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-º-, RECIPROCITY

OF
TRANSPORTATION FACILITIES
BETWEEN THE
UNITED STATES AND THE DOMINION OF CANADA:
AND THE
CANADIAN PACIFIC RAILWAY.
FROM THE ANNUAL REPORT ON THE INTERNAL COMMERCE OF THE
- UNITED STATES FOR THE YEAR 1883.
By JOSEPH NIMMO, JR.,
CHIEF OR THE BUREAU of STATISTICs.
W.A.S EI IN (; Ti" () N :
GOW E R N MIE N T P R INT IN G C F F I {} E.
1884.
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TRANSPORTA'ſ ſº ºf
{{
UNNERSITY OF MICRGAN LIB
RECIPROCITY
OF
TRANSPORTATION FACILITIES
BETWEEN THE
UNITED STATES AND THE DOMINION OF CANADA;
AND THE
(ANADIAN PACIFIC RAILWAY.
TROM THE ANNUAL REPORT ON THE INTERNAL COMMERCE OF THE
DNITED STATES FOR THE YEAR 1883.
By JOSEPH NIMMO, Jr.,
CHIEF OF THE BUFEAU OF STATISTICS.
W.A.S EIING TO N :
GOVERNMENT PRINT IN G O FFICE.
1884.
11302
Trääsportation
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LETTER OF TR A N S MITTA. L.
TREASURY DEPARTMENT,
Document No. 549. ;
Bureau of Statistics.
TREASURY DEPARTMENT,
BUREAU OF STATISTICS,
/ February 19, 1884.
SIR :
The following statement in regard to the United States and Canadian
transit trade, the reciprocity of transportation facilities which exist
between the United States and the Dominion of Canada, and the Cana-
dian Pacific Railway, has been prepared as a part of my annual report
on the internal commerce of the United States. That report treats of
the commercial and industrial interests of the States and Territories
of the Pacific coast, and of transcontinental railroads and their traffic.
The important relations which exist between the railroads of the
United States and Canada in the so-called “transit trade,” under the
provisions of the Treaty of Washington, and the laws and customs of
the two countries, have suggested the propriety of presenting also
some of the more important facts showing the relationships which the
Canadian Pacific Railway will, upon its completion, sustain to the com-
mercial, industrial, and transportation interests of the United States.
JOSEPH NIMMO, JR.,
Chief of Bureau.
Hon. CHAs. J. FolgER,
Secretary of the Treasury.
THE UNITED STATES AND CANADIAN TRANSIT TRADE
AND THE
RECIPROCITY OF TRANSPORTATION FACILITIES BETWEEN THE
UNITED STATES AND CANADA.
Under our laws, treaty stipulations, and usages, the principal rail-
roads of Canada are practically constituent members of the railroad
system of the United States.
In order to describe the relations sustained by Canadian railways to
the commercial and transportation interests of the United States, it
will be necessary to advert to the conditions under which those railroads
co-operate and also compete with the railroads of the United States.
This will be the more readily understood by reference to a provision of
our navigation laws. From the organization of the National Govern-
ment to the present time, no foreign vessel has been allowed to engage
in trade between one American port and another. This has, of course,
debarred Canadian vessels from engaging in our internal trade between
American ports on the great lakes. But no similar inhibition applies
to cars belonging to Canadian Railroad companies. Such companies
are allowed the full privilege of transporting goods from one point in
the United States to another through Canadian territory in their own
cars, and without payment of duty.* Besides, dutiable merchandise
imported at seaports of the United States may be transported without
payment of duty across the territory of the United States to Canada
in cars belonging either to railroad companies of the United States or
to those of Canada; and in like manner goods may be shipped from
points in Canada across the territory of the United States to a seaport
of this country, and thence be exported to a foreign country without
payment of duty.
Similar privileges of transit across the territory of Canada by rail are
accorded to the citizens of the United States. The conditions applicable
to such reciprocal privileges of transit are embodied in regulations
designed to prevent violations of the customs revenue laws of the two
countries.
This reciprocity of transportation facilities constitutes what is com-
monly known as “the United States and Canadian transit trade.”
*About one-half the cars of the Grand Trunk Railway are constructed in the United
States and one-half in Canada.
6
The transit trade has long been the subject of statutory provisions of
the two countries. Finally it was made the subject of treaty stipula-
tions between the Governments of Great Britain and the United States.*
But, beside the specific privileges of the transit trade, the cars of
Canadian railroads are allowed to pass freely with their contents over
railroads in the United States, and the cars of railroads of the United
States are allowed to pass freely with their contents over railroads in
Canada.
