H
CANADIAN AGGRESSION
UPON
AMERICAN COMMERCE,
AND
THE INJUSTICE OF APPLYING
The Long and Short Haul Rule
TO
TRANSCONTINENTAL TRAFFIC.
BY JOSEPH NIMMO, Ju.
WASHINGTON :
Giuson Bros., Printers and Bookbinders.
i8SS.
Rditorial Notice from the Chicago Inter-Ocean of Sept. 8, 1888.
OUR COMMERCIAL RELATIONS WITH CANADA.
The communication from Mr. Nimmo, which is published in The Inter-
Ocean of to-day, deserves not only perusal but study. So far as concerns
the immediate cause of its being written, the article has no claim to con¬
sideration, but the fundamental facts brought out ought to challenge the
attention of the country. Congress is charged, under the Constitution,
with the duty of passing such laws as the commercial interests of the
country demand, and, as Mr. Nimmo shows, this duty is being neglected ;
Great Britain is pursuing her traditional policy in Canada and British
Columbia of fostering her own commerce by liberal subsidy, rail and steam¬
ship, and gradually getting a large share of the transcontinental transit of
the United States.
No one can blame the Canadian and the Imperial Governments for fol¬
lowing this course. It is the business of every nation to look after its own
interest. But this country should have a little of the same kind of com¬
mon sense, and protect its own transportation interest from foreign en¬
croachment. The facts presented lead logically to the recommendations
made. Nothing can be hoped for in the direction of National commercial
protection from such a President as Grover Cleveland, but with Benjamin
Harrison in the Executive Mansion there will be a real statesman at the
head of our public affairs, one who knows enough to appreciate the im¬
portance of not allowing a foreign power to build up its own commerce
and at our expense.
The enormous subsidy to the Canadian Pacific Railroad, $130,000,000,
was dictated primarily by a wholesome desire to be independent of the
United States in transportation and travel between the remote portions of
British America, but it is now coming to be used as a link in that mighty
chain wherewith Great Britain aims to bind the world in bonds of com¬
mercial subjugation and make all nations pay tribute to British capital.
The country has an easy and efficient remedy, if only disposed to apply it,
as Mr. Nimmo points out. Correct the abuse of the privilege of transit
in bond and the evil would be averted by substantially confining the busi¬
ness of the Canadian Pacific to Canadian and British business. This,
however, must not be done in a way to put our shippers at the mercy of a
domestic railway pool, but rather under a judicious exercise of the power
of Congress to regulate not only commerce between the States, but with
foreign countries. The treaty-making power must not be allowed to usurp
the prerogative of Congress as the law-making department of the govern¬
ment, which was what the fisheries treaty attempted to do. The rejection
of that treaty was a preliminary step toward carrying out the policy out¬
lined by Mr. Nimmo.
CANADIAN
AGGRESSION UPON AMERICAN
COMMERCE, &c., &c.
To the Editor of the Inter- Ocean :
It is a compliment to be controverted by a leading journal of a
great city, and in this view I should highly appreciate a recent
editorial in the St. Paul Pioneer Press upon my published state¬
ment in reprd to " Our Canadian Relationships," but for the fact
that the editor of that paper refutes certain views which he im¬
putes to me, but which are the very opposite of opinions which
I have publicly expressed and earnestly desire to inculcate. In
representing me as a hater of Canada the Pioneer Press also mis¬
takes both my temper and purpose. As I am particularly desirous
of being understood by the people of the Northwest, I beg leave
to address to The Inter-Ocean this communication, expressive
at once of my judgment and feeling upon the subject. In my
pamphlet above mentioned I have spoken at some length and
with some degree of particularity of the traffic over the new lines
from Duluth to Sault Ste. Marie and from Minneapolis to Sault
Ste. Marie, over the Grand Trunk Railway from Chicago to Port
Huron, and over the Michigan Central Railroad and the several
eastern connections of those lines in Canada, viz., the Canadian
Pacific, the Grand Trunk and the Canada Southern. I have dis¬
tinctly stated that the traffic over these routes is "mutually
beneficial to the interests of transportation and of trade in the two
countries that it subserves important interests in our North¬
western .States and New England States ; and, in order not to be
misunderstood, I add that such traffic " is characterized by con¬
ditions of a true reciprocity " (see pages 6 and 7).
