat, barley, and the other cereals of the north. During the life of the present generation, or the last quarter of a century, its population has increased more than fourfold, or from 582,000 to 2,500,000. The population of all the Provinces may be fairly estimated as numbering 3,500,000 i 1 u<\ Many of the iiibabitants Hn- of French extract inn, and a tew (Scrtnnn .settlonK'nt>» exLtl ; hat two-thirtln of the {H-<>|)lf of tlie P'-ovincc.H owe their firigin either to t!ie TnitH Htatoi or to the Kriti^h Inhinds whoM« Unyfungc we H|»eak, and who " people the world with men indu!*trioim nnd free." r r^' I I Natural CharaYltri^tic of Northern Satioiu, and the lu-cetsary PrinciiiU of our Policy. The elimale and noil of thj^e I'rovineet* nnd P«>H.ses.Hion», neemin^jly Ions in(iiil<;ent than those of tropical rc'lonx, are preeiwiv tiiohe by which the Hkiil, energy, and virtue!) of the human race are l>(•^t derelo|)ed. Xature there deniandf* tliouglit and labour from man, ai conditions of hi§ exiHtoncc, but yiciiU iiiiindunt rewardK to wine indu' before these additional considerations prcsBcd upon public attention, and brought hom(! a knowledge of our true continental policy to almost every inhabitant of our vast northcin frontier by the common experience of his daily life, the exceptional character of our natural relations with the Provinces had been duly observed by those American Statesmen who have advocated a protective policy. Opinions and Testimonij of Henry Clay. Among the foremost advocate-^ of this system was Mr. Clay, who, in his letter dated October 11, 1820, to Mr. Vaughan. alike expres-sed his own convictions and added his valuable testimony to the uniformity of opinion among American Statesmen in his time, And of the policy by which this Government has always been guided. He said, in his fetter to Mr. Vaughan dated October 11, 1826: "The Government of the United States has always been anxious that the trade between them and the British Colonies should be placed on a liberal and equitable basis. There has not been a moment since the adoption of the present Constitution when they have not been willing to apply to it principles of fair reciprocity and equal competition." Unanimity of the Agents appointed by the Treasury of the United States. Mr. Hatch maintains " that no commercial arrangement can be permanently advan- tageous to one party without being so to both ; that the basis of virtual, if not of literal, reciprocity, is the only solid ground of international relations ; and that the increased prosperity of one of the family of nations only offers an enlarged market for the industry, and an expanded field for the commerce, of every other ;" and that with reciprocal free trade we should present to the world the "sublime example of two contiguous nations abandoning suspicion of injury from each other, and practising in their intercourse the best principles professed in modern civilization." To these opinions Mr. Taylor gives a hearty assent, quoting, in his support, the opinions of various eminent Statesmen. He presents to the consideration of the Govern- ment of the United States the removal of all restrictions upon the commerce of these kindred communities, and brings forward a suggestion which has long engaged the atten- tion of many intelligent men on both sides of the frontier — to extend the principle of reciprocity to manufactures as it now exists in raw or unmanufacturee^ products, and " establish an American Zollverein, each country adopting the policy of unlimited free trade with the other." Complete Reciprocity recommended by the Canadian Parliamentary Committie in 1858. The same plan has, on more than one occasion, received the sanction of the Canadian Parliamentary Committee on Commerce. In 1858, taking cognizance, also, of the US'* 1) if i; ' f - m U}M I mtriotions chcckicj; the niutiul intcrcourie of the diflferent prorincot, which h«rc been •ptly termed " rountrien foreijrn to eiieh other without diplomatie rol*tion«," the Mmo (iommitteo ndviHcd the reino»al til" nil dutica on the productiunN of the BritiMb PoMesaions in America, iM» that "nrt'cindy tho same principle om cxi«t« in the inlcrcourM! between the different States or the Americnn Union majr be established in theno Colonie n tended to manufac- lurei, the retjutratinn nf Cnnadinn niid United Statei' '.lit re$$elt, mii to Ike thippinq and roiiitinij trade, in the innir inannri «m to the production of the $oil." In the Canadian Parliiimer.l n desire hnw frequently been uxprt^ >sc'd to do awajr with the four or fire currcncien, nnd the four or live dilTerent Tarifls, now existing in the Frovin<'CH, and to removt- obstaclcH to trade with the United States, thereby mitigating many evils which nre injurious to the national intei-CHts of the Provinces, and tend to dwarf the niiuds and patriotism of their people, ft will be impossible to say how far these opinions prevail in Canada, until some more efficient indication, on our part, has lieen given of a desire to reciprocate this policy fully and cordially, and to liberate the Kople, on both sides, from the present oppressive restrictioiiii. The market to be created, u^ee access to our citi/.ens, for all the products of Canadian industry, is duly appre> cfatcd by many influential men in all parts of the Provinces. In Upper Canada the cnief journals of both political parties arc alike in favour of a lilieral system of commerce with the United States, although many inequalities and much injustice towards this country BOW exist in consequence of the adverse and restrictive policy of Canada, adopted since the date of the Treaty. Former Revenue on Articles made Free by the Treaty, The amount contributed to our revenue by taxes on Canadian products on articles rendered free by the Treaty was, during the previous year, nearly 1 ,J^00,000 dollars, while the amount contributed to the Canadian revenue on the corresponding articles wns less than 200.000 dollars.* Value of Cuniidian Productions increased 20 per cent, by the Treaty. Here the special operation of the laws of iwlitical economy is worthy of note. Superficially, it is said that the markets of Europe regulate for agricuUurnl productions the markets of this continent, and that the dutv remitted on Canadian products was a saving to the pockets of our people ; but the products of Canada and our relative position and requirements arc such that the United Htates possess, to some extent, a monopoly of the Canadian market as purchasers of the jjroducts of the field. For cattle, sheep, swine, the coarse grains, and certain kinds of lumber, we constitute for Canada the only market worthy of naming ; and the wheat of Canada, from its peculiar an to our uses, was largely aold to us before the Treaty. Of the largo amount of wheat received at Toronto, the metropolis of Upper Canada, in 1859 — the last year of which we possess any authentic statistics on the subject, which have been published — only 2 per cent, were sent vi& the St. Lawrence ; the rest having been received at Oswego and other American ports ;f and that the duties (of 20 per cent.) were, in effect, paid by the Canadians prior to the Treaty is incontrovcrtibly established by the Report of the Select Committee on Commerce, appointed by the Legislative Assembly of Canada in 18o8, testifying that the effect of the repeal of discriminating duties on grain imported into Great Britain was "to depreciate the value of all articles grown or produced in Canada 20 per cent, under the value of like articles grown or produced in the United States, and this difference in value continued uj) to tlie year 1864 (the year of the Treaty), a period of nearly nine years." Right