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Un das symboias suivants apparaltra sur la darnlAra imaga da chaqua microficha. salon la cas: la symbols — »> signifia "A SUIVRE", la symbols V signifia "FIN". Maps, piatas, charts, ate, may ba filmad at diffarant raductlon ratios. Thosa too larga to ba antiraly includad in ona axposura ara filmad baginning in tha uppar laft hand cornar. iaft to right and top to bottom, as many framas as raquirad. Tha following diagrams iiiustrata tha mathod: Las cartas, pianchas. tablaaux, ate, pauvant Atra filmte A das taux da rMuctlon diffArants. Lorsqua la documant ast trop grand pour Atra raproduit an un saul cliche, II ast film* A partir da i'angia supAriaur gauche, da gaucha A droita, at da haut an bas, an pranant la nombra d'imagas nicassaira. Las diagrammas suivants illustrant la mAthoda. ata Hure, a : 2X 1 2 3 1 2 3 4 5 6 1st Session. 3SS, ) J ^ 36th Congress, ) HOUSE OF REPRESENTATIVES. ( Ex. Doc. No. 96. RECIPROCITY TREATY. LETTER OF THE SECRETARY OF THE TREASURY, Communicating reports of Messrs. Hatch & Taylor, in reference to the operations of the reciprocity treaty. June 18, 1860. — Referred to the Committee of Ways and Means and ordered to be printed. Treasury Department, June 16, 1860. Sir: In answer to the resolution of the House of Representatives of the 26th of March, 1860, airecting the Secretary of the Treasury to communicate to the House any information in his possession rela- ting to the operations of the reciprocity treaty with Canada, I have the honor herewith to communicate the reports of Mr. Israel T. Hatch, dated March 28, 1860, and James W. Taylor, dated May 2, 1860. These reports of two of the agents of this department are commu- nicated, in compliance with the direction of the House, for any in- formation they may contain. The views and opinions expressed by the writers must be regarded alone as their individual views and opinions, as the department has not given to them its sanction and approval. All of which is respectfully submitted. HOWELL COBB, Secretary of the Treasury^ Hon. William Pennington, Speaker of the House of Representatives. r BECIPROCITY TREATY. REPORT OF HON. ISRAEL T. HATCH. Washington, March 28, 18G0. In discharging the special duty assigned to me of examining the operations of the revenue laws and the reciprocity treaty on our northern frontier with Canada, I beg leave to report that I have visited the principal points of intercourse between those countries for the purpose of acquiring practical information, and have also had in- terviews and correspondence with leading individuals vdiose interests are affected by the treaty, and who are engaged in the various pur- suits of trade, agriculture, and manufactures. The personal obser- -vation I have thus been enabled to give the workings of the treaty at the places where its effects are perhaps most perceptible, and the information derived thus from the everyday experience of those who do business under it, I have believed would furnish most important data for forming a practical judgment of its operation. The treaty of reciprocity produced a revolution in the operation of the revenue laws, as well as in the revenue itself. Reciprocity, The principle of reciprocity, in the commercial intercourse of the United States with Canada, has met the approbation of all political parties in this country at all times. The territory of the provinces ife indented with our own along a line extending across the continent from ocean to ocean. The Avnges of labor (the great modern test of one phase of national equality,) are nearly equal in both countries. The cost in the production of Avheat and other cereals differs but little on both sides of the boundary line. Shown thus to be appa- rently commercially alike by these leading considerations, and minor parallels confirming the similitude, it is not singular that at various periods of our national existence the idea of reciprocity in trade between the two countries has received the favorable regard of emi- nent men. "The government of the United States," said Mr. Clay, in his le+ter of the 11th October, 1826, to Mr. Vaughan, "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." Three years after the date of this letter, daring the presidency of General Jackson, Mr. Van Buren's letter of in- structions to Mr. McLean, who was then our minister at the court of St. James, announced the principles on which this government re- opened negotiations relative to the trade with the British colonies in North America. He said : "The policy of the United States in re- lation to their commercial intercourse with other nations is founded on principles of perfect equality and reciprocity. By the adoption of these principles they have endeavored to relieve themselves from the discussions, discontents, and embarrassments inseparable from the ;, 18G0. lining tho :y on our it I have intries for 80 hud in- 15 interesta 'ious pur- lal obaer- ho treaty 3, and the hose who important 'he treaty 3 revenue rse of the [ political provinces continent rn test of ountries. flcrs but be appa- id minor It various n trade of emi- Ir. Clay, s always colonies not been len they city and , during r of in- Icourt of ent re- lonies in 3S in re- founded [doption res from rom the RECIPROCITY TREATY. 3 imposition of burdensome discriminations. These principles were avowed while they were yet struggling for their independence, are recorded in the first treaty, and have been adhered to with the most scrupulous fidelity." The freedom of commercial intercourse has never been more ably advocated than by Thomas Jefferson. In the report made by him in 1793, when he was Secretary of the Treasury, as if ho would rescue tho term "reciprocity" from the opprobrium it must sometimes en- counter, he made use of the following memorable words: "Should any nation, contrary to our wishes, suppose it may better find its ad- vantages by continuing its system of prohibitions, duties, and regu- lations, it behooves us to protect our citizens, their commerce, and navigation, by counter prohibitions, duties, and regulations, also. Free commerce and navigation are not to be given in exchange for restrictions and vexations, nor are they likely to produce relaxation of them." Familiar as tho public mind must have been made with the prin- ciples which finally produced this treaty by these and similar almost authoritative expressions of opinion, brought home at intervals as these ideas must have been to the legislation and diplomacy of the country, it is not surprising that this practical but limited experiment in substantial free trade was attempted. The leading idea of the treaty itself was to permit tho introduction of the products of one country into the other free of dut}'. and consequent reciprocal bene- fits were expected to follow to both. The various colonies included in its provisions were left to regulate their own tariffs, and each colonial power can annul its honorary obligations without reference to its sister provinces or the engagements of the empire. No states- manship could, however, foretell the workings of the treaty, or had a right to anticipate legislation adverse to its spirit. Correct in prin- ciple as the treaty itself was, the perversion of its spirit, and the disregard of its substance on the part of Canada, have produced re- sults it Is tho province of this report to exhibit. Uniled States revenue from Canada. The effects of the reciprocity treaty were first and immediately visible in the great change produced in the collection of revenue upon the northern frontier, and cannot fail to attract attention. In 1854, the last year unaffected by the treaty, although the enumera- tion was then incomplete, the revenue, on articles rendered free by the treaty, (during subsequent years,) and imported from Canada alone, amounted to more than $1,243,403. — (See Appendix No. 1.) Assuming this as a basis for calculation in the ordinary mode of com- puting increase of revenue, and that the revenue would have con- tinued to increase in the same ratio as during the previous five years, (Appendix No. 2,) we should, for the five years now past and ended June 30, 1859, have collected a revenue of 17,166,659, or $1,433,331 annually, on importations from this province alone, and we should at the present time have a yet larger revenue from this source if the treaty were abrogated to-day; for the geographical and political rea= 4 RECIPROCITY TREATY. sons wliich inude tho Canadians seek our markets for tlio sale of their products remain unimpaired in every particular. The revenue derived by Canada from the same chiss of merchan- dise was, during the year 1854, as stated by Mr. Bouchettc, then the Canadian commissioner of customs, only $190, 071, or less than one- sixth of $1,243,403, the amount levied that year on Canadian pro- ductions by the United States. Loss of revenue to the United States. During the same year, 1854, the revenue derived by the United States on the chief importations from all the provinces included in the treaty was $1,524,457. — (See Appendix No. 1.) Computing the increase of revenue during the five succeeding years upon the basis of the increase during the five years next before the treaty, the revenue derived from this source would have been $9,257,586, or $1,851,517 annually. Several items of these importations are not in- cluded in this calculation, and we are now near the close of an addi- tional year, when the revenue from this source, for the six years elapsed since the troaty, would have been $11,109,103. Expense of collection hss than the revenue collected. The influence of the treaty on the revenue of the United States is also clearly shown by comparing the receipts at the ports of entry on the northern frontier on all importations from Canada with the ex- pense of collecting them, the necessary expenditure being for the last four years $189,730 (see Appendix No. 3) more than the sum collected — a result contrary to the anticipations of some who advo- cated the adoption of the treaty, and whose views are well expressed in the very able report of the Hon. D. L. Seymour, who argued that •' the laws of trade forbid the conclusion that a foreign commerce which shall afford to such a people as the population of these colonies their principal supplies of necessaries and luxuries will be either re- duced in amount or shorn of its revenues." The large amountof our importations from Canada since the treaty would form no accurate test of the income we might have obtained from that source. In 1856 the articles received from Canada by the United States, and rendered free by the treaty, amounted in value to $17,810,684, besides many important but unenumerated items. At the average duty of 20 per centum, the revenue would have gained more than $3,562,138 on the importations of that year, or, as Canada received from us during the same year $7,899,554, the value of the corresponding articles, there was for that year a balance of trade in favor of Canada amounting to $9,911,130, the duties on which would have been $1,982, 226. During the four years elapsed since the treaty came into effect, and ended 31st December, 1858, we have received from Canada $28,771,690 in value of the articles enumerated in the treaty more than she has received of us. At the same rate of duty the revenue on them Avould have been $5,754,338, or $11,722,689 if computed on $58,613,449, (see table D,) the value of the commodities received by us since the treaty and similarly free. T! liav(| hav(| ganil necel in tf colh* agaiil chanl nor til 1850.. 1851.. 1852. J 1853... 1854... 1855.. 1856.. 1857 . . 1858.. 1859.. RECIPROCITY TREATY. ilo of thoir ' morclinn- 3, then the than ono- iuliaii 2)ro- Iic United icludod in 'Uting tho tlio basis 'eaty, the >7,586, or iro not in- ' an addi- six years 1 States is ■ entry on h the cx- for the tho sum ho advo- xpressed ued that 3inmerce colonies iher re- treaty btained by the value to ns. At gained Canada of tho rade in Avould treaty iceived in the f duty G89 if odities Tho collection and safe-keeping of tho large income which would have accrued to our revenue under the former system of duties would have imposed no additional expense upon our government, as an or- ganization suitable for tho purpose already exists in the custom-houses necessarily maintained on our northern frontier to prevent free trade in these commodities on which duties are now levied, and chiefly collected at the Atlantic ports of entry, and to protect tho public against tho total loss of revenue, which must arise, if foreign mer- chandise could be thrown into the interior, free of duty, through the northern frontier. Increase in amount of free goods imported from Canada. The marked change in the amount of free goods imported from Canada into the United States, since the treaty, is shown in the fol- lowing table, exhibiting also in contrast tho importations from the same province, and subject to duty, from June 30, 1850, to July 1, 1859: Importations to the United States from Canada, Years. Free of duty. Subject to duty. 1850 $636,454 1,529,685 761,571 1,179,682 380,041 6,876,496 16,847,822 17,600,737 11,267,618 13,703,748 $3,649,016 3,426,786 1851 1852 3,828,398 1853 4,098,434 1854 6,341,498 1855 5,305,818 1856 640,375 1857 691,097 1858 313,953 1859 -- -- 504,969 Total 70,733,854 2 s. 800, 344 The above statistics show that while for the five years next pre- ceding the treaty duty was paid on nearly five times the amount of impo' Nations from Canada than the amount admitted free of duty, the exact proportions being $4,487,433 of free goods against $21,344,132 of the other class; since the treaty and beginning with our fiscal j'ear 1856 until July Ist, 1859, a period of four years, similar importations to the amount of $59,419,925 have contributed nothing at all to our revenue, while wo have charged duties only on $2,150,394, or about one-thirtieth part of the amount admitted free of duty. Almost all actual productions of Canada admitted free. On closer examination it will be seen that a large proportion of the duty-paying articles imported from Canada consist of commodities not produced in the country. In 1858 the dutiable importations 6 RECIPROCITY TREATY. IVoin Ciimida, hm kIiowii by. tho uhovo tiil»lo, were only $313, l)').