CHAPTER XVIII.

_The Reciprocity Treaty with the United States._

After asking various questions in the House of Commons, to which I

received unsatisfactory replies, I brought the subject of the

Reciprocity Treaty with the United States before the House of Commons

late one night in February, 1865. My observations, as reported in

"Hansard," were:--

"That the hour was too late to permit more than a speech in outline as

to the Reciprocity Treaty and the Bonding Acts. Under the latter,

articles chargeable with duty could be sent through United States

territory and Canada in bond, and as Canada was for the present, and

would be until the completion of railway communication to Halifax on

the Atlantic, cut off from access to the ocean for five winter months

of the year, the Bonding Acts enabled her commerce with the outside

world to pass unimpeded. The Northwestern States received in return

corresponding facilities of access through Canada. The Reciprocity

Treaty included three essential provisions--the rights of fishery on a

shore line of 1,500 miles, the free navigation of the St. Lawrence, and

the free interchange of productions between the British Provinces and

the United States. (The beneficent theory of the treaty was to make two

countries, politically distinct, commercially one, and to induce the

two peoples, otherwise opposed, to live in co-operation and in peace.)

The provision as to the fisheries had settled for the time difficult

questions leading, in past days, and over and over again, to dispute,

collision, and sometimes the imminence of war. The free navigation of

the St. Lawrence and of Lake Michigan had removed jealousies and

fostered the idea of common interests in the great waterways to the

ocean, while the results of trade had been so happy that a total annual

interchange of commodities of a value of nearly 10,000,000_l. a year

in amount between the British Provinces and the United States now

existed. They were now threatened with the termination of this treaty

at the end of twelve months, and no hope appeared to be held out, so

far, of an amicable revision and extension of its benefits. The

consequences to commerce were evident, and at first would be most

serious. Trade at last, no doubt, would take other channels, and the

British Provinces, trading between each other and with the Mother

Country, and reducing their duties to a low rate, might at the end be

largely benefited at the price of a present loss; but that was merely

the money view, and such a gain would be dearly purchased at the cost

of humanity and civilization if it broke up the commercial and social

union heretofore existing. He held that peace and progress and the

future good relations between Great Britain and the United States, on

which peace and progress were largely based, would suffer by such an

isolation, and he would look with distrust upon a prosperity which was

not still shared between the people on each side of the border. He had

travelled much on both sides of the British lines, and it was cheering

to see there how thoroughly one the two peoples had become, socially

and commercially. They traded together, went into partnership together,

visited together. A Canadian or New Brunswicker would often have a farm

on each side of the, practically imaginary, boundary line; and a

citizen of the United States often lived on his own and traded or

manufactured on the other side of the border. In fact, the border

jealousies which had caused such bitterness and danger even in our own

country had in this generation all but disappeared in this case, under

the operation of high-minded and far-sighted legislation. Considering,

therefore, the magnitude of the commercial interests, the grave

questions of navigation, ocean rights, and free communication, he must

express the most anxious, surprise to learn that Her Majesty's

Government had allowed the matter to drift into its present position.

He was told that no effort whatever had been made to preserve the

treaty as it was, or as it might be amended, by negociations at

Washington. His honorable friend, the Under-Secretary for Foreign

Affairs, had said, in answer to a question he had put in that House

last May, that no negociations were pending as to the Reciprocity

Treaty, and that Government had no official information upon the

subject of the Bonding Acts. He was bound to take that answer as a

correct statement; and he then asked, Was it possible that her

Majesty's Government could remain inactive when a trade of

10,000,000_l_ a year and the issues of future peace or disturbance

were in the balance? Were the proposed notice to terminate the treaty

any matter of suddenness or by way of surprise, he might comprehend it;

but for above three years the subject had been agitated and discussed

in Congress, in Canada, and in all the Chambers of Commerce in the

North-west. It had been notorious to everybody that one party desired

isolation from the British Provinces and another desired the operations

of the treaty to be extended. It was, therefore, a question to be

discussed in advance of the present entanglement; and, as Canada had no

treaty-making power, the responsibility rested with the Government at

home. This was a question so serious from every point of view that the

House would have to take it up as soon as the noble lord at the head of

the Government laid upon the table the notice which he had told them

would be given on the 15th March next. Then would be the time to

discuss it fully and in all its bearings. His object now was to prepare

for that discussion by obtaining all the facts. The papers laid before

the House last week did not go back far enough. It appeared that in the

autumn of 1861 the New York Chamber of Commerce memorialized Congress

for a revision of the treaty, and a committee reported upon it in

February, 1862. That report he had here. It did not advocate notice;

no, it advocated adherence to the principles of free exchange, and it

proposed that commissioners should negociate an extension of the

treaty. In March, 1864, Mr. Ward reported resolutions appointing

commissioners for that purpose, and ultimately the discussion was

postponed to December, 1864. During all this time surely communications

of some kind passed to or from this country; and it was self-apparent

that the treaty might have been revised and extended before recent

causes of irritation had appeared. Those causes had led to much bitter

feeling, and it might now be too late to restore the principle of the

treaty and of the Bonding Acts in all their integrity. He now moved for

all papers subsequent to December, 1861, with a view to further

discussion hereafter. He would call attention to a very singular

letter, given at pages 70 and 77 in the papers printed last week. That

letter had been intercepted by General Augur, and was stated by Mr.

Seward to be undoubtedly genuine. He would ask whether any explanation

of that letter had been offered by his Excellency the American

Minister, Mr. Adams? And, if so, why that explanation had not been

printed? The letter was from a Confederate agent residing in Canada,

apparently to Mr. Seddon, the Confederate Secretary for War. It must

have been written at the end of October last year. It stated that the

writer had made an arrangement with parties 'powerful and influential

with the Government of the United States' to deliver supplies of meat

in exchange for cotton, 'at any port Mr. Secretary Seddon may designate

on the east side of the Mississippi,' or on 'the west side,' and after

this delivery it was said that 'the way was perfectly clear to deliver

anywhere within General Butler's department.' He adds, that he has made

another contract with another Federal American citizen, 'by which

supplies of meat will be furnished at Mobile by written permission of

the President of the United States to the free passage of the

blockading fleet at that port.' His contract, he says, is for 5,000,000

lbs. of meat in exchange for 5,000,000 lbs. of cotton. Now, if this

were true, it opened up a very large question. Merchants in England who

had run the blockade had been most properly censured for the practice.

Their having done so was naturally matter of diplomatic complaint; but

here were the seal and the signature of the President of the United

States himself made use of to send supplies to the enemy on the one

hand, and to give cotton to the manufacturers of the Northern States on

the other. He thought that letter ought not to have been printed

without some comment. If explanations had been given by Mr. Adams and

were not printed, the omission was a slight; and he thought a good

understanding with the United States, desired so sincerely by, he

hoped, the House at large, would not be promoted by its publication."

The "Observer," referring to this speech, made the following remarks:--

"There is a great disadvantage in bringing any important question

before the House of Commons at a late hour of the night, because in

such a case it is impossible, arising from the exigencies of the

morning papers, that full justice can be done by the parliamentary

reporters to the speech of the speaker. An illustration, of this

occurred on Friday evening. Mr. Watkin, in moving for papers respecting

the Reciprocity Treaty between the United States and the British North

American Provinces, entered at considerable length and with great

ability into that important subject. His speech will be found in

another part of our impression. It would not be easy to overrate the

importance of the interests to this country involved in the question

which Mr. Watkin so lucidly brought before the House. He showed that

under the operation of the existing treaty British trading interests to

the extent of 10,000,000_l_. per annum were involved. This is no

inconsiderable sum. Assuredly it is much too large to be heedlessly

sacrificed if means can be found consistent with the honour of the

country to prevent it. And yet, notwithstanding the great and manifest

importance of the subject, and though the United States have given

notice of their intention to terminate the treaty in twelve months from

the present time, it would appear that no steps have yet been taken on

the part of the Imperial Government to avert the evils of which the

termination of that treaty would be productive to the British North

American Provinces, and through them to the Mother Country; for, apart

from the stoppage that would ensue to the international trade now

existing between the States and Canada and her sister provinces, the

old vexed question as to the right of Americans to participate in the

fisheries in the Gulf of the St. Lawrence, along a shore upwards of

1,500 miles in length, is again raised. To call attention to these

facts was the main object of Mr. Watkin's speech. He had no wish to

embarass the Government in any way, but was simply desirous of

impressing on it the importance of early action in the matter, with the

view to the preservation or modification of the Reciprocity Treaty. It

is to be hoped, now the matter has been so fully and ably brought

before the British Government, that steps will be immediately taken to

enter into such negotiations with the United States as will secure this

desirable result. If this were done, we cannot doubt that the

Government of the United States will respond in a friendly spirit to

the wishes of our own Government, and that not only the best results

will follow as regards the treaty in question, but also as regards the

general commercial relations between the United States, the British

North American Provinces, and this country."

