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 (CONFIDENTIAL.) 
 
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 ST. PIERRE=MIQUELON. 
 
 St. Pierre, July, 18!>4. 
 
 On arriving at St. Pierre, I proceeded to mako entiuiiies respecting the stmig- 
 gling of liquor from these island.s, which belong to Fiance, and venture to think 
 I have at last got to the bottom of the business. 
 
 To begin with, it is only fair to relieve the French officials of all responsibil- 
 ity for the contabrand traffic with Canada. The Sr,. Pierre-Miquelon Islands are 
 now treated by France in tariff matters precisely as if they were a department of 
 France. Their exports of fish receive bounties from the French treasury, and are 
 admitted into France free of duty, whilst ther, in turn, have to give free customs 
 entry to all goods from France and the other French colonies. Lic^uors from 
 Fiance are as free as any other French goods. Their price at St. Pierre is lower 
 than in France itself, because they are not struck with the heavy excise and special 
 taxes levied in Franct^. In France the duties on imported spirits, under the tariff 
 of 1892 now in force, amount to loG francs, 25 centimes per hectolitre of pure 
 alcohol, that is, to about !?1.37 Canadian currency per imperial gallon of pure al- 
 cohol. Down to January, 18!)3, the taritf on liquors and other goods in the St. 
 Pierre-Miquelon Islands was a very low one. In January, 189;^ the French tariff' 
 of 1892 was applied to these islands as well as to other colonies of France. The 
 committee of the Chamber of Deputies appointed to report on the French tariff, 
 .said : — 
 
 " It is usked, on all sidcB, that our colonies, which are so closely uttached by sympathy to 
 the mother country, should he considered as French provinces, and treated as such from an 
 economic point of view, and con8e({uently that they should have the same tariff as France. 
 Foreign products should be foreign products in our colonies as they are here in France, and 
 should be subject to the same duties. Our colonies ought to offer to French products more and 
 more extensive markets, otherwise the colonial policy will stand condemned. 
 
 it was resolved, however, to make some modifications in the tariff* in behalf 
 of the colonies. The Council- General of St. Pierre-Miquelon forwarded recom- 
 mendations, most of which were adopted in whole or in part by the French author- 
 ities. Amongst other modifications the customs duty on foreign alcohol, rum, 
 whiskey and gin was reduced to 31 francs, 60 centimes per hectolitre, that is, to 
 about 27 cents per imperial gallon, up to 89 degrees, 100 degrees representing pure 
 alcohol. All French alcohol, spirits and wines are free. But both French and 
 
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iorei<j;n licjuoi-.s have to pay what is called the droit d'octrol dr mcr, a tax levied 
 fur the benefit of the municipalities in the islands, and another impost known as 
 the taxe de ronsovimntion, or consumption tax. These two taxes amount on spirits 
 to i francs and "10 francs res[)ectively, per hectolitre, or both together St GO for 
 every 22 im])erial gallons — a fraction over 20 cents per gallon. In France the 
 consuTnption tax is not levied on liquors which are to bo exported, at 8t. Pierre it 
 \ii. It will be seen, then, that while spirits iVoiu France up to within 11 percent, 
 of absolutely pure alcohol pay 20 cents per imperial gallon, foreign spirits, such 
 as American corn whiskey, have to pay, under the new dispensation, 47 cents. 
 Rotterdam spirit and Rotterdam gin are usually imported direct, paying the 47 
 cents. It sliould be noted that those who })urchase liquor at St. Pierre for the 
 purpose of shi])ping it clandestinely to Canada, obtain a considerable premium on 
 their money. At the present moment the local bank at St. Pierre gives o francs 
 40 centimes for a Canadian or American dollar bill ; in other words, 8100 Cana- 
 dian is worth not 500 but .540 francs. 
 
 If it be asked why the French Government permits these islands to procure 
 liquor so cheaply, the answer is, that the policy of treating them in tariff legisla- 
 tion as if they were a province or department of France necessarily renders all 
 liquors from France as cheap as, or cheaper than, in the mother country ; whilst 
 as regards foreign liiiuors, it is advisable to make them cheap in order to attract to 
 St Pierre the inhabitants of the south coast of Newfoundland as well as the Cana- 
 dian, American and Newfoundland fi.shermen who frequent the Banks. 
 
 The Fi'ench fishermen could not get along without cheap French liquor. It 
 is an important part of their subsistence. Each man gets a )>int or a pint and a 
 half of brandy in the twenty-four hours, with a quart or more of claret, which 
 has been well fortified with alcohol. Under the excise law of France, wines des- 
 tined for the colonies, or for foreign countries, may at the shipping port i-eceive 
 an addition of spirit over and above the maximum allowed for wine intended for 
 home consumption, without paying any tax, provided the mixing is done in the 
 presence of the revenue otficerfj. The French fishermen do not drink foreign 
 liquor on board ship, and seldom ashore. On the ship they get brandy and 
 claret, the brandy being usuall/ colored French alcohol reduced. When they 
 land at St. Pierre to procure bait and supplies, or unload their catch, they sit in 
 the tu/'f'.s' and drink brandy, absinthe and Vermouth. In St. Pierre town, there 
 are probably not fewer than a hundred places where liquor is sold, yet there is 
 extremely little drunkenness. The oa/e's remain open, some until 10 at night, 
 some until 11, and all day Sunday. With regard to foreign li(]Uor.s, gin, rum, 
 American alcohol, and the like, they are consumed, as has been said, principally 
 by the English-speaking fishermen and sailors from Canada, Newfoundland, and 
 the United States. French brandy, i. e., colored French alcohol, is also a favorite 
 beverage with these men. They get a liberal allowance of grog when on the Banks, 
 though on some of the Ameiican schooners engaged in the halibut and herring 
 fisheries, no liquor is kept. The French fi.shing captains are prohibited from sell- 
 ing liquor to their crews over and above the allowai\ce furnished to the men 
 gratis from the .ship's stores. 
 