And yet the editor of the Pioneer Press assumes that I am in
favor of the total abolition of the " transit trade." So long as
peace exists between the two countries—and may it never be
broken—I cannot imagine a condition of aflairs which would ren¬
der a suspension of this particular branch of the " transit trade "
necessary or desirable. I am also glad to know that the Northern
Pacific Railroad Company is about to secure running arrange¬
ments over the new Manitoba Railroad. That traffic will also be
" characterized by conditions of a true reciprocity," and as such
stand upon its own merits.
I am likewise in accord with the Pioneer Press in the general
proposition that it matters not whether the capital with which our
railroads are built comes from England or France or Germany or
Canada or from the pockets of our own people ; but the editor of
that paper assumes that I entertain the opposite opinion.
\
5
Naturally, then, the question might be asked : If such are your
views what are you firing at in your accusations against the Do¬
minion of Canada and against the Canadian Pacific Railway?
That is just the question I wish to answer, and I shall try to pre¬
sent the subject in a clear light by means of an illustration.
The Case Illustrated.
Suppose the State of Pennsylvania should grant a charter
for a new railroad to cost $159,000,000, lend and give it
$130,000,000, grant it all the land it might need, and then
back it up in ever fight with rival railroads to the full extent
of the financial and political powers of the State—in a word
embark full tilt into the railroad business, making the sup¬
posititious railroad corporation a mere agency of the State. Is it
not perfectly evident that this State road, with such backing,
would in a few years be able to force the Pennsylvania Railroad
Company into bankruptcy, and to absorb it, with all its lateral
lines from the Atlantic seaboard to St. Louis and Chicago? In
like manner, the ownership of all the other railroads in Pennsyl¬
vania could be secured. If this State railroad monopoly should
continue to pursue an aggressive policy by reducing competitive
rates to the bare cost of moving trains, neighboring corporations
like the Baltimore and Ohio and the New York, Lake. Erie and
Western would in time grow dizzy and tumble into the maw of
the great Pennsylvania octopus. Is it not evident that this would
give a new phase to the entire railroad system of the United
States, and is it not also clear that our present interstate com¬
merce law could not be equitably or justly administered under
such a state of affairs? That law is intended for the regulation
of railroad corporations, not for the regulation of creators of
railroad corporations like the great State of Pennsylvania, in¬
vested with sufficient financial and political power to take half a
dozen of our strongest trunk lines by the throat and shake them
to death.
The Actual Case which Confronts Us.
But such a state of affairs, in an even more objectionable form,
confronts us along our Northern frontier from the Atlantic to the
Pacific, in the Canadian Pacific Railway Company, the alter ego
ot the government of the Dominion of Canada. That railroad
cost $159,000,000; the Canadian government has aided it to the
extent of $130,000,000, bestowed upon it an enormous land grant,
conceded to it extraordinary monopoly privileges, and now stands
behind it to the extent of its financial and political powers in all
its competitive struggles with American transportation lines on
tiie land and on the sea. From the time it was opened it has
heen able, as the result of such governmental backing alone, to
6
dictate terms to American railroads in their traffic between the
Pacific coast and the States east of the Mississippi river. Pur¬
suing always an aggressive policy, it proceeds to secure the own¬
ership of parallel lines in tiie United States at the West, and after
securing the right of way for a line through the State of Maine,
with the object clearly in view of diverting trade from New York,
Boston and Portland, to St. Johns and Halifax, the Dominion
government proceeds to subsidize that line to the extent of
$186,000 a year from St. Lawrence river to Mattawamkeag.