The railroad companies of Canada have also, under the provisions of
State laws, by lease, and other expedients, extended their control over
railroads in the United States, and, on the other hand, railroad compa-
anies, or persons representing their interests in the United States, have
gained control of railroads in Canada. For example, the Grand Trunk
Railway has been enabled to secure the control and management of
railroads in the States of Vermont, New Hampshire, and Maine at the
East, and in the States of Michigan, Indiana, and Illinois at the West,
by the leasing of certain lines and by the purchase of the capital stock
of others. Thus by means of its own line extending from Chicago to
Portland, Me., and connecting lines, it has been enabled to engage freely
in the transportation business of this country, and it has also become a
strong competitor of the east and west trunk lines of the United States
for traffic between the Northwestern States and the New England States
of this country.f
The granting of these privileges appears to have been a practical ex-
pression of the dominant public sentiment in the United States in favor
of extending to railroad projectors and incorporators generally the priv-
ilege of extending their lines in such manner as to meet the fullest de-
mands of travel and of transportation. This sentiment has also inspired
a spirit of hospitality toward railroad companies of Canada, which has
* The present treaty stipulations and statutory provisions upon this subject are em-
braced in articles 29 and 30 of the treaty between the United States and Great Brit-
ain, concluded at Washington, May 8, 1871, and in sections 3005 and 3006 of the Re-
vised Statutes of the United States. See also the General Regulations of the Treasury
Department made in pursuance of such stipulations and enactments. *
f The Grand Trunk Company hold under lease the Atlantic and Saint-Lawrence
Railroad, which practically extends from the Canadian boundary at a point known
as Norton Mills, through a portion of the States of Vermont, New Hampshire, and
Maine, to Portland, Maine. The lease was sanctioned by the legislature of the State of
Maine, and by the Canadian Parliament. The Grand Trunk Company have no inter-
est in the securities of the Atlantic and Saint Lawrence Company. The length of
this line is 165.22 miles. The Grand Trunk Railway Company also lease a small line
running from Lewiston Junction to Lewiston and Auburn, the length of which is 5.41
miles.
There is also a short piece of line 1.36 miles in length, running from South Paris to
Norway, constructed by local interests and operated by the Grand Trunk Company
under an agreement.
The company also controls, by virtue of holding stock (acquired through another
Canadian line absorbed in the Grand Trunk), a short line running from the boundary
§ 7
enabled them to compete freely with the railroad companies of the
Lnited States in our internal trade.
It is proper also to add that the laws of Congress and the treaty stip-
ulations applicable to the traffic of railroads controlled by Canadian
companies, but situated in part within our borders which have been so
liberally construed by the Treasury Department of the United States
that such traffic is almost as free of restraint as is that of railroads sit-
uated entirely within the territory of this country and operated by cor-
porations chartered by the several States.
On the other hand, a like comity prevails in Canada touching the
traffic of lines within its borders which are operated by citizens or cor-
porations of the United States. For example, citizens of the United
States closely identified in interest with the interests of the New York
Central and Hudson River Railroad, and with those of the Michigan
Central Railroad, have acquired the ownership and control of the Can-
ada Southern Railway of Canada, and for years that road has been
operated as a part of a continuous line between New York City and
Chicago. It would perhaps be difficult to imagine a more nearly perfect
reciprocity of transportation facilities between two contiguous countries.
During the period of unrestricted competition between the east and
west trunk lines for traffic between the Atlantic seaboard and the west,
the Grand Trunk Railway was perhaps the most troublesome of all the
competitors, but it commended itself to public favor in this country
from the fact that it operated as an effective regulator of freight charges
between the New England States and the Western and Northwestern
States. &
The Grand Trunk Railway has from the beginning been a member of
the great pooling association of East and West trunk lines which has
its headquarters at New York City, the chief object of which associa-
tion is to prevent the cutting of rates and Wars of rates, through agree-
ments as to the pooling or division of competitive traffic.
line near Rouse's Point, to the town of Rouse's Point, in the State of New York. The
distance is 1.21 mile. --
In the West the company leases a piece of line extending from Fort tratiot (Port
Huron) to Detroit Junction, where a connection is made with the Michigan Central
road. The length of the line is 59.33 miles. The lease was sanctioned by the State of
Michigan, and authorized by the legislation of Canada.
The Grand Trunk Company also controls, by virtue of holding stock, the line known
as the Michigan Air-Line, extending from Ridgeway to the city of Jackson, in the
State of Michigan, 105.60 miles. The eastern end of it, from Ridgway to Romeo, the
company has held for about four years.