*?, of which iron, hiirdwaro, and wait ari,icloa, not producod in Canada for expoitation in any approciahlo (luantitiow, alono fumiHluHl $1J)3, .'){),'>. Of tho reniai lor a considerablo portion was also of ioroign orij;in. As tho same i^asoninfj; applies also to other years I present srablished; at other times the difl'erence was so great that, on the 17th day of March, 1827, the President of the United States issued a ])roclamati()n prohibiting tho trade between this country and the British colonies of North America. Hitherto differential duties had been exacted in Great Britain on the wheat of the United States and the colonics, with an intention of forcing our agricultural produc- tions through Canada, by way of the St. Lawrence. By an act of Congress, dated August 0, 1846, we permitted the produce of Canada to be sent through our lines of communication to the ocean, either in bond or with the right of drawback, on paying two and a half per cent, at the place of exportation. The effect of this law was largely to divert from the St. Lawrence the shipments hitherto made through it. and send them through our seaport ;, and it will thus be seen that under the operation of this law wo were the carriers for Canada; •but since the treaty the Canadians have not only carried the commo- dities required for their own use, but have become tho forwarders and carriers for us. Although tho free navigation of the St. Law- rence had been for years held up to the great west as an inestimable prize, the Canadian or British government always preferred to enjoy its advantages in driving a good bargain with us rather than rely i HECIPROCITY TREATY. on the ulated oil was [t that, States ry »nd duties States roduc- act of anada her in If per jarg-ely rough seen mada; mmo- irders Law- inable enjoy |i rely I upon its ntircrtaiu half year'w navigation for the outlet of their Hur- plus productions. They continui'd to Heek a free aceess to our niarki^ts. Ill 1847, wluiii the colony sulfered un(h;r a removal of the exclusive privileges it had formerly enjoyed in Great JJritain, duties on Ameri- can iiiiiiiiifactures were reduced from \2\ io1\ percent., and iiicrcNised on Ihitish manufactures from T) to 1\ percent.; thus ri'moviiig all dif- ferential duties against the Unite(l States. In 1840 the i»rovini!ial legislature passed an act authorizing thi> removal of duties on all articles Ixung the growth or production of the United States, on con- dition that we shouhl pass a similar law. Sir 11. L. Biilwer, when IJritish minister at Washington, pressed upon our governnumt the consideration of such a treaty as became law in 1854, urging as a reiison the liberal policy of Ciinada towards our manufactures. The following is an extract from his letter to our Secretary of State: Jieufons ut'ijcd hy I lie Jlritinh miniHfer for the admission of Canadian 'products. "T have already expressed to you at different ]»oriods, and espe- cially in my note of 22(1 March last, the disappointment which was experienced in Canada when, at the close of the last sessitJU of Con- gress, it was known that no progress what(^ver had been made in the bill which had been brought forward for three years successively for recii)rocating to the measure which passed the Canadian legislature in 1847, and which granted to the natural produce of this country an entry free of duty into Canada, whensoever the federal legislature of the United States should pass a law similarly admitting into the United States the natural ])roduce of the Canadas. lite dimppoint- ment wan the greater inasinuch as the Canadian gm'irnnwnt has always adoptvd. the most liberal cotnmercial policy with resjHcf to the United States, as well in regard to its transit through its canals as in regard to the adtnission of manufactnred goods coming from this country." The formal declaration of the basis of the treaty. The treaty itself was formally declared to be founded on a desire to regulate the commerce and navkjation between the respective territories and people of the United States and Great Britain, and " more especially beticecn her Majesty^ s possessions in North America and the United States, in stich manner as to render the same reciptrocity bene- ficial and satisfactory." The assent of Congress was i)rocured on this understanding, and it was substantially admitted on both sides "that no commercial arrangement can be permanently advantageous to one party without being so to both; that the basis of virtual, if not of liberal, reciprocity is the only solid ground of international relations; and that the increased prosperity of one of the family of nations only oflers an enlarged market for the industry and an ex- panded field for the commerce of every other." Tlie treaty Avas conceived in the theories of free trade, and in bar- 10 RECIPROCITY TREATY. mony with the prof^ress and civilization of the age. It was a stop forward in political science American legislation had b' i charac- terized by an extraordinary liberality to a foreign neighbor, placing her lines of transportation upon an equality with our own, and her merchants upon an equality with our own, in receiving foreign merchandise in bond. We conceded commercial freedom upon all their products of agriculture, the forest, and the mine, and they have either closed their markets against the chief productions that we could sell to them, or exacted a large duty on admission into their markets. Yearly changes and increased duties m Canadian tariff's. From time to time Canadian duties have been increased since the ratification of the treaty, and during the last five years the following duties have been exacted on the declared value of various chief articles of consumption: Articles. Molasses Sugar, refined.. Sugar, other... Boots and shoes Harness Cotton goods Iron goods Silk goods Wool goods 1855. 1856. 1857. 1858. Per cent. Per cent. Per cent. Per cent. 16 11 11 18 32 28 25 26i m 20 m 21 12i m 20 21 12^ 17 20 21 m 13S 15 15 m 18§ 15 16 m l^ 15 17 ui u 15 18 1859. Per cent. 30 40 30 25 25 20 20 20 20 Every year a new tariff has been enacted, and each of them has inflicted higher duties upon the chief productions of American labor. These duties are so adjusted as to fall most heavily upon the products of our citizens. III' Tariff to exclude the manufactures and commerce of the United Stales. The tariff of 1859 was avowedly based upon an isolating and ex- clusive policy. It was supported on this ground alike by ministerial organs of the press, by petitions in its favor, and by members of the colonial parliament. After securing our free market for all Canadian productions, its advocates argued that it was the interest of Cana- dians to become independent of all other countries, and to employ their own ships and their own people; thus "keeping in the country all that is now paid to the United States." They can find no justification for the annual increa.-e in their riites of taiiff in the assertion that the nresent rates do not oxcoed nnr own. When the treaty was ratified our tariff exceeded theirs, and the consideration given to them was not an equality of tariffs, but an interchange of the produce of both countries and certain privileges w RECIPEOCITY TREATY. 11 Per cent. 30 40 30 25 25 20 20 20 20 lem has labor, oducts md ex- isterial of the inadian Cana- employ country ir rates ^od our [rs, and but an Ivilegos in navigation, Avhile a liberal policy towards our manufactures was promised and had been adopted; thus placing the commerce and navigation of the two countries upon ' ' terms reciprocally beneficial and satisfactory," although we have made large reductions in our tariff since the treaty. Canada had determined to free herself from the difficulties of her geographical position, and the British government was compelled to secure our free markets to prevent rebellion. This was secured through menaces and promises of liberality to "manu- factured goods." Justice to our people for the privileges granted by the treaty demands that future Canadian legislation should conform to tlie letter and spirit of the treaty, and that Canadian enactments should be in the direction of a more free intercourse between the two countries. If it be true that the Canadian government has a right to increase its taxes upon our industry, as it has done, almost to the exclusion of our manufactures, because no stipulation against this course was inserted in the treaty, then it has a right to put an embargo (for a prohibitory duty amounts to an embargo) upon all articles not enume- rated in the treaty, and there could be no check to its aggressions. Public opinion in Canada. I believe that the Canadian people do not feel easy under their recent legislation affecting this country., and many of their public men and some public journals speak of it as furnishing just grounds to the United States for annulling the treaty. The Canadians rely more upon American forbearance, under the violations of the spirit of the treaty by colonial legislation, than upon any omissions in the treaty to provide against such wrong. Opinion of Canadian Boards of Trade. The Boards of Trade in the chief cities of Canada West complained of the Canadian tariff in such representations as the following: "Your petitioners are of opinion that so uncalled for and unwise a scheme is calculated to affect the existing pleasant commercial rela- tioiishiii between Canada and the United States in the working of the reciprocity treaty, the groat advantage of which to this province is well known to your honorable house, inasmuch as the proposed policy of the inspector general practically shuts the door to the admission into Canada of the leading articles of commerce hitherto purchased in the great markets of the United States, and forcing Uppie^' Canada to iinpoii via t/ie St. Laivrcnce, or otherivisc pay an enormous increase of duty.'' Deficiency in Canadian revenue and cause of taxation on our products. When the tariff was under discussion in the provincial parliament a deficiency of $4,000,000 (greatly exceeding the revenue of that year) was officially announced. This deficiency, and the consequent 12 RECIPROCITY TREATY. increase of taxation on American manufactures, arose, it is osserted by the organs of the government, from expenditures in carrying put their system of internal improvements. That a largo amount has been thus expended is shown by the following quotation from the report of the select committee appointed, in 1858, by the legislative assembly of Canada to inquire into the course of trade between the different Atlantic ports in America and Great Britain, &c., (p. 3:) "The public debt of Canada has increased from year to year to about fifty millions of dollars, twenty-five millions of which have been created since 1853, principally in the construction of railways yielding no income." — (See Public Accounts, 1857, p. 223.) Countless trains of cars are now daily dashing along these railroads from the seaboard towards the Rocky mountains, competing, without regard to remuneration, for the commerce of the great valleys of the lakes and the Mississippi. Railroads and canals in Canada constructed for United States commerce. The railroads and the canals of Canada were alike constructed for the express purpose of extending political and commercial power, by the diversion of the trade of the great interior of our country through the valley of the St. Lawrence and the Canadian routes of transpor- tation, thereby advancing the prosperity of the colony and increasing British power. They were undertaken by the government, and were mainly dependent upon subsidies and municipal bonds; and the object of their managers has hitherto been to secure the largest amount of traflic to the roads, instead of the largest dividends to the stock- holders. This extensive system of internal improvements was brought into active life by the ratification of the reciprocity treaty, through which Canada wae enabled to open a grain trade between the great Avest and the eastern States. To control it, she plunged into extraordinary expenditures for an extended railroad and carrying system. Increased taxation was the consequence, and additional duties were imposed upon all manufactured articles, and upon many others not enumerated in the free list of the treaty. Official avotcal of Canadian policy. The Canadians attempt justification of these impositions by their public necessities. Whence arose their necessities? Did they not originate in a desire to abuse our concessions by strengthening their hands in grasping the carrying business of the United States? Amount expended hy Canada to control our commerce. Their minister of finance, Mr. Gait, inareportrecently issued by him in England in support of a Canadian ministerial scheme, admits the in- sufficiency of the commerce of Canada to support her public works, com- i ^ M RECIPROCITY TREATY. 13 ossertetl rying put lount has from the sgislative ween the [p. 3:) 3 year to lich have railways ) railroads ;, without 3ys of the commerce. I'ucted for 30wor, by y through transpor- increasing I and were the object imount of le stock- ught into ;;h which rcat west lordinary ncreased imposed imerated by their I they not ling their flby him Is the in- rks, com- plaining that, whilst possessing the most magnificent canals in the world, she is ^^tvithout avv trade to support them, except her own," and adding that the cfr. of Canada have failed to divert trade from the channels it had al. ,Ay formed; a system of railroads had also been constructed for thf> purpose of competing with American in- terests. — (See rejiort, entitled ''Canada, 1849 to 1859, by Hon. A. T. Gait, finance minister of Canada, 1860.) He then proceeds to state that, after deducting a sinking fund for the redemption of the imperial guaranteed loan, the direct public debt of the province amounts to ^8,884,672, or $43,001,812; adding, that of this sum debts incurred in consequence of the canals and other works connected with the navigation of the St. Lawrence, and railway advances, furnish .£8,801,400, leaving only X22,272, or $107,796, as the total direct debt of Canada made for any other purposes. Canada taxes our pi'oducts to pay for public ivorks constructed against us. To make up the deficiency caused by these speculative expendi- tures, Canada now seeks to make our merchants and manufacturers, who have been most damaged by the diversion of western trade to Canadian cities and transportation routes, pay for her non-remuner- ative carrying system. This whole modern movement of Canadian or British policy, in transportation, is artificial, unnatural, and against the laws of trade, climate, and geography — in violation of the spirit of international intercourse as mutually recognized and sanctioned by the reciprocity treaty. It cannot last, even if Congress should refuse to protect our commerce on the inland seas. The transit lines of freight and passengers across this continent to the ocean may be deflected for a time by disturbing causes, but cannot be permanently changed. They are governed by laws as imperative as the natural laws which govern the flow of our rivers in their course to the ocean. Benewcd assurances of the British minister. Besides establishing a system of ad valorem duties, levied in such a manner as to discriminate against the commercial and shipping interests of the United States, the duties on our manufactures are already increased, by the tariff of 1859, to an almost prohibitory extent; and its authors must have known that if such duties had exis^ted, or been expected, at the time when the treaty was made, it could never h-xve obtained the assent of Congress. The letter of Sir H. L. Bulwcr, from which I have already quoted, did not close with a hierc statement of the liberal commercial policy already pursued towards the manufactures of the United States, but alleged, upon the oOieial authority of the Canadian irovernment, that if the natun ity go> pro- duce of the Canadas sho'.ild be admitted duty free, they would be ''ic'dlimj to carry out still further" the same policy; adding, as a threat, that if we refused to comply with the offers made to us, "the Canadian government and legislatures are likely forthwith to tako '^ 14 RECIPROCITY TREATY. n I certain measures which, both in themselves and their consequences, will effect a considerable change in the commercial intercourse be- tween the Canadas and the United States." We accepted the offers, made the desired and friendly concessions, and trusting in the assertions unequivocally made, the American authors of the treaty did not stop to weigh with miserly precision the exact balance of profits to be made and advantages to be given, or the loss and gain in our revenue; but the " considerable changes in our commercial intercourse," and also in our revenue, have been, indeed, the unfortunate consequence of our liberality. Anomahj presented here in the collection of revenue by the tivo countries. The United States and Canada present the anomalous spectacle of two border nations with an array of custom-houses extending along their whole coterminus frontiers, sustained at an expense to this gov- ernment greatly exceeding the revenue it collects, whoso principal occupation is to enter and register the free products of Canada on their way to our free markets, while on the opposite shore, often sep- arated from us only by a bridge, a ferry, or a boundary line, is found an equall}' extended cordon of imperial customs' buildings, emblazoned with the royal arms of England, collecting large revenues on our taxed products, as a tribute from the commercial bondage beneath which the unfriendly legislation of provincial parliaments has placed us in exchange for the commercial freedom we have granted to the Canadas. Those exactions are derisively justified on the ground that no special provision against them was inserted in the treaty, although its avowed object was to carry out the principle of reciprocity, and " especially to regulate the commerce and navigation between her Majesty's pos- sessions in North America and the United States in such manner as to render the same reciprocally beneficial and satisfactory." Increase of duties on various American manufactures — Canadian tariffs. In comparison with the duties of 1854, the duties levied by the tariff of 1859 on many of our manufactures, such as boots and shoes, harness and saddlery, clothing, wearing apparel, &c., has been increased a hundred per cent., and in the large class of unenumerated articles, including leather, and nearly all our other manufactures, such as woollens, cottons, tobacco, printed handbills, cheques, &c., hats, household furniture, glass, axes, edge-tools, firearms, agricultural implements, nails, !ty's pos- nner as to an tariffs. !d by the nd shoes, has been lumerated jires, such jc, hats, Iricultural iholstery, jnts, soap lead, and lof shii)s, ]ed sixty- of grain lit.