Besides all this the Canadian and British governments have
subsidized a steamer line between the western terminus of the
Canadian Pacific Railway and China and Japan to the amount of
$300,000 a year, as against a compensation of $14,820 per an¬
num paid by the United States for its China and Japan postal
service, which service is at least four hundred times as greatas the
postal service performed by the competing British line. Is it not
perfectly apparent that this whole scheme for the promotion of
thç commercial and political designs of the Canadian and British
governments presents no aspect of free trade or of reciprocal
trade.? It would be an ellipsis to call it protected trade. It is
not trade at all. It is simply a scheme of premiums paid by two
allied British governments to a Canadian railroad company and a
British steamer line to grasp a certain portion of the internal and
foreign commerce of the United States, with the object distinctly
in view of breaking down American commercial enterprise and
of absorbing the commerce on both sides of the boundary line.
The Interstate Commerce Law cannot be beneficially
Administered in the face of such Interference by the
Canadian and British Governments.
Is it not perfectly apparent that such interference by the Cana¬
dian and British governments in our transportation affairs intro¬
duces a new phase into the conduct of the transportation interests
of the United States, utterly vitiating the scheme of regulations
formulated in our interstate commerce act.? That law, as be¬
fore stated, was intended for the regulation of competing railroad
corporations, not for the regulation of States, much less for the
regulation of a jealous and aggressive foreign government em¬
ploying its political powers for the absolute control of a part of
our internal and foreign commerce, and under no sort ot obli¬
gation of conformity to our municipal law. The Constitution of
the United States provide.s' that " Congress shall have power to
regulate commerce among the States and with foreign countries,"
and it is an offence to our National pride that a foreign govern-
mj;nt should, by direct or indirect means, exercise tliat power.
Manifestly no scheme of railroad regulation can be beneficially
administered in this country so long as we allow a foreign gov-
7
eminent to run a saw cut clean through our plans at will. The
difficulties of the case naturally arise from the clashing of an ag¬
gressive governmental railroad system of a foreign country with
our own railroad system created and operated by private enter¬
prise, and at all times subject to public scrutiny and governmental
restraint.
The Interstate Commerce Commission has projected its func¬
tions across the Atlantic Ocean, legally 1 assume, and why not
across the Pacific Ocean ? But an attempt to apply the long and
short haul rule to our China trade in the face of the subsidy
granted to the competing British line would be as absurd as an
attempt to apply it to railroads which compete with Canadian
railroads built by the Dominion government, and in the face of
the determined purpose of that government to back its lines up
with the whole force of its financial and political powers, in all
their competitive struggles with American railroads. The at¬
tempt to enforce that rule upon our railroads exposed to such
competition would simply be to throw the power of our own gov¬
ernment on the side of Canadian aggression.
The Question in its Political Aspects.
The facts thus set forth clearly indicate that Canadian and
British competition with American transportation interests is a
political rather than a commercial question, and, therefore, one
which should engage the earnest attention of the people and the
Congress of the United States. Perhaps the most obnoxious fea¬
ture of the British-Canadian attempt to capture American com¬
merce has not yet been stated. The political phase of that ag¬
gressive move is accentuated by a British fortress and naval sta¬
tion at Esquimault, on the Island of Vancouver, opposite and in
sight of our shores. This Esquimault military establishment is a
concrete expression of British imperial confederation, although
ostensibly for the protection of British Columbia, a colony having
less than half the population of little Washington Territory, which
is just thinking about gaining admission into the Union as a State.