 The St. Pierre officials freely admit that immense ([uantities of liquors, 
 French and foreign, are snuiggled into Canada and Newfoundland, but say with 
 truth that they are in no way responsible. Liquor is cheap for the reasons just 
 set forth, and they are not to blame because Canadians, Americans, or Newfound- 
 landers conspire to .ship it without paying duty to their respective countries ; the 
 responsibility rests, if any where, upon the Governments of tho.se countries. It is 
 estimated that the quantity exported annually for snmggling into Canada is about 
 
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 20(),0()() potable gallons. This includes claret and Mala<,'a as well as spirits; it 
 also includes tlie alcohol transhipped from American to Canadian vessels outside 
 the harbor of St. Pierre, a process that will be described by and by, thouj^h noth- 
 ing better than a very rough guess can be made of the quantity in this case. 
 There has always l)een an active smuggling trade with Newfoundland, probably 
 to the extent of fifteen or twentj'^ thousand gallons a year. On what is known 
 as the French shore of Newfoundland, extending from Cape St. John on the east 
 coast up to Belle Isle, and down tlie west coast to Cape Ray, anil forming a coast 
 line of T'JO miles, though the distance direct is only 425, the French claim exclu- 
 sive fishing rights and something like teri'itorial jurisdiction. Goods landed 
 from French bottoms do not pay the Newfoundland customs duty. The French 
 (Jlovernment is encouraging the resident fishermen of St. Pierre to settle on that 
 shore, apparently with the view of .strengthening its foothold. A nund)er of fish- 
 ing vessels from France arrive at the shore every spring and return in the fall. 
 The salmon and lol)ster fisheries are being developed, the cod being about played 
 out ; there is also an extensive bait fishery. I have been unable to obtain any 
 information touching the quantity of French li(juors shipped to Canada illicitly 
 from the French shore of Newfoundland, Init a trafiic has been established, with 
 its headquarters at St. George's Bay, and is likely to grow as the French multi- 
 ply their settlements. 
 
 The spirits smuggled to Canada froni St. Pierre are principally American 
 alcohol, gin, and Scotch whiskey in bottles, French branily of a cheap grade, and 
 Cognac of a better grade, along with cigars, cigarettes and tobacco. In France, 
 the Government has a monopoly of the tobacco business, both in manufacturing 
 and selling, and the exports to St. Pierre are retailed at a low figure. The quan- 
 tity of Scotch whiskey sent to ('anada is small, and is consumeil mostly in Cape 
 Breton. The other spirits rind their wa}^ to Cape Breton, the New Brunswick 
 coast, and the Province of Quebec. Occasionally shipments of rum are made. 
 The wholesale prices at St. Pierre, with tlie customs and other taxes paid, run 
 about as follows per imperial gallon : — 
 
 French alcohol, 89 degrees or over 45 cents. 
 
 Rotterdam gin 75 " 
 
 Cognac (so-called) 72 " 
 
 The American alcohol transhipped outside the harbor costs from 25 to SO 
 cents at Boston. The export bonus paid by the Whiskey Trust reduces the price 
 to 20 cents or thereabouts. The cost of sending it to St. Pierre is not very great. 
 Altogether, when brought outside St. Pierre and transferred in dories to Canadian 
 schooners, the cost to the shipper, allowing for the export l)onus, will not exceed 
 25 or 20 cents. It is from 20 to -tO and 45 over-pioof. The French alcohol im- 
 ported into St. Pierre is said to have deteriorated in quality of late years. In 1875, 
 the French Assembly passed a law allowing farmers and fruit-growers to distil 
 alcohol on their own prennses. Distillation from wine has since fallen off, and 
 distillation from potatoes, beets, mowra-flowers, and the lees and dregs of the 
 beet, wine and cider presses enormously increased. Nevertheless the French 
 alcohol is said to be of a better quality than the American. Claret reaches St. Pierre 
 in fids or barriqiws of 60 gallons. It is a fairly good article, and so cheap that 
 no one thinks of drinking water. When shipped to Quebec it is usually fortified 
 with alcohol, for the merchants say the French Canadians want something that 
 will " bite." The Scotch whiskey is imported in bond from Halifax, and retails at 
 60 or 70 cents a bottle. The Demerara rum comes in bond from Boston. A good 
 deal of Cognac of a tolerable quality is smuggled to Canada, the brands mostly 
 of Frappin, Malifaud, Mainfonds, Aubeville and Pereuil. The wholesale price laid 
 
I 
 
 4 
 
 down at St. I'ioiie runs from T") to 170 fiancs per hectolitic. It is known in 
 (J|uul)ec as three and f'oui' star luatuly, imt much concoct"<l licjuor passes under 
 tliose n'arks. The Frcncli alcohol is teciinically known as Trois-Six ; one gallon 
 makes two potahh' ujaUoiis. When smuffj^led to ( 'anachi it is coh)roil \>y tlie smug- 
 glers or their agents in the Province of (Quebec, and palmed oH'as lirstclass Cog- 
 nac in Cognac bottles. 
 