— (See a- i American manvfactures injuriously affected. The motives actuating the enactment of the present tariff are of less moment than its results; and although no duties avowedly discrimi- nating are levied on American goods, the influence of the provincial tarllf produces the same effect, for the manufactures most readily adopted by Canada must be like our own. The climate, price of materials, interest on money, wages of labor, and the various causes determining the kind and prices of manufactures on both sides of the frontier are nearly identical, when no legislation intervenes to arrest or aUer the laws of trade. It is as easy to transplant manufactures to Canada as from one State to another. Master manufacturers and work- men already skilful in the special pursuits of their industry, together with the tools and machinery adapted for their purposes, can go to Canada in a few hours. Well known establishments originating in this way were already transplanted under the influence of the high tariffs of 1858 and 1859, and the tendency of these tariffs is towards a virtual prohibition of our manufactures, although Canada will still continue to import as we do, from Europe and Asia, commodities requiring such skill as we have not attained, materials not readily accessible to us, or the products of cheaper labor than Ave possess. The usual policy of Canada has also been to encourage manufactures by admitting their materials, raw or partially manufactured, either free or at a low duty. Viewed as a question of national integrity, the conduct of the Cana- dian parliament in thus taxing the products of American industry almost to their exclusion from the province must be pronounced to be a vio- lation not only of the letter and spirit of the treaty but of the amity and good faith in which it was conceived, and without which all inter- national obligations are unavailing. Differential ditties against our shippers^ fortvarders, and merchants. The retrograde policy developed by the Canadian tariffs since tho ratification of tho treaty is not confined in its action to American manufactures. With duties practically differential, through a change in the valuation, she has endeavored to lessen the business of our shippers, forwarders, and merchants, by diverting trade in tea, coffee, sugar, wine, and all other articles of foreign production, but especially those of tropical origin, from New York, Boston, Philadelj)hia, and other Atlantic cities of the north, to Montreal, choosing a long and circuitous route to the richest and most progressive portions of lier territory, endeavoring thus to draw her commerce from all parts of the world along the vast line of her frontier, instead of taking tho shortest course from the Atlantic, across the United States. Abuse of our bonded system. The laws by which the passage of foreign productions through our country in bond was permitted were an essential part of the system 16 EE':'IPROCITY TREATY. of reciprocal benefits intended to develop harmoniously the natural advantages of each country. They tended to reconcile our people to the inequalities it imposed on us. They vested in the financial officer of the government a power hitherto exercised in the most liberal manner towards the railroads and carrying lines of Canada, in permitting alii^e the exportation to Canada and re-importation to the United States of foreign merchandise in bond, and merchandise of American origin. Upon this idea of being the carriers for us de- pends the hopes of making profitable their investments in railroads and canals. Their public works were constructed as our carriers not theirs. System of differential duties adopted hy Canada. of Canada now endeavors to deprive us of all the benefits tern of levying duties on the value of goods at the place of purchase. The people of w^esterr Canada were accustomed to buy their wines, spirits, groceries, and East and "West India produce, besides many other commodities, at New York, Boston, or Montreal. The former system admitting American cities to competition — the duties having been specific and levied on the iveight, measure, or number of the articles wherever they were purchased. Thus no greater duty was charged on imports, via Boston or New York to Toronto or Hamilton, than via the St. Lawrence to Montreal. The present system forces the people of Candia to discontinue their business connexions with our mer- chants and buy from the Montreal and Quebec importer. Thus the productions of China, Brazil, or Cuba, if brought to Canada via the St. Lawrence, will pay dut}' on their value in the country of their origin, but if purchased in our Atlantic cities must pay duty on that value increased by interest, freight over the ocean, and the various other expenses and charges of the insurer, shipper, and mer- chant. This is not only legislation against our carriers but against all our mercantile interest. The "increase of duty" has been care- fully estimated to be twenty per cent, on goods imported into the United States and thence into Canada, in excess of the duties levied via Montreal. The distance from Cuba to Toronto, via the St. Law- rence, (a river frozen half the year,) is about three times as great as tlirough the United States. Thus Canada vainly strives to conquer the laws of arithmetic, climate, and geography. Effects of the treaty upon Canada. This legislation occurred at a time Avhen, without asking for any •equivalent, we had reduced our duties on Canadian manufactures twenty per cent. Before this, desirous of rendering "our commer- cial relations reciprocally beneficial and satisfactory," wo had con- ferred upon Canada benefits shared by all classes of her people^ We gave to her farmers highly remunerative prices, and brought tlioir lands and productions upon an equality with our own, and thus gioatly increased the value of their homesteads. Through their ag- 8p % RECIPROCITY TREATY. 17 latural people lancial 3 most ada, in , to tho dise of us de- lilroads ers not Kis sys- irchase. ' wines, s many former having articles charged ;han via I people iir mer- lus the a via try of uty on d the d mcr- against sn care- ito tho levied Law- ;rcat as on que r or any ictures jmmer- id con- ieOT)le= [rouglit id thus leir ag- a.^1 -ft ricnlturo we aided every branch of their industrial occupation, thoiis'i ^^'^ thereby left tho most important points of our trade in the liands of those among whom hostile traditions are not yet wholly ex- tinct, and whoso minds are liable, on occasion of pecuniary pressure to bo swayed by theories, petty in their nature and opposed to their interests and our own. Prosperity of manufactures in Canada, All tho consequences of the high tariffs of Canada cannot yet be thoroughly shown by the govermental statistics of either country. The minute ebb and flow of commerce from one year to another year cannot show the full effect of these exclusive laws. Manufactures are chiefly rej)resented as products of the United States, paying duty in Canada, in the table already given, and exhibiting in this class a decrease from nearly eight millions in 1856 to four millions and a half in 1858. Manufacturing establishments, however, cannot be brought into full operation in six or twelve months, although the progress made by Canadians, under the influence of these tariffs, towards supplying their own wants and excluding us for ever, has been so great that from a locomotive down to a shoe-peg almost every branch of the manufactures of this country is already successfully commenced. Montreal, under the forcing process of protection and discriminat- ing tariffs, is now rivalling Lowell and Lynn in almost every article of their manufacture, and approaching our Atlantic cities in the magnitude of her commerce. For similar reasons the effect of the tariff of 1859 on our exporta- tions of foreign merchandise to Canada cannot be shown in the form of statistics. Less than a fiscal year, under the regulations of either country, has elapsed since it received the requisite legal assent. To carry an order for tea to China, and allow time for the return voyage to Canada via the St. Lawrence, requires nearly a year. Importa- tions also are frequently large in anticipation of increased duties. Abundant crops, expansion of the currency, an accidentally excited demand for breadstuffs in Europe, and other causes, might have the same temporary effect, but a more comprehensive induction will show the folly of })assive obedience and non-resistance under such aggressive cuiictiuents a« can only be overcome by counteracting legislation, including a repeal of our bonded system and a withdrawal of the privi- leges hitherto liberally granted under laws permitting the transit of merchandise, either of Am_erican or foreign origin, from the United States through Canada to be returned again to this country. Special and injurious effects of the treaty and the ivarehonsiny sysfetn on the wercantile interests of our northern frontier. The combined influence of the treaty on our bonded system, even before the high tarill's, was exceedingly injurious to the largest por- tion of the northwest. Its farmers sutler from competition with those of Canada. Its manufactures, useful in the daily wants of Canadian H. Ex. Doc. 96 2 18 RECIPROCITY TREATY. life, are now excluded, and in the bonded syntems the whole trade in forcl^'n goods on the frontier is lost to the tJnited States. Anmriean duties beinp; exacted in all cases where the original package is broken, and the Canadian purchaser from the frontier American merchant would thus be compelled to pay duties twice over: first to the Amer- ican, and aflerwaids to the Canadian government. The ordinary customer is thus driven from our stores, and so far as the American market is yet used by Canadians for purchasing foreign goods, or rnanulactures, the common supply of Canadian stores is thrown into the hands of Canadian merchants, who procure their supply in Mon- treal. If, upon exporting foreign goods to Canada in less (pumtities than the original package, the goods were returned to the owner, the goods, until the recent increase in the Canadian tariff, woidd still have been bought in the Atlantic ports; but they would have been sold to Americans, Avho would resell to the Canadian retailer or con- sumer as they had done in former years, and our merchants on the frontier Avould not be debarred as now from a fair profit, by the dis- crimination of ovr own Imvs against them. An extensive trade had been established in leather, alcohol, pure spirits, burning fluid, boots and shoes, castings, hardware, clothing, machinery, cabinet ware, upholstery, musical instruments, drugs and medicines, manufactures of cotton, wool, and tobacco. On most of these articles the present duty is prohibitory, and the trade is entirely destroyed, or of trifling amount. Upon some articles, as upon leather, the operation of the bonded system on ex])orting to Canada forms a differential system against our own manufactures. We pay an ad valorem duty, amounting to a cent per pound, on imported hides. This duty not being collected of Canadians, when exported in bond, constitutes an advantage over our own tanners. In following up this subject we find an illustration of the careful vigilance illiberally exercised by the Canadian govern- ment in all cases. Canada levies no duty on hides, but excludes our leather from her market by a duty of 20 per cent., making a further discrimination of five per cent, additional against the chief articles manufactured from it, such as shoes, «fec. Thus the trade of most of our Atlantic cities, and of all our cities and villages on the northern frontier, feel keenly the loss of Canadian customers, who have almost totally deserted our markets, and purchase the j)roductions of their own tanneries. Similar results are rdready experienced in other depart- ments; but such manufactures as require the construction of expensive machinery will be the last to exhibit the effect of these tariffs, and in the years 1858 and 1859 importations were made in anticipation of increased duties. 1 Opinions in Canada upon actual reciprocity. Many influential mendjcrs of the provincial j)arliament advocate the advantages their country would enjoy in gaining the market created by 1-54,000,000 of our citizens for all the products of Canadian industry. Opinions favorable to actual reciprocity of commerce with us are not RECIPROCITY TREATY. 19 triulo in m(MMi;an broken, lorcliani u An\(M"- jviliiuiry mcrican oods, or nvii into in Mon- uiintities nwr, the )nld Htill nve been r or con- ts on the : the dis- hoi, pure clothing, Inigs and 1 most of 8 entirely e bonded against ing to a :ollected iige over ustration govern- ndes our further articles ■ most of northern \;c almost their own r depart- xpensive fs, and in ipation of 'OC ate tl le [t created industry. IS are not uncommon !'