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Tous les autres exemplaires originaux sont film^s an commandant par la premiere page qui comporte une empreinte d'impression ou d'iilustration et en terminant par la dernlire page qui comporte une telle empreinte. Un des symboles suivants apparaltra sur la dernlAre image de cheque microfiche, selon le cas: le symbols —^ signifie "A SUIVRE", le symbols V signifie "FIN". Les cartes, planches, tableaux, etc., peuvent 6tre fiimds d des taux de reduction diff6rents. Lorsque le document est trop grand pour dtre reproduit en un seui clich6, il est fiimd A partir de I'angle sup6rieur gauche, de gauche A droits, et de haut en bas, en prenant le nombre d'images nidcessaire. Les diagrammes suivants iilustrent la mithode. 1 2 3 1 2 3 4 5 6 f»>' V 1^ J. MAGI t ■** .. ^^^'''.'^l*!* "^?.^ ■> h i-s .ik. ■\™- •<'.i-r THE TARIFF REVISION OF 1897. Tlie work of revising the tariff has now begun, and the government is face to face with immediate action. It is one thing to construct a tariff upon proper principles and another to revise one constructed on improper principles. A man who remodels a house will not have as beautiful a structure as if he began from the ground. One of the recognized cvIIh of the protective sys- tem is that all the bad things in it can- not be got rid of at once. A reduc- tion of the tariff, however, is due, not only as a recognition of Dublic senti- ment in Canada and as a measure of justice to the consumer, but also as a measure of relief to many existing in- dustries, which are hampered by con- ditions that impose very heavy burdens on the general industrial prosperity. There ought not to be any difficulty in atlhering to the two chief rules laid down by Adam Smith as fundamental principles of taxation, namely, that everybody should be taxed in propor- tion to his ability to pay, and that as little as possible should be taken over and above what goes into the public treasury. Both these conditions are scandalously violated in the present tariff. The main points urged before the tariff commissioners in the recent hearings at various points by the pro- tected manufacturers were the natural and normal conditions which make the coHt of production in Canada abnormal- ly high, the disadvantages of a limited market, competition with Great Britain, Gennany and the United States, labor, freights, and prices. I i)ropoise to ex- amine some of the statements made and the arguments advanced, and to discuss some of the possibilities of the coming revision. ("HEAP nOOim TAXBP M(»8T, The most highly protected manufac- turers, in giving their reasons why the tariff should remain as it is. or be in- creased, usually presented the same ar- guments. In many cases it was not the United States manufacturers they were afraid of, but the British and Ger- man manufacturers. Mr. Skelton, one of the deputation hear \ at Ottawa on behalf of the manufa< -^rs of shirts, blouses, collars and cuffs, made the fol- lowing statement to the tariff commit- tee: — 'On a fair basis we can compete witn the Americans if we had their markets and no restrictions. We have labor as cheap and it is as good.' Mr. Tooke of Montreal, another member of the same deputation, said: — 'We are not afraid of the Americans, or of anybody, on a fair basis.' The general line ot argument nearly everywhere was that a mill could be erected in England or Germany so "nuch cheaper than a simi- lar mill in Canada, and could be main- tained and run at a much less cost per atinum. The manufacturers of Canada who are beneficiaries of the tariff com- plain more that they cannot compete with liritish goods than they complain that they cannot compete with Ameri- can goods. No wonder that the Con- servatives voted to a man in parliament against the motion of the Liberals a few years ago to reduce the duties on Brit- ish goods. The j)rotected manufactur- ers would not allow the Conservatives to pursue any such policy, except on the platform where it might catch some votes for a high tariff government. An- other point, upon which those who ap- peared before the tariff committee in various parts of the country dwelt, is that the duties must be highest on the cheapest classes of goods. This is probably the one point as to which there is the greatest unanimity. The facts furnished by the collars and cuffs dep- utation already quoted will illustrate this point very clearly. The duty on linen and cotton collars is twenty-five percent and two cents each. Reduced to an ad valorem basis, collars costing wholesale sixty cents a dozen pay a duty of sixty-five percent. At ninety-seven cents they pay forty-nine percent ; at a dollar and fifty-eight cents hey pay forty one percent; shirtH costing three dollars per dozen are taxed fifty-seven percent, while shirts costing six dollars a dozen are taxed only forty-two per- cent. ' These rates of duty,' said Mr. Tooke, 'of course decrease as the price of the article increases.' The expres- sion, ' of course,' gives