I felt so strongly that great opportunities had been lost owing to the

negligence and incapacity of our rulers, that I drew up and widely

circulated, various memoranda, intended to inform public opinion in

England. I felt convinced that, if once this wise and fraternal treaty

were allowed to expire, the future relations of the British Provinces

and Canada must gravitate towards antagonism, or towards annexation. My

forebodings are, at this moment, justified by the action of the United

States Congress in the matter of the fisheries. Because Canada has

enforced the provisions of the, still existing, and recognized, Treaty

of 1818, the Congress of the United States has, in 1887, by statute,

instructed the President to put in operation odious "reprisals"--

reprisals which throw the "Milan Decrees" of the first Napoleon into

the shade of barbarism. The President, believed to be an enlightened

man, threatens to put his powers into strict operation. If he goes to

the full length of this unique enactment, he may practically close all

industrial, and even social, intercourse between the British territory

--a territory larger in area than that over which he rules--and the

United States. Such legislation, so eagerly acted on, is simply

sickening. Talk of fraternity and liberty for all mankind. Delusion

--mockery.

A concise _resume_ of this question, written by me in 1865, here

follows:--

"A treaty of amity and commerce between Great Britain and the United

States of America, known as the 'Reciprocity Treaty,' [Endnote 1] has

been allowed to expire with the expiry of the twelve months' notice,

given on the 17th March, 1865, by the Government at Washington, under

the authority of the Senate.

"No explanation has been given to Parliament; nor has a single paper of

any kind been laid upon the table of the House by Her Majesty's

Government. It is, therefore, thought to be time to ask for

explanations, and thereby, so far as may now be possible, to prevent

that gradual 'drifting' into serious complication which disfigured the

transactions of the Whig Government in 1854 (Russian war), in 1861-2

(Poland), and in 1863-4 (Denmark). The Reciprocity Treaty provided not

merely for free interchange of commodities between Her Majesty's North

American Colonies and the United States, but it settled the fishery

complications, on a coast line of 4,000 miles, and provided for the

international navigation of the St. Lawrence (1,200 miles), and of the

canals and locks of that mighty river, and of Lake Michigan and its

tributaries. It thus dealt with questions which, unsettled and in

doubt, had led to antagonism and the recurring danger of war; and, in

the twelve years of its existence, its operation has alike enlarged the

commerce and the friendship of the neighbouring subjects of the two

powers parties to the treaty. Perhaps no convention of modern times has

more tended to produce material prosperity and peace and goodwill

amongst those concerned. But it has been, it is repeated, allowed to

expire, and, as will be shown, owing mainly to the culpable negligence

and maladroit management of those who have had charge of British

interests.

"On the 27th June, 1854, Lord Clarendon said in the House of Lords, in

answer to a question put by Lord Fitzwilliam (see 'Hansard's Debates,'

27th June, 1854):--

"'It appeared to Her Majesty's Government that the return of Lord Elgin

to Canada afforded an opportunity which ought not to be neglected, of

endeavouring to settle those numerous questions which for years past

have been embarrassing the two Governments. One of those questions

especially, that relating to the fisheries, has given rise to annually

increasing causes of contention, and has sometimes threatened

collisions, which, I believe, have only been averted for the last two

years by the firmness and moderation of Sir George Seymour and of the

British and American naval commanders, and by that spirit of friendship

and forbearance which has always characterized the officers of both

navies. But, my Lords, your Lordships are aware that there are other

questions which have given rise to embarrassing discussion between the

Governments of the two countries--questions which involve the commercial

relations of our North American possessions with the United States, and

that those questions, which involve very divergent interests, have

become so complicated as to render their solution a matter of extreme

difficulty.' And he added, 'I trust, therefore, that nothing will occur

to mar the completion of this great work, which, I firmly believe, more

than any other event of recent times, will contribute to remove all

differences between two countries, whose similarity of language and

affinity of race, whose enterprise and industry, ought to unite them in

the bonds of cordial friendship, and to perpetuate feelings of mutual

confidence and goodwill.'

"In the conversation which ensued all parties coincided as to the vast

importance of the treaty, and Lord Derby, while doing so, took the

opportunity of insisting that Her Majesty's Government should keep such

treaty negociations affecting the whole Empire in their own hands, and

not permit them to be dependent upon the will or consent of the local

authorities. He said (see 'Hansard,' 1854):--

"'He was afraid that if we had to consult the Colonies, with respect to

a treaty with a foreign country, the effect would be that in such

questions the Colonies would be independent.'

"It is well specially here to note, that the Government of that day,

speaking by Lord Clarendon, considered it as a condition, that the

person highest in dignity, authority, and ability should be selected as

the fittest negociator; and that Lord Derby gave a caution which all

who regard the British Empire as 'one and indivisible,' must coincide

in. It will be seen hereafter how, in the present case, the actual

Government has departed from both the condition and the caution.

"An extract from a letter from Mr. John Bright, M.P., to Mr. Joseph

Aspinall, of Detroit, Michigan, in response to an invitation to attend

the Reciprocity Convention, held last year, will illustrate the

benevolent idea of the treaty, and exhibit the opinion of a

distinguished admirer of the United States upon the renewal of the

instrument. The letter, itself, is dated London, 10th June, 1865. 'The

project of your convention gives me great pleasure. I hope it will lead

to a renewal of commercial intercourse with the British North American

Provinces, _for it will be a miserable thing_ if, because they are

in connection with the British Crown, and you acknowledge as your Chief

Magistrate your President at Washington, there should not be _a

commercial intercourse between them and you, as free as if you were one

people, living under one Government_.'

"To make 'one people,' though living under two separate Governments,

was the great, and has been the successful, object of Lord Elgin and

Mr. Marcy. But the 'miserable thing' has happened, and the treaty is at

an end.

"On the 23rd May, 1864, I put a question on the subject of the renewal

of this treaty. The question and the answer of the Under-Secretary for

Foreign Affairs were as follows:--

[_From_ "HANSARD," _Monday, May 2nd, 1864_.]

"'Mr. Watkin said he wished to ask the Undersecretary of State for

Foreign Affairs to state the present position of negociations with the

Government of the United States in reference to the proposed

termination or repeal by the United States of the "Reciprocity Treaty,"

and of the "Bonding Act," under which instruments facilities for mutual

commercial interchange have been afforded, and a large and increasing

trade has grown up with the colonies of British North America?

"'Mr. Layard, in reply, said there were no negociations pending with

regard to the suspension or repeal of the Reciprocity Treaty, and the

Government had received no official information upon the subject of the

"Bonding Acts."'

"On the 17th February, 1865, I again called attention to the question

becoming more and more urgent, by moving for 'Copies of all papers in

the possession of Her Majesty's Government respecting the Reciprocity

Treaty and the Bonding Acts, of dates subsequent to December, 1861.'

"In reply, the Under-Secretary for Foreign Affairs said (see 'Hansard,'

17th Feb. 1865):--

"'He had only to report what was stated by the noble lord the other

night, that there were no papers on the subject of the Reciprocity

Treaty; as the hon. gentleman was aware, no notice with respect to the

treaty had been given to Her Majesty's Government. Resolutions on the

subject had been submitted to Congress, but there had been no

intimation given to Her Majesty's Government, consequently, there were

really no papers to lay on the table.'

"Thus we have it on the direct declaration of the organ of the

Government, that no negociations were undertaken having any reference

to the retention or renewal of the treaty up to the 23rd May, 1864; and

that there were no 'papers' even in the possession of the Government up

to the 17th February, 1865, bearing upon so momentous an international

question.

"The Bonding Act, or Acts, are above alluded to; and it will be well

here to state, that under these Acts of the Congress of the United

States, goods liable to United States duties may be sent in bond

through United States territory into and through Canada or New

Brunswick. In fact, but for this privilege, Canada would be, under

present circumstances, shut out for the five months of her winter from

access to Europe. That access could, of course, be given by the

construction of the remaining links of the 'Inter-colonial' Railway

(about 360 miles), connecting Halifax, Nova Scotia, with Quebec and the

Canadian railway system; but pending such construction, it is in the

power of the United States thus to isolate Canada. Being in their

power, we may ask, What is their intention? and we may ask, What have

the Government done to ascertain the one and prevent the other? Have

they ever thought of danger? Certainly, in May, 1864, both Mr.

Cardwell, the Colonial Secretary, and Mr. Layard, the Undersecretary

for Foreign Affairs, were puzzled to know what was meant by the

'Bonding Acts.'

"Particulars of these Acts are given in a note below. [Endnote 2]

"We must now briefly sketch the history of the discussions and events

which more immediately preceded the notice of the 17th March, 1865,

given by the United States Government and Senate, to put an end to the

treaty. Subsequent to the treaty (1854) Great Britain (1859) founded

the Colonies of British Columbia and Vancouver's Island on the North

Pacific. For this we are indebted to the then colonial minister, Sir E.