• Janada, especially in its western districts. They are lield by tlie many Canadians who realize the necessities of their goo- graphical position, and fear the disastrous results of their modern legislation. Their country, already too important to bo regarded either as a province or a colony in the old sense of the words, pos- sesses a population computed to be nearly three millions in number. International resiilts expected from the treaty. Annexation does not possess many advocates on either side of the frontier. It was, no doubt, believed by the authors of the treaty that reciprocal trade would remove the causes which render any closer union (Uisirable, and would perpetuate alike international good will and se{)arate nationality, presenting to the world the sublime exam- ple of two contiguous nations, abandoning suspicion of injury from each other, and practicing in their intercourse the best principles professed in modern civilization. The Canadians have now most of the material benefits of annexation to this country', without any of its taxes; more than that, they impose taxes through their tariffs upon our tax-paying people. The Canadian markets are open to all the world for the articles named in the treaty The statesman-like ideas prevalent at the time when tlie treaty be- came law, anticipating the removal of all unnecessary restrictions between two neighboring States, are in strong contrast Avith the realities to-day. The British [)rovinces are admitted to a special par- ticipation in the benefits arising from the American system by an exemption in their favor, while we continue to levy duty on the arti- cles named in the treaty when imported from other countries, but in Canada all these articles, with a few nominal exceptions, arc admitted free of duty from every country in the world, and the products of the United States enjoy no more advantage in Canada than they would do if the treaty had never been made or were now abrogated. Thus, also, for tlic articles enumerated in the treaty and produced in Canada, the market of tlie United States is thrown open to all the world via Canada and tlio provinces, for no system of inspection can be devised sufliciently exact to determine in what country these common products of the temperate zone may have had their origin. The following is a schedule of the articles enumerated in the trcatv, and to bo admitted into each countrv free of dutv, when the growth and produce of the exporting country: Schednle of free articles enumerated in the treaty. Grain, flour, and brcadstuffs of all kinds; animals of all kinds; fresh, smoked, and salted meats; cotton, wool, seeds, and vegetables; un- dried fruits, dried fruits; fish of all kinds; products of fish, and all other creatures living in the water; poultry, eggs, hides, furs, skins, 20 RECIPROCITY TREATY. or tails undressed; stone or marbl' in its crude or unwrouplit state; slate, butter, clioeso, tallow, lard, manure; ores of metals of all kinds; coal, pitch, tar, turpentine, ashes; timber and lumber of all kinds, round hewed, or sawed, unmanufactured in whole or in part; fire- wood, plants, shrubs, and trees; pelts, wool, fish-oil, rice, broom- corn, and bark; gypsum ground and unground; hewn, or wrought, or unwrought burr or grindstones; dyestuffs, flax, hemp, and tow un- manufactured; unmanufactured tobacco. The following is a statement of the value of the articles enumerated above, and imported into each country from the other since the treaty came into operation to January 1, 1859, without deduction for the items re-exported to us. — (For the value of each class see appen- dix No. 6.) less. 1856. 1857. 1858. Totals. Imports into the United States Trom Canada. Imporu into Canada fh>m the United States, . 916,476,093 7,725,561 917,810,684 7,909,554 917,813,308 8,649,030 911,514,364 5,564,615 958,613,449 29,841,760 EicesB of imports frse under the treaty in favor of Canada 8,750,569 9,901,130 4,170,978 5,949,740 28,771,689 ■i ■-■ I IIU n RECIPROCITY TREATY. 21 lit Btato; all kindu; ill kinds, I art; fire- !, broom- ought, or tow un- rime rated since the action for BO appen- Totalt. 4 5 $58,613,440 29,841,760 38,771,669 w 00 cs s QO M I I c •■s s 5C o ft s ^ I 'S i "i 3 §9 13 5i t- § eT lUCI is ii I S8 as hois' ^ HO B « CJ nn nn Oj Q fl S V V ■|53 22 RECIPROCITY TREATY. < iilllti Nominal ejcpf '^" imwith ^//e not correct tests of the trade bclivccn the United B^cii niid Canada. Althuui4,u the L'xpoii':^ iiikI iniportH to an'l from (lilForeiit countries nro pop, riilly correct indexes to the vtihii- )f their trade, the pre- ccdir»K; rtiMo does not pii-nf^nt in a true lifj^ht tli(! iictunl condition of o«i »v f' Willi Caniida. Tii statinticH of that trader have created nnmv >, '-^eous imprcHsionH. 'IMio pc nliaritic^H of the cawe, apart from the (/i«(>f/'bing uifluences of politit md h>j;islativo cauHOH, arise from her j;-eogrup'hical position. WhiK% for a {)art of the year, hIio possesses the means of communicating with the rest of the worhl by the St. Lawience, slie is ho f;ir enclosed hy tlu; United Stati's, that a line drawn from the northern extremities of Mainc^ and Wisconsin wouhl pass to the northward of Quelicc, and cut off, with the excep- tion of a few unimportant counties, the wliole iniiahitcd territory of ('anada, besides vast areas of fertile land yet unexplored. — (See Report on Crown Lands, part II, 1S57.) On the north she is hemmed in l)y the desert wilderness of the frigid /one, and on the east, south, and west by territory of the United States. Special leijisJah'on in Great JirUain and Canada against the carrying interests of tlie United States. The current of trade cannot be at once diverted ; but it has been already shown that the lep:islation of Canada is intended to divert from the United States the commercial a'huitages naturally resulting;' from our relative geographical ])()sitions. The means through which it is hoped this result will be attained are tho differential duties here- tofore explained in favor of the St. Lawrence and the change of the system of specific duties, under which goods taken into the wester)i or any other part of the province from the United States heretofore bore only tho same duties as if imported via the St. Lawrence. A reservation is also made by which the governor of Canada, (see Stat- utes of Canada, cap. 17, sec. 24. 2,) through a departmental order, may quietly permit goods to l)e imported through any ])art of the United States. un! u ;v origin — a privilege not tiie less likely to be exercised in fr. v i -i i ,, Grand Trunk railroad, (a foreign institution on American soil,; against the railroads and canals of tlie United States; because certain im- portations, via Portland, are already admitted into Great Britain by the British gov* -ment at a lower duty than from any other port of the United State.^. -f :>'.(; 22d and 23d Victoria, cap. 37, sec. VII.) Classifcation of Oo: ad o>n product 'ons and natural course of trade. A simple and compendious method of considering tho exports of Canada is afforded by classifying them as the products of the mine, the sea, tho forest, as animals and their productions, agricultural pro- UECIPROCITl TREATY. 23 coiiiitrit's tlio pre- 11(1 it ion of a fronted iH(!, upiirt isoH, arihe year, hIio world by (>H, that a WiHcoiitiin lie ox()S, being on'y $220,397 less than the whole amount of ex- ports in this class from Canada to all countries. These exports IVom '^aiiada iiave increased nearly six-told sini'o the treaty. The older and more closely settled regions of this country all\)rd to Canada such a market for tho chief item in this class — animals thenisclvos — as her geogra[)hical position, remote from all other countries except the thinly peopled prcninces, forbids her to export profitably elsewhere. Our wheat exported to Canada is not coiifiuined there, and ivasfree be/ore treaty. 1 Wheat, the staple crop and chief export ot vjiinaiia, was not rendered free by the treaty on its admission into that country. It was made free before the treaty by tho Canadian legislature for the benefit of Canadian millers and ship owners. It is exported into '•I l« !i l( 'HI fin, f 24 KECIPROCITY TREATY. Canada in pursuanco of the great commercial law by which, in our time, the demand of the eastern States and for shipments to various l)arts of the world is supplied from the rich soil and cheap land of the west. Much of it is manufactured in Canada and returned to the United States free of duty; nor can the ordinary course of this traffic he better illustrated than by the well-known fact that Chicago, Mil- waukie, and the other western ports are shippers to, and not receivers of grain from Canada, whose large exports are fully transmitted from the eastern side of her territory to the American frontier. It is stated on reliable authority in the provincial public journals that much of their imported wheat fs ground on the Welland or Lachine canal. Alter this process it cannot be identified as of American origin. It is less expensive and troublesome to enter wheat as free under the treaty than to keep it in bond, and to a considerable extent there is little more distinction as to the origin of the wheat after it has once been taken into Canada than there is in the nationality of the mingled waters on which it is carried towards the ocean. Canada exports more ivheat and flour than she imports. As Canada produces more Avheat and flour than she can use, our shipments to her are not made for purposes of consumption, but must compel the return of the same or an equivalent quantity to us, chiefly in a manufactured condition, at the expense of the milling interests of this country, or its shipment to Europe in foreign vessels at the ex- pense of our American bottoms. Statement .sJiowimj the comparative value of the imports and exports of wheat and /four into and from Canada, from the year ending January 1, 1850, to January 1, 1859. IMPORTS. EXPORTS. Wheat. Flour. Wheat. Flour. 1850 $113,936 294,479 76, 953 14, 664 r{8,913 1,461,624 1,094,091 2,375,63" 1,647,489 $2,247 4,507 4,937 4,870 17,965 1,625,735 808,737 1,262,485 763, 960 $1,072,135 687, 180 1,421,825 3,090,441 2,098,137 5,928,866 6,977,843 2,789,975 2,355,096 $2,743,185 2,683,301 lf<51 1852 1853 1854 1855 185(1 2,757,510 4,248,8.35 4, 796, 699 5.801,920 6,009,809 1857 1858 4, .537, 642 3,065,810 Of nearly all the articles named in the treaty a surnbis is con.imon to both countries; and we have an abundant supply and a surplus for export of every article named in it. Canada has no crop so cheap and profitable for various manufactur- RECIPROCITY TREATY. 25 in our various 1 of the to the H tralHc ^,•0, Mil- sceivers 3cl from , It is it much B canal. r;m. It der the there is las once ningled use, our )ut must , chiefly erests of the ex- 'port.s of January i'loiir. f, 743, 185 !, 683, 301 L7r)7,510 ,248,835 t, 7'Jt), (599 [.801,920 ,009,809 [,537,642 ,065,810 loiumo!! I)his for ifactur- ' 1 in^' and other purposes as the corn bought from us. She admitted it, Hke wheat, free before the treaty. For other grains, barley, rye, oats, &c., we furnish for Canada the only market worthy of mention. Canadian farmer placed hy treaty on equality loitli our farmer as to value of farm and product. The increase in the profits of the Canadian farmer, since the treaty, i^* well known on both sides of the frontier. The large amount which would have accrued to the United States in the form of duties has gone to his benefit in the increased value of his products and real estate. The production of many articles has been greatly stimulated, (much to his advantage,) and their importations have been severely felt by our own producers along all that line of frontier through which access is naturally sought in an eastward course to our cities, manufacturing districts, and the great highway of the world. A strong stimulus has been given by the treaty to all the chief public works of Canada, which before had signally failed. General dissatisfaction with the treaty. A general dissatisfaction with the treaty exists on the southern side of the boundary line, wherever its operation is perceived, except in those parts of the west where the Canadian is erroneously regarded as an additional purchaser or consumer, and not, as he really is, a i mere grain carrier in rivalry with our own, or in those other parts of the United States as to which, for its own purposes, the Canadian or British government has made preferential laws, and to which it has given a local prosperity at the expense of the general welfare of this country. Geographical disadvantages of Canada shoivn hy the low prices of her I 2>roduce before the treaty. An investigation of the Canadian exports made free by the treaty proves that Canada has now for many of their products no market equally profitable with that of the United States, and had no outlet for them at all worthy of mention before the treaty, except this country, where thev then contributed to the revenue. The same examination will disclose the fact, that most of the leading articles named in it were imported into Canada, free of duty, before the ., treaty. For more than half the year the rigor of her climate debars /' her from commercial exchanges with any other country, except the I United States, or through our territory, preventing her during that period from taking advantage of a rise in the market. She is placed in the position of a farmer who has only one customer. This is the polit oiiticiU and geogra})hical disadvantage sought to be overcome by the Earl of Derby when he urged the abolition of duties discrimi nating in favor of the mamifactures of his own country against the manufactures of the United States. 26 RECIPROCITY TREATY. i Canadian testimony as to higher value of United States productions lie/ore treaty. It was for this cause that reciprocity was urged so strongly by Sir H. L. Bulwcr; and, to compare this argument and these admissions with the facts of experience, I again refer to the testimony of the select committee appointed by the legislative assembly of Canada in 1858, by Avhich, in reference to the repeal of large discriminating duties on grain imported into Great Britain, it is said, (pp. 4 and 5 of their Report:) "The eifect of this law was to depreciate the value of all articles grown or produced in Canada twenty per cent, under the value of like articles grown or produced in the United States, and this difference in value continued up to the year 1854 — a period of nearly nine years." The opinion of her merchants as to the value of our market is re- corded in their having exported to us six times as much wheat and flour as to Great Britain during the four years which elapsed since the treaty, and before January 1, 1859. 2^ he fallacy of the Liverpool market aliuays fixing value. Contrary to the belief commonly held at the date of the treaty, the Liverpool market does not determine the standard of value for bread- stuflFs on this side of the Atlantic. European prices are now far from being remunerative to the American producer. They have seldom been profitable to us since the termination of the Crimean war. Re- opening the Russian granaries threw the Russian serf into close com- petition with the American farmer, who can only sustain himself by his su2)erior intelligence and the application of modern labor-saving implements of agriculture. Since the speculations consequent upon that war have ceased, our exportations of grain and flour to Europe have been insignificant, nor are they likely to be of much importance hereafter, except from the occasional and irregular demand caused by war or f;miine. All the wdieat and flour sent by us in 1858-59 to England, where flour is charged with a duty of 4.^f/. per cwt., or about sixteen cents a barrel, and a corresponding duty is levied on grain, was only $1,736,152 in value, or less than half of $3, 005,502— the amount thrown on our market from Canada, notwithstanding the failure of her crop. The grain-growing regions of the northwestern States have suffered more than other })arts of the Union from a de- pression of prices in our Atlantic cities, thus caused by the influx of Canadian products. A temporary cheapness of transportation will not compensate for reduction in the value of the grain; and Canada, by virtually prohibiting the importation of American manufactures, prevents, so far as she is able, an increased demand and consumption for breadstuffs within the limits of our confederacy. HP RECIPROCITY TREATY. 