away the wiiole basis of the National Policy system, which contemplates the highest taxation on the cheapest classes of goods. Not- withstanding these heavy rates of duty Mr. Tooke not only urged their continu- ance, but asked for an increase, and the public have a right to examine his argu- ments and to spcuk about his business, in which he desires the government to become partners. He said to the minis- ters: ' We strongly urge the continuance of the present i-pec ific duties in order to protect us against the pauper labor of Europe.' The bulk of the imi)orted goods in this line comes from Knglund so that ' the pauper labor of Europe ' may be read, ' the pauper labor of Eng- land,' or the United Kingdom. One wonders whether the late government was deemed by the protected manufac- turers to be, so ignorant as to place the artisans of (ircat Britain in the cate- gory of ' pauper labor ' ? Mr. Tooke said that a collar was imported which cor* a dollar a dozen, and in or 'cr to meet tbnt the ("anndia.i jiiannfac.urcr had to make a collar and sell it tor a dollar a dozen, and he added, ' we make nothing on it.' T'^ Mr. Tooke cannot make any- thing with a protection of sixty-five per- cent or fifty jierceiit as the case may be, and he appenla to the people of Canada to help him, the answer comes naturally that he should tuin his attention and his abilities to something in which he can PMccccd without public aid. Another manufacturer who pleaded that he could not hold his own in the cheaper lines without an enormous public tax was the manufacturer of lamp chimneys, who ask- ed for a duty equivalent to nearly ninety percent. Here again the government is asked to tax the cheaper class of goods fifty percent more than the better class. ' The duty wc ask seems enormous,' said Mr. Snyder, ' Init it is the only way we can be protected.' Asked for aome rea- sons. Mr. Snyder replied that his fur- nace cost thirteen thousand dollars more than the like furnace in the United States, and in the United States they had natural gas for fuel, and had all the facilities for turning these goods out cheaply. This expensive furnace of Mr. Snyder's for second grade goods is a first- rate example of the hot-house industry, and hothouse industries are no good for Canada or any other country. M«)RK I'HOTKCTION AHKEP. Another argument is this: — We enjoy Budicient protection at present on low grade goods. The blue book returns, in many cases, prove this by showing al- most no importation in many of the lines, and there would be no use in deny- ing it. Well, give us more protection on the higher gi-ades of goods and we will now cultivate their manufacture, and employ skilled and better paid labor. We have the market now for low grade goods, t'ontinue our protection on th«se lines, and if you really desire to prove yourselves statesmen and to build up the country, increase our protection on the better grades. The people who use these better goods can well afford it. This is literally the argument. The policy of discriminating against the poor would be continued, and the well-oTT part of the population would simply be taxed a little more. Some of the manufacturers, therefore, want to keep out the cheap foieign (in which term Uritish is always included) goods, while others say they have accomplished that and would like to limit the imjmrtation of the better classes. No general policy or application of any particular economic principle will meet both these cases. This would re- duce the government to Mr. Foster's sys- tem of taking each industry by itself and each item in the tariff by itself, and endeavoring to adjust one against the other, a herculean task which led Mr. Foster into all sorts of inconsistencies and difRculties, and actually laid him on a bed of sickness in the end. lONKITIONH OF COST. Nearly all the leading manufacturers complain of a limited market, but add that they will be satisfied with a limited market if the market is limited to them. With one or two exceptions none of them had bothered about a foreign mar- ket. The cotton men are an exception, for it Is well known they occasionally make a slaughter market of China. Most of them, however, when the home de- mand is supplied, simply close down their factories and rest on their oars. 3 Under like ronditionn their competitora ia the United State* keep their factories runiiinK and Hhi)> out their product at cost price, and this is one of the chief complaints made against the foreign pro- ducer. It is claimed on behalf of many Canadian induHtries that if they could run on full time and up to the limit of their capacity, they could produce goodrt at a much Ichh cost. In their view the tariff Hhoidd be ho framed as to keep the merchantH from importing these cheaper goods from abroad, which the couHumer wants and will buy, and com- pel the consumer to purchase the home- made article, and this, it is promised, would be cheaper than it in now under those circumstances. At the same time, however, they present