Bulwer Lytton. The first gave a new gold field; the second contains all

the bituminous coal to be found on the west side of the great North

American Continent. These new countries were not embraced in the

operation of the treaty; nor does it seem that after Sir E. Bulwer

Lytton left office, any effort was made to enlarge the operations of

the treaty. But of course American commerce was anxious to extend

itself, and Californian and American cruisers in the Pacific wanted the

coal of Vancouver. Hence a party in the States was formed for an

extension of the area of the treaty. Then Canada, having established

her railway system by the aid of British capital, and having expended

large sums to promote public works generally, got into debt and had to

raise her taxation; and as import duties are, and must always be, most

easy of collection in a new country, and the most popular, or rather

the least unpopular, mode of taxation, she raised her import duties

generally to a scale as high on many articles, if not higher, than the

import duties of the United States. This led to complaint; and hence a

party was formed in the United States for an extension of the 'free

list,' or list of articles to be admitted duty free into Canada. It is

but fair to bear in mind that the Canadian import duties on United

States goods were the same as those on _British_ goods; so that

whatever ground of complaint might be set up, Great Britain had the

right to the largest share of it, because she had the ocean freights to

add to the duty, and _pro tanto_ was at a disadvantage in

competing for Canadian custom with the manufacturers of the States.

"In 1861 the Chamber of Commerce of New York moved Congress on the

whole subject. Their object was the extension of the area and purposes

of the treaty: in no sense its termination. Congress, hereupon,

referred the matter to the 'Committee on Commerce,' Mr. Ward being

chairman. That committee reported in February, 1862, in a most able

document, usually known as Mr. Ward's report. This report also

recommended a more extended area, and _more_ extended purposes;

but in no sense the abrogation of the treaty.

In March, 1864, Mr. Ward proposed a resolution in Congress for the

appointment of commissioners to negociate an extended and improved

treaty with Great Britain. That resolution was laid over by Congress

till December, 1864. In the summer and autumn of 1864 a correspondence

sprang up between Earl Russell, Mr. Seward, Mr. Adams and others in

reference to the dangers of the invasion of the territory of the United

States by Confederate agents asylumed in Canada. Mr. Seward and Mr.

Adams strongly urged that preventive measures should be taken by Great

Britain, but Earl Russell could not see it--did nothing, and the

burning of United States steamers engaged in peaceful commerce, and the

robbery and murders at St. Albans and Vermont followed. Correspondence

in reference to the 'St. Albans' raids' was laid before Parliament last

year. The following is an extract, bearing, too, indirectly upon the

Reciprocity Treaty, from one of the letters of Mr. Adams, United States

Ambassador in London, to Earl Russell, echoing a despatch of Mr.

Seward's and dated November 23rd, 1864:--

'In the use of the word exigency, the full sense of its effect is

perfectly understood. The welfare and prosperity of the neighbouring

British Provinces are as sincerely desired on our part as they can be

by Great Britain. In a practical sense they are sources of wealth and

influence for the one country only in a less degree than for the other,

though the jurisdiction appertain only to the latter. That this is the

sincere conviction of my Government has been proved by its consent to

enter into relations of reciprocal free commerce with them almost as

intimate as those which prevail between the several States of the Union

themselves. Thus far the disposition has been to remain content with

those relations under any and all circumstances, and that disposition

will doubtless continue, provided always that the amity be

reciprocated, and that the peace and harmony on the border,

indispensable to its existence, be firmly secured. The fulfilment of

that obligation must be, however, as your Lordship cannot fail to

perceive at a glance, the essential and paramount condition of the

preservation of the compact. Even were my Government to profess its

satisfaction with less, it must be apparent that by the very force of

circumstances peace could scarcely be expected to continue long in a

region where no adequate security should be afforded to the inhabitants

against mutual aggression and reprisal.

'Political agitation, terminating at times in civil strife, is shown by

experience to be incident to the lot of mankind, however combined in

society. Neither is an evil confined to any particular region or race.

It has happened heretofore in Canada, and what is now a scourge

afflicting the United States may be likely at some time or other to re-

visit her. In view of these very obvious possibilities, I am instructed

to submit to Her Majesty's Government the question whether it would not

be the part of wisdom to establish such a system of repression now as

might prove a rock of safety for the rapidly multiplying population of

both countries for all future time.

"'I pray, &c.,

"'(Signed) CHARLES FRANCIS ADAMS.'

"But the 'Alabama' correspondence was also going on, and a new Congress

had to sit in 1865. Was it then surprising that on the 17th March,

1865, notice to put an end to the treaty was given?

"But in July, 1865, a convention, already alluded to (see Mr. Bright's

letter), composed of delegates from New York, Philadelphia, Baltimore,

Cincinnati, St. Louis, Boston, Portland, and in fact from almost every

important town and district of the States north of Washington,

assembled at Detroit to consider the expiry of the treaty and the

question of its renewal. After long and earnest deliberations they

unanimously approved the notice given, and as unanimously passed the

following resolution for transmission to the Government of the United

States:--

"'That the convention do respectfully request the President of the

United States to enter into negociations with the Government of Great

Britain, having in view the execution of a treaty between the two

countries, for reciprocity and commercial intercourse between the

United States and the several Provinces of British North America,

including British Columbia, the Selkirk Settlement, and Vancouver's

Island, upon principles which should be just and equitable to all

parties, and which also shall include the free navigation of the St.

Lawrence and other rivers of British North America, with such

improvements of the rivers, and enlargement of the canals, as shall

render them adequate for the requirements of the west communicating

with the ocean.'

"At the time of passing this resolution a 'Revenue Commission' was

sitting, and its members recommended the Secretary of the Treasury, Mr.

McCulloch, to have a special report upon the treaty and its renewal.

The task was, thereupon, committed to Mr. E. H. Derby, of Boston. The

Commission also includes this subject in their report. Their report

(dated January, 1866,) says:--

"'In accordance with the resolutions of Congress and the notification

of the Executive, the commercial arrangement known as the "Reciprocity

Treaty," under which the trade and commerce between the United States

and the British Provinces of North America have been carried on since

1854, expires on the 17th day of March, 1866. The consideration of the

effect which the termination of this important commercial arrangement

is likely to have upon the revenue, as well as upon the trade and

commerce of the United States, has legitimately formed a part of the

duties devolving upon the Commission; and has also been especially

commended to their attention by the Secretary of the Treasury. The

Commission do not, however, propose to present in this connection any

review of the history of the treaty, or of the circumstances which, in

the opinion of Congress, have rendered its termination expedient. This

work has already been performed, under the auspices of the Treasury

Department, by E. H. Derby, Esq., of Boston, to whose able and

exhaustive report the Commission would refer, without, however,

endorsing its conclusions. There are, however, certain points connected

with this subject to which the Commission would ask special attention.

"'The first of these is, that during the continuance of the Reciprocity

Treaty the trade and commerce between the United States and the British

North American Provinces _has increased_ in ten years _more than

threefold_, or from seventeen millions in 1862 to sixty-eight

millions in 1864: so that at present, with the exception of Great

Britain, the commercial relations between the United States and the

British North American Provinces outrank in importance and aggregate

annual value those existing between this country and any other foreign

state. [Footnote: The value of the import and export trade of the

United States with the following countries for the year ending June

30th, 1864, was, according to the Treasury Report, as follows (in round

numbers):

Great Britain ...................... $317,000,000

British North America .............. 68,000,000

Spanish West Indies ................ 57,000,000

France ............................. 29,000,000

Hamburg and Bremen ................. 29,000,000

Mexico ............................. 20,000,000

Brazil ............................. 19,000,000

China .............................. 19,000,000

British West Indies ................ 12,000,000]

"'It may also, they think, be fairly assumed that taking into

consideration the growth of the two countries in population and wealth,

(that of Canada for the last ten years having preserved a nearly equal

ratio in this respect with that of the United States,) the trade as at

present existing is really but in its infancy, and that the future may

be expected to develop an increase equally as great as that of the

past.

"'A change in the conditions under which a reciprocal commerce of such

magnitude is carried on, and is now developing, ought not, therefore,

to be made without the most serious consideration.

"'As regards the present treaty, the Commission, as the result of their

investigations, have been led to the conclusion that its continuance,

under existing circumstances, unless accompanied with certain important

modifications, is not desirable on the part of the United States.

"'They, however, are also unanimous in the opinion, that, in view of

the close geographical connection of the United States with the British

Provinces--rendering them in many respects but one country--and of the

magnitude of the commercial relations existing between them, it would

be impolitic and to the detriment of the interests of the United States

to decline the consideration of all propositions looking to the re-

establishment of some future and satisfactory international commercial

arrangement. Such a course would be in entire opposition to the spirit

of the age, the liberality of our people, and the policy of rapidly

developing our resources as a means of diminishing the burden of our

public debt.