 The trade in spirits 1)etween St. Pieri'e and Newfoundland is also a large one. 
 Hundreds of small craft from the coasts of I'laceiitia ami Fortune Hay visit St. 
 Vicrre to sell hait (the prohil)itory iJ.iit Act has licen suspended;, hay, vegetahlcs, 
 spruce poles, firewood, etc. Prior to ilanuary, 1S1»,'{, the Newfoundlanders pur- 
 chased almost all the goods they consum(<l at St. Pierre with the mom-y received 
 for their cargoes. Down to that time the St. Pierre tarirt'on Canadian, American 
 and other foreign merchandise was only four per cent., so that it v%as a dicap 
 |)lace to buy in. But now the duties on foreign goods are excessively high. 
 Fieiich goods are admitted free, but the Newfoundlanders want (Janadian and 
 American wares, such as heavy boots and coarse clothing, anil find it cheaper to 
 buy them at Ifarliour Grace or St. Johns than at St. Pierre. J3ut they still pur- 
 chase their Tupior at St. Pierre, and convey it to the Newfoundland coast without 
 paying the Newfoundland customs duty. Newfoundland ve.s.sels bound for Cape 
 Breton and other Canadian poits are in the lialiit of calling at St. Pierre, and 
 sliipping spirits and tobacco, to be suniggled. A iew days ago the Maggie 
 ii/aiR7<e, a Newfoundland schooner, was seized for this ofience at North Sydney, 
 C.B., by S|)ecial Officer Phoran, but for one seizure there are piobably fifty 
 .successful ventures. 
 
 In discussing the subject of smuggling with the French officials here, they 
 state the case in this manner : " It would be alisurd for Canada to expect France 
 to make a racPical change in her political and commercial relations with these 
 island.s, merely that Canada might be relieved from tlie lo.ss entailed by a smug- 
 gling industry carried on by Canadians and Americans. So long as the islands 
 remain in possession of France, and the present tariff exists, so long must we ad- 
 mit French liquors and all other French commodities free; .so, too, must we con- 
 tinue to tax foreign litjuors lightly in order to maintain our trade with our neigh- 
 bors in Newfoundland. This state of things is nece.ssary to the existence and 
 prosperity of this French colony, and we cannot help it if bad men from Canada 
 take advantage of our cheap liquois to swindle the revenue of Canada, and rob 
 her distillers. That is the affair of the Canadian Administration. We are quite 
 willing, however, to do what we can to put a stop to that branch of the smug- 
 gling industry which consists in shipping American alcohol in bond from Boston 
 ostensibly to St. Pierre, and tran.shipping it before it reaches land into Canadian 
 vessels that carry it to Cape Bieton or up the Gulf of St. Lawrence In fact we 
 are enforcing our laws against that trafiic as stringently as we can." 
 
 Befoie the new duties came into force the alcohol manufactured in Illinois 
 and Minnesota and shipped from Boston was landeil on the wharf at St. Pierre, 
 paying the low customs tariff and the octroi de mer; it was then stored by the 
 consignees and put on board vessels going to Canada as the opportunity aro.se. 
 There is not now and there never was a bonding system at St. Pierre. All goods 
 landed have to pay duty even though they be destined for a foreign port. The 
 I'cason why bonding is not permitted is briefly this : The St. Pieri-e peojile regard 
 the south shore of Newfoundland as their particular commercial preserve. The 
 trade done with it forms the best portion of their foreign trade, and they do not 
 believe in affording facilities to their (Canadian and American competitors. If 
 bonding were allowed at St. Pierre, Halifax and Boston firms dealing with St. 
 
Pierre woiilil niitiiially tiike iiilvaiitfii,'e of it t(t Mimiiieiit tlieir luisiiiess with New- 
 FoimhIIhimI; Tliere is Hiiotlier olijfi'tioli h) liiitnliiiL;. Kver sini-o ISKI, when the 
 St. l*ii!riu-.Mii|UeU)ii ishuiil.s passed iiiti> the |iennjuieiit possossioii of Kiuiice, 
 Kraiice liiis ^iveii I oiiiities tit the lislieiineii fi'ei|iieiitiii;,' the I5aiil\s aii<l iiiiikiii;^ 
 St. I'ieiie thi'ir h.'a<h|iiaiteis. Of hite, liomities have also heen ^^nveii lo lli(! hical 
 or iiisiion? fishe.iiieii of St, I'ieii'e, Tlic^ lioiinty on iliy end sold aiiywheie on this 
 side the Athii'iie is a cent and a half ]ier jioiind. Tlieie is also a nood iMiimty on 
 the t;reen cod shi|)|ied to l''i anue and diicd there. I f liondiiiLf were permitted, it is 
 thoui^ht that frauds would lio perju'tratod on the Kreticli treu.stiry thron;4h ndxini,' 
 tish ciiiti;ht hy loreiuixMs with the French catch. 
 