It is characterized by Lord Lansdowne, late Governor General
of Canada, as " one of the greatest and most important strong¬
holds of the empire," and Captain Colomb, of the British Army,
say§ : "It holds a pistol to the heatl of San Francisco." The
great port of New York is nothing like so strongly defended. But
this whole politico-commercial scheme is eminently British. Eng¬
land's military arm always covers her commerce, and when she
wishes to establish a new trade she sticks her guns out in front of
it. The intimate connection between British commerce and
British military power is strikingly illustrated in the new steamer
Ciiy of New Tork, which is huilt according to plans approved
by the British Government, and in such manner that she can be
8
converted into an armed cruiser and transport in two weeks. In
consideration of being so constructed, and of being at all times
subject to the command of the Admiraltv, she receives a special
annual subsidy, the amount of which is not publiclv known. And
this is the case with respect to all the- fast British steamers en¬
gaged in our transatlantic commerce.
To allow a foreign country to exploit upon our commercial and
transportation interests in the manner hereinbefore described in
the case of the Dominion of Canada, without adopting measures
for avoiding the effects of such aggression, would be almost as
disgraceful as to allow a foreign government to make such cap¬
tures by means of its military power, without show of resistance.
The honor and dignity of the country, as well as our commercial
interests, are concerned in this matter. No State of the Union
would desire the continuance of such aggression, even though it
might afford her some incidental advantages, any more than the
State of Massachusetts would allow a profitable tea-trade at Bos¬
ton in 1775 at the expense of political usurpation.
Attitude Assumed by Canada toward the United States.
The pertinent question arises, What do you propose to do about
it.' I answer, first discuss it, and let the people of the United
States know the exact nature of our Canadian relationships, and
the character of the methods and expedients to which the gov¬
ernment of the Dominion of Canada is having recourse in its
eftbrts to snatch from us a part of our internal and foreign com¬
merce.
The United States is a very large part of the world to Canada,
but Canada is a very small part of the world to the United States.
As a Nation, we know much more about England, or Germany,
or France, or Brazil, or China, than we do about Canada.
Let us glance, for a moment, at a few facts illustrative of the
attitude assumed by the Dominion of Canada toward the United
States. And first I would state that in the face of the relations
of reciprocity known as " the transit trade," under which Canada
is enabled to ship every conceivable domestic and foreign product
across our territory without payment of duty, she absolutely re¬
fuses to allow American fishermen to ship across her territory fish
which have been caught in the Atlantic ocean far beyond the terri¬
torial jurisdiction of any country, and such refusal is based upon
the flimsy pretext of the proximity of the fishing grounds to
Canadian territory. The absurdity and rank injustice of this as¬
sumption has for months been reiterated in Congress and in the
public press, and the President of the United States at last deemed
it his duty officially to announce to Congress and to the country
his disapproval of this outrageous denial of our commercial rights.
The astonishing feature of the business is that the reciprocal right
9
of free transit across the two countries is worth more than a hun¬
dred times as much to Canada as it is to the United States, not
only during the seven or eight months when the St. Lawrence
route is closed by ice and fog, but also during the period when
that route is open to commerce.
Second. By act of Parliament, in the year 1879, the Canadian
government offered to place certain products of the United States
upon " her free list " whenever the United .States should place
similar Canadian products upon our " free list." This offer was
accepted by act of Congress in 1883, but for a long time Canada
neglected to observe her part of the compact ; ffnally she yielded
a reluctant compliance in April last, after several diplomatic notes
upon the subject had passed between the two countries.
Third. For several years Canada has persisted in imposing cer¬
tain discriminating entry fees upon American vessels in the face
of the manifest spirit and intent of the treaty of Washington.
Fourth. In the year 1878, by act of Congress, we offered to
allow Canadian wrecking vessels to come to the relief of Canadian
vessels in distress in American waters, provided Canada would
allow American wrecking vessels to go to the relief of American
vessels in Canadian waters, but as yet the offer is refused, although
it appeals to considerations of humanity.
Fifth. For several years past Canada has persisted in a discrim¬
inating toll of 18 cents per ton upon her canals in favor of vessels
bound to Montreal. This discrimination against American ports
is in open violation of Art. XXIX of the treaty of Washington.