"'In view of such an arrangement, the question of whether either of the

parties to the treaty has, or has not, conformed to the spirit of its

stipulations, is of little importance. It is the future, not the past,

that we are to consider; and if advantageous terms for the future are

offered--terms which are calculated to promote the development of the

trade and commerce of the United States, encourage good feeling and

prevent difficulties with our neighbours, and at the same time protect

the revenues of the country from serious and increasing frauds--it

would be, in the opinion of the Commission, most impolitic to disregard

them.

"'The offer on the part of the provincial authorities to re-negociate

in respect to the commercial relations of the two countries, is in

itself an expression of desire to make an arrangement that must be, in

every respect, reciprocal; inasmuch as it is evident that no treaty

can, for any length of time, continue that does not conduce to the

benefit of both parties.

"'It is evident that the necessities of the United States will for many

years require the imposition of high rates of taxation on many

articles, and that with the production of such articles free, or

assessed at low rates of duty, in the British Provinces, the

enforcement of the excise laws on the borders will be a matter of no

little difficulty, annoyance and expense; and under all ordinary

conditions a large annual loss of the revenue must inevitably occur.

The experience of all the nations of Europe has shown that to attempt

to wholly prevent smuggling, under the encouragement of high rates of

duty, is an utter impossibility. If, however, such an arrangement can

be made with the British Provinces as will ensure a nearly or quite

complete equalization of duties--excise and customs--it must be

apparent that all evasions of the revenue laws by smugglers would

instantly come to an end; and that the attainment of the above result

would be of immense advantage to the United States in a revenue point

of view.

"'Again: it is also urged that under the existing system the products

of American industry subject to high rates of excise, are injuriously

brought into competition with similar products of provincial industry

which are subjected to little or no excise, and then admitted into the

United States free of duty. That such is the fact cannot be denied; and

is itself a reason why the abrogation or modification of the present

Reciprocity Treaty has become imperative. But if it were possible to

effect such an arrangement with the British Provinces as would allow

the imposition of duties equivalent to the American excise on all

articles of provincial production passing into the United States, it

seems clear that the afore-mentioned objection would be entirely

removed.

"'As the whole subject, however, is now before Congress for

consideration, the Commission do not consider it as within their

province to submit any specific recommendations; but would content

themselves with merely pointing out that, under certain circumstances,

conditions of great advantage to the United States, in a revenue point

of view, might be secured.'

"Mr. Derby's report contains much that is sensational, and many curious

admissions, but its general tenor is strongly in favour of a new

treaty, regard being had to the revenue necessities of the United

States; _i.e._, that articles admitted into the United States from

Canada should pay a duty equivalent to the internal revenue tax on the

same articles charged in the States. This is just as if Great Britain

said that brandy from France coming into England should pay a duty

equivalent to the English excise duty upon spirits, which would be

quite fair.

"The next fact in the history is that delegates from Canada, New

Brunswick, and Nova Scotia, are found at Washington on the 24th

January, 1866, and that they remain there till the 24th February, on

which day they report that after many days' discussion they have failed

to do anything, and that the Reciprocity Treaty is finally at an end.

"Our Government having done nothing, the Provinces, it would appear,

had, at the last moment, to send 'delegates' themselves to negociate; a

mode of procedure altogether very unlike the action of 1854.

"The following papers give a _resume_ of the discussion :--

"WASHINGTON,

"_February 7th_, 1866.

"'SIR,

"'We have the honour to inform Your Excellency that our negociations

for the renewal of Reciprocal Trade with the United States have

terminated unsuccessfully. You have been informed from time to time of

our proceedings, but we propose briefly to recapitulate them.

"'On our arrival here, after consultation with Your Excellency, we

addressed ourselves with your sanction to the Secretary of the

Treasury, and we were by him put in communication with the Committee of

Ways and Means of the House of Representatives. After repeated

interviews with them, and on ascertaining that no renewal or extension

of the existing treaty would be made by the American authorities, but

that whatever was done must be by legislation, we submitted as the

basis upon which we desired arrangements to be made the enclosed paper

(marked A).

"'In reply we received the Memorandum from the Committee, of which a

copy is enclosed (B). And finding after discussion that no important

modifications in their views could be obtained, and that we were

required to consider their proposition as a whole, we felt ourselves

under the necessity of declining it, which was done by the Memorandum

also enclosed (C).

"'It is proper to explain the grounds of our final action.

"'It will be observed that the most important provisions of the

expiring treaty, relating to the free interchange of the products of

the two countries, were entirely set aside, and that the duties

proposed to be levied were almost prohibitory in their character. The

principal object for our entering into negociations was therefore

unattainable, and we had only to consider whether the minor points were

such as to make it desirable for us to enter into specific engagements.

"'These points are three in number.

"'With regard to the first--the proposed mutual use of the waters of

Lake Michigan and the St. Lawrence--we considered that the present

arrangements were sufficient, and that the common interests of both

countries would prevent their disturbance. We were not prepared to

yield the right of interference in the imposition of tolls upon our

canals. We believed, moreover, that the privilege allowed the United

States of navigating the waters of the St. Lawrence was very much more

than an equivalent for our use of Lake Michigan.

"'Upon the second point--providing for the free transit of goods under

bond between the two countries--we believed that in this respect, as in

the former case, the interests of both countries would secure the

maintenance of existing regulations. Connected with this point was the

demand made for the abolition of the free ports existing in Canada,

which we were not disposed to concede, especially in view of the

extremely unsatisfactory position in which it was proposed to place the

trade between the two countries.

"'On both the above points, we do not desire to be understood as

stating that the existing arrangements should not be extended and

placed on a more permanent basis, but only that, taken apart from the

more important interests involved, it did not appear to us this time

necessary to deal with them exceptionally.

"'With reference to the third and last point--the concessions of the

right of fishing in provincial waters--we considered the equivalent

proposed for so very valuable a right to be utterly inadequate. The

admission of a few unimportant articles free, with the establishment of

a scale of high duties as proposed, would not, in our opinion, have

justified us in yielding this point.

"'While we regret this unfavourable termination of the negociations, we

are not without hope that, at no distant day, they may be resumed with

a better prospect of a satisfactory result.

"'We have the honour to be,

"'Your Excellency's most obedient Servants,

"'A. T. GALT, Minister of Finance, Canada.

"'W. P. HOWLAND, Postmaster General, Canada.

"'W. A. HENRY, Attorney General, Nova Scotia,

"'A. J. SMITH, Attorney General, New Brunswick.

"'To His Excellency, SIR FREDERICK BRUCE, K.C.B., &c., &c., &c.'"

"'MEMORANDUM A.

"'The trade between the United States and the British Provinces should,

it is believed, under ordinary circumstances, be free in reference to

their natural productions; but as internal taxes exceptionally exist in

the United States, it is now proposed that the articles embraced in the

free list of the Reciprocity Treaty should continue to be exchanged,

subject only to such duties as may be equivalent to that internal

taxation. It is suggested that both parties may add certain articles to

those now in the said list. With reference to the fisheries and the

navigation of the internal waters of the continent, the British

Provinces are willing that the existing regulations should continue in

effect; but Canada is ready to enter into engagements with the view of

improving the means of access to the ocean, provided the assurance be

given that the trade of the Western States will not be diverted from

its natural channel by legislation; and if the United States are not

prepared at present to consider the general opening of their coasting

trade, it would appear desirable that, as regards the internal waters

of the Continent, no distinction should be made between the vessels of

the two countries.

"'If the foregoing points be satisfactorily arranged, Canada is willing

to adjust her excise duties upon spirits, beer and tobacco upon the

best revenue standard which may be mutually adopted after full

consideration of the subject; and if it be desired to treat any other

articles in the same way the disposition of the Canadian Government is

to give every facility in their power to prevent illicit trade.

"'With regard to the transit trade, it is suggested that the same

regulations should exist on both sides and be defined by law. Canada is

also prepared to make her patent laws similar to those of the United

States.

"'WASHINGTON, D.C.,

"'_Feb. 2_, 1866.'"

"'MEMORANDUM B.

"'In response to the Memorandum of the Hon. Mr. Galt and his

associates, Hon. Mr. Smith, Hon. Mr. Henry, and the Hon. Mr. Howland,

the Committee of Ways and Means, with the approval of the Secretary of

the Treasury, are prepared to recommend to the House of Representatives

for their adoption a law providing for the continuance of some of the

measures embraced in the Reciprocity Treaty, soon to expire, viz.--For

the use and privileges as enjoyed now under said treaty in the waters

of Lake Michigan, provided the same rights and privileges are conceded

to the citizens of the United States by Canada in the waters of the St.