 Vessels cuLerinLf the nnh' (roadstciid) of St. I'iiMio or tlie hdrciilio'in, tho 
 liarlior piopur IVofitinj^ the Lu lloncMere wliai'f, are not allowed to tranship ^roods 
 from one to the othei'. Such transhipment is deemed tantamount tf) landiiiLj the 
 uoods, and duty is collctited. Outside tluj harhor ami roadstead, transhipment can 
 lie carried on to any extent, siiict; undei' international law the jurisdiction of 
 Franci! ceases threii nules from sliore, where the open ocean is supjiosed to heein. 
 Since tile new taritr was estahlished, all or nearly all the AmiMican alcohol has 
 lieen transliippcd outside to evmle |iayment of the hi^dier duty ; some of it is 
 tiaiisliipped to Canadian vessels on the ed^e of tlie l-i.-ndvs a^; hir as thirty or forty 
 miles from ^t. I'lerie. I had a c'ianc(i of observinj^ tin' dertness dis[ilayod iiy 
 the French custom.s officers in <,fuardin^' a^'ainst translnpi; "t within the harhor 
 and loadstoad. They are hostile to the traffic and aL,'iiii»st j;ivin^' the slij^htest 
 facility to the American and (.'anadian operators. Bv^ ot" course tliev have no- 
 thiuLf lo say to a carufo which is lai.ded and stored ..Ler payin;.'' d ity, ami suh- 
 sc(piently sliipih 1 to Canada. That is a perfectly lawful ti'.iusaciion. 
 
 U will he understood that St. Pierre is the oidy haihov in the three islands. 
 There arc numerous coves and inlets lait tlKy are too shallow and rocky to permit 
 the entrance of sehooMi rs. On I..an;^diido island, also called the Little Mi(pndon, 
 there are landiuL,' places for suiall l)oats at one oi' two points, notal!\' at Ikdle 
 Kivjeie, but it would he (piite inqiossihle to run alcohol ashore, for outposts oi' the 
 (/(•ndaruu'rif; are stationed theie, and, what is more, there are no inhabitants 
 worth speakiiitf of exce))t the li^htdiouse keepeis. The resident population of 
 St. Pierre and J)oi;- Island, whicli forms the eastern side of the liarl)or and road- 
 stead, is 5,70.'}, that of the Little ^,'i(pie]on and the Great Mi;iueh)n 540. All 
 li(pior lamled must therefore lie landed as St. Pierre. The outside customs service 
 consists of five oflicers, who ai'e aided by five harbor police and also by the i/f??- 
 (hirmerif, wliose barrack stands at the north end of the [uincipal wdiarf and in 
 full view of the harbor. 
 
 The traffic in American alcohol began a long time ago and grew to its present 
 proportions, under the eye of Mr. (.'harles Freeker, commercial agent of the United 
 States j'or about thirty years. Mr. Fi'ecker, who dieil two or tlu'ee years ago, wa.s 
 a well-to-do merchant, dealing, like other St. Pierre merchants, in all kinds of 
 articles — litjuor, clothing, provisions, hardware, etc. His son-in-law, Mr. tieorge 
 J. Steer, and his .son carry on the business under the old name of Freeker ^: Steer. 
 Mr. Steer succeeded Mr. Freeker as counnercial agent of the United States. It is 
 hardly necessary to point out that a counnercial agent of the Washington (Jovern- 
 nient, him.self engaged in the liquor trade, has a decided advantage over everybody 
 else in handling the spii'its shipped in boi; 1 from J^oston and destineil for surrep- 
 titious deliveiy in Canada. The United ^,L!;tes law with lespect to shipuients in 
 bond is briefly as follows : — The shipper gives a bond to the collector of customs 
 that the goods shall be landed out of the jurisdiction of the United States. This 
 bond is cancelled on the production of a certificate from the foreign consignee that 
 
M 
 
 tlie gooil.s have heeii received by liiiii, ac'C(jiiipaiiie<l liy a certiticatc tVoin the 
 Uniteil States consul or coniniercial atjeijt at. the port of hiiidiiii;', settiiii,' forth that 
 the stateiiicuts in tlie consiifnee's oerLiticate are " to his knowlcdife true or deserv- 
 ing of faitli and credit. " In adilition, the master of the vessel lias to make oath 
 before the consul or commercial a,<;;ent as to the crrectness of both certiticates. 
 'I'lie consul or agent gets twenty-tive cents foi' administering the oath ami a dollar 
 for each certificate. 13efore liSi).*{, when the St. Pierre tariff on liijuors was 
 scarcely more than nominal, any one in St. Pierre couM take a hand in the busi- 
 ness of importing American alcohol for shipment to Canada or Newfoundland. 
 The duty was jiaid on the arrival of the alcohol from Boston, and the bon<l given 
 to the Boston collector cancelled by means of the certificates called for l)y the 
 United States law. .Mr. Chai'les Frecker had no particular advantage over others, 
 except that he had no consular fees to pay on his own importations. But so far 
 as I can learn, otdy oiif St. Pierre firm, other than .Mr. Frecker's, embarked in 
 the traffic. It is ditferent now, when most of the alcohol is not landed at all, 
 but transhipped outside the harbor to vessels l)ound for Canada. Mr. Steer would 
 in all likelihood lefuse to issue a certificate to a competitor on the ground that 
 the alcohol had not been landed oi- delivereil hova ji<l<', ami that, in any event, he 
 had no means of ascertaining that the consignee's statements were " true or de- 
 serving of full faith and credit." Anyhow, Mr. Steer has now a monopoly of the 
 business. He issues his certificate for the alcohol consigned to him, or to others 
 acting in his behalf, although he knows nothing of the state of things at the point 
 of transhipment miles away ; in fact, for all he can tell, the alcohol may have 
 been transferred to an American ve.s.sel and smuggled Itack to the United States. 
 There is little doubt that this is sometimes done. The issuing of a constdar 
 certificate under the circumstances described appeals to be a. clear violation of 
 sections ^044 and .'J045 of the Revi.sed Statutes of the United States. 
 