The Grand Trunk Company also control the Chicago and Grand Trunk Railway,
under arrangements made for the exchange of traffic, and by virtue of certain proprie-
tary rights in the stock of the company. This line extends from the city of Port
Huron to the city of Chicago, and is 335 miles in length.
The Great Western Railway Company of Canada, consolidated about fifteen months
ago with the Grand Trunk, controlled the Detroit, Grand Haven and Milwaukee
Railway, and the Grand Trunk, as the successor of that company, now controls that
line. It extends from the city of Detroit to Grand Haven, and its length is 189 miles
8 Q.
THE CANADIAN PACIFIC RAILWAY.
The Canadian Pacific Railway Company is now the most conspicuous
inheritor of the privileges of the transit trade. Its managers and pro-
prietors can also acquire the control of railroads in this country, if they .
should be inclined to do so, and possess the energy, tact, and financial
ability requisite to the accomplishment of that object, just as such con-
trol of railroads in the United States has already been acquired by the
management of the Grand Trunk Railway. By this means the Canadian
Pacific Railway would be enabled to compete sharply with the railroads
of the United States in the conduct of our infernal commerce.
The main line of this railroad will extend from Montreal in the east,
along the northern shore of Lake Superior to Winnipeg, in the Province
of Manitoba, and thence westerly to a port in British Columbia on Bur-
rard Inlet, an arm of the Strait of Georgia. f -
At the close of the season of 1883 the company was operating 1,931
miles of completed road, and it was expected that the main line from
Montreal to the Pacific coast would be completed and in operation by
the beginning of the year 1886. The total distance from Montreal to
the Pacific Ocean by the Canadian Pacific Railway will be about 2,870
miles, of which there was completed, at the close of the season of 1883,
from Montreal westward, 470 miles; from Winnipeg in Manitoba east-
ward, 535 miles; from Winnipeg westward to the summit of the Rocky
Mountains, 963 miles; and from Port Moody at the western terminus
eastward, 140 miles; making a total of 2,108 miles of completed road,
and leaving to be completed 762 miles, consisting of the gap of 425
miles between the lines extending west from Montreal and east from
Winnipeg, and of 337 miles between the summit of the Rocky Mount-
ains and the Pacific Ocean. In a communication addressed to this
office, under date of November 8, 1883, the secretary of the company
says that statements which have been published to the effect that un-
foreseen difficulties have been encountered at the Pass of the Rocky
Mountains are untrue. - -
The total mileage of the Canadian Pacific Railway will be as follows:
• Miles.
Main line------------------------------------------------------------------- 2,870
Branches ,------------- ... sº s = * * - - - - - - * - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Te - - - - 398
Total ----------------------------------------------------------------- 3,268
Of this total mileage, 714 miles of road will be constructed by the
Canadian Government and transferred to the company free of cost.
It is expected, also, that, by the close of the year 1883, a branch line
will be completed from Sudbury, on the eastern division of the main
line, to Algoma Mills, a point on the northern shore of Lake Huron;
and that during the next season of lake navigation the Canadian Pacific
Railway Company will, by means of its own steamers plying between
that point and Port Arthur, on Lake Superior, enjoy the advantages of
.*
9
a through line, under its own control, from Montreal to the summit of
the Rocky Mountains.
The Government of the Dominion of Canada appears to have been
even more liberal in promoting the construction of the Canadian Pacific
Railway than was the Government of the United States in promoting
the construction of the Union Pacific and the Central Pacific Railroads
of this country. *
The Dominion Government has granted to the Canadian Pacific Rail-
road, in aid of its construction, a subsidy of $25,000,000 in money as a
loan; and has donated to it 25,000,000 acres of land, embracing only
lands fit for settlement; also the right of way, station grounds, dock
privileges, and water frontage, in so far as the same are vested in the
Government. Besides this, the Canadian Government is to construct
and transfer to the company, free of cost, 714 miles of railway, the value
of which is estimated at about $30,000,000. The company is also au-
thorized to build a line of telegraph along the entire railway, which
under its charter it is empowered to use for commercial as well as rail-
way purposes. The privilege is extended to the company of importing
free of duty steel rails, and other material used in the construction of
its road and telegraph line. It is also empowered to build branch lines,
with right of way and other privileges granted by the Government.
The company is besides protected against the construction of compet-
ing lines for a term of twenty years from the date of the contract.
The stations, buildings, equipment, and the capital stock of the com-
pany are to be free from taxation by the Dominion Government, or by
any Province established after the date of the charter, for all time, and
the land grant within the Northwest Territories is also declared to be
free from taxation for twenty years unless sold in the mean time.