Lawrence and its canals as are enjoyed by British subjects, without

discrimination as to tolls and charging rates proportioned to canal

distance; also for the free transit of goods, wares, and merchandize in

bond, under proper regulations, by railroad across the territory of the

United States to and from Portland and the Canada line; provided equal

privileges shall be conceded to the United States from Windsor or Port

Sarnia, or other western points of departure to Buffalo or Ogdensburg,

or any other points eastward, and that the free ports established in

the Provinces shall be abolished; also the bounties now given to

American fishermen shall be repealed, and duties not higher imposed

upon fish than those mentioned in Schedule A., provided that all the

rights of fishing near the shores existing under the treaty heretofore

mentioned shall be granted and conceded by the United States to the

Provinces, and by the Provinces to the United States.

"'It is also further proposed that the following list of articles shall

be mutually free:--

Burr Millstones, unwrought.

Cotton and Linen Rags.

Firewood.

Grindstones, rough or unfinished.

Gypsum or plaster, unground.

"'SCHEDULE A.

FISH--Mackerel $1 50 per bbl

" Herrings, pickled or salted 1 00 "

" Salmon 2 50 "

" Shad 2 00 "

" All other, pickled 1 50 "

"'Provided that any fish in packages other than barrels shall pay in

proportion to the rates charged upon similar fish in barrels.

All other Fish 1/3 cent per lb

"'As to the duties which will be proposed upon the other articles

included in the treaty, the following are submitted, viz.-

Animals, living, all sorts 20 per cent ad val

Apples and Garden Fruit and Vegetables 10 " "

Barley 15 cts per bushel

Beans (except Vanilla or Castor Oil) 30 " "

Beef 1 ct per lb

Buckwheat 10 cts per bushel

Butter 4 " lb

Cheese 4 " "

Corn (Indian) and Oats 10 cts per bushel

Corn-meal (Indian) and Oatmeal 15 " "

Coal, bituminous 50 " ton

" all other 25 " "

Flour 25 per cent, ad val

Hams 2 cts per lb

Hay $1 00 per ton

Hides 10 per cent ad val

Lard 3 cts per lb

Lumber--

Pine, round or in the log $1 50 per M

" sawed or hewn 2 50 "

" planed, tongued and grooved or finish'd 25 per cent ad val

Spruce and Hemlock, sawed or hewn $1 00 per M

Planed, finished or partly finished 25 per cent ad val

Shingle bolts 10 " "

Shingles 20 " "

All other, of Black Walnut, Chesnut, Bass,

White Wood, Ash, Oak, round, hewed or sawed 20 " "

Planed, tongued and grooved or finished 25 " "

Ores 10 " "

Peas 25 cts per bushel

Pork 1 ct per lb

Potatoes 10 cts per bushel

Seed, Timothy, and Clover 20 per cent ad val

Trees, Plants and Shrubs, Ornamental and Fruit 15 " "

Tallow 2 cts per lb

Wheat 20 cts per bushel

"'MEMORANDUM C.

"'In reference to the Memorandum received from the Committee of Ways

and Means, the Provincial Delegates regret to be obliged to state that

the proposition therein contained in regard to the commercial relations

between the two countries is not such as they can recommend for the

adoption of their respective Legislatures. The imposts which it is

proposed to lay upon the productions of the British Provinces on their

entry into the markets of the United States are such as in their

opinion will be in some cases prohibitory, and will certainly seriously

interfere with the natural course of trade. These imposts are so much

beyond what the delegates conceive to be an equivalent for the internal

taxation of the United States, that they are reluctantly brought to the

conclusion that the Committee no longer desire the trade between the

two countries to be carried on upon the principle of reciprocity. With

the concurrence of the British Minister at Washington, they are

therefore obliged respectfully to decline to enter into the engagement

suggested in the memorandum, but they trust that the present views of

the United States may soon be so far modified as to permit of the

interchange of the productions of the two countries upon a more liberal

basis.

"'WASHINGTON,

"'_February 6th_, 1866.'

"This abortive negociation was followed (March, 1866) by a United

States Bill for enabling a new treaty upon impossible terms; that Bill

was at last hung up in Congress, and so the matter ended, so far as the

States were concerned.

"The operation of the treaty from 1854 to 1866 may now be considered.

"The Report of the Revenue Commissioners shows that the trade under it

increased from 20,000,000 dollars, to 68,000,000 dollars in 1864, and

that this trade was larger than the trade of the United States with any

country in the world except Great Britain. It was 31/2 times more than

with China; 31/2 times more than with Brazil; above 3 times more than

with even Mexico; 21/4 times more than with Hamburg and Bremen,

notwithstanding the direct line of steamers to and from New York; 21/4

times more than with France, with all its wines, silks, and fashions;

and one-third more than with Cuba and the Spanish West Indies.

"Then, on the whole, 'the balance of trade,' as it is called, was in

favour of the States during the whole period of the treaty by a sum of

56,000,000 dollars.

"As regards coal, the quantity taken in 1865-6 from Pennsylvania and

other States to Upper Canada was about 180,000 tons; while the quantity

of Nova Scotian coal taken to Boston and the Eastern States was about

200,000 tons. Thus the supply of districts 1,000 miles apart had nearly

balanced itself under the treaty. As regards fishing rights, the United

States appeared largely to have the advantage, for they had, by the

treaty, access to excellent fishing grounds and passage through the Gut

of Canso, while the provincial fishermen rarely troubled the coasts of

Maine or Massachusetts--'bare pastures' for fish. As an example, the

boats employed by the United States in the mackerel fishery in 1852

were 250, the tonnage 18,150 tons, and the value 750,000 dollars, while

the catch of fish was 850,000 dollars; while in 1864 it showed 600

vessels, 54,000 tons, 9,000 men, and a catch worth 4,567,500 dollars.

"Upon the general question, Mr. Derby says in his report:--

"'If the Maritime Provinces would join us spontaneously to-day--sterile

as they may be in the soil under a sky of steel--still with their hardy

population, their harbours, fisheries, and seamen, they would greatly

strengthen and improve our position, and aid us in our struggle for

equality upon the ocean. If we would succeed upon the deep, we must

either maintain our fisheries, _or absorb the Provinces_.'

"'No negociations' and 'no papers'--say our Government. This may be

true. Or it may be true that the Foreign Office have had papers, and

the Colonial not. Or that the Board of Trade have had papers, and the

Foreign and Colonial people have not; but, however that may be, Canada

has made, in good time, very serious representations. It is believed

that her Government had long before made personal appeals to both the

Colonial and the Foreign Offices, but the following document (19th

February, 1865), will speak for itself; and the Government at home

cannot deny that they had it, but which of the three departments will

admit its receipt is yet to be seen; always let it be remembered that

in _May_, 1865, there were 'no papers:'--

"'_Copy of a Report of a Committee of the Honorable the Executive

Council_, approved by his Excellency the Governor-General on the

19th February, 1865.

"'The Committee of the Executive Council deem it to be their duty to

represent to Your Excellency that the recent proceedings in the

Congress of the United States, respecting the Reciprocity Treaty, have

excited the deepest concern in the minds of the people of this

Province.

"'Those proceedings have had for their avowed object the abrogation of

the treaty at the earliest moment consistent with the stipulations of

the instrument itself.

"'Although no formal action indicative of the strength of the party

hostile to the continuance of the treaty has yet taken place,

information, of an authentic character, as to the opinions and purposes

of influential public men in the United States has forced upon the

Committee the conviction that there is imminent danger of its

abrogation, unless prompt and vigorous steps be taken by Her Majesty's

Imperial advisers to avert what would be generally regarded by the

people of Canada as a great calamity.

"'The Committee would specially bring under Your Excellency's notice

the importance of instituting negociations for the renewal of the

treaty, with such modifications as may be mutually assented to, before

the year's notice required to terminate it shall be given by the

American Government; for they fear that the notice, if once given,

would not be revoked; and they clearly foresee that, owing to the

variety and possibly the conflicting nature of the interests involved

on our own side, a new treaty could not be concluded, and the requisite

legislation to give effect to it obtained before the year would have

expired, and with it the treaty. Under such circumstances--even with

the certain prospect of an early renewal of the treaty--considerable

loss and much inconvenience would inevitably ensue.

"'It would be impossible to express in figures, with any approach to

accuracy, the extent to which the facilities of commercial intercourse

created by the Reciprocity Treaty have contributed to the wealth and

prosperity of this Province; and it would be difficult to exaggerate

the importance which the people of Canada attach to the continued

enjoyment of these facilities.

"'Nor is the subject entirely devoid of political significance.

"'Under the beneficent operation of the system of self-government,

which the later policy of the Mother Country has accorded to Canada, in

common with the other Colonies possessing representative institutions,

combined with the advantages secured by the Reciprocity Treaty of an

unrestricted commerce with our nearest neighbours in the natural

productions of the two countries, all agitation for organic changes has

ceased--all dissatisfaction with the existing political relations of

the Province has wholly disappeared.