27 odudlons ly by Sir ilniissions ly of tho ;anada in imiiiating [ and 5 of the value iiit. under id States, —a period ket is re- vlieat and jscd since [ue. treaty, tlie for brcad- w far from vc seldom war. Re- close com- limself by |l)or-saving uent upon to Europe mportanco Inid cansed ,858-5'.) to r cwt., or levied on (;G5,5()2— luulinjj; the rtlnvestern Ifroni a de- le inilux of Itation will Id Canada, lufactures, jnsumption Nnfural commercial dependence of Canada vjpon the United States. There has not been a year since the treaty when Canada has not tlirown ujion our markets a larger amount of her productions than she has sold to any other country, and to all other countries added togetlier — demonstrating her commercial dependence upon the neigh- boring States when thwarted by no artificial cause or restriction. — (ApjuMidix 7.) The difference will be yet more conspicuously and clearly shown by deducting the products of the forest from her EuroiKNin exports. These alone amounted, in 1857, to more than ^8,000,000, or twice as much as was sent to ns — differential duties yet existing in Great Britain in favor of colonial timber. Struggling under these obstacles imposed by the British and Canadian govern- ments, we are yet to Canada of more commercial value than all other countries together, while recent legislation has reversed the natural laws of trade, that a nation should buy where it sells. Her people sell to us, and are now prevented by the tariffs from buying of us. Hitherto the further injurious legislation of Canada is too recent T. have fully exhibited its effects, and an additional illustration of her natural commercial dependence is found also in our exports to that province, (Appendix No. 8,) showing that for each of the four years ending December 31, 1858, the amount taken from or through the United States exceeds the Canadian imports from all other countries unitedly. It has already been shown how large a portion of them is re-ex])()rted to us, wdiilst the taxes on our manufactures, and differen- tial duties on merchandise of foreign origin passing through tho United Stntes, will eflectually check the other classes of their imports into Canadii. In the profits accruing from freight between the two countries, tho advantage, since the treaty, has been in favor of British shii)ping, the value of exports and imports by the vessels of each country being regarded as the test. In the five years ending June 30, 1854, the value ofdomestic exports to Canada in British bottoms was 81 2, 595, 816, and in American bottoms $10,595,810, the preponderance in our favor being about one-third; whilst in the five years since the treaty and beginning with July 1, 1854, there was an excess against us of nearly onc-h;df, the value being $20,330,730 in American vessels, against $38,942,052 in vessels of British nationality. No marked inequality exists in the imj/orts to the United States by tho shipping of both countries, the value carried by each being $37,223,005 in American and $30. 528, 908 in foreign vessels. In this competition of shipping, American ship-owners ran a race in fetters. The staple manufacture of Canada has long been that of ship-l)uilding for exportation. A cheap and abundant supply of labor nose Is obtained l)ur[) Qi n perisiiin oi navigation, and the vahie of ships built there for sale i foreign markets exceeds by many times that of all other manufactured ex{)oits of Canada. This branch of industry is encouraged by ad- mitting all the materials used in the construction, rigging, or ecpiip- 28 RECIPROCITY TREATY. i:' ment of ships, either at a nominal rate of duty or entirely free, or subject to a return of duty to the ship-builder when satisfactory proof is given that they have been used for this purpose. Value of free navigation of St. Laivrence to United States. Canada grounded her hopes of future greatness upon the possession of the St. Lawrence. The Avestern States have considered it of great advantage to themselves, and it was said, when we obtained its navi- gation, that the benefits arising from this national privilege would more than counterbalance any fancied injuries or wrongs on other interests. The British minister. Sir H. L. Bulwer, after pressing upon our attention the spirit evinced by Canada towards our manu- factures, and promising on behalf of the Canadian government to carry a liberal policy out still further, presented the navigation of the St. Lawrence, with the adjoining canals, as the consideration to be paid by that province for the free interchange of all natural produc- tions with us, and for the navigation of Lake Michigan. The arrange- ment of the treaty Avas comprehensive, and included a satisfactory settlement of the perplexities then existing in regard to the fisheries along the coast of the provinces, but for this the maritime provinces also received a full equivalent in the opening of our market to their fish, coal, and other products. The debates in Congress show the high value placed by the advo- cates of the treaty on the use of the St. Lawrence. One honorable member lamented that, by being debarred from it, the shipping of the lakes was compelled to be idle and unproductive for about one- third of the year, whilst the interest on the capital thus invested was running up to $250,000 annually. Another, expressing only the general expectation of many others, said : ' ' The free navigation of the St. Lawrence is only necessary to ..how us, 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 labor for nearly half a year." The commerce of tin northwestern lakes is of immense national importance, amounting to $587, 197,320. — (See report of Committee on Commerce to House of Representatives, 1856, No. 316, vol. 3, p. 9.) More than sixteen hundred vessels, with an aggregate burden exceeding four hundred thousand tons, are employed in navigating these waters, which Cliief Justice Taney, in that decision of the Supreme Court of the United States which gives the lakes forever their international character, termed "Inland Seas." It was believed that the advantages gained by the navigation of the St. Lawrence would bear adequate })roportions to the number and value of these commercial fleets, but the official statements of Canadian authorities show that since, the treaty received the signature of the President of the United States, nearly six years ago, no more than forty American vessels, with a burden of only twelve thousand five hundred and fifty tons, passed seaward through the St. Lawrence j and that of these less III . RECIPROCITY TREATY. 29 rco, or Y proof ^session )f great ts navi- 3 would I otlior )res8ing f manu- nent to II of the 11 to be produc- iiri'ange- sfactory fisheries rovinces to their lie advo- jnorable iping of )ut one- itod was )iily the ation of if every a, hiden ck with lirly half national jinmittcc |()1. 3, p. burden 'igating of the forever l)olievod awrenco )f these thorities ■;idcnt of [.inerican iiid fifty liese less than one-half, or nineteen vessels, with a burden of only five thousand four hundred and forty-six tons, have returned from sea. So insig- nificant has been the foreign commerce expected by honorable mem- bers to be developed in this direction, that during these six years only twenty-five of these vessels have sailed for foreign countries, the other fifteen having gone to American ports. It would seem that the promised advantages from the navigation of the St. Lawrence were more poetical than nautical, as the navigation of Lake Michigan, ceded to Canada by the treaty, has been so exclu- sively used, that in the year 1857 one hundred and nine British ves- sels cleared from Chicago alone, thus depriving our own carriers of freight, by enabling others to take the produce of the great grain- growing regions through Canada to ports on either side of Lake On- tario, or to Montreal, and thence to the Eastern States, or chiefly by British vessels to Europe. It is a noticeable fact in this connexion, that the above is a statement of only the clearances of one port upon Lake Michigan of Canadian or British vessels for one year, and that is more than double the number of United States vessels that passed outwards through the St. Lawrence for the last six years, since the ratification of the treaty, and quintuple the number that ever re- turned inward from sea. Well might Lord Elgin exchange congratulations with the British capitalists in London, as he did in a recent speech, upon the advan- tages to his country arising from the working of the reciprocity treaty* which he signed at Washington, where the barren advantages of the free navigation of the St. Lawrence have been given in ex- change for our free markets to all Canadian productions, and when the consequent increase of their exports has added wealth to their country and operated in inverse ratio upon the prosperity of our ag- ricultural and industrial classes. Commerce of the States pay most of the revenue of Canadian canals. Ahliough the equivalent gravely offered to us by the British min- ister in exchange for the valuable concessions we made has hitherto been tlnis unimportant as regards the St. Lawrence itself, the other part of the consideration — the use o" the canals — was enjoyed by us so freely before the treaty was in operation, that in 1854, no less than 198 American vessels used the canals of this river, and 3,160 vessels of tlie same nationality used the various canals of Canada, and paid, as now, the principal part of the tolls collected thereupon by the government of this province. To close these canals to our vessels would not only be an act of folly on the part of Canada, but would be contrary to the objects for which they were constructed, ^his pro- '* UiKkr 5th article of treaty, Great Britrtin reserved the right of suspending the naviga- tion of thu St. Lawrence and canals in Canada at lier nleusure ; and whenever she should exercise tiiin reserved right, tlien the government of the United States was permitted to suspend the " operation of article 3 of treaty, (which contains the enumeration of free list of articles,) so far as the province of Canada is aftected thereby." It will thus be seen tliat Great Britain's concessions in navigation were placed iu treaty as equivalents for ad- miseiou of Canadian products into the United States. 30 RECIPROCITY TREATY. Mil fessod equivalent to us was itself the consummation of tlicir long- cherished project. The State of New York might with more wisdom close the Erie canal against the^commerco of the other States, for that canal passes through the central portion of a State possessing a much larger population than Canada, creating an extensive local traf- fic for its support, while the canals of Canada are lateral and depend almost entirely upon the commerce of the United States. They were made for the purpose of diverting American commerce, not of facili- tating it. Canadian canals huilt to divert trade of ivestern States. The committee apj)ointed by their own legislative assembly, in 1855, unhesitatingly affirm in their report (p. 3) that "the St. Law- rence canals were constructed at a largo public expenditure for the purpose of drawing the trade of the western States to the ports of Montreal and Quebec." We are entitled, under the treaty, to use the river St. Lawrence and the canals in Canada, as the "means of communicating between the great lakes and the Atlantic ocean, subject only to the same tolls and other assessments as now is or may hereafter be exacted of her Majesty's subjects." — (See article 4 of treaty.) Canadian discrimination upon American vessels. But, as we arc the chief carriers through the Welland canal of wheat flour, and corn — almost the only freight of our vessels by this route — a discrimination against us is made by imposing the same tolls on these articles on their passage through this canal, a work twenty-eight miles in length and forming the only means of communication for lake vessels between the upper and lower lakes — as if they passed through the canal of The Galops, Point L'oquois, Rapid Flat, Favian's Point, Cornwall, Beauiiarnois, and Lachine, via Montreal and Quebec, to the ocean. Yet we carry twenty-five tons on the Welland canal for every single t(»n we carry on the others — their respective amounts in 1858 being 787,877 tons on the Welland, and 31,968 tons on the lower canals. On the other hand, in the same year the tonnage of Canadian vessels was only 300,894 tons on the Welland canal, but was 725,842 tons on the others. Thus, our vessels are heavily taxed for tolls on canals which they do not use — the tolls collected on the Welland eaiinl from Aniei'ican vessels alone being in the year last men lit tried SI 8, 522, or, as is usual, more than half of the whole amount collected on all the canals in the province, while we paid only $405 on the St. Lawrence canals. — (See Canadian Trade and Navigation, 1858, p. 40.) While an eilbrt is thus made to divert the |)roduco of the west to the St. Lawrence by discriminating tolls, it is also attempted to se- cure the carriage of iron and salt to the west by passing them free through the Welland canal, if they have })aid tolls on the canals of the St. Lawri'iice, thus adbrding another example of the studious and RECIPROCITY TREATY. 31 nbly, in 5t. Law- } for the ports of awrencc between ime tolls ill of her of wheat route — on these y-eight ion for passed avian's (iuobec, 1 canal imounts on the na^'o of nal, but y taxed on the ear last e Avholc we paid ule and west to ;d to so- lem free anals of ous and systematic evasion of the spirit and letter of the treaty ratified under the promise of reciprocity. Niiture, in the severity of climate, has placed the St. Lawrence under insurmountable disadvantages; and that its deficiencies as an available and reliable inlet and outlet for the internal and external trade of Canada are duly felt by the Canadian and Imperial govern- raents is demonstrated by the extension of the Grand Trunk railroad, a British Avork, to Portland, by a perpetual lease of an American railroad to that place. Every element entering into the price of freight and determining tlie channel of European, and yet more of tropical trade with Canaila and the northwest, is in favor of our sea- ports t)ver Montreal and Quebec as natural ports of entry. Population and productions of Canada insufficient to sustain her canals and railroads. Whilst vigorous efforts have been made by means of Canadian canals to divert western traffic from our own lines of communication, the ])eninsular sliape of Canada West has caused the disclosure of the same intention in the construction of five different railroads across the Peninsula. Two of them connect Lake Huron with the Lakes Erie and Ontario. Two otliers extend from the St. Clair river to Lake Ontario; one of them leading also across the suspension bridge, near the falls of Niagara. Another is laid near the Welland canal, from Lake Erie to Ontario. They all complete at or above Toronto, the connexion of the various lakes. These roads could not have been made for the use of this province, with a population at the largest es- timate of no more than three millions, not more than one-third of whieli occupies the country above Toronto — the regions through which the roads run. Neither the population nor productions of Cana'da are sufficient to support them. They have been made "on the invitation of the imperial government, (see report of Canadian par- liauientary connnittee on commerce, 1858, p. 4,) and by British capi- talists, sustained by "imperial credit," for the purpose of securing our western trade. They were chiofiy constructed with a view to the inconsistent distinction made by our laws, but having no foundation ; in justice, permitting foreign or American merchandise to be conveyed ■■ by land, or partly by land and [)artly by water, from one part of the |; United States to another, by Canadian lines of communication, while : we prohibited their carriage by foreign vessels from one American port to another. Large (piantities of grain and merchandise are thus sent