of the United States to a just Reciprocity. The " Reciprocity Treaty " is thus shown to have been productive of extraordinary advantage to Canadian industry, which is chiefly employed in agricultural pursuits. From Canada, as from the newer States of this Union, the chief articles of export are raw- products ; but a considerable sliare of the exports naturally made from the United States to Canada consists of the products of manufacturing industry ; and it does not admit of any doubt or question that commercial reciprocity, apart firom the confusion arising from a conventional and technical construction of the words — actual reciprocity of commerce between the two countries — implies a free and fair exchange on equal terms of all the products of kbour in both. In admitting Canada to the commercial advantages she * As nearly as can be ascertained. — See Report of Canadian Commissioner of Customs, f See itcport of Canadian Commissioners of Public Works, page 7. <,u abe would 'njoy if lOic were a bUi<> of thin Union, we hate • right to expert from bcr in rttwn the Munc commercial priTilege* which each State of the I'nion ronfera upon the othm. CanadiaH Minitter of Finance officially avoum a Policy udiet$r to U^ciptority teilh the United States. It wn■( Natural Excluinges of Canada and the United Staten. Canada is in many respects like our new North- Western country, her farms and forests yielding a great variety of products, which under a fair system of reciprocity would be exchanged for articles manufactured in the Eastern and older States. So different arc the relative circumistances of the two countries, that, under the moderate Canadian Tariff in operation when the Treaty was made, we exported to Canada manu- factures to the value of nearly 8,000,000 dollars in one year, while the manufactures of Canada ^Id to us have never exceeded about 1 60,000 dollars in value, so far as they can be ascertained. The free admission of the products cf Canada is injurious to our fanning and lumbering interests, while our manufacturers, shippers, and merchants are attacked by the UDju it and restrictive laws of that Province.* Ui\fair system of Canadian Tolls discriminating against the United States. Under the stipulations of the Treaty, Canada granted the use of her canals to American vessels on the same terms as those enjoyed by British vessels. The Welland Canal, connecting Lakes Eric and Ontario, is extensively used by American shipping. Under an enactment of 1800, if vessels and goods having paid toll on the Welland Canal enter the St. Lawrence Canals or any Canadian port, all except 10 per cent, of the Welland charges is refunded ; thus creating a discrimination of 90 per cent, against vessels going to American ports, besides a free passage through the Canals of the Galops. Point Iroquois, Rapid B'lat, Favian's Point, Cornwall, Beauharnois, and Lachine — a discri- mination against the forwarders and millers of Rochester, Oswego, and Ogdensburg, the carrying systems of New York, and the shippers and merchants of that port. In the same way, vessels from Canadian ports on liake Ontario or the St. Lawrence are charged only one-tenth of the Welland tolls exacted if they pass from American ports. These enactments are evidently inconsistent with our just expectations. They clearly discriminate in favour of the route vi^ the St. Lawrence, and against the great carrying systems of the United States. By thus throwing off a large amount of its revenue, and it. the same time unnecessarily assuming large debts already incurred by municipal incorporations for a similar purpose, the Cana£an Government has lost all claim to the plea frequently urged on its behalf, of financial necessity, as a reason for its high tariffs on American manuiiactures. I ■I •1 1' The late Qovemor-Oeneral of Canada represents Discriminating Tolls as a Free Trade Movement. Although the policy of Canada in reference to her canals is thus plainly restrictive and adverse to American shipping and ports, Sir Edmund Head, lately the 'Governor of the Province, in a despatch to the Secretary of State for the Colonies of Great Britain, da^ tions of the Treaty, as steps towards greater freedom of trade. Canadian system of Free Ports. Canada is also deprived of the plea of insufficient revenue, the excuse usually alleged by the apologists for her adverse Tariff, by having given up the collection of Customs duties in di&rent parts of her territory, throughout lines of frontier extending for some thousiuids of miles, evidently to the injury of her revenue and our own. By Proclamation dated November 30, I860, and published in the "Otoadlan Gazette," it was officially declared, in pursuance of an Act of the Provincial Parliament, passed the previous session, that the harbour of Gaspd Basin, in the Gulf of the St. Lawrence, and on the southern side of that river, was constituted a free port, where goods, wares, and merchandize of every description, may be imported either for consumption or expor- tation, without being liable to any duties of Customs; and the limits of this port were * See Report of J. D. Colver, 1860, adopted by the Chamber of Commerce at Milwaukie. 'y^** Ut should be er the Mine lited StAtes, islatures are mseqnenccB, [Panadas and ' farms and [ reciprocity States. So te moderate .nada manu- ufactures of they can be farming and attacked by tea. ;r canals to 'he WeUand m shipping, he Wclland cent, of the ;nt. against ' the Galops. le — a discri- msburg, the ort. In the are charged ions. They )t the groat nount of its incurred by has lost all iason for its ree Trade y restrictive Sovemor of eat Britain, if the inten* tally alleged of Customs ng for some "O&nadlan Parliament, t. Lawrence, ;oods, wares, )n or expor- tis port were iie. practically extended so as to include so much of the promontory on the southern side of the St. Lawrence as is eastward of a line formed by and from the River Nouvolle, in the Bay of Cbaleur, to the headwaters of the River Chattc, and thence down that river to the RiTer St. fjawrcnce — a river which, measuring from its chief headlands, has a sea-cnast of about 220 miles ; and the privileges thus conferred upon this section of the district of Gasp^ are also extended to the Magdalen Islands and the Island nf Anticosti, and also to the north shore of the River St. I^awrence from Point des Monts ca.stward to the eastern limits of Canada, on the coast of Ijabrador, including an additional line of sea-coa-st of more than />00 miles,* measuring on the water from the chief headlands ; the whole, following the line of indentations on the shore, presenting a sea-coast of 1,200 or 1,500 miles, where goods from all parts of the world can be brought free of Customs duties at the entrance to the River St. Lawrence, and near the other British Provinces and the United States. It is more important to the United States that by a similar Proclamation another "free port" has been established, under the name of the Port of Sault St. Marie, so as to include practically not only that port itself, but also nearly the whole Canadian coast of Lakes Huron and Superior, beginning at the point of intersection of the principal meridian line with the waters of Lake Huron, extending westerly and northerly along the line of Canada to the westerly boundary of the province, and including the adjacent islands. All goods, wares, and merchandise from any part of the world can be brought into this port, and thence exported or taken to any part of a coast which, by land measurement, commencing from the chief headlands, is not less than 400 miles, and including the islands, is more than 1,000 miles in extent. A wholesale merchant from the