"'Although the Committee would grossly misrepresent their countrymen if

they were to affirm that their loyalty to their Sovereign would be

diminished in the slightest degree by the withdrawal, through the

unfriendly action of a foreign Government, of mere commercial

privileges, however valuable these might be deemed, they think they

cannot err in directing the attention of the enlightened statesmen who

wield the destinies of the great Empire, of which it is the proudest

boast of Canadians that their country forms a part, to the connection

which is usually found to exist between the material prosperity and the

political contentment of a people, for in doing so they feel that they

are appealing to the highest motives that can actuate patriotic

statesmen--the desire to perpetuate a dominion founded on the

affectionate allegiance of a prosperous and contented people.

"'The Committee venture to express the hope that Your Excellency will

be pleased to bring this subject and the considerations now submitted

under the notice of Her Majesty's Imperial advisers.

"'W. H. LEE, C. E. C.'

"Does it not seem as if the whole business was let alone, neglected,

despised?

"What were our Government doing from 1861 to 1865?

"POLAND exercised the minds of the Foreign Office from an early date,

and they have given us papers from July 31st, 1862, December 31st of

that year, and on to April 23rd, 1863, when that affair ended.

"DENMARK revived their old discussions in 1863, and they began to write

despatches about them. They have given Parliament papers about the

'Conference,' which only began January 23rd, 1864, and ended March

26th, 1864.

"The whole number of papers printed for Parliament, and laid on the

table in 1864, was 369. Yet there was not, out of these, one single

paper about the Reciprocity Treaty.

"The whole number of papers printed for Parliament, and laid likewise

upon the table in 1865, was 170, but not a line appears about the

Reciprocity Treaty. So much for the attention of the people we pay to

watch over our affairs.

"The question, as regards our relations with the States, Was a great

opportunity lost? arises. Let us see. 1st, the Chamber of Commerce of

New York, and its 1,300,000 people, ask for a treaty in 1861; 2nd,

Congress asks for it by appointing a committee in 1861; 3rd, the

committee ask for it by their report of 1862 and by their resolutions

of 1864; 4th, Mr. Seward endorses it even so late as November, 1864;

and 5th, the Convention at Detroit ask for it so late as the 14th July,

1865. In further testimony, a member of Congress said, on the 14th

March, 1866, on the debate on the _abortive Bill_ for regulating

trade with British North American Provinces:--

"Mr. Brooks, 'Dem. N. Y.,' said, 'that he would not have risen to

obtrude any remarks on the committee on a subject that had been

discussed with an ability and ingenuity reminding him, of ancient times

in the House, and demonstrating that upon subjects which interest our

own race there is as much ability here as of old, if he had not voted

last year, with others, for an abrogation of the Reciprocity Treaty,

and if he did not see now, from the tendencies and sympathies of the

House, that the moment the Bill passed from the hands of the committee

of the whole it would receive its final death blow. He did not believe

there would have been thirty votes obtained in this House last year for

the abrogation of the Reciprocity Treaty with Canada, but for the

explicit understanding that some sort of reciprocity in trade would be

forthwith re-established, either through the treaty-making power, or

through the legislative power of the Government. The people of the

United States were ground down by the internal revenue taxation, and he

had not felt at liberty to let the Reciprocity Treaty stand, without

being at liberty to make some sort of bargain with the people of

Canada, that whatever our internal revenues might be, the same would be

levied, either by them or by us, on our imports from them. It was

exclusively on that understanding that he had voted for the abrogation

of the treaty. And he now saw in the additional claims of those who

represented the lumber interests, and the coal and other interests of

the country, that advantage was to be taken of the present opportunity,

and that never again were we to have reciprocity with the neighbouring

Provinces. On the contrary, we were to impose as high duties as could

be imposed upon their products, higher if possible than those now

levied under the general tariff bill. If that were to be so, he never

should regret any vote that he gave in his life as he would regret his

vote of last winter to abrogate the treaty. He had given it with the

understanding that it should be substantially renewed. He spoke of the

people of the Provinces as being connected with us by kindred and by

blood, and as rightfully belonging to us; and he hoped to live to see

the day when the seats on this floor and in the Senate would be

occupied by representatives and senators from Canada, New Brunswick,

Nova Scotia, Prince Edward's Island, and all the other American

dependencies of Great Britain.'

"Then it will not be forgotten that the Government and Congress of the

States ratified a treaty with Great Britain, which never could before

be acted on, viz., that affecting the African slave trade, on the 7th

April, 1862, and they agreed to the important additional article on the

17th February, 1863. At these dates the Government and people of the

United States were most anxious, therefore, for friendly relations with

us. But Earl Russell lost the golden opportunity. British interests

were entirely neglected.

"We must now look at the new features of difficulty which have sprung

up; and first, there is now a Congress with a Republican majority, and

the majority of that majority are Protectionists: while a considerable

number are Annexationists.

"The Convention at Detroit was appealed to by the latter. Mr. Consul

Potter, United States Consul at Montreal, Canada, and Mr. O. S. Wood,

Manager of the Montreal Telegraph Company, appear in the following

report of a speech of the Consul at a meeting specially convened by him

at Detroit:--

"Mr. Consul Potter, at Detroit, July 12th, 1865, said, "'I would meet

the people of Canada on the most friendly footing, but I would say to

them, in making an arrangement, we must look to our own interest as

well as yours, and in looking to our interest we cannot forget that the

policy we may adopt in relation to reciprocity will have a very great

influence on the future relations of the two countries. Now, we are

ready to give you in Canada the most perfect reciprocity. We will give

you complete free trade, but we ask you to come and share with us the

responsibilities of our own government. We make this proposition, but

not in a spirit of conquest, for, as I remarked before, if it were

positively certain that by one day of war we could obtain possession of

the whole Provinces for ever I would say--No!--for this reason, that

after the conquest you would find a feeling of opposition to the United

States and our government on the part of the people of Canada which

would prevent any harmonious working. When they come, let them come by

their own consent, let them come as brothers, and let us be all

brothers with one flag, under one destiny. The question then is, Shall

we simply be content to give the Canadians all the privileges of our

markets? For the true policy is, that in getting those privileges they

should be placed on equal footing with our own citizens in relation to

our responsibilities and in relation to taxation. I believe I express

the general feeling of those who are the most friendly to the United

States in Canada when I say it is not the policy of our Government, or

our policy, to continue this treaty, and I believe that in two years

from the abrogation of the Reciprocity Treaty, the people of Canada

themselves will apply for admission to the United States. I repeat that

I believe in two years they would ask for admission. I have a letter

which I received on the evening of my departure for Detroit, and I may

say I came here, with the consent of my own Government, to express my

views on reciprocity. This letter is from a gentleman in Montreal, than

whom none stands higher--a gentleman of intelligence and wealth, and

whose judgment is as good as that of any person in Canada on these

matters:--

"'MONTREAL,

"'_July 10th._

'"MY DEAR. MR. POTTER,

"'I am much delighted to hear that you have decided to attend the

Detroit Convention, as it is in my opinion of the greatest importance

that the real friends of the United States who reside here shall be

represented at Detroit, or that our friends, before committing

themselves to a renewal of the Reciprocity Treaty, may know our views

on the subject; and I can assure you, from the knowledge I have of the

sentiments of those who have been and still are the friends of the

United States in this country, that not one in fifty of them wants a

renewal or extension of the treaty. On the other hand, every man who

has been openly hostile to us is for the renewal. The reasons are

obvious, as it is clear to all intelligent men that a failure to renew

the treaty will result in thorough reciprocity. All the friends of the

Western States here, and they are rapidly increasing in numbers and

influence, would rejoice to submit to temporary inconvenience and loss,

for the purpose of accomplishing this result, while those who are

against us wish for a renewal of the treaty which, during the last four

years, has given so much trouble to both sides. They know that a

renewal of the treaty would be the only effectual check on the

annexation movement. I believe the renewal of it would be one of the

greatest political blunders on the part of the United States. This is

the feeling of our friends on this side, and I am sure our friends on

the other side of the frontier who have already suffered so much, will

join us heartily in this additional sacrifice, if such it should

prove.'

"As Mr. Potter closed reading the letter there were loud cries from the

Canadian delegates of 'Name, name.'

"Mr. Potter gave the name, 'O. S. Wood, Superintendent of the Montreal

Telegraph Company'--a gentleman, he said, of wealth and the highest

respectability in Montreal.

"Some one asked whether Wood was a born Canadian.

"Mr. Potter replied he was not, but came originally from New York.

"The Republican journals in the West have since taken up this tone, and

Mr. Morrill, the Protectionist chairman of the 'Committee of Ways and

Means,' echoed it even in conference with the provincial delegates at

Washington last February:--Witness the following:--

"'Chicago Tribune' (Republican), Jan. 6th, 1866.

"The 'Tribune' concludes:--'The Canadians will soon discover that free

trade and smuggling will not compensate them for the loss of the

Reciprocity Treaty. They will stay out in the cold for a few years and

try all sorts of expedients, but in the end will be constrained to

knock for admission into the Great Republic. Potter was right when he

predicted that the abrogation of the treaty would cause annexation.'

