greater from the standpoint of the colonies than from that of Great Britain. Proposals looking to reduced taxation on trade within the empire as compared with external trade must be considered in the light of actual facts. If interimperial trade is to be made to contribute but lightly to colonial revenues, the basis of revenuetaxation is very much narrowed. The question cannot be considered adequately without an examination of the classes of goods concerned, on which taxation is actually levied, in greater detail than is proposed here. The general tendency of the trade figures set forth is to show a marked contrast between the British and colonial aspects of the problem. To grant colonial preferences in Britain would mean imposing taxation which would affect the stability of the foreign trade, whose magnitude relative to the colonial is shown above. Were it possible to admit British goods to the colonies at nominal tariff rates, Great Britain might find some compensation for interference with her foreign trade. Fiscal needs at present render it impossible for the colonies to abandon duties on inter-imperial trade, while vested interests in many places would prove obstacles to such a movement, even if the fiscal situation permitted a practical abandonment of the customs duties on British goods. See also GREAT BRITAIN — Commerce, Export Statistics; CANADA-THE BRITISH PREFERENTIAL TARIFF; CANADACOMMERCE, TARIFFS, AND TRANSPORTATION. ALFRED W. FLUX, Professor of Political Economy, McGill University.

by the mother country. After the Peace of 1783. the British Navigation Acts in restriction of colonial trade, and the British discriminating duties in favor of the mother country were applied against the United States. Congress early adopted a mildly protective tariff (1789) and enacted navigation laws. But in the era following the War of 1812-15, public feeling on both sides of the Atlantic increasingly condemned this restrictive policy.

By a statute of 1846 (9 and 10 Vict. c. 94) the British colonies in North America were empowered to repeal the existing differential tariff made for them by the Imperial Parliament. The Province of Canada availed itself of this permission to enact (1847) a uniform tariff of 71⁄2 per cent against British and American manufactures alike. Nova Scotia adopted the same course. New Brunswick maintained a discriminating tariff against the United States. The remaining parts of the Navigation Acts were repealed in 1849 (12 and 13 Vict. c. 29). Meantime public feeling in Canada and the United States favored still greater freedom of intercourse. The general prevalence of the doctrine of free trade, its triumph in England (1846), and the adoption by the United States of the low tariff of 1846, set strongly in this direction. Attempts were first made to establish reciprocity by means of conCurrent legislation in Congress, and the Canadian legislature. It was hoped in this way to avoid the constitutional question that might arise should the President exercise his treaty-making power for the regulation of customs duties. The Canadian Parliament passed an act to the desired

effect in 1849. But the legislation introduced in Congress in 1848 and 1850 failed to pass, Congress being unwilling to concede reciprocal lowering of duties without obtaining the free navigation of the Saint Lawrence. Finally Congress adopted a resolution (1353) asking the President to settle both these matters, together with the coast fisheries, by treaty. A like wish having been communicated from Canada to the Crown, Lord Elgin, the governor-general of Canada, was sent to Washington to arrange a treaty. William Marcy, the secretary of state, conducted the negotiations for the United States. The result was the Reciprocity Treaty signed 6 June 1854. It was duly ratified, and an act of Congress passed (Approved 5 Aug. 1854) to carry out its provisions, which came into effect by proclamation 16 March 1855. The terms of the treaty were as follows. An enumerated list of natural products (Art. 3) were to be admitted free of duty between British North America (Canada, New Brunswick, Nova Scotia, and Prince Edward Island) and the United States. According to these specifications no manufactured articles were to be admitted. The treaty further provided for the free navigation of the Saint Lawrence and the opening of the coast fisheries of each country to the fishermen of the other. It was to remain in force for 10 years and further "until the expiration of 12 months after either of the high contracting parties shall give notice to the other of its wish to terminate the same." The reciprocal relations thus established lasted for II years. The economic effect of the treaty is still a matter of controversy, The following figures illustrate the course of trade between the United States and British North America before, during, and after the Reciprocity Treaty:

Complete statistics illustrative of the operation of the treaty can be found in the appendix to an article thereon by Professor Haynes in the publications of the American Economic Association, Vol. VII. The stimulus it afforded to trade between the two countries is undoubted, but it must be remembered that the situation during a large part of the treaty period was quite exceptional. The inflated prices of agricultural products due to the Crimean War stimulated the farming industry. The strain of the American Civil War naturally led to an increased importation of Canadian products. The great increase for the fiscal year ending 30 June

1866 ($48,528,628), was partly due to the rush of importation in view of the prospective abrogation of the treaty. During the earlier years of the operation of the treaty, it met with a general approval. But unfortunately for its continuance it was presently claimed on the part of each country that the existing arrangement unduly favored the other, and that the provisions of the treaty had not been faithfully observed. The American contention can be found in detail in the report made by Mr. Israel T. Hatch 28 March 1860 (House Executive Document No. 96, 36th Congress, Ist Session, Vol. 3, pp. 1-48), in the concurrent resolutions in the New York legislature early in 1862, and in a report made to the House by Representative Ward on behalf of the Committee on Commerce (House Committee Reports, 37th Congress, 2d Session, Vol. III., No. 22). It was here claimed that the increase of duties on manufactured articles adopted by Canada since 1854 was a virtual violation of the treaty. The navigation rights secured by the treaty were argued by Mr. Hatch to have been of little actual benefit, only 40 American vessels with a gross burden of 12,550 tons, having gone down the Saint Lawrence during the first six years of the treaty. "Our railroads," he said, "suffer from a British competitor (the Grand Trunk) supported by privileges equivalent to the taxation on their business with the Canadian Province, and the interior of our own country." The New York resolutions denounced the "gross inequality and injustice existing in our present intercourse with Canada," and called for a revision of the treaty. As against these contenttions the Canadian side of the controversy appears in a report made by Mr. A. T. Galt, Canadian minister of finance (March 1862). The increase of Canadian duties on certain manufactures, from 15 to 20 per cent, he declared to be due solely to financial exigencies, and to be a quite legitimate step since the "treaty contains no reference to manufactured articles whatever." To show Canada's sincerity, he instanced the "repeal of tonnage dues on Lake Saint Peter,» and "the abolition of tolls on all vessels, whether American or Canadian." He argued further that the "spirit of the treaty," had been "infringed by the United States by the imposition (though removed on protest) of heavy consular fees on proof of origin, tantamount to a duty." The ill-feeling thus engendered in regard to the treaty was still further aggravated by the strained relations of the war period. Indeed competent authorities on both sides attribute its final abrogation to the violence of partisan feeling, rather than to commercial reasons. Charles Francis Adams, minister to Great Britain, wrote (February 1865) that the measures for abrogation "were the result rather of a strong political feeling than of any commercial considerations." As a result Congress (16 Jan. 1865) passed resolutions calling on the President to give notice of the termination of the Reciprocity Treaty. This having been done, the treaty expired in 12 months (17 March 1866). The British government made no attempt to preserve reciprocity, but efforts were made in its behalf both in the United States and in Canada. A convention was held at Detroit (July 1865) consisting of representatives of boards of trade, etc., of the leading American cities and Cana

dian provinces. The hope that had been freely expressed in the United States that the desire for renewed reciprocity might lead to annexation, was defeated by the action of the Canadian delegates, but the convention, while approving the abrogation of the present treaty, passed a unanimous resolution in favor of a new one. At the eleventh hour (January 1866) a Canadian delegation of provincial cabinet ministers came to Washington and endeavored fruitlessly to arrange a new basis of agreement. Since the expiration of the treaty in 1866, reciprocal trade relations (except in fish under the Washington treaty of 1871 [q.v.]) have never again been adopted.