North- Western States, or the region of the lakes, may purchase goods in bond in New York, convey them free of duty to Sault St. Marie and the territory fiscally attached to that port, and thence smuggle them into the United States — a proces.? of which the risk of insurance by responsible parties is asserted to be no more than from 5 to 10 per cent., according to the nature of the commodities themselves. Besides the injury which such a state of things must inflict upon the revenue of the United States, and ♦*»" great expense of maintaining a sutficient number of oflScers to check illegal traffic, injuries no less serious will arise from the demoralizing influence of the va,st ai-my of smugglers which in a few years will thus be called into existence, and who, both by day and night, will be engaged in a system of continual secret warfare against the laws of the United States. Fiscal reasons for a Continental System. A valid reason for a fiscal system which should embrace the whole American Conti- nent, is to be found in the extreme difficulty which must always attend the collection of revenue on both sides of any boundary in the interior, and the comparative ease with which smuggling on the Atlantic coast can be prevented. An army of functionaries, maintained at vast expense, would be needed on both sides of our northern frontier, if, under a system of retaliation, aiming at injury to each other, each nation should endeavour to promote a system by which the revenue of the other will be defrauded of its just dues. Debt of Canada created in effiarts to divert the Trade of the United States. While it is to be regretted that the Canadian Government, having thought proper to diminish its own revenue in various methods known to be injurious to the revenue and commerce of the United States, should also have relied for its own revenue chiefly upon a Tariff avowedly adverse to the interests of the United States, althoiigh 'inariy'otTier usual sources of reyenue remained untouched, the justice of this complaint becomes yet more clear upon examination of the Report entitled " Canada. 1849 to 1859, by Hon. A. T. Gait, Finance Minister of Canada, 1860," showing that the direct public debt of the province then amounted to 8,884,672/., or 43,001,812 dollars; all of which, except 107,796 dollars, was contracted by making canals and railroads in Canada to compete with American interests, and in fruitless but persistent efforts to divert the trade of the Western States from the natural channels it had akeady formed. * The extent of these free ports has been carefully estimated from maps published under the official authority of the Canadian Government; and it is intended, as no accurate measurement can be given, to give too low rather than too exaggerated a statement. ss^ l\?.' . i hi m -'i ii 10 Official Avowal of Di^niminatiny Dutirs mjaintt the Merchants and Carriers of the Cniled tilates. Mr. Gait thus explains tiic change in the method of levying duties so as to divert trade from the ports of the Uniicd States: — " By extending thu ad valorem principle to all importations, and thereby encouraging and developing tlic direct trade between Canada and all foreign countries by sea, and so far benefiting the nhipping interests of Great Britain — an object which is partly attained through the duties heiii<; taken upon the value in the market where last bought — ^the levy of specific duties for several years had completely diverted the trade of Canada in teas, sugars, &c., to the American markets (our Atlantic cities), and had destroyed a very viJuable trade which formerly existed from the St. Lawrence to the lower provinces and West Indies. It was believed that the competition of our canals and railroad systems, via Portland, together with the improvements in the navigation of the Lower St. Lawrence, justified the belief that the supply of Canadian wants might be once more made by sea, and the benefits of this commerce obtained for our own merchants and forwarders. Under this conviction, it was determined by the Government to apply the principle of od va/ornn duties." Special Exemptions in favour of the Grand Trunk Railroad. In pursuance of this discriminating system, it was also provided (see " Consolidated Statutes of Canada," chap, xvii, sec. 24) that the Governor of Canada, by a Departmental Order, might discriminate in favour of particular routes through the United States — a singular violation of the comity or hospitality of the United States in extending unusual facilities not required by any Treaty for the transfer of goods on the Grand Trunk Railroad, vi& Portland, into Canada. Value of the St. Lawrence hitherto. During the debates in Congress on the subject of the Treaty, great stress was laid on the use of the St. Lawrence. One honourable member, expressing onlj the general expectation of many others, said: — "The free navigation of the St. Lawrence is only necessary to show 'as, in the fall of every year, long lines of vessels seeking the Atlantic, through Canada, laden with western produce, and in the spring making their way back with foreign wares, and with the avails of profitable labour for nearly half a year." Hope seldom told a more flattering tale than on this subject. Sixteen hundred vessels, with an aggregate burden of 400,000 tons, were, so long ago as 1856, employed on our northern " inknd seas;" but from the date of the Treaty to 1860, a period of nearly six years, only 40 American vessels, with a burden of no more than 12,650 tons, passed seaward through the St. Lawrence, and less than one-half of them ever returned ; while, in 1857 alone, no less than 109 British vessels cleared from Chicago alone, on Lake Michigan — a privilege which they only enjoy by means of the Treaty. Remembering that the Treaty had no practical effect until 1855, the following Table of the imports and exports into and from Canada, vil^ the St. Lawrence, from 1853 to 1859, inclusive of those years, affords the best data for an accurate comparison of the value of the St. Lawrence, and those routes through the United States through which free transit was granted to Canadian productions by the Treaty. It is compiled from the official Returns published by the Canadian Government. CoMPABATiVB Lnports and Exports into and from Canada, by way of the St. Lawrence River, from 1853 to 1860, inclusive. Goods in transitu '*■'■_;. Imports. for United States. Export*. Dollai'B. Dollars. Dollar*. ' 185.S* 1D,268,360 1,047,964 15,556,594 1854 21,171,735 495,326 14,709.621 ISRS 11,494,028 18,014 8,195,500 1936 15,319,361 13,492 11,817,137 1857 14,561,884 183,789 13,756,786 1858 10,795,077 26,916 9,727,413 1859 11,472.754 76,314 8,983,773 1860 13,537.160 21.505 a400.096 We find no statistic* on thi* vubjeet previous to 1 853. t«s^ II of the 18 to divert icoaraji^ing lea, and so ly attained ; — the levy ida in teas, 'ed a very ivinces and ystein8,vi& Lawrence, ide by sea, forwarders. >rinciple of >n8olidated partmental : States— a ng unusual md Trunk 93 was laid he general ^ the fall of th western 1 the avails n hundred , employed period of 650 tons, returned ; alone, on ring Table m 1853 to on of the which free from the Lawrence Since 18fl/», the first year when freedom of import, export, and transit through the United States was granted to Canada for all her raw products, her people, as is shown by the foregoing Table, chose routes through our territory as most conducive to their own interests ; and this diminution of trade via the St. Ijawrence has occurred when the aggregate of the imports and exports of Canada, from all sources together, has greatly increased. The "Reciprocity Treaty " removed many impediments to our use of the St. Law- rence, and the free use by the Canadians of the routes through the territory of the United States. DolUn. In 1854, the vcar before the Treatr, tlie value of imports bv the St. Lnwraice .. 