the strongest rea- sons why the conditions are so onerous on the Canadian manufacturer as to make the cost of producing goods in Canada about thirty percent greater than in Kngland, Germany and the United Slates. In a word, the natural resources of some countries are no great — machin- ery, raw materials, jiower, fuel, wide market, cheaper freights, and enormous production in special lines— that it is absolutely impossible to compete with them on anything like even terms. If these things are true, then the effect of excluding importations altogether would l>e to compel the Canadian consumer to pay more for the necessaries of life thini the citizens of other countries. This would make the cost of living in Canada higher than in other countries, and would have a very bad effect on immi- gration, which is of vital consequence to a young country with millions of acres of unoccupied landH, and Avould thus make ii necessary to impose still further duties to make manufacturing possible. THE QrEHTH)N OF WACK.S. Two questions might be asked in con- nection with the assertions of many of the manufacturers; first, are they accu- rate; and, second, is it within the power of any government in Canada to dis- charge its general duty to the people, and at the same time do anything to overcome these enormous natural ob- stacles which lie in the way of exten- sive manufacturing in Canada at the pre- sent time? Take the question of wages. One of the manufacturers stated to the tariff commissioners that the difference between Canadian and Continental wage« was a hundred percent. In an- other industry another manufacturer (who would likely be more responsible) stated that the wages in factories in Kngland were forty percent lower than in a similar factory In Canada, adding, however, that on the Continent the wages were still lower. The average wages paid in one of the great industries in Canada amount to ninety-three cents a da.\. In another it was stated to be one dollar a day, including women and children. These figures seem to be low enough, but if we are to take the assur- ance that they are high compared with Kuroi)ean countries, there is this to be borne in mind, that the producing power of the poorly paid, badly nourished operative, is much less than that of the better ))aid, better nourished and more robust operative. It is admitted that wages computed in money are lower in (iermany than wages in England. The jtroducing power of the German opera- tive in 1894 was £79 per operative; while in Kngland it was £106; and ac- cording to the census of Canada the figure for this country was £265. In the United States it was £414 in 1890. Of course wages are merely relative to pur- chasing power, and the lower wage of one country is very often equivalent to the higher wage in another. If, then, the (lerman operative works for low wages, he gives in return low produc- tion. The returns of earnings per in- habitant in the various countries of the world show them to amount in Germany to *VH), in (ireat Britain to $190, and in ('anada to ^220. Wages must be con- sidered in connection with the power of production, or return, and in connection with the purchasing power of a dollar. To say that one man in one country works for one dollar a day and anotlier man in another coun- try works in the same business for one dollar and a-half, means of itself nothing at all, and no conclusion can be drawn from it, and no argument based on it. Wages are lower in this way in Scotland than in Kngland, and in Ontario than in British Columbia. All the authorities agree as to the improved condition of the working classes in Great Britain, and this fact taken in c yunection with this other fact that average earnings per in habitant have risen fifty percent in sixty years in the United Kingdom, makes it clear that wages are steadily improving in that country. According to the United States census of 1890 the cotton operative received six centa and the woollen operative twelve cents on every pound of raw material that pa8B<;d through hia hands, yet the cotton opera- tive received twenty-six percent of the output while the woollen operative re- ceived only twenty one percent. FRICEM. I Another argument by means of which acme of the manufacturers sought to in- fluence the tariff commissioners was wit)i reijtard to prices, fciince 1878, they said, prices of goods produced in C'anada have been rediiced by forty and fifty percent. In connection with this something would be said about severe competition. Kvery one who has given the sliglitest atten- tion to the matter knows thnt prices have fallen all over the world. Sauer- beck's price level of forty-five articles shows that cottons and woollens rated at cne dollar in 1895 were a dollar and ninety-two cents in 1877. Sugar sold at a dollar in 1895 sold for two dollars and eight cents in 1880. These figures apply to the world. Is there any reason why Canada should be an exception ? Ac- cording to MuUuill a thousand dollars in 1895 would purchase