 The French officials are bitterly opposed to this traffic, first, because it is dis- 
 honest in itself, and, sec )ndly, fiecause they conclude that men who will lireak 
 American law and cheat the Canadian revenue, will just as readily break the law 
 and cheat the revenue of tb.c colony of St. Pierre-Mi(pielon by smuggling gooils 
 into it from the I'nited States or Can;tda. The new tariff of the islamls makes 
 it worth while for such persons to run tlie risk of landing articles like boots and 
 .shoes, cottons, oil-skin coats, small hardware, etc. There has been a trenrendous 
 falling off in imports under the new tariff. The average value of imports from 
 INNo to 1S!)(), was 1.'} million francs per annum, whereas in hSDIl, the new 
 tariff having been proiiudgated on January 11, the value was only (»,17!>,00() 
 francs. Live animals, fresh meat, cordwood and fresh vegetables, are ailniitted 
 free as before, and under other modifications of the French tariff", which otherwise 
 is in ftdl blast, low duties are levied on flour and .salt meats; but those on manu- 
 factures are in all cases exceedingly heavy and in some prohibitory, so that the 
 purchase of Canadian and American wares has almost ci ased, and buyers are 
 thrown liack upon the Fiench factories. There is considerable discontent over 
 the rise in prices, and smugglers, if they could escape detection, would make 
 money. 
 
 The French otlicials declare that Canadian-made whiskey shipped in bond 
 fi'om Canadian ports is occasionally found on French vessels, and more often on 
 vessels going to Newfoundland, and that in some instances it is " rushed back " 
 into Canada and sold without paying duty; and so with Canailian toliacco. It 
 is not tiieir business to look alter such matters, and their information on the 
 subject is not very complete. It will lie seen, however, by reference to the 
 reports of the commanders of the (Canadian cruisers in past years that there is or 
 has been ground for making this charge. The commanders more than once state 
 
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that the bonds given on exportation from Canada were cancelled by certificates 
 issued at St. Pierre, and the cargoes tlien carried back to Canada and sold illicitly. 
 Section 104, of the Dominion Customs Act, reads as follows : 
 
 " If within the period appointed by the said bond there ia produced to the proper collectDr 
 or officer of customs, the written certificate of some principal officer of customs or colonial 
 revenue at the place to which the goods were exported, or, if such place is a foreign country, 
 of any British or foreign consul or vice-consul resident there, stating that the goods were 
 actually landed and left at some place, naming it, out of Canada, as provided by the said bond, 
 such bond shall be cancelled." 
 
 It is said by old residents of St. Pierre that Mr. Charles Frecker was in the 
 habit of issuing certificates, as consular othcer of the United States, to cancel the 
 bonds given to Canadians who had shipped liquor or tobacco ostensibly to St. 
 Pierre, although the cargo, as he well knew, was not landed, but retainel in the 
 ves.sel, and subsequently conveyetl back to Canada. Some have told me that Mr. 
 Frecker actually signed certificates in blank which were distributed amongst 
 Canadian smugglers and filled in by them as occasion required. It is also stated 
 that Mr. Steer is always ready to issue a certificate, for the fee, to Canadians 
 engaged in these frauds even when the cai'go is distributed amongst Canadian 
 schooners a long way from St. Pierre; but upon this point I found it inq)o-sible 
 to obtain any really trustworthy information. There is no doubt, howevir, that, 
 as the French officials .say, Canadian whiskey, which has not paid tlie inlan(] 
 revenue tax, is floating about the Banks, the Magdalen Islands, ami the north 
 coast of Cape Breton. Last year a Cape Breton schooner enteted the roadstead 
 at St. Pierre in a leaky condition and asked leave to unload a portion of her 
 cargo. She was bound for Placentia, and thence to the Magdalen Islands, and 
 had 48.5 dozen bottles of whiskey, believed to be Canadian contraband, on board. 
 She was told that duty would have to be paid on the whiskey, and, after making 
 repairs, sailed off without discharging cargo. 
 
 It is the general opinion that when the old four per cent, tariff was in force 
 at St. Pierre, the smugglers did a considerable business in conveying certain 
 manufactured articles to Canada. Nearly all the manufactured goods sold to the 
 fishermen from the .south coast of Newfoundland were carried thither without 
 paying duty, but this trade losulted, in many instances, in lo.ss to the St. Pierre 
 merchant. If the Newfoundland fisherman chose to refuse to pay in ca.sh or fish 
 for the goods it was useless for the St. Pierre dealer to attempt to collect the 
 account in the Newfoundland courts, for they held that as the goods had been 
 smuggled the Crown had the first lien on the fi.sherman's sole effects, namely, his 
 boat and tackle. At present, as has been said, the prices of the goods required by 
 fishermen are higher at St. Pierre than in Newfoundland. But French-made 
 articles, entering free, such as kid gloves, kid boots, and the like, are much 
 cheaper than similar articles in Canada or the United States, and it is easy to 
 believe that they are smuggled into those countries, along with diessed furs 
 (smuggled into St. Pierre from Newfoundland), drugs, peifumes, cigars and cigar- 
 ettes. A leading St. Pierre merchant told me that whenever he started on a trip 
 to Boston he put two or threi) dressed silver fox or .sea otter skins in his valise 
 and paid his expenses by selling them, A silver fox skin is worth ^7"), and the 
 smuggler makes !?15 on each by evading the United States duty of '20 per cent. 
 