21,171,756 Value of exports Total value of trade III IS55, the year alter the Treaty, the value of imports by the St. I 20,898.676 ttfie • ■ • • • • 43,584,387 22,704,609 18&7 • ■ • • • • 39,430,597 20,224,(i50 IMS ■ • • • • • 29.058,527 15.635,565 1859 .. 33,555,161 17,593,916 ISQO • • • t • • tai Impnrtii .. .. 34,447,935 17,<73,029 To 215,982,776 114,259,345 Iinporti from the United Sute* . from all other eountriea . 114,259,345 Import! 101,723,431 Importi nam from the United Statet, above thoie all other countries together, for the last iix years 12,535,914 Natural ResuHt of the Treg^ I i i us^ 14 I ,'i I? 5 I The following Table shows the importx and exports between Canada and the United Htates, of articles free under the Treatj to January 1, 1801 .— ItM IfiU mj. IWll. 1M. IMO. TMtk. iBfvU UM Um I'uM SUira fraa CtakU U4^ !■><><'•»<>• ho* <>M t'lHW »Uln IMlH* IMhn I7,SI».M« 7.IUS.it4 Di>UM< MMttM IWInn ll.IU.U4 i.M4,(IS IMIui ii4»i.Bro 7.IM.llt IMIan. Mhn. HMMM MJ>l7.m BiMM of Inpaiti fn* anilrr \ht TmXj m tnmi of CmA» ^.,7«),Mt .*£!>*£. \^mL (.M.74I a,iin.M4 is.m.i«o M.tl0.1M Gmftnurt/ incTHUe in Canadian Tarifft tince the Treaty, and their injuriom effect on our Northern Frontier. During this unequal condition of trade few complaints were made until the Canadian Tariff of 1859 was enacted. Until that time when a Tariff against American manufactures reached its maximum, Canada had increased her Tariff every year since the Treaty, as will be seen by the following sketch of the Canadian tariff from 1855, the year when the Treaty went into effect : — Article!. 1855. 1856. 1857. 1858. 1859. Per cent. Per cent. Per cent. Percent. Per cent. MoImim 16 11 U 18 30 Sugar, refined . . . . 32 28 25 26i 40 ,4 Siifrsr, other .. 27 20 :7i 21 30 Uoots and thovt .. .. 12 141 20 21 25 Harnett 12 17 20 31 25 Cotton gool.'i 12 134 18} 15 15 20 Iron frooda .. 13 IS 16 20 Silk Koodn 12 13i 15 17 20 Wool fooA* 12 14 15 18 20 The duties now levied in Canada on many of our manufactures — such as boots and shoes, harness and saddlery, wearing apparel, &c. — are 100 percent, heavier than in 1854, when the Treaty was signed ; and on nearly all our other manufactures, such as woollens, cottons, leather, liats, houseliold furniture, hand-bills, glass, agricultural implements, edge tools, fire-arms, carriao;es, nails and other hardware, India-rubber goods, manufactures of brass, copper, lead, tin, &c., and almost all our other manufactures, it has been increased 62^ per cent. The injury thus inflicted upon our people is avovred by the Hon. A. T. Gait, the Financial Minister of Canada, to be " no subject of regret to the Canadian Govern- ment." The Tariff of which Mr. Gait speaks with so much complacency extinguished the trade of our frontier cities with Canada in their own manufactures. Many manufacturing establishments on our side dismissed their workmen and were closed, and many were removed to Canada in order to avoid the payment of duty on their productions. It can create no surpri.se tlm/ much indignation was excited, without exception, in all those cities on the Canadian frontier which are daily and hourly witnesses of the one- sided nature of our dealings with Canada in the products of American labour. Some ports of Buffalo, for instance, arc scarcely half a mile from the Canadian shore. Fort Porter, until lattdy unoccupied on this side, and Fort Erie in ruins on the other, attest the long cessation of warlike aggression on both sides ; but the natural benefits of peace do not exist. Under the full operation of these causes Buffalo would be the commercial and manufacturing metropolis of a large region in Canada, greatly for the conimon good; with a view to this natural advantage she wlvocated the enactment of this Treaty. She expended large sums of money on a railroad extending across Canada from Niagara River to Lake Huron, and has been ready to assist in constructing a bridge over the river. Many of her citizens, and those of Rochester also, have been compelled by the Canadian Tariffs to leave their homes and remove their families to Canada. The daily and hourly view of a country close to their own doors, and into which their manu&ctures and goods are almost forbidden to enter, although the chief products of that country are admitted free of d'.ity, under the name and disguise of " reciprocity," into all ports of the United States, must bo a cause of frequent irritation to the citizens of Buffalo, and in the early periods of this discussion such projects of a retaliatory policy naturally arose as from other points of view seem less likely than more moderate counsels to accomplish the desired object. Remonstrances from Boards of Trade in Canada West. Tlie origin of the tariff, tolls, and discriminating duties of which the people of our Northern States complain is not with their neighbours of the Upper Province, who have always opposed this legislation, but with those of the Lower Province, who have vw* of \5 endesToured, in violation of the lawa of trade, to force the trade of C«n«dft West and of the .Wfttv"' Htat^pff to Montreal and Quebec, instead of allowing New York and BoHtoa to compete on equal terms with the ports on the St. Lawrence. As the chief exportM of Qjnafla to the United States are made from the Upper Province, to Htop the importation of^these prcicluctionH into the United States would ityurc must that rectiou of Canada agaifiSl%hrch no complaint has been made. The chief cities of Canada West, through Ihcir Boardx ofTrade, presented iK-titions against the objectionable Tariff, of which the following is nn example : — " Your iietitioners arc of opinion that mo uncalled-for and unwise i. selienic is calculated to atfect the existing pleasant commerciul relationship between Canada and tliu United States in the working of the Reciprocity Treaty, the great advantage of which to this province is well known to your Honourable House, inasmuch as the proposed policy of the Inspector-Qencral practically shuts the door to the admission into Cnnada 'if the leading articles of commerce hitherto purchaseen practically removed by the increase of neighbouring settlements and the progress of modern methods of intercourse by means of steam and electricity. In the power of ttese agents we have a guarantee for the indestructibility of the beneficent civilization we desire to establish ; and firom their agency seconded and advanced iii mutual alliance by the power of the Euting press, arises from one end of the northern frontier to the other an universal owledge of the advantages to be gained in both countries by a removal of the legislative barriers to our commercial and social intercourse with the provinces, in pursuance of a settled policy, based upon a just regard to their interests and rights. Let practical legislation secore the beneficent results of this wisdom. Prevalent Ojnnions throughout the Northern Frortier of the United States. In Minnesota and Dakota, where a knowledge of the climate and fertility of the British North-Western Possessions prevails, a strong and uniform feeling as to the value of this commerce exists. At Milwaukie the Chamber of Commerce reported in favour of reciprocity, but stated its inability to discover any fair or equitable equivalents for the present advantages given by us to Canada. Chicago, conscious that, by the interposition of the great chain of lakes stretching northward from her through seven degrees of latitude, she is ue "inevitable gateway to and from the British possessions in the No. ".