what required four- teen hundred dollars in 1880, taking the price of ten principal articles of mer- chandise. His explanation may be of interest. ' The fall in jirites is mainly ' the result of machinery and eauier trans- port, not an increased apjireciatioii of gold, since we see that wages, salaries, and house rents have risen in all coun- tries since 1850.' (' In.lustries and Wealth of Nations,' 1896.) ENOLANU AS A WAKNINO. Some of the manufacturers tried to make out that England was losing her trade to the protected countries, notably Germany. The fact is that as the world's consumption of manufactur^ed articles in- creases, other countries are sharing with England the benefits of inventions and improved machinery in supplying the en- larged market. The nineteenth century has witnessed a much greater develop- ment of manufactures than of agricul- ture. The output of manufactures in 1840 was of the value of nine thousand and fifty million dollars; in 1894 it was twenty-eight thousand three hundred and eighty million dollars. This is not wholly due to the increased population, because the world's consumption of cot- tons, woollens and other textiles now averages twenty-four jiounds of fibre per head, against eleven pjunds in 1840. The value of all textile manufactures is about four thousand one hundred and thirty million dollars a year. As the total value of the manufactures of the United Kingdom in 1895 was four thousand three hundred and eighty million dollars it is manifestly impossible to supply even the bulk of the world's consumption of tex- tiles as was done, conjointly with France, in 1850. Here is a sample of tlie state- ments made before the tariff commis- sioners: ' CJreat Hritain, notwithstanding her large capital, great experience in manufacturing, the running on a few and special lines, cheap money and fuel, is losing both her home and foreign mar- kctw; and (ireat Hritain has far greater advantages over us than France and Ger- many have over her.' The enormous amount of monej' at her disjiosal is ra- ther taken for granttnl. It is asserted on the authority of Mulhall that the amount of money which Great Britain uses is relatively very small, being only nine percent of her internal trade, as against thirty-nine percent in France, seventeen in Germany and sixteen in the United States. Passing over this, however, Great Hritain has not lost either her home or foreign markets to Gcnnany or France, with all their ad- vant^iges. Great Hritain's output of manufactures exceeds that of (Jermany by fajO.OtW.OOO annually; and exceeds that of France by *1, 400,000,000. These figures are for 1894. In 1860 Great Bri- tain exported of textiles €584,000,000; in 1870 she exported i;954,000,000; in 1880, the figures rose to £1,107,000.000, and in 1894, to £1,459,000,000. The steel pro- duced in Great Britain in 1860 was 390,- 000 tons; in 1880, it was 510,000 tons, and in 1893, the production was 2,777,- 000 tons. The total trade of the Tainted Kingdom in 18.50 was $845,000,000; in 1895 it was ^,515,000,000. The increase in the volume has, of course, I)een very much gieater because of the fall in values. For the last five years Great Hritain has exjiorted on an average per annum more to Germany than she has imported. Great Britain has bought more from Canada than she has from Germany during this period. The wbok subject of the losii of British inarketH ut liomc niid ahrond, whith grpiitly K''i»'v«'»< tl>«' MT- eiit lines, the cost of money, and othor things enhance the diHiculties. How arc these to he rcmcdie-l ? Haw materi.il from all parts of the world is shipiicd first to England, whose mills ai-e thus in the centre of the supply. London is the great s«or'-'hou8e of the world, wheth- er it is wool from Australia or South Africa. No tariff made in Canada can take away from Yorkshire tiie natural advantages there for manufacturing. The chemicals, for instance, used in the voollen industry there are produced on the spot as an auxiliary industry, and the same is true of the auxiliary indus- tries around Sheffield, all contributing to the cheap production of cutlery. The very fine steel required for certain linos of cutlery is made froni iron obtained from Sweden, antl no British government would dream of keeping it out by a hich duty in order to force the Sheffield manufacturer to use nothing but home- made iron. It might be possible to grow the cork tree in Canada, and give employment to workmen in the manu- facture of corks, bu t_thc natural ndy an- ta ge of Spain_ in_^hig_j:<;s]jcct.j£i^ul(L-npt be overcome Ivy^ tari ff. The coiiBi- ticn~orenorm6u8 oulputliT the mills and factories of England atid the Ignited States will always exist, and if it fur- nished a good argument a protective sys- tem would be a necessity in Canada for all time. But although the output of leather in the United States is $500.