"(Mr. MORRILL, Chairman of Ways and Means, "Washington, Feb.

6th, 1866.)

"'Mr. GALT: We would not build those canals for our own trade alone. I

think, indeed, it might well be considered whether it would not suit

both parties to put this trade on a better footing. I am not authorized

to make any proposition looking to this end, but my idea is that these

waters might be neutralized with advantage to both.

"'Mr. MORRILL: That will have to be postponed until _you, gentlemen,

assume your seats here_.'

"Mr. Derby coolly discusses the question as to whether concession or

coercion will best succeed in inducing the British Provinces to 'come

over,' and his recipe for all outstanding grievances is the following.

He says, in his report of January 1st, 1866:--

"'And if as an inducement for this treaty and in settlement of Alabama

claims we can obtain a cession of Vancouver's Island, or other

territory, it will be a consummation most devoutly to be wished for.'

"Would our Government 'devoutly wish' such a consummation?

"Mr. O. S. Wood had to resign his position as manager of the Montreal

Telegraph Company: that was done by public opinion in Canada. But Mr.

Potter, who attends a meeting to enforce the annexation of a part of

the Queen's dominions, by the consent of the Washington Government, is

still Consul at Montreal.

"But what are these dominions which Mr. Potter would annex? Read what

Mr. Ward's Report of 1862 says:--

"'The great and practical value of the British North American Provinces

and possessions is seldom appreciated. Stretching from the Atlantic to

the Pacific Oceans, they contain an area of at least 3,478,380 square

miles--more than is owned by the United States, and not much less than

the whole of Europe, with its family of nations!

* * * * *

"'The climate and soil of these Provinces and possessions, seemingly

less indulgent than those of tropical regions, are precisely those by

which the skill, energy, and virtues of the human race are best

developed. Nature there demands thought and labour from man as

conditions of his existence, and yields abundant rewards to a wise

industry.'

"Specially, as regards Canada; let us recapitulate her progress, as

compared with that of her giant neighbour, the United States.

"During the interval between the last census and the preceding one

(1850-1860), the decennial rate of increase of population in Canada

exceeded that in the United States by nearly 51/2 per cent.--Canada

adding 40.87 per cent. to her population in ten years, while the United

States added only 35.58 per cent. to theirs. She brought her wild land

into cultivation at a rate, in nine years, exceeding the rate of

increase of cultivated lands in the United States in ten years by

nearly 6 per cent.,--Canada in 1860 having added 50 acres of cultivated

land to every 100 acres under cultivation in 1851, while the United

States in 1860 had only added 14 acres to every 100 acres under

cultivation in 1850. The value per cultivated acre of the farming lands

in Canada in 1860 exceeded the value per cultivated acre of the farming

lands of the United States--the average value per cultivated acre in

Canada being $20.87 and in the United States $16.32. In Canada a larger

capital was invested in agricultural implements, in proportion to the

amount of land cultivated, than in the United States--the average value

of agricultural implements used on a farm having 100 cultivated acres

being in Canada $182 and in the United States $150. In proportion to

population, Canada in 1860 raised twice as much wheat as the United

States--Canada in that year raising 11.2 bushels for each inhabitant,

while the United States raised only 5.50 bushels for each inhabitant.

Bulking together eight leading staples of agriculture--wheat, corn,

rye, barley, oats, buckwheat, peas and bean, and potatoes,--Canada,

between 1851 and 1860, increased her production of these articles from

57 millions to 123 millions of bushels--an increase; of 113 per cent.;

while the United States in ten years, from 1850 to 1860, increased

their productions of the same articles only 45 per cent. In 1860 Canada

raised, of those articles, 49.12 bushels for each inhabitant, against a

production in the United States of 43.42 bushels for each inhabitant.

Excluding Indian corn from the list--Canada raised of the remaining

articles 48.07 bushels for each inhabitant, almost three times the rate

of production in the United States, which was 16.74 bushels for each

inhabitant. And as regards live stock and their products, Canada in

1850, in proportion to her population, owned more horses and more cows,

made more butter, kept more sheep, and had a greater yield of wool,

than the United States.

"Our British Government having thus allowed the treaty to expire, and

having thereby damped the energies of the colonies, and excited the

hopes of the Protectionist and Annexationist parties in the States,

what are we to do?

"In the first place, Parliament should express its condemnation of the

failure of the executive; in the second, its desire for peace and

fraternity with the United States; and in the third, its determination

to stand by the Queen's dominions on the other side of the Atlantic.

Language so just and so clear would lead to the inevitable result of

renewed negociation. But who should negociate? The incapable,

nonchalant people who have so signally perilled the interests of Great

Britain,--or new and capable men? Or should the whole state of our

relations with the United States be remitted to a plenipotentiary?

"What ought we to seek now to secure, in the interests of peace and

civilization?

"1. A neutralization of the 3,000 miles of frontier, rendering

fortifications needless.

"2. A continuance of the neutrality of the lakes and rivers bordering

upon the two territories.

"3. Common navigation of the lakes and the outlets of the sea.

"4. An enlargement of canals and locks, to enable the food of the west

to flow unimpeded and at the smallest cost direct in the same bottom to

Europe, or any other part of the world.

"5. Neutrality of telegraphs and post routes between the Atlantic and

Pacific, no matter on which territory they may traverse.

"6. A free interchange of untaxed, and an exchange, at internal revenue

duty rate only, of taxed, commodities.

"7. The passage of goods in bond through the respective territories as

heretofore.

"8. A common use of ports on both sides of the Continent."

It seems to me, now, in 1887, that this paper sums up a question of the

past, now re-appearing in full prominence. It also sums up what ought

to be done if civilization and friendship between English-speaking

nations still exist.

[Endnote 1]

The Government of the United States being equally desirous with Her

Majesty the Queen of Great Britain to avoid further misunderstanding

between their respective citizens and subjects in regard to the extent

of the right of fishing on the coasts of British North America secured

to each by Article I of a Convention between the United States and

Great Britain, signed at London on the 20th day of October, 1818; and

being also desirous to regulate the commerce and navigation between

their respective territories and people, and more especially between

Her Majesty's possessions in North America and the United States, in

such manner as to render the same reciprocally beneficial and

satisfactory, have respectively named Plenipotentiaries to confer and

agree thereupon--that is to say, the President of the United States of

America, William L. Marcy, Secretary of State of the United States; and

Her Majesty, the Queen of the United Kingdom of Great Britain and

Ireland, James, Earl of Elgin and Kincardine, Lord Bruce and Elgin, a

peer of the United Kingdom, knight of the most ancient and most noble

Order of the Thistle, and Governor General in and over all Her

Britannic Majesty's provinces on the continent of North America and in

and over the island of Prince Edward--who, after having communicated to

each other their respective full powers, found in good and due form,

have agreed upon the following articles:--

ART. I. It is agreed by the high contracting parties that, in addition

to the liberty secured to the United States fishermen by the above-

mentioned convention of October 20, 1818, of taking, curing, and drying

fish on certain coasts of the British North American Colonies therein

defined, the inhabitants of the United States shall have, in common

with the subjects of Her Britannic Majesty, the liberty to take fish of

every kind, except shell-fish, on the sea-coasts and shores, and in the

bays, harbours, and creeks of Canada, New Brunswick, Nova Scotia,

Prince Edward's Island, and of the several islands thereunto adjacent,

without being restricted to any distance from the shore; with

permission to land upon the coasts and shores of those colonies and the

islands thereof, and also upon the Magdalen Islands, for the purpose of

drying their nets and curing their fish: provided that, in so doing,

they do not interfere with the rights of private property or with

British fishermen in the peaceable use of any part of the said coast in

their occupancy for the same purpose.

It is understood that the above-mentioned liberty applies solely to the

sea fishery, and that the salmon and shad fisheries, and all fisheries

in rivers and the mouths of rivers, are hereby reserved exclusively for

British fishermen.

And it is further agreed that, in order to prevent or settle any

disputes as to the places to which the reservation of exclusive right

to British fishermen contained in this article, and that of fishermen

of the United States contained in the next succeeding article, apply,

each of the high contracting parties, on the application of either to

the other, shall, within six months thereafter, appoint a commissioner.

The said commissioners, before proceeding to any business, shall make

and subscribe a solemn declaration that they will impartially and

carefully examine and decide, to the best of their judgment and

according to justice and equity, without fear, favour, or affection to

their own country, upon all such places as are intended to be reserved

and excluded from the common liberty of fishing under this and the next

succeeding article, and such declaration shall be entered on the record

of their proceedings.