Since January last, protest has been made against this practice in
Congress and in the public press, and the President, in his recent
special message, has also in this case deemed it his duty officially
to announce to Congress and the counjry his sense of the wrong
thus perpetrated upon the United States.
Sixth. The people of the Northwest know perfectly well that
Canada has thrown every possible obstacle in the way of allowing
American transportation companies the privilege of carrying goods
from one part of Canada to another part of Canada, although in
the conduct of the " transit trade" the " Grand Trunk" and the
" Canadian Pacific " are living upon traffic between different parts
of the United States. As I have elsewhere remarked, Canada
is allowed to dip her ladle into our big dish, while refusing us the
privilege of dipping our spoon into her little dish. But reciproc¬
ity in good faith in this matter is incompatible with the Canadian
determination to grasp American commerce in the manner here¬
inbefore described. The Grand Trunk and Canadian Pacific
Railwjiy Companies have, by direct and indirect methods, been
enabled to secure extensions to their lines in the States of Maine,
New Hampshire, Vermont, Michigan, Indiana, Illinois, Wiscon¬
sin, and Minnesota, but American railroad companies are unable
10
to secure reciprocal privileges in Canada. Canada has no general
railroad law, and it is certain that no American line could secure
a charter for a road which would compete with any one of her
trunk lines. But the fact that those lines are so heavily subsidized
by the Dominion government, alone prevents foreign competition.
The Manitoba Connection of the Northern Pacific
Railroad the Result of Political Revolt.
The people of the Northwest well know that the connections
recently formed by the Northern Pacific Railroad with the Red
River Valley Railroad is simply the result of a revolt by the peo¬
ple of Manitoba against the Dominion government. The par¬
liament of that province, under a threat of secession, nullified the
act of the Dominion parliament, which granted the monopoly ot
railroad construction to the Canadian Pacific. Such a revolt in
this country would have been opposed by the Army of the United
States. But the Dominion government is nothing more or less
than a loose-jointed autocracy, with a monarchical feather in its
cap. It can bluster and fall back, and perform political antics
which the people of the United States would not for a day toler¬
ate in their National Government. The ownership and control
of the Canada Southern Railroad by the dominant interest in the
Michigan Central and the New York Central and Hudson River
Railroad Companies has been mentioned as an exception to the
asserted exclusion of American railroads from Canada, but the
control of that line was acquired before the Dominion govern¬
ment had embarked in the railroad business as a fundamental
part of its national polity.
The people of Spain call Cuba their " milch cow," and the
people of Canada for a veiy different reason appear to regard the
United States as their milch cow. In the latter case the spirit of
aggression appears to be the result of the fact that the Canadians
are a small and ambitious people, neighbored by a great and mag¬
nanimous nation, which has not, and never has had, an affirma¬
tive foreign policy.
The Historic Origin of Canadian Aggression.
In the year 1848 the Canadian government completed a line of
canals which overcame the obstacles to navigation between Lake
Erie and the St. Lawrence river at Montreal. The superiority
of this route to the Erie Canal route was loudly asserted upon the
grounds that " it was the natural highway of commerce" between
the West and the seaboard, notwithstanding the fact that the
Canadian improvements to navigation cost rather more than did
the Erie Canal. But six months of ice and about two months of
fog in the river and Gulf of St. Lawrence leave only about four
montlis of safe and reliable navigation. Tlicrefore tlie Canadian
11
water-line has failed to meet the demands of the bounding West.
Besides, the American railroad system has placed that route in
eclipse, and Montreal has in consequence become an inconsider¬
able factor in tbe competition with New York and Boston for the
foreign commerce of this country. Perceiving the failure of her
water-line with the indomitable energy of the British race, Canada
next turned to the railroad, and during the last fifteen years she
has been employing it toward the accomplishment of her original
purpose and to the full extent of her powers.