 The facilities for smuggling liquor could not well bo surpassed. All the mer- 
 chants at St. Pierre keep a large stock, Frecker & Steer perhaps the largest. 
 Every month or so, a tramp steamer or other vessel arrives from Fiance with 
 liquor and goods, and cargoes are brought in by the vessels known as longK-cuur- 
 rievs, which return laden with fish, fiah oil and cod roes. In 1S',).S, 10(j longs- 
 
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courrin'!* entered the port, their ajf^negato tontia<i;e l)oin(; 18,')0(). The nuinbi'i' of 
 vessels eni^a^ed last year in the Sliore and Bank fisheries, inchiding those which 
 came from France in the spring ami retmnod in tlio fall, was ,S3i), the crews num- 
 bering 7,-2()0 men and hoys. It takes an immense lot of liquor to supply these 
 vessels and the poiiulation of tlie islands. A good deal of French liipior, however, 
 does not reach St. Pierre at all, but is distributed at the Banks. Theli([Uor from 
 France actually landed at St. Pierre in 1S!)|}, was valued by the ofiicials(/ln7i(''^'ife, 
 p \-l) at (i2'2,0()() francs say, Sl"2()00(). No Hmires are given respecting the value 
 of the gin brought in French bottoms from Holland, of the rum from the French 
 West Indies and Demerara, of the Scotch and otlier whiskey from Halifax in 
 bond, or of the Americau alcohol landed. It should lie remembered iu connection 
 with the figures of the imports from France that tlie cost of li(pior is exceptionally 
 low, and that the alcohol is mostly Trois-Six — 3 ti as tliey write it — each gallon 
 being eepiivalent to two potable gallons. This is true in a measure of all or near- 
 ly all the foreign liquor. The gin, for instance, comes in casks, and after being 
 reduced is put into l)e Kuyper or Blankenheym bottles, though some is bond fide 
 gin bottled at Rotterdam and Schiedan. The officials are unable, of course, to 
 furnish Hfures concerning the vVinerican alcohol transhipped outside St. Pierie. As 
 stated abo*^e, their estimate is that the ([uantity of stuff of all kinds smuggled into 
 Canaila reaches 200,000 pota'de gallons a year. One officer places it as high as 
 350.000 or 400,000 gallons. lie tells me that French liquors being aduiilted 
 free at the customs, and being subject only to the octroi de 'imr and consuiuption 
 tax, there is no object in making a very strict valuation, and the real value of the 
 imports is far greater than the value set upon them in the books ; also that the 
 quantity of American alcohol transhipped outside, at the Banks and off' the Cape 
 Breton coast, cannot be less than 150,000 potable gallons when reduced. These 
 conflicting estiuiates are given for what they may be worth. 
 
 There is no dispute about the quality of most of the alcohol snniggled into 
 Canada. The French liave a new method of testing (luality. ')n ■ part of crystal- 
 lised nitrate is dissolved in ten parts of distilled water, ami rendered clear by the 
 addition of a trace of nitric acid, and allowed to settle over som ; metallic mer- 
 curv. When thret; drops of this solution are added to 3 cc. (about 50 m.) of corn 
 spirit of high strength, a uulky mixture with a yellowish white tinge results upon 
 a'dtation, if the spirit be reasuiiahly free from acetic and other ethers, and after 
 standing for a few hours the spirit lets fall a pale yellow precipitate and the upper 
 liquid is as clear and bright as piu'o alcohol. On the other hand, if the spirit is 
 rank with ethers and fusil oil, the precipitate is small and pure white in color 
 while the liquid becomes bluish while. 
 
 This test shows that the American alcohol is fidl of ethers, and the presence 
 of sulphuric acid is disclosed l)y applying organic acids to the precipitate. The 
 potato spirit fiom which gin is nuide is nearly as bad. When rendered potalde 
 the Americati alcohol has the taste of ashes. The French fishermen will not 
 drink it if they can get anything else, and marvel at the fondness of French 
 Canadians foi' it. 
 
 Two steamers ply between St. Pierre ami Canada. One, the >S7. Pirrre, Capt 
 AnoTOve, used to be the mail boat. She was owned in Halifax. Last fall, Mr. 
 Theo. Clement and Mr. J. Cecconi, leading merchants on the islands, placed the 
 Pro Patr'ia, Capt. Denis, on the route as a French bottom, and obtained a subsidy 
 of !?13,500 a year from the French treasury for carrying the mails <mce a fort- 
 night between St. Pierre and Sydney, C.B., where connection is inaile with the 
 Intercolonial Railway. Capt. Angrove's vessel now devotes herself to carrying 
 passengers and freight fronr Halifax and the Bras d'Or ports of Baddeck and 
 