The commissioners shall name some third person to act as an arbitrator

or umpire in any case or cases on which they may themselves differ in

opinion. If they should not be able to agree upon the name of such

third person, they shall each name a person, and it shall be determined

by lot which of the two persons so named shall be the arbitrator or

umpire in cases of difference or disagreement between the

commissioners. The person so to be chosen to be arbitrator or umpire

shall, before proceeding to act as such in any case, make and subscribe

to a solemn declaration in a form similar to that which shall already

have been made and subscribed by the commissioners, which shall be

entered on the record of their proceedings. In the event of the death,

absence, or incapacity of either of the commissioners, or of the

arbitrator or umpire, or of their or his omitting, declining, or

ceasing to act as such commissioner, arbitrator, or umpire, another and

different person shall be appointed or named as aforesaid to act as

such commissioner, arbitrator, or umpire in the place and stead of the

person so originally appointed or named as aforesaid, and shall make

and subscribe such declaration as aforesaid.

Such commissioners shall proceed to examine the coasts of the North

American Provinces and of the United States embraced within the

provisions of the first and second articles of this treaty, and shall

designate the places reserved by the said articles from the common

right of fishing therein.

The decision of the commissioners and of the arbitrator or umpire shall

be given in writing in each case, and shall be signed by them

respectively.

The high contracting parties hereby solemnly engage to consider the

decision of the commissioners conjointly, or of the arbitrator or

umpire, as the case may be, as absolutely final and conclusive in each

case decided upon by them or him respectively.

ART. 2. It is agreed by the high contracting parties that British

subjects shall have, in common with the citizens of the United States,

the liberty to take fish of every kind, except shell-fish, on the

eastern sea-coasts and shores of the United States north of the 36th

parallel of north latitude, and on the shores of the several islands

thereunto adjacent, and in the bays, harbours, and creeks, of the said

sea-coasts and shores of the United States and of the said islands,

without being restricted to any distance from the shore, with

permission to land upon the said coasts of the United States and of the

islands aforesaid for the purpose of drying their nets and curing their

fish; provided that, in so doing, they do not interfere with the rights

of private property, or with the fishermen of the United States in the

peaceable use of any part of the said coasts in their occupancy for the

same purpose.

It is understood that the above-mentioned liberty applies solely to the

sea fishery, and that salmon and shad fisheries, and all fisheries in

rivers and months of rivers, are hereby reserved exclusively for

fishermen of the United States.

ART. 3. It is agreed that the articles enumerated in the schedule

hereunto annexed, being the growth and produce of the aforesaid British

Colonies or of the United States, shall be admitted into each, country

respectively free of duty:--

SCHEDULE.

Grain, flour and breadstuffs of all kinds.

Animals of all kinds.

Fresh, smoked, and salted meats.

Cotton-wool, seeds, and vegetables.

Undried fruits, dried fruits.

Fish of all kinds.

Products of fish, and all other creatures living in the water.

Poultry, eggs.

Hides, furs, skins, or tails, undressed.

Stone or marble, in its crude or unwrought state.

Slate.

Butter, cheese, tallow.

Lard, horns, manures.

Ores of metals of all kinds.

Coal.

Pitch, tar, turpentine, ashes.

Timber and lumber of all kinds, round, hewed and sawed, unmanufactured,

in whole or in part.

Firewood.

Plants, shrubs, and trees.

Pelts, wool.

Fish oil.

Rice, broom-corn, and bark.

Gypsum, ground or unground.

Hewn or wrought or unwrought burr or grindstones.

Dye-stuffs.

Flax, hemp, and tow, unmanufactured.

Unmanufactured tobacco.

Rags.

ART. 4. It is agreed that the citizens and inhabitants of the United

States shall have the right to navigate the river St. Lawrence, and the

canals in Canada, used as the means of communicating between the great

lakes and the Atlantic Ocean, with their vessels, boats, and crafts, as

fully and freely as the subjects of Her Britannic Majesty, subject only

to the same tolls and other assessments as now are or may hereafter be

exacted of Her Majesty's said subjects; it being understood, however,

that the British Government retains the right of suspending this

privilege on giving due notice thereof to the Government of the United

States.

It is further agreed that, if at any time the British Government should

exercise the said reserved right, the Government of the United States

shall have the right of suspending, if it think fit, the operation of

article three of the present treaty, in so far as the Province of

Canada is affected thereby, for so long as the suspension of the free

navigation of the river St. Lawrence or the canals may continue.

It is further agreed that British subjects shall have the right freely

to navigate Lake Michigan with their vessels, boats, and crafts, so

long as the privilege of navigating the river St. Lawrence, secured to

American citizens by the above clause of the present article, shall

continue; and the Government of the United States further engages to

urge upon the State Governments to secure to the subjects of Her

Britannic Majesty the use of the several State canals on terms of

equality with the inhabitants of the United States.

And it is further agreed that no export duty or other duty shall be

levied on lumber or timber of any kind cut on that portion of the

American territory in the State of Maine watered by the river St. John

and its tributaries, and floated down that river to the sea, when the

same is shipped to the United States from the Province of New

Brunswick.

ART. 5. The present treaty shall take effect as soon as the laws

required to carry it into operation shall have been passed by the

Imperial Parliament of Great Britain and by the Provincial Parliaments

of those of the British North American Colonies which are affected by

this treaty on the one hand, and by the Congress of the United States

on the other. Such assent having been given, the treaty shall remain in

force for ten years from the date at which it may come into operation,

and further, until the expiration of twelve months after either of the

high contracting parties shall give notice to the other of its wish to

terminate the same; each of the high contracting parties being at

liberty to give such notice to the other at the end of the said term of

ten years, or at any time afterwards:

It is clearly understood, however, that this stipulation is not

intended to affect the reservation made by article four of the present

treaty, with regard to the right of temporarily suspending the

operation of articles three and four thereof.

ART. 6. And it is further hereby agreed that the provisions and

stipulations of the foregoing articles shall extend to the Island of

Newfoundland, so far as they are applicable to that colony. But if the

Imperial Parliament, the Provincial Parliament of Newfoundland, or the

Congress of the United States shall not embrace in their laws, enacted

for carrying this treaty into effect, the Colony of Newfoundland, then

this article shall be of no effect; but the omission to make provision

by law to give it effect, by either of the legislative bodies

aforesaid, shall not in any way impair the remaining articles of this

treaty.

ART. 7. The present treaty shall be duly ratified and the mutual

exchange of ratifications shall take place in Washington within six

months from the date hereof, or earlier if possible.

In faith whereof we, the respective Plenipotentiaries, have signed this

treaty, and have hereunto affixed our seals.

Done in triplicate at Washington, the fifth day of June, anno Domini

one thousand eight hundred and fifty-four.

W. L. MARCY. [L.S.]

ELGIN AND KINCARDINE. [L.S.]]

[Endnote 2:]

Act cap. 71 [Dunlop's Laws of the United States, Federal], passed March

3rd, 1845, page 1075.

"SEC. 7. That any imported merchandize which has been entered, and the

duties paid or secured according to law, for drawback, may be exported

to the British North American Provinces, adjoining the United States;

and the ports of Plattsburg, in the District of Champlain; Burlington,

in the District of Vermont; Sackett's Harbour, Oswego, and Ogdensburg,

in the District of Oswegatchie; Rochester, in the District of Genesee;

Buffalo and Erie, in the District of Prequ'isle; Cleveland, in the

District of Cuyahoga; Sandusky and Detroit, together with such ports on

the seaboard from which merchandize may now be exported for the benefit

of drawback, are hereby declared ports from whence foreign goods, wares

and merchandize on which the import has been paid or secured to be

paid, may be exported to ports in the adjoining British Provinces, and

to which ports foreign goods, wares, and merchandize may be transported

inland, or by water from the port of original importation, under

existing provisions of law, to be thence exported for benefit of

drawback. Provided, that such other ports situated on the frontiers of

the United Sates, adjoining the British North American Provinces, as

may hereafter be found expedient, may have extended to them the like

privileges on the recommendation of the Secretary of the Treasury, and

proclamation duly made by the President of the United States, specially

designating the ports to which the aforesaid privileges are to be

extended."

NOTE--Several other ports have since been proclaimed, viz., Whitehall,

Lewiston, and others.

"SEC. 11. That the Secretary of the Treasury is hereby further

authorized to prescribe such rules and regulations, not inconsistent

with the laws of the United States, as he may deem necessary to carry

into effect the provisions of this Act, and to prevent the illegal re-

importation of any goods, wares, or merchandize which shall have been

exported as herein provided; and that all Acts or parts of Acts

inconsistent with the provisions of this Act, be, and the same are

hereby repealed."

See, also, Warehousing Act of United States Congress, chapter 48,

Dunlop's United States Statutes, page 1106, passed 6th August, 1846, in

which it is enacted as follows:--

"And in case the owner, importer, consignee or agent of any goods on

which the duties have not been paid shall give to the collector

satisfactory security that the said goods shall be landed out of the

jurisdiction of the United States in the manner now required by

existing laws relating to exportations, for the benefit of drawback,

the collector, &c., on an entry to re-export the same shall, upon

payment of the appropriate expenses, permit the said goods, under the

inspection of the proper officers, to be shipped without the payment of

any duties thereon," &c.