Remedies Proposed.
But the question recurs, What do you propose to do about it.'
I reply generally—respond to each refusal to reciprocate and re¬
taliate in each case of absolute aggression ; but in no case over¬
step the bounds of a temperate and just vindication of our rights.
Our self-respect as a great nation dictates that. I do not wish to
be dogmatic in my utterances touching specific measures, and yet
it appears proper to state plainly the expedients which, in my
judgment, ought to be adopted for the protection of American in¬
terests and the vindication of the honor and dignity of the country.
1. I recommend that a discriminating duty be laid on all im¬
ports from China and Japan and other foreign countries through
British Columbia and over the British Canadian Pacific Railway,
and I think the duty ought to be just high enough to offset the pre¬
mium paid by the Canadian and British governments to their
Pacific ocean steamer line and to the Canadian Pacific Railway
in order to enable those lines to force American commerce from
American steamships, American seaports, and American rail¬
roads.
2. I would recommend the passage of a law forbidding the
transportation of goods free of duty from our Pacific coast ports
to points in the United States east of the Rocky Mountains by-
steamer to Port Moody, and thence east to destination over the
Canadian Pacific Railway and lines in this country. Besides the
objection to this sort of traffic upon the commercial and political
grounds hereinbefore set forth, it is an improper mode of admin¬
istering our customs service. Its looks too much like abrogating
our customs laws in the interest of a foreign government to allow
transfers of miscellaneous dutiable goods to be made from vessel
to railroad car and vice versa, in a foreign country, with no pos¬
sible security against violations of our revenue laws, through the
supervision of our own customs officers acting in their official
capacity. Therefore, I recommend that the "transit trade" be
confined to continuous rail movements in sealed cars without
breaking bulk, in all such cases the Canadian link being a part
of a direct route from the point of shipment in the United States
to the point of delivery in the United States. Here I would draw
I'i
the line. As before stated such traffic embraces in itself " the
conditions of a true reciprocity." I also regard this traffic as per¬
missible, for the reason that the links across the interjecting ter-
ritoryof Canada are such as probably would have been constructed
by American capital, if allowed that privilege, in order to com¬
plete direct through routes, in case such links had not been con¬
structed by Canadian capital. It is for these reasons that I oppose
any interference with the " transit trade" between different points
in the United States over Canadian lines east of Sault Ste. Marie.
3. I recommend that no attempt be made to enforce the " long
and short haul rule" against American railroads engaged in com¬
petition with Canadian government railroads and sustained by it
in their efforts to direct American commerce from American lines.
Such enforcements of that rule would operate directly as an aid
to the Canadian government in its raid upon American commerce,
and I hesitate not to characterize it as unwise, unpatriotic, and
unjust.
Under every form of government, from the family to the State,
the exercise of restraint implies the duty of protection, and in all
great questioning this rule commends itself to the inherent honesty
and integrity of the American mind. Upon no other principle
can oqr railroads be justly or beneficially regulated.
CoNci.uDiNG Remarks.
And now in conclusion I would say, let not the question of
principle involved in this subject be lost sight of in considering it
in its economic and commercial aspects. That would be dis¬
creditable to us as a nation. The very thought of allowing the
Dominion of Canada to interfere in any manner with the course
of our material development is upon its face absurd. The pride
and self-respect of this nation revolt at it. Rather must the United
States by a loyal fidelity to those conditions which constitute the
muniments of its greatness and power exercise a paramount in¬
fluence over the commercial development of this continent. Amer¬
ican statesmen who fall below this mark will fail to meet the
demands of " a proud, expectant nation." But there need be no
fear of failure here. The whole subject of Canadian aggression
has been referred to an able committee of the Senate of the United
States, and it is earnestly to be hoped that that body will be guided
to such conclusions as shall be conformable to the interest and
mission of the United States on this continent and at the same
time be iust to Canada.
JOSEPH NIMMO, Jr.