- 000,000 It yrar, ngninst W(>rk of rcviitioh ia aiiii- plf>, compared with the other. To chiH- hify the importa und deui v ith them on Homo ifenenU principle in the only tiling to Ih) done. A low duty mual be placed on the neceuiMiriea of life. Specilic du- ties niUHt be Het uaide in order to relieve the turill from the acundal of making the cheupcHt gooda pay the highcMt tux. Haw materiula muat be aubjtcted to a low rate of duty in order thut legitimute nmnniuctiiring ahull not be too heuvily hundicapped. The question whut ia raw muteriul cun be euaily made a very puz- zling one, but it iH ulao cupuble of u aimple uuMwer. There ia nothing thut can be mentioned on the whole list of imported article*' ua u tit Mubject for tu.xution but there will be ttonie one to object. One man will adduce the atrong- eat urgumenta to nhow why an article hIiouUI lie on the free liat, und another will be juttt aa logical in proving thut it ought to i)e under a fifty percent duty, 'J'o aeparalely autiafy the individuala in un impoaxible tuak for the tariff commia- aionera. It ia, however, us enay to aut- iafy the general muaa of the community U8 it ia hard to propitiute individuula. There ia no Huch thing ua raw nuiteriul thut dropa into u factory or workMhop, like the ruin thut wutera the earth, with- out labor in ita production. It ia wild thut pig iron ia not raw muteriul be- cause it ia the finished product of thj binst furnu'e. Then raw cotton ia not raw material because it is the fiiiirihed product of the plantation, which is a huge workahop, employing nmch labor in gathering the crop, manipulating it und putting it into bales suitable for trans- portation. Coal, iron, wool, cotton, lum- ber, tin, crude rubber, leaf to- bucco — these are raw materials, nnd to attempt to extend the list much fur- ther would land the government and purliamsnt in inextricable confusion. 'Jo recognize everything that enters into nuinufacture would be to create the most ridiculous claims. The raw material of the muscle upon which labor depends to wrest a day's wages from a selfish world is built up on flour, oatmeal and other HUch foods, and why should these be taxed ? No, there is no safety for the government but the adoption of the plain rule aa regards raw materials. Then cornea the question, ahall these raw ma- terials be free altogether from duty ? Why ahould they Y There is offered here a tenq>tution to dihcUHS the prind- plea of tuxution in the abstract, but that temptation has been avoided before, and muHt bo set aaide now. It will be much better to avoid theories and discuMa ac- tual conditiotiH. It might, indeed, well be anked, upon whut principle, in a coun- try whose public it'vonue de|>ends chiefly on a cuHtoiuM t iritf, arc manufacturers as a cluxM exempt fn m contributing to the revenue t The olough of the farnier, the sewing machine of the HeaniHtress, the tyi)ewritiiig iiuichine of the typist - all these are made to contribute to the general revenue. The free list of the present tarifT was made on the )>lan of giving special and extraor- dinary favors to some of the mnnu- facturei's. Why ia thick for belting and hose free, and for a workingman's over- alls thirty and thirty-five percent ? Why irt footgrease for manufacturers free, and axle greaae for farmers twenty-five per- cent ? Hut aside from the justice or injustice of these things the VUEHTION OK REVENl'K is the main thing, the first consideration. F'or the hiat year o*" record, ending .luiie 30, 18iK), the total imports of Cnnada anumnted to $118,011,000, of which $110.- .587,000 wus entered for home consump- tion. The average of home consumption for the lust five years was $113,5«M).000. The avenige of dutiable goods for home coi sumption in the five years was $65,- 5*22,180 per annum. This at present is the sum from which the bulk of our re- venue must be raised. It strikes one at once that the sum is too small, and compared with the total imports of $110,- 000,000 is the reason why a very high rate of duty must l>e exacted, seeing that only sixty percent pays any duty at all. The average VAIA'E OF FREE OOODS imported for the last five years was $48,- 000,000 per annum. If corn is eliminat- ed, the corresponding importation in 1877 was about $21,000,000, and with pre- sent values applied, the figure would be about $13,000,000. Wheat in 1877 was a dollar a bushel. If the population has increased fifteen percent and this is add- ed, it will make the corresponding free list in 1877 (com excluded) about $15,- 00<»,n()0 What in to lie done with the preiieiil enorniouii free list? In view of the rapid iiicTea«p in annual expenditure anf our maiiu- letic vision years after- Federation agree to the ontemplated or the army jntiment for ver weighed f protective :rade within mem so long 1 parties in )rotection. iNE. acks to the ty, and one government ial comniu- fied tariff. should be schedules. ate of duty rritation of crent ports rhe import- erable, and parliament, iuty, under rnment can east a two !W tariff it itage. To 8 with the policy pre- nriff would devoted to a general IC tllC KOV- irepared to ,'ome8 ncar- y will, nat- A. J. M.