-West," and that^ being within striking distance of the navigable waters falling into the Gulf of Mexico, and having both railway and water-communication with it, she wiUlRllect within her storehouses the products of every zone, as the great commercial metropolis between the North and South, the Ilast and West,t " demands even a much more liberal Reciprocity Treaty." Detroit, of which the neighbouruig regi m of Canada is naturally a suburb or a [166] * Seo Report of Detroit Board of Trade. I Report of the Board of Trade at Chicago. i:- ; l^tA M # H I'l put, finds tlut the aale of her numafkctttres and goods of foreign origin is almost prohibited in Canada, while the winter wheat and other products of her State meet those of Canadu in Kastern markets free of dutj. Her Board of Trade oxprcssed its preference of a cessation of intcrcourHc with Canada to the present system, but is in favour of a fair and equal reciprocity. Cleveland desires a complete and harmonious development of the rcMourcoH of each country. Buffalo and Uochestcr see, in their proximity to the coal of Pennsylvania, and the absence of this valuable mineral in the geological formations of Canada WchI, and, in other causes, an inexhaustible source of mutually profitable commerce between themselves and Canada, but cannot deem that system reciprocally free which admits the products of the province free of duty, but closes American manu&c- tories, and removes them to a foreign country. At Oswego the Board of Trade declared itself in favour of a Zollvcrcin. Ogdensburg, ever liberal towards Canada, finds itself^ like the other frontier cities, permitted to buy from, but prevented from selling to, that province. The intcrest.s of Maine, necessarily, from her geographical projection into the territory of the provinces, tend strongly towards commercial unity with the provinces. No State is more interested than Massachusetts, whose manufacturing industry would thus become tree throu/rhuut the entire North. The conclusion at which the people of the frontier have thus unanimously arrived has not been reached at any moment of passing excitement. It is the deliberate opinion of practical men, whose daily interests are involved in the question, who perceive that the attainment of the objects at which they aim may bo retarded, but cannot be prevented, and who ask of the Statesmen of their country to cast the sentiment of the frontier into a useful and permanent form, by tho removal of restrictive laws, and by opening such channels of trade as, beginning at the frontier, will enrich the interior of their various States, concentrating wealth and commerce at our seaports, increasing our shipping, and adding materially to our national resources. Our Mutual Intereatt. The British possessions on this continent have a population nearly equal in number to that of our Union at the time of its origin, and nearly twice as large as that of the seven originally Seceding States. Sprung from the two great rival nations of the Old World, their people so closely resemble our own that they mingle with us unobserved, and almost without distinction, in our daily thoroughfares, wondering, it may be, why they and their vast country, close to our own doors, should have less importance, as may superficially appear, in the estimation of the United States, than has been awarded to the small and remote Island of Japan and its oriental inhabitants, on whom we have lavished large sums for luxurious entertainments and costly Embassies. It is computed that Canada alone, if her past and present rate of increase is continued, will have 20,000,000 of inhabitants at the end of this present century, numeri- cally exceeding the population of Great Britain when this century began. Adding our own territories to those of Great Britain on this continent, we find that instead of discussing only the interests of a few frontier cities, our attention is directed to the commercial relations of one-eighth of the habitable surface of the world. There is no part of the globe where greater natural advantages await the use of civilized man. Such are the physical proportions of the subject, but the political ideas and moral agencies which pubUc opinion desires to apply to it are yet more comprehensive, sublime, and perpetual. It seeks a unity, " not of Governments, but of people.'' It desires to extend to the provinces and ourselves the same system of mutual and material benefits which has been found so beneficial to ^he various States of this Union. It is the system by which the present enlightened Bui ^rs of England and France are endeavouring to reverse the political estrangement of " those two great nations whose conflicts have often shaken the world, by undoing for their purpose that which their forefathers did for a difierent purpose, and pursuing, with equal consistency, an end that is more beneficial."* Tlie provinces may be said to be foreign countries, but each of them is less distant from the United States than many of our own States are from each other ; and while Providence has thus made us neighbours, and by the indentations of our respective terri- tories has rendered mutual rights of transit almost necessary to both, it has also given to us, as NortJiern and Southern nations, so great a variety of climate and productions as to render us capable of conferring upon each other such benefits as we cannot estimate too highly. The timber, wheat, and other grains, wKter-power, and fisheries of the provinces, fiirnish abundant material of beneficial exchange for the com, cotton, tobacco, coffee, sugar, fruits, and mineral wealth of the more Southern portions of this continent. With full development ox these material interests, social relations and the beneficial * See the memorable speech of Mr. Gladstone, Chancellor of the British Exchequer, February 10. 1860. y ^Ul IT ini«rchan|(c of u\tM will incresM. Tt wm an object worthy of European ntatwmen, and honourahlv to our comniun nature, to eclipse the glorieK of former hiMtory hy enileavour- injr to Huhstitute U'tween Frnnce and En^lund the realities of jteaee anil those true nnti mutual iiitercHis wl-jeh. when underslotMl, are always fouiul to bo Imrnionious, for the mcniorieM of fuise glorv. and "a |)oliey founded U|>on wnr, conquest, expenditure, and patronofro." To us n wider and clearer field is open on a new continent. We and the nritisli provinces*, younp as nations, arc comimratively unimpeded by petty interests an«l hoHtile traditions. A policy based u|K)n the best and ]>urest foundation will p;row with our growth, and Ntrongthen as we become stronjirer. The travoller on our Joint frontier has been accustomed to sec our forts in ruins or withotit garrisons. The standing armies of Europe arc computed to include more than :i,00(>,0()0 men, withilrawn permanently from prowerful political alliance would arise upon the basis of iMSCuniary interests and intimate social intercourse. It ciTected so great a saving in the collection of revenue that in three years — from 1 834to 18!U>— the expenses of the fiscal establishments were reduced from 18,000,000 dollars to 1 4,rtOO,000 dollars. Advantageous to all, this result was especially beneficial to the smaller States, whose revenue service, like that of Canada, was spread along extensive frontiers, and absorbed a large proportion of their income. Owing to increased prosperity, and the consequently increased consumption of tax- paying articles, the revenue of Prussia rose from 18 S silver groschen per head in 1834, to 23-4 in 1838. The saving in the expense of collection, the increased prosperity of our people, and the additional demand for foreign goods consequent upon it, would afford a basis for a friendly and satisfactory arrangement with European Powers, so far as they might be affected by the adoption of a policy which could not fail to be beneficial to the Provinces and the United States. The laws of the Zollverein provide for the means of mutual investigation, so as t.o insure accurate returns of revenue from each place of collection. 