to and from the United States through various Canadian ports on Lakes Huron, Erie, and Ontario. It was enacted by Congress, March 8, 1817, section 4, that "no ^ goods siiall be imported, under penalty of forfeiture thereof, from one K port in the United States to another port of the United States in a I vessel belonging wlioliy or in [)art to a subject of any foreign power;'' % and the evasion of this law by these railroads, enabling Canadian to I compete with American vessels, may be illustrated by the case of the AVelland railroad, a lino only about twenty-eight miles in length and I •f I i'li a ;# 32 RECIPROCITY TREATY. runniiif^ alongside the Wolliind canal. Its owners carried a large pro- portion of" the grain sent last year IVoin Chicago to Oswego, receiving it at one end of their line from Canadian vessels and delivering it to vessels of the same nationality at the other, thus, by the simple pro- cess of transhipment, evading and frustrating the law by which no foreign vessel could carry directly from Chicago to Oswego. In this competition of shipping interests there can be no equality so long .'is Canadian legislation makes the prices of ship-building materials cheaper in their country than in this. The British monopoly of Grand Trunk the political and commercial poiver of Canada. These efforts to divert our own traffic from our own territory, al- though important in themselves, are insignificant in comparison with the ambitious schemes developed in the construction of the Grand Trunk railroad — a work owned by a combination of British capitalists. In our commercial age, British capital is the power behind the throne, and the armies and navies of Great Britain follow and protect the en- terprise of her subjects. Having enlisted in their service the special and individual interests paramount in certain portions of the province, the managers of this road, in emulation of the ancient influence of the East India Company on an imperial government, have subjected the parliament of Canada to their control. Already expending yearly $6,000,000, nominally, in subsidizing steamships for the postal service, and only receiving for it a direct return of $3,000,000, the statesmen of Great Britain obtain a remu- neration for the outlay in the influence thus acquired over the com- merce, and, hence, in the politics of the world. They soon perceived the importance of obtaining a route to and from Canada at all seasons of the year, and that liberal aid to a railroad communicating with the western States, through this province, might affect our domestic poli- tics and render us yet more tributary to the wealth and power of our chief commercial rival. They thus projected the great work of the age, for purposes corresponding to the magnitude of its physical proportions. Intent on securing the valuable priz;e of western trade, $1(5,000,000 were advanced to the thoroughfare known as the Grand Trunk Railroad, virtually as a perpetual loan. The road was relieved from the payment of interest on this vast sum, and the lien of the province — a first mortgage on the road and its appurtenances — was rendered secondary to the other bonded debts of the company. Thus an additional loan of $10,000,000 more was effected on the stock ex- change of London. The interest on the sum of $10,000,000, which had thus for practical purposes ceased to be secured by the road, is not paid from the receipts of the road, but creates those governmental necessities which the present high tariff is necessary to supply. Alreadv this srrand incf)rnoration is enriched bv carrvintr mails for the United States, Great Britain, France, and various otiier countries on the European continent. Its managers publicly congratulate them- selves that "the battle-ground of their competition will not bo in Ipniii RECIPROCITY TREATY. 33 •gc pro- iceiving iiig it to ])le pro- ^hich no In this ) long as nnterials mmcrcial OiiiiiKla or fonglit against British rapitul," but against tlioir "Aniorioan rivals." Tlio road is made in tlio most substantial manner, and, apa'-t extends nearly a thousand miles, frt ri itory, al- ison with 10 Grand vpitalists. Lo throne, 3t the en- le special province, nee of the ected the ibsidizing it a direct n a remu- the com- perceived ,11 seasons with the [estic poli- er of our irk of the physical jrn trade, Iho Grand Is relieved jn of the ices — was ^y. Thus stock ex- 0, which road, is rnniental mails ior countries ate them- Inot be in from its smaller provincial lines Portland to the St. Clair river, opposite Detroit. With both its ad- juncts, from Quebec and Portland to Sarnia and Detroit, (the doors to our ])rairies,) it measures 1,11G miles in length, and tributary to it are various other roads. The total length of these lines is 2, 003 miles, and their cost, with equipments, was more than $100,000,000. It is the great railroad of the world, unequalled in extent. The Victoria bridge, crossing the St. Lawrence at Montreal, is unsurpassed by any monument of human enterprise, power, and skill, erected during the present century. It is two miles in length, over a vast and rapid river. By means of this bridge, the Grand Trunk railroad can trans- port goods for a distance of 1,400 miles from the Atlantic to the Mis- sissippi, with but one transhipment. The change in tariffs, of which we justly complain, was caused by the capitalists interested in this road, wlm, supported by the British and Canadian governments, hope in addition to secure the trade of the western States, to divert from us the profit of buying, selling, and carrying the commodities produced or consumed by the people of the peninsula of Canada. This they puriiose to cflect by the high tariff and dilTerential duties already mentioned and professedly made infavor of direct shipment to Quebec and Montreal. The interests of these places, however, are subservient to the road, the government having reserved to itself the right of permitting goods to be brought through the United States, in such cases as it may choose, subject only to such a valuation as if they were imported directly from the country of their origin. This influence, far from being confined to Canada, is felt throughout the western States, penetrating to Memphis, and already diverting from Charleston and New Orleans the cotton and other products of the south, and seeking to transfer the shipment of the great southern staple to the terminus at Portland, on its way to the factories of New England and Europe. The experimcMit is boldly pushed in a manner indicating less tlie struggle for temporary trade tlian for permanent empire. Flour has been carriei in Groiit Biitiiiii, diHcriiniiiatin^' in iiivor of this roiul tig'iiinst (lilTerciit ports in our own country, u^^iiinst all roiitls owned by our own puoplo on our own soil, subjcctiti};' certsiin jirtii'les Hcnt to Grc^at Britain via Portland to tlu' .same dutioM only as if imported directly fnan Canada. No interest is expected on the $1(1,000, 000 advanced by government. Tlie patr(tnaj^'e of (Ireat JJritain and tlu! provinces is in its favor. \t possesses at Portland an extensive ranj^e of docks, vvlier(^ its cars run aloni;side the ocean steamers. Clieap fuel is bountifully supplied at all its stations. 'IMie lio|)e of reciprocity in tlie carryinj;* trade is futile wlu-n such distinctions are made in favor of thisgijj;antie competitor. The IJritish government, i)ur.-uing- tliat commercial policy by which her historical career has always been characterized, has not supjtorted this road with a view to the profit of the Htt)ekh{)lders, but with the dtisi^n of openinj;' a direct trade with the interior of this continent, and of en- ablinj:: her manul'acturers, bankers, and merchants, by means of agents in the western States, to convert to their own use the [)rolits and connnissions now made in our Atlantic cities. It is intended ultiini'toly to use Montreal and Portland as way stations only lor a system of c(uumunicati(ui, imduding the Ocean and Grand Trurd< road, with ilh, western connexions — thus uniting Jjiverpool, London, Glasgow, Shef- field, Manchester, and Birmingham, the commercial and manufactur- ing cities of P^ngland, with our inland cities in the valleys of the lakes and Mississippi. The whole plan and structure of this monopoly for the aggrandi/ement of a Ibreign power is conceived and built upon the basis of our bonded system, and the liberal exercise of oHicial au- thority under the act of 1700, and the warehousing aC '^f 1854, (and certainly undei- the most liberal construction of the act of 1700,) jjcr- mitting the transit of foreign and domestic goods, tirst through our territory, then through Canada, and afterwards to their ultimate des- tination in this country. The law of 1700 was enacted at a time when its framers could not have foreseen any such application of its authority as to permit the productions of American origin to be taken from one section of the United States, through a foreign country, by fbrciu'Ti mciins. to another section of the United States tlutv free. Fdlhj and inJvsH'p of (l,i,s (jovernment hi vot jxrofecfing A)ncrivan cnfcr- 2))'(scs from foreign agyrc.ssioii. The inconsistency, not to say injustice, must \h\ a})[»ai'ent ol" tliat ])olicy which j»rohibits transj)oi'tation in foreign vessels from one American ])ort to another, and at the same time tolerates the same transit from the siime ports to the same ports, through Ibreign means developed in anothci' form, and e([ually in rivalry with the enterpi'ise, labor, and capit.d of our own citizens. From such inconsistent legis- lation, or a too liberal construction of it, a ibreign govcrinnent now derives a licen;-e l''r its subsidized and privile;;ed road to become the great carrier of our exjjorts and im})orts to and from our western and east( rn State.'^. In addition, this tbreign monopoly sustains its passage through our territory under the evasion of the spirit of our laws, and i RECIPROCITY TRKATY. H di lie rout II peoplo •itiiiii via, Ciiiiii> ;> ui ^teni ai id |ts par laws, sage and trade, and j)rt'veiits her merchant and agriculturist from buying in the same market where they sell. The revoiiuo for- ^toerly et)llected on our northern frontier has been annihilated. She pus increased her own revenue by a tax on American industry. The ■ i 30 RFCIPROriTY TREATY. i MllHll li II n(lvnMtiijj;eoiia trudo formorly ciirriod on with Ciinadiihy t\w citioMiind vill.ij^crt «)ii our iHtrtli(M'ii iVonficr Iiiim Ikhmi dcHtroyiMl. Oiir lin'riiors and luiul>t>i-riii>n oncoinifiM' the ('<)iu|M>tili()ti of new and [iriMluctivo tenitorii's. It havin;; ItciMi loinid that our Hhippcrs, siiilms, and nierchantH in tho Athmtic cities vvoro transacting; a mutually piiditahle husincss with Canadians, the graspinj:: spirit of their le^isliition en- deavored to s(>cure all the heiielits of this trallic, and attaektd our interests with discriminating:: duties. Our railroads suirer from a nritish coni[»etitor, mupported by privile^'es «>(|uivalent to taxation on th(;ir husiiK'ss with thi^ Canadian provinces and tho inttM'ior of our own (•(Unilry. Our manufacturers, instead of exporting' to Canada, arc; check(!«l hy imposts intended soon to prohihit tlu; entrance of their productions into the province. Tho wool and raw inaierialsof Caiaida are admitted duty free into our markets, but the lahrics made from them are (>xclu(h'(l from Canada, contrary to the explicit assuraiiceof the British minister on behalf of tin; Canadian government, that it would be " willinjx to carry tho |)rinci|)lo of reciprocity out still fur- ther." Hitherto the vauntod advantaj;os from navi^^ation through till' St. Tjawrence have been scarci'ly worthy of any serious consideru- ti(Ui. The prolVered hand of coUiUUTci.d friendship, accepted for a tinu^ by Canada, with far more advanta<;o to (Canadians than to our- selves, is now rojiH'teil. In this exclusive and unnatural system, Canadians yet depend upon our market for the sale of their produc- tions, U|)on the immense trallic of our States lor their carryin;:,' trade, and upon our territory for the means of transit to the ocean. For their ])artici|)ation in tho trallic of our States, which is tlu^ object of theii' unscrupulously a;i-;;'ressive tarilTs, they dejx'iid up(»n the con- tinued liberality of our rovenue rej;ulations, made under laws ^iviiij;' j:,r(;at discretionary powers, intendefl to bo used in facilitating;' our connuori'e, instead of advancing; the commorce of a foroi^-n country. The results of the reciprocity treaty and Canadian le;j,isliiti')n upon our connuerce and reveniU' are too obvious to have ( sc!i|)ed the sa{j;a- city of Hritish stat(.'smanslii|). l>y the treaty we jtlaced Canada on an t(juality with one of th(> States of this Union, without subjecting;' her to any of its burdens. Hy her le[;'isl!ttion in imposinjj,' exlraoi'dinary taxes upon the products of American industry, she is compi'llin^ us to bear her burdens, created to sustain gigantic livalries, worthy of tho imperial and)ition for supremacy, by hmd and watei', over oar ndaiid commerco, and for the «;rave influeiu-e wliirli thus may he exercised upon our political career. Tiio tenor of the instructions under whicli ibis rejxat is macK' excludes the idea of any recomnieiuhition upon my part pointiuj;' toward any ri'medy of the j^reat I'vils wliich investi<:,ation has thus shown to exist under this system of niiscalle(i rci'Ijirocit/. 1 carmot but believe, however, that I should fail in the duty assigned to lur if I omittt'd to at least suggest the practical results to which the fore- going considerations would lead. A treaty broken is a treaty no longer. Obligations ui)oii one pai'ty coaso wl leii corre hiti ive ol)li<;ati(nis imvo no bind ing torco upon th other. That th(>, substance and spirit of this treaty inive been more RECIPHOCITY TRfcATY. 87 itics nnd • lurilKM'S odiirtivti ors, and )i(tllt;il)le iilidii on- (•k» of tlioir if (Canada iiadi! from suranco of nt, that it t Htill fur- i\ tliron^;;li fonsidera- iptcil for a lan to our- d system, ir produc- ,hi};' trade, •can. For c object of \ tln! eoii- lus ;;-ivin^;- tat in;:; our u coiiiitry. ati'iu upon 1 the sa^ii- Canaihi on suhjfctinii' raordiuary |ipt"Hin^ us worthy of over oiu' lis may hi- i> made |t pdintinj; has tluis I caimet ju'd to uic li tlif fore- one party upon thi' licmi more than disri'^nirded by tJio other contruetinij: f)ower with which it was nuuie is loo evi(h'nt to achoit of (hsputci. It is (upiidly ovidcMit that a svstrmatie selicmc of provincial le}j;ishifion, allirmatividy a^;j::r<'ssivo upon ^reat intercntH of this country, commenced with the ratification of the treaty, an the hf;j,inninji!; of its opportunity, and has proi^resscd ill its strength and its extent, in its (h'tails and its scope, in all dis- astrous c(»iisi'(pn!neoH. »iv(>ry day while that opportunity has eontiniU'd. Witliout the treaty no such a^j^rossions could have been over ut- teiupled. With its termination they must cease. Then the ^overn- iiK'iil tif tills conidry can resume, through le;^itiinate mcNins, the |)roti'ctitui of those ^jjreat interests wliieh j;'overnment exists to pro- tect, 'riieii the Canadian parliannMit nnist be comj)elled to modify its existing" le^'islation in this respect until the day shall return when, as liefore, the laws of trade, re>;idated by the lej;'isli'.ti(»n of Congress, shall ;:,ive us something; far mori^ like reciprocity than we now possess. The hoiiK^ ^'overnmeiit, the provincial government itself, in the ;j,reat interests entirely depeiulent upon our trade, have given hostagcH, which will be far more binding upon them than this ruptur(>d treaty, that their legislation would not then be shaped to UJake us their triliutaries. 