9 
 
 Noitli Sydney to St. Piorre and the small ports on the south shore of Newfound- 
 land ; whilst the Pro Patria goes from St. Pierre to Cape Breton ports and Hali- 
 fax, and on every second trip to Boston. The agent at Boston is Mr. Bailly- 
 Blanchard, a Louisiana Frenchman, who is also New England agent of the French 
 line of Atlantic steamers. Neither the I'ro Patr'ia nor the »SV. Pierre has any 
 connection with the suuigglois. The Boston trade done by the former is con- 
 trolled to a great extent by ])e Long \' Scamans of Boston, and by Outerbiidge 
 \: ( 'o. of New York, both reputable firms. The American alcohol transhipped 
 outside St. Pierre is carried there by trading .schooners, which unload the rest 
 of their cargo, if the}' have any, within the harbor, or go on to Newfoundland. 
 The exports from the United States to the islands in 18!)2 amounted in value to 
 SJ5<iO,000, and embraced coal, lumber, Indian corn and corn meal, flour, lard, pork, 
 meats and a'';ohol. These are the latest returns at hand. The Canadian vessels 
 from Cape Breton, Prince Edward Island, and the Province of Quebec, bring in 
 live cattle, poultry, lumber, potatoes, hay, shooks and staves, and soft coal from 
 Sydney. It is on these ves.sels that most of the American and French li(iuor is 
 shipped. When they get near the Canadian coast they usually transler the 
 liquor to smaller craft, to the luggers of '20 or oO tons which fish a little and trade 
 a little between the north and .south shores of the St. Lawrence, and to similar 
 boats in the Bale des Chaleurs. Newfoundland ve.ssels trading with Cape Breton 
 also carry liquor obtained at or outside St. Pierre. It is probalily not lasli to as- 
 sert that considerable quantities are stowed away at North and South Sydney by 
 the crews of the large steamers which carry coal from those two places to Mon- 
 treal, though the officers of the steamers are doubtless unaware of it. 
 
 It would be impossible for the Government to prevent the landing of 
 smuggled licjuor on the Cape Breton coasts. There are scores of nilets where it 
 can be landed that are .seldom, if ever, visited by customs officers. The thick 
 fogs which hang over those shores for days and nights together favor the traflic. 
 The Scott Act is in force at the two Sydneys, liut, according to all accounts, and 
 I made enquiry at both places, grog shops exist and supply themselves almost 
 exclusively with smuggled liquor. At Kelly's Cove, a coaling point, Baddeck and 
 St. Peters, things are not so bad, nevertheless the crew of the Pro Putria, on 
 which I was a passenger, had no difficulty in getting all the drink they wanted, 
 despite the prohibitory law. The northern peninsula of Cape Breton is said to be 
 a favorite resort of smu"<jlers. I was told at St. Piei re of a vessel which in the 
 first w^eek of June landed loO barrels at Aspy Bay, St. Lawrence Bay, and Mar- 
 garee River. Taking them all round, the customs officers in Cape Breton appear 
 to be rather a poor lot. 
 
 I am not in a position to speak of the extent of the smuggling industry on 
 the Majjdalen Islands or along the shores of New Brunswick and Prince Edward 
 Island, not having visited those parts. But along the St. Lawrence the trafhc is 
 (juite brisk. At Bic, 15 miles west of Father Point, there is a temperance hotel 
 kept b}- Michel Pineault. It is a few yards from the Intercolonial station. The 
 sign over the door reads, " (Janada Temperance Hotel.' Yet Mr. Pineault has a 
 wholesale license. He expects to get a tavern license but does not particularly 
 care for one, as he retails freely enough under his wholesale license. His store- 
 house, recently erected, stands in the front yard and is well stocked with Cognac, 
 gin, " white whiskey " made from American alcohol, claret, Malaga, cigarettes and 
 tobacco, with a barrel or two of Boswell's Quefiec ale. I happened to be there on 
 a Sunday, and, while the people were at chunA, Mr. Pineault loaded some of their 
 rigs with bottles of white whiskey and brandy. The owners hail seen him before 
 going to church and given their oi'ders. The next day theie was a meeting of the 
 County Council, and the process v^as repeated. The Cognac, which was in cases, 
 
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 had been siaujfyled from St. Pierre ; one of the covers bore tl>e mark of the St. 
 Pierre customs ofHcial. Tlie tobacco, cigaiettes and <,nn had also come from St. 
 Pierre. Tiie harbor at Bic is hmdlocked^and can be entered only at high water. 
 When the tide is in, small vessels run up to the long wharf and beyond, within a 
 short distance ot the road whicli passes the mill at the east end of the village and 
 leads to the hotel. One night Mr. Pineault and friends made several trips with a 
 hay cart to the harbor, and returne.l with barrels of alcohol and cases of Cognac. 
 They spent the rest of the night and a portion of the morning in " H.KJng" the 
 alcohol and putting it into bottles. Everyone about the place knew they had 
 been smuggling ; they them.selves made no secret of it. The stuff had lieen brought 
 by a small trading boat from Sault au C'ochon on the north shore, 30 odd miles 
 from Bic. J have described Mr. Fineault's operations at length in order to show 
 how the business is managed once the contrabrand litpior reaches Canada. 
 
 The same sort of thing is going on, to a greater or less extent, all along the 
 south shore from Gaspd up to the city of (^)uebec. On the nortli shore, with its 
 smaller population, the traffic is not so lucrative. On the inhabited islands in the 
 St. Lawrence, smuggled alcohol and Cognac are more abundant than whiskey that 
 has paid the iidanil revenue tax. The Isle of Orleans and Isle aux Coudres are 
 notorious smuggling haunts. I was on the Isle of Orleans in the early spring, 
 and in a farm house found ten or a dozen men drinking American alcohol. One 
 old fellow half filled his tumbler and after swallowing the liijuid set down the 
 glass witli tiie remark, Ca grattemaiti cest du bon, "That scratcucs, still it's fine !" 
 It must have scratche,! considerably for it was alcohol 30 overproof, smuggled in 
 by the lilouins, a famous smuggling family belonging to the island. 
 