'J'hey contemplate the extension of its operations to other States, and provide for retaliation where commercial restrictions adverse to it are adopted. Its influence has continued to spread more and more widely. On September 7, 1 85 1 , a Treaty was mode with a rival Association, called the Steuverein, and consisting of Hanover, Oldenburg, and Brunswick, by which, from the Ist of January, 1854, both were included in one revenue system — the Zollverein — ^thus extending its operation to .')G,000,000 of Germans ; and a Treaty for limited reciprocal trade has been made with Austria, to last for twelve years from February 19, 1853. It is believed by many that this Treaty will lead to the actual consolidation of the whole Germanic race now existing in Europe. ReasoHKfor adopting a similar System. At the present period of history, assuming that the popular sentiment of the Canadian people is Monarchical, and not Republican or Democratic, the benefits of reciproca trode can only be enjoyed by the United States and the British Iforth American Possessions under a system resembling that of the Zollverein. It might include other regulations necessary for the freedom and convenience of our commercial and social intercourse, such as an uniform system of light-houses, copyrights, postage, patents, telegraphs, weights, measures, and coinage. Neither country is ready to adopt the plan of collecting a revenue entirely by direct taxation. Duties on imports are at present necessary for the government of each. It is desirable that the principle of reciprocity should be extended to manufactures as well as to the products of the field and forest ; but to do this fairly there must be an nnifomiity of duties on the materials forming the component parts of the articles manu- factured. If of two manufacturers, one purchases his material free of duty, and the materials used by the other are subject to a high duty, there is no equal competition. The same is true of every consideration affecting the price of labour ; hence an identity of Tariffs is necessary. — ■ qt^ 19 Tho CMC with nhicii rcTcnne cnn b«> odIltTtoil on the Atlantic frontier, and the UitticulticN which ntttmil iU <-ollr<'tion in lht> iiil4'riur i»t' tho Continent, and the neighbour* hood of (>ountrioH coninifreially hoNtile, Iwvo alreadjr Iwcn indicated. Nor can the natural, );t.>«>f(nii>hical, and other adrantaffeit of our rcHpectivc countrici, in their itcveral parlH, be developed u|ton a |irnper Continental pUn, unloM a MjHtcm of free purchaiie and Hale in extended through all their parts, in reference to productiontt of foreign as well aH of donicHtic oriffiu. There in a great dilferenco lictwcen a bonded Hjrstem and a Hyntcm of perfect freedom, an to exporUt and importx. Tho annoyances vexationn, and delayn necesHarily attached to any bonded Hystem are often Hufficient, in this day of easy coniinunication, to turn away busineiM from its natural and best centre. It is also to be remembered that hitherto the Government of the United States has not thought it expedient to refund duties on the re-exjiortation of foreign merchandise in less quantities than the original package, thus creating an olmtarlc, often amounting to prohiuition, to the iobbing and retailing of goods. Tliis in felt every day on our frontier, where it has caused ruin to sonn^ merchants and scriouH loss to many othent, while at the same time it imures those who, under ii free and natural Hystem, would consult their interests by purchasing the commodities sold by these merchants. So far as can be ascertained, the whole amount of revenue eollccted by the United States on the North- Western Lakes, from 1855 to isr)!) incliiHively, was Ichh by 180,730 dollars than the expenses of collecting it. A mere identity of Tariifs would not miflicu for the exigencies of the ease. IMuladel- phia, New Vork, Boston, and Portland would frequently re<-eivi> duties on articles consumed in Canada and the North- Western Possessions ; and Montreal and Queliec would frequently receive duties on commodities used in the Wcsti'm States. Tluis the best port might collect nearly all the duties, and the region in wliieli it is situated would have a large mcomc derived from the goods eonsumed in other parts of the ('ontiuent. To those British Settlements of which the enpital of Minnesota is the general emporium for merchantable commodities of every deseription, this commercial unity is the only system by which connection with (Jroat Britain can long Ik; maintained. /' For \ the whole vast and yet almost unoccupied ex|>nnse of the North-West, so far exceerd John KiimwII, the principte of c<>1onifii •eIf-(r»»Temnient «m fully ftdmitted. It wan ft natural re«iiilt of the withdrawal of special privileirca in favour of colonial prodnetfl. In I84H Iho dtfferontial dutivM in th* ColunicN in favour of RritiMh fouds wfiTu repealed, and in 1840 thv privilege of catirdjr cuDtrolling hor own trailt* and hor own customs uuon wan awarded to Ouiad*. Krom that time the name duty wa«charfre«l on A fpodft manufactured in Oroat Hritain a* on those manufactured in the United Htatos. 1 \ When the jirofbrcntial lawH in the liritish marketn in favour of colonial produce were aholished, Canada became IncreaNingly solicitous for the admiftsion of her pniducto into the American marketH, and the " Reciprocity Treaty " took effect in 1869. PropoMniM of tkt Britiah Minutn, in Ifo commercial relations between the nited States and the UritiHh Provinces." Ihfferences between the British and Colonial Oovernmenti. In the name year, on the 27th of Angust, the Canadian Government having nrged a law inflicting certain (lisabilities on our Hhinping, the Duke of NewcanJe, flecrotary of the Colonies, on behalf of the Oovemmcnt of Great Britain, transmitted to the Colony an official despatch, of which the following is part : — '' " The highest respect for Colonial self-government in domestic matters is not incon- sistent with the rule that commerciAl freedom cannot be maintained by the Imperial Legislature, while systems of exclusion, protection, or retaliation arc maintained, or rather recommended, by that of a portion of th(, empire. I trust that the Canadian Government and Legislature will fully weigh the force of these reasons, and will acknow- ledge that (all diHCUssiun on speculative truth in political economy left aside) the advisers of the Crown in this country could do no less than maintain, as far as in them lies, unify of legislation on this most important subject throughout Her Minesty's dominions. " An Order in Council dun/Zowiny the Bill will be accordingly forwarded to you by an early opportunity. " T h&VG &o " Right Hon. Sir E. W. Head, (Signed) '" NEWCASTLE. &c. &c. &c." The tendency of the Tariff enacted by the Canadian Parliament in 1859 having been, as was admitted by Mr. Gait, the Financial Minister of Canada, "somewhat to interfere with the existiug close commercial relations between Western Canada and the United States,"* and, as he also stated, to exclude cc- tain articles of American manu- facture, " which cuuld be no cause of regret ;" and it being subversive of the spirit and intentions of the Treaty for Reciprocity of Trade between the United States and Canada, and likely to produce suspicion as to the liberal commercial policy of Great Britain in the minds of those who do not know how little control she exercises over her Colonies, the course of the Canadian Government excited much attention. Its inconsistency with the avowed policy of the British Empire drew from the Colonial Secretary a remonstrance, on the t ime grc unds as those named in his despatch of August 27, 1859. The nature of thu despatcli, and of the reply of the Colonial Government to it, were related by the Minister of .