1 certainly should transcend my province in making any particular lion of the means of abroLiatinir tlu^ treaty. It is not for me to RU csl sav whether or not tin; repi^al of the assenting law of Congress re- (piireil by its fifth arti(de would have that effect, or what more limited eflV'ct. if any, it would iiave. CJonvinced as I am, however, that the dilatory measure of giving the notice riupured by the treaty for its abroj;ation would b(^ far too slow to allbrd practical remedi(^s of the al'uscs 1 have exhibited in this report, I certainly should fail in that dutv which till' prolonged and most careful consideration of these important matters brings so strongly homi^ to me if I did not at least point out the fiU't that such [iroper alteration of the navigation laws of is 17,* in relation to the transportation of goods in foreign vessels from one port in the United States to another port in the United States, as would makv" the j)rohibitions in such case U|)on foreign vessels e(pnilly applii'able to a carriage of property by other foreign means from one of (Uir ports to another, and that the withdrawal of tlu' present privileges, existing under the laws of 1705)1 and 1S,')4,^ in reference to the shipnuuit, carriag(\ and re-entry of property going to and from the United States and Canada, would, in a most impiutant degree, hasten the removal of many, and perhaps all, of the iiimierous evils I have stated. The necessary conse11» iji"" w %>} m \f -5; S ■i) •*.* JC !li 'tv p* 'W ^ 4> >C It. ^ ^1 /J s a '0* • •% s =r5 ^. l^i ^ » §: §3^^. ^^ . ^'S -M -^ s a 'i; a ^ >— ( 21 a J S^ ?". 0:s a, vr- Oh ^ c: 't* c ir: '■^ X) 'rs -> _ e CO s ~ .0 ■=: ? 2 •S v: s: ^ ~. ^j I RECIPRO ITY TREATY. lU»Di.-ld311)}{ I §S jS ;^ 'S^ 3 Q 00 ■v s a »0 3> St I; 5§ O £ s S?5 :S S 3 Oft Sc8 10 f^ (Tito" 10 . — to .1^ — ■ o 3 Q ni^ S -S — a o «3 — 3> i = :S 3 Q :« .- S3 3 »_'- 10 t~ ■5 < o — 5 5 •" ' ■. « 2 a) ?8 2« 55 CO O S2~ ^t ecu SS 'N'N 00*3" •OSS • ffJS32S •2" »g;« t~ Ol -^ 5 -- r^ 1^ I gCTnC 10— f-i s ■^ f?5co ^ f^ V as :g3;s ojeooj; :£::S' S3) O 3 • too in — s ? g .§ s? s 9. a . — ^ — r> • n R o ifs • ^ • n :^i in V :-S2 •o a 3 wa? 3 Jri 3 °^ B » D ^ _- = = £ 3 « 3 = O . ^ ft Si CD -O r- CO 8 r 2S ;^ :§2 ■ iO-< • 00 is? IS"* is ■.82 el Ob §« a?'^" x'= a.-■o.S"2r: 2 ^ '■ 5 S ~ c S £•»♦ X ~ - s s s s » „ ^- i .s — / 4) M^ * .^7 rt 3 bC.3 ^ — i'^'**!'— ^i:'U)Qb<0.r.UXb-^aQCDUH'Jtl3oa-Ik<«)0< fea 1-^ a o :^ . .'< £ a 3 cSeasn RECIPROCITY TREATY, 41 r.l T — ^ if: 3 in :i3 a 11 31 S to no 10 D t- 10 o S .S£ ^ V •01 71 r^" : '" CO " A •-IO >,x: • to 5f <-» s i'o 2 « c* " a <- n •lOO 3 »o o o • ->31 Ol T •lO >£^ = 1 •3 O ■ : ; r^ ■ • c ' & ii _ — 3 S->« o C ■• 1 j< S i 2 2 S i> S a « C 3 2 = 2 M — = 2 ^a ^ C 4J U w' 5 w i> C — fc- OJ — » rt t CD to s ■UIBldlUBlO 5(M — * Sotro ■3tl|31B8aAVSO o •5|a3iO oi«una (0 ■BJoSeifij in -"IN CO V 3> »rt Oi to tr "— ■ ■oSaMsQ 00> 3"l^ ^ 5 QO t^ lonon ■3383U3<) S i2 o S" S3 OK do s Si 00 o 2 s S!^ CO n «« S s 5" ID oT s ^ X flj • ,0 SM . ■- i' B • m >t V • n. 2 • '■ !S A • 9 3 S • .t; 'S tn ; 3 I- "^ »' ; SOS'S 8 3 a. ■a s U o i ' ;'i RECIPROCITY TREATY 43 APPENDIX No. 4. M Statement exhibiting the amount of revenue from duties on products of American origin collected by the Canadian government from December 31, 1855, to January 1, 1860. 1856.— Duties, Bpecific Diitieis, 20 percent Dntifs, 12J aud 15 percent Dutks, 5 iind 2lt per cent Total 1857.— Duties, specific Duties, 20 per cent. Duties, 15 per cent Duties, 5 and 2 J per cent Total 1858.— Duties, specific Duties, 25 and 20 per cent Duties, 20 and 15 per cent Duties, 15 per cent Duties, 5 and 2 J percent. Total 1859. — Duties on American productions $217,941 99 41,796 60 813.641 12 21,935 90 1,095,315 00 $200,442 00 89,885 40 636, 160 35 17,496 24 943,983 38 $362,955 00 52,784 00 292,123 00 163,557 00 11,742 00 883,261 00 $1,109,461 GO The total amount of duties levied in Canada in 1859 under the high tarilf was $4,437,846 for eleven months. lu 1858 the whole of the duties was $3,381,389, of which more than one fourth was levied on productions of United States origin. It is therefore fair to assume that more than $1,109,461, or one-fourth of the whole customs revenue, arose from the pame source in 1859, the duties by the tariff of that year being proportionally higher upon the dutiable articles exported from the United Stutes to Canada than those exported from I any other country. APPENDIX No. 5. jmStaternent of the Canadian tariff of 1859 in contrast loith that o/'1854, the year lohen the treaty was made. 1859. Jrandy, gin, rum, &c., 100 per cent. 1854. Class 1. Brandy. 40 cents per gallon, and 25 per cent. Rum, &c., 25 cents and 25 per cent. Class 2. 10 percent. — rigars, sugar, refined— duty on Cigars, 30 cents per pound and 12J per cent, the latter to be reduced on a sliding scale Sugar, rjfined, $2 50 per cwt. , and 12J to 15 per cent, in 1862. percenu. 44 RECIPROCITY TREATY. ■1''i!! 1859. Cl,AS:1 ;i. 1864. .'Id iitT (lilt -Cofftio, niastor >j;r(>iiii(I,H|)icftH, ;;i()i'.T»(i, (Iri (I fiiiits, siiull", Kt.iicli, piitfiit inc(li< iiicri, sii^.ii', not rcliiicd, iind mo lasH(!K; two liiHt on a Hluling sc.ilu to 10 |)('r cent, in lK(i2. UnrefintMl Hiigar, $1 20 per vv/t. ami 12^ ixr rt^nt ; iimlaHst!)*, 4 C'titH pitr f^^allon ami 12^ piT oiMit.; <;o(|'iM', roant or ^loiiml, $2 T.") pur cwt anil 12J pi^rciiiit.; spiii^n, urMuml or «iij:;roiiiiil, .'JO pisr <:cnt ; fruits, .'{() jmt cent ; Hiinll', 7 cuntH pei pouml and 12^ poroi'tit. ; Htiiroli, 12^ percent. Class 4. IT) perci-nt. — TeaandKi'''ent'i)ireo; onslidiiif? scale to 5 per cent alter January, 18G.'i. Tea, 2 centw per pound and 12^ per cent ; culloc, ureen, 92 cei.'.t« per cwt. and 12^ per cent. Clabs 5. 2.') per cent - Manufactures of leather, viz: boots and shoes, harni'ss and saddlery ; clotliinfi or weariuf^ apparel made by hand or sevvini' niaehine. Manufactures o. leather, boots and hIuh's, sad'llery, clotliirif?, weariuf^ ap|)arel, &e., 12^ per cent. Class G. •HllRli (iooils pajiiifj; 20 per cerit almoul every maniij'aclure. leather, anil Unenuinerated goods, 12 J per cent., includin;,' leather, and almost all manuiaclures, wool- lens, cottons, tobacco, (»his article beini,' also subject, when luanufaetured, to al)(:ut 2 ctnt^ per pound, and snnlf to 7 cents per pound,) hats, furniture. ji;lass. axes, eiliie tools, nsricultural iniplenicut.^, hiril- ware, cistings, mowing machines, &c. Clash 7. Book, map, and printing p iper, 15 per cent. | I'aper, 12J per cent. Class 8 10 [KM- cent. — Ships, books, iron, brass, or copper in bar, rod, hoop, or hheets, wire, boiler plates, maps, sheet lead, candle wick, cotton yi(rn,iS;c ; mill shafts, cranks, forged in the rough, and generally all ar»i- clefi partially manufactured. Rooks free ; iron, brass, and copper, and must articles in this class, 2^ per cent. Class 9. Specific— Whiskey, 18 cents per gallon. Whiskey, 5 cents per gallon and 12 J per cent. NJS 6 X -* X 5S^ (-^ s-o Q ■r T- y. i: S w s ss l-H •S •- ^ >^ *s -t^. , ' c -* ?< -2 ^ e -~ « 's; >. in 00 00 ■ 2 cS CT 1'- ft to CO r- T ^ to 00 •— t^ •r »ft" g ig SliscSS CI 19 IC (C -^ l7j -H 5 'J '^'nn *2 a 1.^ ^2 o S a; -73 O >aoir>oio >g> Oll-l- r* 010s 10 1 u3 ti^ r» r- ^^ ao^o ^-« ^ to •— ^c^ 3> s to o "f to ^" o ! t- I- H t* I* — M — tc * O ^ffl r^ W ir^ («5 TO — cT c a U o g = 2 3 ?;" 5s 5i rt V »nDr»teco S c ? 355 t-H M ^^ OJ ^^ a» CT. r- 00 — 00 (w -^ 10 oT (X Q — OS O ^ 03 "^ X Jj « .J s IS U o T in c if^ *r C-; r: If; cc 1 '• r- oj "JO — — — X 1.-5 .r. oi fM -■ T JO ift in oo r- • 3 E ~ « T • E.2 o c — 3 :; ■ « a. << '• f* 46 RECIPROCITY TREATY. APPENDIX No. 7. Sionmary shoiinng an annual cxcefis of exjwrfations from Canada to the United States above those to all other countries together, from Decern- her 31, 1854, to January 1, 1859. Years. 185o 1856 1857 1S58 Total E.Kports to tlie United States .. -, Exports to all other countrien , Amount of Canadian exports to the Uniteil States ahove those to Great Britain and all other countries aada to Great r coun- -2 mCa tates, lothe ^"'■s 6^ ^11 t; .1= =« il O fl - .>- a X^ U -w ♦- (a « a o >3 H W $28,108,4fil $20,002, 290 32,047,016 20,218, 653 27,006,624 14,762, 641 23,472,609 13,373. 138 110,634,710 68,356, 722 68, 356, 722 42,277,988 26,078,734 I., %; Pli wm APPENDIX No. 8. Summary shotcing an annual excess of importations into Canada from the United States af)OVe those from all other countries together, from December 31, 1854, to January 1, 1859. Years. Imports into Canada from the United States and all other countries. Imports into Canada from the United States. 1855 $36,086, 1(;9 43, 584,;js7 39,430,597 29,078.527 $20,828,67(1 1856 22,704,509 1857 20,224.65(1 1S,")8 15,635,56;') '\\>\xx\ 148, 179,680 79,393,400 79 393.400 Imports from the United States Imports from all other countries Imports from the United States aliove tliose from Great Britain and all otlier countries. ............ 68,786,280 10,607,120 ». I.ll RECIPROCITY TREATY. 47 inada to the ram Decern- $20,002,290 20,218,653 14,762,641 13,373.138 I 68,356,722 2 8 14 Canada from ogether, from -. a o -• '-0 r3 *{ a js CJ-, 5| S20.828,G7(; 22,704,509 20,221,65(1 ir),(;3!),.")65 70,393,400 Mr. ftalt, finance minister of Ciuiiulii, reports, March 1, 18G0, page :jG, as follows: '•I>y extending the ad valorem, principle to all importations and thereby encouraging and developing the direct trade between Canada and all foreign countries by sea, and '^ far benefitting the shipping ■interests of Great Britain — an object which is partly attained through the duties being taken upon the value in the market where last liouglit — the levy of specific duties for several years had completely diverted th(^ trade of Canada in teas, sugars, (fee, to the American markets, (our Atlantic cities,) and had destroyed a very valuable 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 slni, 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 ad valorem duties." 'From the same, page 38: "Any increase of duty which has been placed on English goods is quite indemnified by the decreased costs at which our canals, rail- ways, and steamships enable them now to be delivered throughout the province, and that if the question were one of competition with Canadian manufacturers the English exporter is quite as well off as before, while as compared with the American his position is greatly improve ;1." Saint Paul, May 2, 18G0. Sir: Allow me to submit some considerations in favor of the Cana- dian reciprocity treaty: The newspapers represent so persisten("ly that a reaction of public [sentiment exists, which threatens the stability of this measure, that I [have ventured to present the results of an inquiry into its operation, |at least so far as these can be gathered from public documents. Not feeling certain that such a communication would be regarded IS within my instructions from the Treasury Department, I have given lit the forni of a distinct memoir, without any special address. I For the present I can safely aver that there is but one sentiment %vi!st of Buflalo on the line of the great lakes, and that is hostility to the abrojiation of the reciprocity treaty. If any change is demanded it is in a dilVerent direction — in favor of its territorial extension t(^ the Hew province sooii to be organized northwest of Minnesota and British .,.,,1 ,^v Cobn.nb of its enlar!i,'enient, as soon as practicable, so as t o jaaerit the desii>-iiation of a zollverein or customs union. That statesman is to be congrat; lated whose name shall be con- )icu()usly identilied with such a measure. I hope that you, sir, will 'I **" K'* 48 RECIPROCITY TREATY. lio ahlo to present it, cither as u deliiiite rocoinmendiitioii or as a fart aecoiiiplislied, in your next annual report. I shall labor earni'stly to prepare and coniniiinii'alcj snch statistics as will assist yon in detcrniinirij; whether a policy thus coniprcdiensive is not dictated by the best interests of the treasury, as well as by other considerations of great public iinportai'.cc. I remain, sir, very respectfully, vour obediiMit servant, JAMES W. TAYLOK. lion. IIowELL Conn, Secretary of flic Treasury. REPORT OF JAMES W. TAYF.OR. Canadian reciprocity treaty — some considerations in Its favor. •» » The commercial relations of tlie United States can he readily inves- lip,iited by the })e()j)le from the re(!ords and documents pni)lished by the "government. Secrecy attends dif)lomacy and i)nblication is ex- ceptional, but on all questioiis of revenue and finance open discussion has j)revailed. Hence our public debates are on no subject more exhaustive than ujyon the tariff question, and the reports of the Treasury Dei)artmcnt arc carefully studied whenever regulations of coUimertial interests are agitated. Public attention has recently been called to tlu; reciproi ity treaty between the United States and the British possessions in North America. Hostility to its continuance is manifested in influential ({uarters. The first impulse of the citi/en interested in the discussion is to refer to the archives of the government, as published by Con- gress, and by study and comparison of authentic statistics to deter- mine the results of the treaty in (piestion. At least, until other materials lor decision are interposed, our investigations may properly be allowed such a range. The general principle which should govern the policy of the Unite'.: ■• •4;/ I* ' ', 'II '' *i, .; ri^:;litK of tlio rcMpoc^tivo p:irtii's, ol'toii mid tlion in sorioiiH conflict, to tlu' (isliiii)j; ImiikM adjaciMit to t\w nortliwt^'^tcrn Atlantic coaHt. At tlic conchision of tho piNico of 17S,'{, tin* trt-aty between tlie United States and (ireat Hrifiiin Hti[)nlated the ri^lit of Americans "to tako i\n\\ on the Grand Hank and all other lianks of Newfound- land, in tho (lulf of St. Lawrence, and all other place's in tlu; Hca, where tint inhahitanls of both countries had heiMi iis(m1 Ixdori;, and the liberty to lish on such parts of the coast of Newfoundland as Hritish lishornien used, (but not to dry or euro fish thereon,) and on the coasts, bays, and creoks of all other British dominions in America." The war of 1812 abroj>;atod the above. Tho convention of 1818 secured to the United States the rij;ht to llsh all alonjjj tho coasts and harbors ot Mritish North America, but not within three marine leagues of the shori'. and to cure lish in such bays and harbors as were not inhabited, and also to enter any bay or harbor lor sludter, to repair damages, or to obtain provisions or water. Such a provision made collision almost unavoidable. American vessels were fri'(|uently seized within the three mih,' limit. And cruisers, with each recurring season, were despatcluul to ac.comj)any and protect the fishermen. Jjord El^in lately observed in a speech at Liverpool, that when the nej^otiation of the reciprocity treaty was in progress at Wasliin;4ton, "a British admiral and an American com- mo(loi-e wei'e sailinjj, on the coast with instructions founded upon ojjposite conclusi(ms, and a sinj;le indiscrcot act t)n tho part of one or the other of those naval ollicors would have brought on a coidlict in- volvin;;- all the horrors of war." The lirst article of the treaty was occupied with an adjustment of this fishery (piestioii. It was af;reed that " in addition to tho liberty secured by the convention of October '20, 181S, oftakin^-, curinj^, and drvinjx tisli on ct'rtain coasts of the British North American colonies therein defined, the inhabitants of the I'nited States shail have, in common with the subjects of her Britannic Majesty, the liberty to take fish of every kind, except shell fish, on the sea coast and shores, and in the bays, harbors, and creeks of ('anada, New Bruns\vii;k, Nova Scotia, Edward's island, Mid of the several islands adjacent thereto, without beinjj; restricted to any distance frt)m the shore, with permission to land upon the coasts and shores of those colonies and the islands tlier 'of, and also upon the Maj:;dalen islands for the pur- pose of drying' their nets and curing- their fish." The j)reamble stated as a prcuninent motive to tho treaty, a desire "to avoid further niisunderstandin;;- in regard to the right of fishing on the coast>- of British North Anierii a." The second article secured a similar ])rivilege to British subjects on tho eastern seii- coasts, shores, and islands, north of the^lJth parallel of north latitude. President Pierce, in his last ainiual message, (December 2, 1856,) alludes prominently to the treaty as a measure of pacification, while expressing his satisfaction with its commercial operation. His lan- guage is annexed : "The treatv between the United States and Great Britain of tla- •.n. HKCirKOCITY TREATY. 