Repeated efforts have, however, been made on both sides of the line for their re-establishment. The federation of the Dominion of Canada (1867) was followed by the adoption of a tariff which contained a standing offer for a resumption of reciprocity. Meantime the Canadian minister of finance, Sir John Rose, visited Washington in 1869, with a view to arranging a renewal of tariff concessions. It is thought that he even proposed a complete customs union (see 'Canadian Magazine, March 1897). Further efforts were made by the Liberal party on their advent to power (1873). Mr. George Brown visited Washington as Canadian commissioner, acting in conjunction with Sir Edward Thornton, the British minister. They, with Mr. Hamilton Fish, secretary of state, drafted a new reciprocity treaty (June 1874). Its terms referred not only to natural products, but a number of manufactured articles, agricultural implements, boots and shoes, cottons, iron, leather, engines, etc. Duties were to be diminished by one third each year, until a basis of free exchange was reached. The treaty was rejected by the United States Senate. Shortly after this the Conservatives returning to power (1878) adopted the high tariff schedule of the so-called "national Policy"; this and the American tariff act of 1883 rendered the chances of renewed reciprocity still more remote. But towards the close of the 80's, the question again assumed great prominence, especially in Canada. It now took the form of a movement in favor of "commercial union," advocated by Mr. Erastus Wiman, Prof. Goldwin Smith, and others. This meant the abolition of customs duties between Canada and the United States, and the erection of a common tariff. A modified form of this policy known as "unrestricted reciprocity," was adopted by the Canadian Liberals as the main issue in their unsuccessful election campaign of 1891. The term was generally understood to mean a large measure of free trade both in manufactures and products, but not of necessity a complete customs union (see address of Sir W. Laurier, Quebec, 12 Feb. 1891). Meantime in the United States Representative Butterworth introduced a bill (December 1888) in favor of complete reciprocity. Representative Hitt in 1889, presented a resolution in favor of commercial union. Neither of these measures was carried, and the McKinley Tariff (1890) considerably raised the duties on barley, peas, potatoes, and various other natural products. After their successful re-election in 1891 the Canadian Conservatives opened negotiations with Mr. Blaine, secretary of state, for renewal of partial reciprocity. The negotiations came to nothing,

Mr. Blaine refusing to consider a treaty which should include only natural products. An international convention at Saint Paul, Minn., 1893, passed a resolution in favor of "a treaty providing for the free interchange of those classes of the products, both natural and industrial, of each [nation] that are most generally in demand in the markets of the other." The Wilson Tariff (1894) lowered many duties in the agricultural schedule and placed lumber on the free list, but the Dingley Tariff (1897) raised the duties on cattle, wheat, flour, etc., and put a duty on lumber of $2.00 per 1,000 feet. Mr. Osborne Howes of the Boston Chamber of Commerce, gave evidence before the U. S. Industrial Commission (Report Ind. Comm., Vol. IX., 1901) in favor of adoption of reciprocity. He showed that the Canadians were, per capita, the best customers of the United States, and that the 6,000,000 people of Canada purchased from the United States more than the 60,000.000, south of the Rio Grande. The balance of trade between the two countries was strongly favorable to the United States. Such a trade should, therefore, be developed by reciprocal concessions. especially as there was a possibility that the present Canadian pereferences (333 per cent) in favor of British goods might develop into a commercial federation of the empire. The balance of trade for recent years is seen by the following figures:

The lumber interest in the United States is strongly opposed to reciprocity. Canadian lumber would have nearer access to the markets of New England, and the Middle States than the lumber of Minnesota or Wisconsin. The bituminous coal of Nova Scotia is mined at the same cost as in Maryland and West Virginia, but the Nova Scotia mines are on the sea board, whereas the railroad haul from the States mentioned, to tidewater, costs $1.25 a ton. Without a tariff New England would look to Nova Scotia for her supply of bituminous coal. It thus appears for a considerable time New England was the territory most interested in securing reciprocity. A considerable movement in that direction is developed and various public meetings in Boston and elsewhere, in the spring of 1904, passed resolutions in favor of reciprocity with Canada. The negotiation of the Reciprocity Treaty of 1911, following upon a small re-arrangement of certain Canadian duties to avoid the imposition of the United States maximum tariff in 1910, made the whole subject one of international and Imperial discussion. In the end the Treaty failed to pass the Canadian Parliament - though accepted by the United States Congress; and defeated the Laurier Government in Canada during the ensuing General Elections.

STEPHEN LEACOCK, Lecturer in Political Science, McGill University.