*^'inance in the Canadian Parliament, April 17, 1860. He said : — " The Colonial Secretary took occasion to express views of rather a strong character in reference to the measure to which I allude — the Tariff— and even went so far as to intimate that under certain circumstances, although he did not absolutely state that they existed in regard to this measure, the question of the right of the Colonial Legislature to decide upon Its own measures of taxation might come before the Imperial Government, and that Her Majesty might possibly be advised to disallow Acts of this kind. (Hear ! hear I) I will read a part of the answer the Government of this country thought it their duty to make to these remarks. (Hear ! hear !) " ' From expressions used by his Grace in reference to the sanction of the Provincial Customs Act, it would appear that he had even entertained the suggestions of its disallowance ; and though happily Her Majesty has not been so advised, yet the question * Sec his letter to the Duke of Newcastle, October 25, 1659. Mi^ II •I havinf( btfcii tliiit raistHi, ami tho ouiuM-i|uunrcN ul' nuch a »tv\t, it° vvt-r ii.j Mliat Uiov cunniilcr to Ins the uonition niitl riKhln of the (^auatliati l^vginUturt*. (Hear! b«-ar') lu>M|N!i-t to llir Ini|)crial GovLTiuiirnt iiitut ainujr* tlit-lalo thf tlckirv to Mtinfy thoiii lliiti the polic} of thi> (r"intr\ \h lu'itlitr ha.xlily nor unwisely fnrtnvU, and thnt due re^'ard \>* had to thf inti-rcHt of th*- rnotlu'r counlrv as mcU an of th>- proviiuT. Hut the (ioirniment '»/ Ctininln, tirtiny ffir Hk i,eyislntui '■ and proplr, ruumit, thrnwjii Ihnie fttlin^H of Hrfrrinrr which they ime to the Impeiial authui ilir:i, in iiny inunnir u-tiite or diminuh the riyht of the people of C iiniida to deride for ifirmnelres hulh hm to the mode und txtrnt to whirh liirnlion uluill tie imposed. Tlic IVuvinoiul Miiii^try nru at ull tiiiies remly to ufl'ord explaiiAtiiiiiM in repird to the lu-tii of tho lA'^islaturc to whit-h thc,v aru a |Mirty, but, subjoct to their duty aittl allogiunco tu iU-r Majesty, their ri's|i<)iisibility in all K^'i^ral qucBtioiiH of policy munl hv to the I'rovincial I'arliauieut, by whose runfidence they admini.ster the ttlluirs uf the eountry. And in the iinpohition of taxation, it is ho plainly nccCHt>ary that the Adniinistration and the people should be in aerord that the former cannot admit responsibility or require approval beyond that of the Local LeKiHlature. Belf-governnient would Itu utterly nnnihilatvd if the views of the Imperial (lovernment were to b(? preferred to those of the iteople of Canada. It is, therefore, the duty of the prenent Government distinctly to affirm the right of the Canadian Legiulatitre to adjust the taxuiiun of the people in the way theu deem best, even if it should tinfortunntelif huopen to meet the disapuroval of the Imperial Sliniatry. Her Majesty cannot be advised to diiutllow Buch Acts, unlesH her advisers an: preitarcd to .;H()Umc tlie administration of the aflairH of the Colony, irrespective of the views of its inhabitantii. " 'The Provincial (Jovemment believcH that bis Cinice umst share their own convic- tionH on this important subject, but as serious evil would have resulted had his Grace taken a different course, it is viser to prevent future complication by distinctly slating the poiition that must be maintained by every Canadian Administration .' (ApplauHe.) " These, Mr. Chairman, are the views the Government felt it their duty to lay before the Imperial authorities (Hear !), and lam gratitiod to be able to ndd that when these ])apcrs are read by meinbers of the House, it will be found that on the point on vhich they objected to the Tariff, they have been obliged to admit that ue were in the right, and that any assumed interference with our rig/its and privileges is not for one moment to be entertained." (Hear! hear!) 80 far an can be a>«ccrtained, no I'urthcr correspondence between the Government of Great Britain und the Government of Canada as to the restrictive and adverse poHcj of the province has been made public ; but some other ()utsti()iis haviufj arisen on another subject, the Governor-General of Canada, at the opening of the Canadian Parliament in March 1801, declared it woji expedient for that Assembly to "deline by statutory enact- ments of your own the nature and extent of the laws and customs of Parliament as they shall exist in Canada." The intentions expressed in the words of the " Reciprocity Treaty " made by the United States with Great Britain in l8oi were "to rejjulate the commerce and naviga- tion between Her Majesty's po-sscssions in North America and the United States in such manner as to render the same reciprocally beneficial and satisfactory." The Financial Minister of Canada carried into practical effect a policy avowedly restrictive .ind adverse to the interests of the United States. To these efforts the Government of Great Britain, through the Duke of Newcastle, Secretary for the Colonies, objected in terms of force unusual in diplomatic correspondence. The reply of the Canadian Government was a declaration of complete self-control or independence in its financial affairs, and as regards its commercial relations with the United States. It seems that Great I'ritain, acquiescing in the principle of Colonial self-government, made no further public attempt to rogulfttc the Tariff" of Canada, retaining only the power to make Treaties mi behalf of the Prov' ces, while Canada assumes and exercises a right to mnko laws m 'iposition to lliriv -pirit and intentions, the enactments of the Cauiidian Govomment beii: opposed to the aevelopmeut of those mutual interests which on both sides of our va.st lui'' t>>terminous frontier contribute no little to the best system of national defence, althoii' it yet relies to a considerable extent for military protection upon the arms and cvpenditures of a Power whose policy and wishes it disregards. No Basis of Settlement hitherto offered by the United States. The Government of the United States has never yet presented to Great Britain, on behalf of the Provinces, any basis or means of negotiation by which the existing causes of complaint on both sides may be removed, and a system established enabling the people 1 bA 22 to cnjov all the reciprocal advantages which they and their nost^rity must lie caiwble of conferring ujion each other ho long as the reUtiye ^graphical position of their respective territories remains unchanged, increasing the liberties and rights of each, and strengthening the sense of honourable patriotism by demonstrating its consistency with international goodwill. Method of Negotiation. The Conmiittec on Commerce believe, with the Legislature of the State of New York, that "free commercial intercourse between the United States and the British North American Provinces and Possessions, developing the natural, geographical, and other advantages of oncli for the good of all, is conducive to the present interests of each, and is the proper basis of our intercourse for all time to come ;" and that such measures should be adopted as wiU ftilly carry into cffect_th§ priuciples.anMimcod.by the British Minist er at Washington. jnjy869,.iifoFthe.