51 illict, to oen tlic ■ wlouixl- tlll' HCil, foro, mid (lliind us Mm,) iiiid mionrt ill of ISIB OiVHtS illld c leagues were not to repair American lit. And ccoinpany I ii speei'li reaty was riean com- ided upon of one or •oiilliet in- stment of lie liberty luring, and n eolonies 1 have, in liberty to ,11(1 shores, |>runs\viek, adjacent Ihore, witli ilonies ami r the pur- treaty, a he right of 1)11(1 article Isteni sen- h latitude. ir 2, 1856,) ]ioii, while His iai>- I Lain of the ,')tli of .Tunc*, 1Hr)4, wliich went into enV'ctiv*^ operation in ISf).'), put ,111 (Mid to causes of irritation Ix^tweeti the two countries, by securing to tlic UnitiMl States tli(( right of lishing on the coast of the British North Ainerican provinc«(s, with advantages ecpial to those enjoyed hv Ibitish subjects. Besides the signal bemdits of this triiaty to ti large class of our cili/ens engage(| in ii pursuit (Minnected to no incon- siderable degree with our national prosperity and strength, it has had u favorable elVeet upon other int(^restH in tho [)rovision it made for re- cipHK id freedom of trade between tho United States and the British provinces in Anieri(!a. '•Tiie exports of domestic articles to these provinces during tho last vear amounted to more than twenty-two million dollars, exceed- ing those of the preceding year by nearly s(!V('n million dollars; and the reports ther(!l"rom, during tin; same period, amounte(l to more than twenty-on(! million — an increase of six million upon those of tho previous year. "The improved condition of this brancdiof our commerce ih mainly attributablo to the above-mentioned trc^aty." Are parties, who demand the abrogation of the treaty, willing to remit the country to the uncertainties and ha/urds of the convention of iSlcS? Or do they hope to discriminate betwe(;n the tirstand third articles, retaining wliat is of exclusive advantage to the United States, wiiiic di.scarding those provisions which have proved beneficial to our provincial neighbors? Article four of the treaty s(M'ures to tlu^ citizens and inhabitants of tim United States the freedom of navigation on the river St. Law- rence and the canals of Canada, and to British subjects the same right upon Lake Michigan. The hostility manifested in .rtain ([uartcrs is probably founded Ujioii the third article, whicl\ ;idniits the products enumerated in a sche(liile annexed, being the gtowtli and produce of the British col- onies and the United States, respectively, free of duty. The {)ructical results <^t this stipulation are unchanged since Presi- dent Pierce congratulated the country in 185(5, Successive Secreta- ries of tlie Treasury have been content to tabulate the progress of exports and imports under the reciprocity treaty, the balance of trade : being always favorable to the United States. Li the re[u)it just pub- HsIumI this comparative statement is made to iiudude the year termi- nating .hiiie .'JO, 185!), and exhibits the increase of exports for that year from the United States over the year 1852 to be $17,645,158; increa>e of imports, $1. 'J, 617,252; excess of exports over imports, [$8,426,623. (See Report on the Finances, 1 858-' 59, page 357.) It is alleged that since the date of the treaty Canada has increased he duties upon imports, especially by tho tarilf of 1858. Glranted; )nt this is no reasonable ground for comjilaint. Canada is careful to include in the free list every article naiiKMl in the schedule of tlie ttreaty; a.nd, as to the manufactured articles, what right have we to emand that the provinces should encourage importations from tho Jnited States when our legislation of 1846 imposed duties as high as ihirty jK-r cent., and the act of 1857 only reduced their average to 52 RECIPROCITY TREATY. twenty-four per cent, upon Canadian manufactures. Canada needs revenue; the public lands, as with us, have ceased to yield any con- siderable revenue, and it became a public necessity to increase the tariff. In doing so how can he assert that Canada "has acted in bad faith to the United States and violated the spirit of the reciprocity treaty," to repeat the current complaints of the New York journals ? But the most direct treatment of tiie objections to the reciprocity treaty is to compare the Canadian and American tariffs, especially in respect to manufactures : Bates of duty. Articles. Manufactures of wood Manufactures of mahogany Wax, bees' Refined sugar 1846. . 30 • 40 • 20 30 Chocolate 20 Spirits from grain, whiskey 100 Spirits from grain, other • • • • 100 Molasses 30 Vinegar • 30 Beer, ale, porter, cider 30 Linseed oil 20 Spirits of Turpentine 20 Household furniture 30 Carriages and cars 30 Hats 30 Saddlery 30 Candles 20 Soap 30 Soap, perfumed and fancy • • 30 Snuif 40 Tobacco, manufactured 40 Leather 20 Leathf^r, boots and shoes • • • 30 Cables and cordage 25 Gunpowder 20 Salt 20 Lead 20 Iron — pig, ba nails, American Tariff. Canadian Tariff. Articles. IS-ie. 1857. 1858. Medical preparations 30 24 20 Medical drugs 20 15 16 Cottons (average duties) 25 19 15 Hemp, manufactures of---- 20 15 16 Wearing apparel 30 24 25 Earthenware 30 24 16 Combs 30 24 15 Buttons 25 19 16 Brushes and brooms 30 24 20 (Brooms, corn, S. ; 50c. p. doz.) Umbrellas and parasols 30 24 15 Printing materials 20 15 15 Musical instruments 20 15 20 Books and maps 10 8 Free, Paints 20 15 15 Glassware 30 24 20 Tinware 30 24 5 Manufactures of pewter and lead 30 24 15 Manufactures of marble 30 24 20 Manufactures of India rubber 30 24 20 Manufactures of gold and sil- I ver leaf 15 12 20 I Artificial flowers 30 24 15 I Lard oil 30 24 15 ■ Manufactures of wool 30 24 15 I hair 25 19 15 I for 30 24 20 I goat's haa-- 25 19 20 silk 25 19 20 I worsted- •-■ 25 19 - 15 I hemp 20 15 15 i flux 20 15 15 Average ad valorem duties in force, in 1857, about 21 per cent; in 1858, about 16 per cent. Our manufacturers demand that Canada shall restore the scale of |utiert existing when the reciprocity treaty was ratified, on penalty its abrogation. When it is considered that the duties imposed by le American tariff of 1857 are fully 25 per cent, higher than the cor- ^sponding rates of the Canadian tarilT, the demand borders on arro- Mice. What lias been the effect of the Canadian tariff of 1858 upon our sports of manufactures ? It went into operation August 7,1858; insequently the exports from the United States of dutiable articles the year ending June 30, 1858, ms compiirod vvith the exports tor year ending June 30, 1859, will exhibit the comparative opera- »n of the former and the existing tariff's: ifMf' 54 RECIPROCITY TREATY. Exports from the United States to Canada. ArticK'8 1858. 185!). Adamantine and other candles $10,00G 5,415 Beer, ale, and porter, in casks 6,809 2,707 Books and maps 50,364 150,034 Bricks, liino, and cement 31,547 25,477 Brooms and brushes 5,5 18 4, 149 Buttons 3,168 Cables and cordage 18,494 28,433 Carriag-es, railroad cars, parts of, «fec 24,681 20,449 Combs 1,127 12.824 Copper and brass, manufactures of 66,803 60,511 I)ruj::s and medicines 74,965 58,529 Earthen and stone v/are 9,889 9,350 Fire enj^'ines and apparatus 5,900 1 200 Gunpowder 6,020 137 Huts— of fur and silk 47,087 115,571 ofpidmleaf 1,741 579 Household furniture 183,566 136,765 Manufactures of India rubber — shoes 707 169 other 20,863 13,048 Iron— bar 21,331 10,852 castings 62,734 41,918 nails.. 13,209 H,13G pijx 23,260 18,240 manufactures 614,439 697,713 Jewelry, real and imitation 6,617 15,914 Lard oil 9, 160 1,277 Lead 1,407 872 Leather 258,563 216,436 Leather manufactured — boots and shoes 242,450 211,147 Linseed oil 9,568 7,854 Manufactured tobacco 670,466 1, 205,684 Cotton, manufactured— printed, 115,162 sheet 2,233 other manufactures 16,293 Leather, manufactured, boots and shoes . . • 701 gloves skins tanned 544 tanned, sole 196 not specified 2, 874 Salt 20,878 Silk, manufactured, piece goods 147 not specified 536 Spirits, brandy 13,973 from grain 4, 006 from other materials 299 Sugar, brown 976 Wares, china, earthen, kc 850 I Wood, manufactures of 21, 820 I Wool and worsted, manufactured — "^ Blankets 34 [Carpeting 464 iFlanncls 50 Mece goods 1, 897 lot specified 2.00o 234,234 1859. $6,160 898 981 1,166 2 480 1,628 289 38 354 501 480 7,700 5,070 221 690 1,441 672 5.783 209,672 1,347 19,883. 696. 474 2,066 2,309 3,397 15,231 416 804 18,579 2,785. 803 4,958 13,753 36,578 70 125 134 1,311 5,555 375.201 H. Ex. Doc. 96- 58 RECIPROCITY TREATY. Tills ii<::p;ron;i,to (if rimiidiaii nmiinfnctiiroH, v liicli woro l)roiip;lit into the UiiitcMl States (liiriii^j: IS.'iH-'.'iJ), altlioiij>li «>xceu(lin^ by $140, 9(57 the KJinilar import of 18r)7-'r)8, is iiisigiiilicai U comparison with the movonKMit of American manufactures into Canada (hiring the Hamo j)eri()(ls, and which excee(h'd three million dollars for the year endinj^ tlunc [\{), ISf)!). Surely our inanufacturors, diflicult ns they are "^o satisfy, have no good reason for dissatisfaction with the reciprocity treaty. But prominent Canadian statesmen ])resent another alternative for our I'onsideration than to restore restrictions uj)()n the trade awd com- merce of kindred communities. It coiisists of the removal of existing restrictions. It is proposed by a leading politician of Upper Canada, (Hon. Isaac Buchanan, M. V. P., of Hamilton, in a late address to his constituents.) ''''to cjctcml the rcciprocitij treat ij to mnmi/artures,^' ^*to carry nv'iprocUy fnrth'r^ and estnUlsh Ixdimen the provinces and the United States an American Zotl-Verein, each count)!/ adopting the policy of iDiliinited free trade with each other, atd the same protection to do- mestic man iifactures. ' ' Instead of abrogating tlie reci{)ro(nty treaty, will not the govern- ment concur in this suggestion, and })roi)cse its eidiirgement ? It is insisted that the frontier States are hostile to the treaty, and in favor of giving notice of a wish to terminate the same. What is the evidence of such a disposition? Do tlu^ New England States de- sire to involve their fishing interests in the embarrassments from which the treaty relieved them? Is the country at large disposed to incur again the risk of hostilities between American and Englisli cruisers, which was imminent in 18r)'}-'r)4? What evidence is there tiiat the lake States would be satisfied by a surrender of free naviga- tion u[)on the St. Lawrence river and the canals of Canada? In response to these and similar questions the following extract of a recent article from the Detroit Tril»ine is jiertinent: ••We do not know ^\ hat effect the treaty has had upon the lake Statt's, but it has certainly produi-ed n()_such disastrous results upon ]\Iichigan. Undoubtedly, Canada dt'iives more advantage from it than we do. unless we offset the opening of the direi't trade between the lakes and Europe against the very general advantages it has con- ferred upon them; but it has driven no : lanufaetories or manufac- tiirers from Miihigan into Canada, nor has it, so far as we have ever heard, injuriously affected our manufactures. The trade which has grown up untler the treaty is mutually beneficial. On the 30th of Septend)er we (Michigan) had exported to Canada since the treaty went into opi -ation, of raw material, manufactured wood, «fec., and , foreign productions, mostly sugar, molasses, coffee, and tea, to the j value of $23,457,700, and imported only $15,805,509 worth, leaving j a balance in our favor of $7,051,271. In addition to this, the trade has given large emjdoyment to our 8hii)ping, about one-half of the above aggregate of |39,000,000 having been carried or brought by >| our own vessels." ] of trade bears emphatic testimony to the satis- S nn,., r(tar(ls, plank, and scantling, Butter Cheese CMover seed Coal Cotton Fish, (lri(!d or smoked, • • • • Fisli, pickled, ILims and bacon Hemp Hewn timber Other hnnber Hides H<)t;s Horned cattle Horses Hops Indian corn Indian meal Lard Mules Pork Potatoes Rice Rosin and turpentine Rye meal Rye, oats, ttc, (small grain,) Sliet'p ; Skins and furs i Tallow [Tar and pitch [Tobacco leaf 542,972 27,344 21.909 73.020 2,015 103,052 20,288 00,555 113,013 8,743 174,812 Wheat 1,178,500 iWh eat floui '^ool 1,000.540 224,881 43, .375 12,305 2,942 93,320 179,919 20,092 3.390 007,837 9,012 19,127 17,013 29,130 50,909 2,000 4,850 58,577 17,870 28,584 100,717 2,902,171 60 RECIPROCITY TREATY. «wu ■•n ^»H(ti( The report njton commerce and navigation returns $394,131 ti CiUiada, and $1G2,045 to other provinces, aa the vahie of raw articles many of which would doubtlesn be included in the free list of thi treaty; but the object of the foregoing statement is less to exhibi aggregates than to show how every portion of the country is in terested in the trade, which has grown up within four years unde the encouragement of the policy of reciprocity. The late attack upon that policy can be traced exclusively to om quarter, the shipping interest of New York and Philadelphia, and th( lines of transportation between those cities and the west. Pennsyl vania, as a State, cannot share the sentiment, for coal and iron, witl the manufactures of the latter, are p'-ominent exports to Canada while the other manufacturing interest, both of Pennsylvania an( New York, gain largely from the consuvnption of their products in th( provinces. But the importing and railroad interests of the two Statei are apprehensive of the competition of the Giand Trunk railway anc the navigation of tne St. Lawrence ; and the northwestern and ever the Mississippi States must be forced, by the abrogation of reciproca trade and navigation, to pursue, exclusively, certain channels of com munication. It is not possible that the government of the Unitec States can be induced to yi^ld to such an appeal. The foregoing considerations have been suggested by the docu mentary evidence before me. There may be other facts, which would warrant other conclusions, but the records of the country, particularly the reports of the Treasury Department, are, without exception, ; complete vindication of the treaty of June 5, 1854. Still, if there is necessity for revision, let it be in the direction o the principle which the United States has always advanced, freedom not restriction, of commercial intercourse. JAMES W. TAYLOR. "Tmnii 'It n returns $394,131 to le value of raw articles, in the free list of the sment is less to exhibit I of the country is in- athin four years under ■y- aced exclusively to one d Philadelphia, and the id the west. Pennsyl- for coal and iron, with it exports to Canada ; 1 of Pennsylvania and of their products in the erests of the two States and Trunk railway and northwestern and even abrogation of reciprocal jertain channels of com- ernment of the United 3al. aggested by the docu- )ther facts, which would he country, particularly e, witliout exception, a 1854. t be in the direction o' ays advanced, freedom, .MES W. TAYLOR.