 The im[)ression prevails at St. Picrre-Mi(|uelon, and at such points in Canada 
 as St. Flavie. Bic, and Trois Pistoles, that much more contraliand li(iuor reaches 
 the City of (.jjuebec than tlie customs and inland revenue officers there in)agine. 
 There is certainl}' an enormous (piantity of gin and Cognac in the retail stores in 
 Quebec, particularly in the stores in St. lloch's and St. Sauveur. Some of it nuiy 
 or may not have been smuggled. 
 
 Having now given the results of my enquiry in as brief a form as the subject 
 admits of, I proceed to state my conclusions as to the best means of diminishing 
 the conti'aband trade. 
 
 First of all : it is obvious that liquor of all kinds will always be cheaper at 
 St. Pierre than in Canada and the United States. Cheap liquor is a necessity of 
 the situation there, and as a consequence there will always be a |)iofitable held 
 for the smuggler in French spirits, gin, claret and tobacco. All that can be done 
 by the Dominion Covernment towards chocking that branch of the traffic is to 
 appoint more efhcient custom officers and place another cruiser or two on patrol 
 duty. The inland revenue officers are usually capable men, but the customs 
 olhcers in Cape Breton and the more ex|)osed parts of Quebec are not. Additional 
 .special officers should be employed. There is reason to believe that when the 
 smugglers find a cruiser in their way. and the cruisers are easily discovered owing 
 to their use of Nova Scotia coal which emits an intensely black smoke, and by 
 other means— they load an old broken-down vessel with a few barrels and send 
 her out to be caught and carried to Quebec as a prize. The cruiser having gone 
 away on this erand, they seize the opportunity to land the rest of their cargo or 
 to distribute it amongst the small trading craft which run in and out of every 
 little harbor. This and kindred practices can only be stopped, if at all, by the 
 activity of special ofHcers on shore. More attention should be paid by customs 
 officers to Newfoundland vessels landing in Canada or hovering off the coast. All 
 
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 vessels shouM bo compelled to display the colors of their nationiility on entering 
 Canadian waters. 
 
 Tht' praetice of sellinj; seized spirits subject to duty is a vicious one. It 
 makes the reward paid to tlie informer laige enouyh to justify the smu<,'<^ler who 
 has a lot of spiiits on board a worthless boat in informing upon himself. He ean 
 make money by <loii)g so ; meanwhile he has blinded the otheers, for the greater 
 part of his cargo is probably elsewhere ready to be Ian led whtn they have gone 
 ott' with the decoy. 
 
 Means should be devised for keeping account of the stock of spirits in the 
 stores and hotels along the coast, liy retpuring the proprietors, for instance, to 
 enter in a book the (pmntities purchased, the date of purchase and the name of 
 the vendoi'. No honest dealer would object. A comparison of tho stock-liook 
 with the stock on hand might be made from time to time by the inland revenue 
 ottioers ; it would be easy to asceitain the truth or falsity of the entries. Pos- 
 sibly this plan would recjuire provincial legislation. In France when spirits are 
 moved from one place to another or even from one house to another a circulation 
 tax is charged and the proper papers have to accompany the goods. In this way 
 and by means of the powers vested in the officers, who have the right to demand 
 at any time an account of where, when and from whom the stock in hand was 
 purchased, smuggling along the Swiss and Belgian frontiers is rendered extreme- 
 ly hazardous. 
 
 As regards the smuggling of American alcohol into Canaila, F would suggest 
 that a copy of this report be submitted in confidence to the Secretary of State, 
 and the Secretary of the 'i'reasury at Washington, in order that their attention 
 may be called to the allegations made herein against Mr. Steer, the commercial 
 af;ent at St. Pierre. Tl>e French ofiicials at St. Pierre will lend everv assistance 
 in their power to any Tnited States Government officer who may be sent to make 
 an investigation. The collectors of customs and inland revenue in <i>uebec. New 
 Brunswick, and Nova Scotia, are aware that Mr. Steer, and Mr. Freeker before him, 
 have been the instruments whereby this fraudulent traffic has been carried on, 
 but they feel it to be a delicate matter to complain otticially or publicly of an 
 agent of the United States in a foreign colony. If the issuing of consular certifi- 
 cates of landin4 or delivery for American spirits transhipped virtually in open 
 ocean were put a stop to, smuggling into Canada and, as believed, into the United 
 States as well, would be gi'eatly checked, if not altogether terminated. To land 
 sturt'at St. Pierre would now entail a cost, as shown, of 47 cents per gallon ; and 
 if the smugglers resolved to land it rather than abandon the business, the French 
 authorities would, without doubt, meet them b}'^ increasing the octroi de mcr on 
 foreign spirits. They feel that the traffic is of no benefit to them, and that in a 
 sense it brings discredit upon the colony. 
 
 It would be a protection to the Canadian revenue if the British Government 
 were to appoint a vice-consul at St. Pierre. It would be his duty to give certifi- 
 cates cancelling the bonds on goods exported thither from Canadian ports. At 
 present such certificates are issued by Mr. Steer.