^confirmatio^n_^ ofJ[rc.e comniercial ration s between tlu ^United States and th e BriikhlVovinges.'' arid to " regu late the commcreeliiHl navigation b etween Her jyifljeaty 'a Poasfigsionsjn. North AmcrUA AndJthe ITnitptlSfjitns i n such manner as to rende r t.h<> usimpt rftciprnrAlly bonpfifinl anA »uifiBfin» . torg Tas was intended and expressed by the Treaty made between the United States and Qreat Britain, and commonly known as the "Reciprocity Treaty." The Committee on Commerce would, therefore, recommend that three Commissioners be appointed by the President of the United States to confer with persons duly authorized by Great Britain in that behalf, with a view to enlarging the basis of the former Treaty, and for the removal of existing difficulties. : ! , I I M :'i 'ii APPENDIX. , In No. 1 of the following Tables the commerce of the United States with Canada and the other Provinces is shown distinctly and apart, inasmuch as no complaint is made against the " Maritime Provinces." In No. 2 a general view is given of the trade with aU the Provinces together. , "No. 1. Tablk showing the Exports from the United States to Canada and the other British North American Provinces, and the Imports into the United States from the same places, from 1850 to 1859, inclusive. Date. I'roviiicos. * Domestic Exports. Of' foreign Origin. Total. Imports. Dollars. Dollars. Dollars. Dollars. 1850 Canada 4,641,451 1,289,370 6,930,821 4,225,470 Otlier Britisli Nortli American provinces . 3,116,840 501,374 3,618,214 1,358,992 1851 Canada 5,535,834 2,093,306 7,929,140 4,956,471 Other British Morth American provinces . 3,224,553 861,230 4,085,783 1,736,651 1652 Canada 4,004,963 2,712,097 6,717,060 4,589,969 Other British Nortli American provinces . 2,650,134 1,141,822 3,791,956 1,620,330 '853 Canada 4,005,512 3,823,587 7,829,099 5,278,116 Other Britisli North American provinces . 3,398,575 1,912,968 6,311,543 2,272,602 1854 Canada . . . . . . . . 10,510,373 6,790,833 17,300,706 6,721,539 Other British North American provinces . 4,693,771 2.572,383 7,266.154 2,206,021 1855 Canada . . . . . . 9,950,764 8,769,580 18,720,344 12,182,314 Other British North American provinces . 5,855,878 3,229,798 9,085,676 2,954,420 1856 Canada . • . . . • . . 15,194,788 5,688,453 20,883,241 17,488,197 Other British North American provinces . 7,519,909 626,199 8,146,108 3.822,224 1857 Canada 13,024,708 3,550,187 16,574,895 18,296,834 Other Britisli North American provinces . 6,911,405 776,182 7,637,587 3,832,462 1858 Canada 13,663,465 3,365,789 17,029,254 11,581,571 Other British North American provinces . 5,975,494 646,979 6,622,473 4,224,948 1859 Canada 13,439,6*^7 5,501,125 18,940,792 14,208,717 Other Britisli North American provinces . 8,329,960 883,422 9,213,382 5,518,834 qw% 23 No. 2. Trade between the Vniled States and the Briti$fi Provinces. Statement oxhibiting the increase in the Exports to, and the Imports from, Canada and other British Possessions in North America, from the 30th day of Jnne, 18r>l, to the 1st day of July, 1859. Year* pndiiifr Kx|>firt!i. Import*. Inrn>ase cncli sucrcisiiri> Year over 1852. Foroiffn. Domcatic. Total. Exports. imports. Dollar!.. Dollars. Dollars. Dollars. Dollars. Dollars. June 30,1852 3.853,919 6,655,097 16,509,016 "■ 6,110.299 18S3 5,7.36.555 7.404,087 13,140,642 .•'7,550,718 2 631,626 1,440,419 1864 9,302,716 15,204,144 24,566,860 8,927,560 14,057.844 2,817,201 1855 11,999,378 15,806,642 27.806,020 la,l 36,734 17,297,004 9.026.43.5 1866 6.314,652 22,/ 14,697 29,029,349 21,310,421 1 8,520,333 15,200.122 18«7 4.326,369 19,9.36,113 24.262,482 28,124,296 13.753,466 16,013.997 law 4,012,768 19.638,959 23,651,727 15.806,519 13.142,711 9,090,220 18M 6,622,473 17,029,254 28,154,174 19,727,551 17,654.158 13.617.2.52 52,228,830 124,388,993 181,120.270 116,594,098 97,057,142 67.811.700 No. 3. Tables showing in contrast the Customs Revenues of tlic United States and Canada. Canadian Customs Kevenue. United States Customs Hevenue. Dollars. Year endedJime 30. 1857 .. .. 03.873,905 ,. „ 1858 .. .. 41,789,621 1859 .. .. 49,565,824 1860 ,. .. 53,187,511 Total for four years Average »ch year 208,418,861 .52,104,715 Amount paid yearly by each individual — reckoning the population of the United States as 32,000,000— 1 dollar 62 c. Year ending December 31, 1857 ., „ 1858 1859 I860 Total for four yeara . . Average each year . . Dollars. 3,925,051 3,381,389 4,437,846 4,758,466 16,502,751 4,125,688 Amoimt paid yearly by each individual — reckoning the population of Canada as 2,500,000 — 1 dollar OS^c The amount contributed by each individual in the two countries towards the Customs revenue is almost identical. In the preceding Tables the period of four years is taken as a proper basis of calcu- lation, the present Tariff of Canada having been in operation about half that period. The intention of those who framed that Tariff having been to exclude American manu- factures and increase those of Canada, the Canadian revenue derived from goods of American origin will, under the present system, be gradually diminished. It is estimated that the saving in the expense of collecting revenue would under a free system be, to both countries together, nearly 500,000 dollars annually ; and the profits which under adverse systems would go into the hands of lawless smugglers, would be the honest gam or saving of consumers and legitimate dealers. As a system of national defence, the economy of this plan can scarcely be estimated. In 1849 the Hon. William Hamilton Merritt, having been requested by the Governor-General of Canada to bring under the consideration of the United States the condition of the commercial relations between this country and Canada, stated that an extension of the principle of reciprocity to the manufactures of the United States and Canada could be obtained at any future time, if deemed desirable by the United States. The dissatisfaction with the present Treaty has arisen from its incompleteness. The Committee on Commerce in the House of Representatives, 1853, regarded a limited and partial reciprocity as being reciprocal free trade. Had the reciprocity been actual and perfect, the hope would have been realized which was expressed m the Report presorted by the Hon. David L. Seymour, as Chairman of that Committee, in tin; following words : — " They confidently present this measure as a system of broad and comprehensive * The iisc>il year of the United States ends on the 30th of June, and that of Canada on the 3Ut of December in each year. [165] E m \ k^ 94 ■M Wr 'M ill 'ml m II international trade, mutnally 1)cncfieia] to the commercial interests of both countries. Thej recommend it as a iicaccfnl method of gathering up and putting to rest for ever many vexed questions and possible future causes of contention between Great Britain and oursclvcH, while the Colonies, hound to us by a commercial alliance which removes all causes for changing thoir present political position, as the pulsations of a common social and mercantile vitality heat through our joint body politic, become hostages to insure our ])crmanent peace with Great Britain, and tliiough her with the whole European world." f f Hi' 25 M* untrics. for ever Britain cmovcs ommon ages to iropean IS ii ■35 12 s § l| s 5 *u !■■■■,) i»t«| ■"II "l"l S2 ?i 5 = =!S ^•' « IT r. i]i 35 San p •'• C I 3 v; Vr 5 r. us '.? £ J.IH '' C-ll I — j^ ^ <« Mmsimni.T! ^^ 1 ^^ b 91(1 11)11 1 2*; J! Ji g •■(itnt ) (nm - <• - S'=. -- ■=- 5 I?? a :; s ,■? ■; •; ? Minis ^.llMl I 5 J- g. ;• ^ .M|i 1,1111 ||rf S :^ ;i S IS is 52 ? ^ f? •nlMinaniiii I J5-. _- _■ ^ 13., = = ^, 2 i en 1- «e "'I'"'"! 3i I ,i? 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