The capital stock of the company is 8100,000,000, upon which the Do-
minion Government has guaranteed a minimum dividend of 3 per cent.
per annum for ten years, the company having placed with the Govern-
ment a sum which at 4 per cent. interest will be equal to the dividend
on the stock at 3 per cent. for ten years.
It would appear from these extraordinary concessions and subven-
tions that the people of Canada regard the construction of the Canadian
Pacific Railway as a work of great commercial and political importance.
In view of the facts just stated, and the additional fact that the Cana-
dian Government has already appropiated the sum of $45,115,649* in
the construction of canals connecting the upper lakes with tide water
on the Saint Lawrence River, it appears safe to say that the enterprise
of the Dominion in the establishment of the facilities for internal trans-
portation is perhaps unequaled by that of any other country in modern
itmes.
It is expected that the proceeds of the capital stock of the Canadian
* This fact was furnished to this office by Mr. Fred. L. Jones, of Ottawa.
10
Pacific Railway, with the subventions granted by the Government, will
be sufficient to build and equip the entire line.
The construction of the Canadian Pacific Railway mainly through an
uninhabited wilderness, marks it as one of the heroic railroad enter-
prises of the present age.
It is stated by the president of the road, in an official memorandum,
that the entire line is being constructed with a view to efficient and
economical operation, steel rails of the best quality, weighing 56 pounds
per yard and upwards, being used throughout, and that all the impor-
tant structures of the road are of a substantial character.
Abundant supplies of coal have already been discovered along the
Rocky Mountain division of the road, a very important consideration,
in so far as relates to the cost of transportation as well as to the inter-
ests of the settler.
THE RELATION OF THE CANADIAN PACIFIC RAILWAY TO THE COM-
MERCIAL AND TRANSPORTATION INTERESTS OF THE UNITED
STATES.
By means of its connections with navigation on Lake Huron and on
Lake Superior, and its connections with railroads in the New England
States, in the State of New York, and in Minnesota, close traffic rela-
tions now exist between the Canadian Pacific and railroads in the United
States as well as with American navigation interests on the lakes.
A similar intermingling of transportation interests may be expected
to spring up on the Pacific coast.
It is easy also to perceive the possible future relationships which may
and probably will spring up between the Canadian Pacific Railway and
the transportation interests of the United States under the privileges
of the “transit trade,” and of the ability of railroad companies of each
country to enter into combination with railroads in the other, and also
to acquire the control of lines within the territory of the other.
As the Grand Trunk Railway has become one of the competing rail-
roads for traffic between Chicago and the New England States, upon
equal terms with the great east and west trunk lines of the United
States, so may the Canadian Pacific Railway be expected to become a
competitor of the Pacific railroads of the United States for a part of the
transcontinental traffic of this country. The Pacific railroads of this
country will also become competitors of the Canadian Pacific Railway
for the transcontinental traffic of the Dominion of Canada.
But this competition will undoubtedly be mutually beneficial to the
commercial and industrial interests of the two countries. Besides, it
will introduce elements of competition, both of transportation and of
trade, the effect of which will be to regulate rail rates. And as the
Grand Trunk Railway has joined with the great east and west trunk
lines of the United States in an association, the object of which is to
prevent the cutting of rates and wars of rates, so may we expect that
the Canadian Pacific Railway will, upon its completion, unite with the
transcontinental railroads of the United States in such an association
as that which was entered into between those railroads at San Francisco
in September, 1883, for the pooling or division of traffic.
It is said that the population of the Province of Manitoba and of the
Northwest Territories of the Dominion of Canada increased from about
12,000 in 1871 to about 250,000 in 1880, that the population of the city
of Winnipeg, the capital of Manitoba, increased from 350 in 1871 to
20,000 in 1881, and that its population is at the present time about
30,000. . - -
Manitoba and Assiniboia have proved to be highly productive wheat
Provinces. It is stated upon official authority that the wheat product
of those Provinces averages about 25 bushels to the acre.
The Canadian Pacific Railway will undoubtedly be the instrument of
a rapid development of the resources of a vast and productive territory
extending along our northern border line from the great lakes to the
Pacific coast. This fact, in connection with the well-established fact
that the line of policy pursued by the management of every railroad
must from the force of circumstances be controlled mainly by the de-
, mands of commerce, affords abundant reason to believe that the various
Sections and branches of that railroad will, in many important ways,
tend to promote the commercial, industrial, and transportative interests
of the United States. -
Minneapolis, the principal city in the United States for the manu-
facture of flour, will probably furnish a market for a large proportion
of the grain grown in the Provinces of Manitoba and Assiniboia, and
as the population of those Provinces increases there will undoubtedly
spring up an important reciprocal trade between them and the com-
mercial cities of our Western and Northwestern States.
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