LETTERS TO THE EDITOR.
A CANADIAN EX-PREMIER ON THE CANADIAN
TARIFF.
[TO TES EDITOR OF THE "SPECTATOR.'] Sra,—'1 he condemnation of the Canadian tariff by the Parlia- ment and Press of the United Kingdom has been so general, that I should have been reluctant to offer even a word in ex- tenuation of the policy of the Canadian Government, were it not that efforts have been made by those hostile to the subsist- ing connection between the United Kingdom and one of her greatest dependencies to cause a rupture between them. Nothing can be more satisfactory than the course taken by her Majesty's Imperial Government, which has met the inquiries of Members of the House of Commons directed towards inter- ference with the clearly expressed wishes of the Canadian people, by declaring that beyond ehforcing the observance of Treaty obligations with foreign nations, the Parliament of the Dominion would not be interfered with in regard to its fiscal policy. It is much to be regretted that the people of England are labouring under a great deal of misapprehension as to the practical effect of the new Canadian tariff on their com- merce with the Dominion, and it seems desirable that they should be put in possession of the principal causes which have led to the change in the fiscal policy of Canada, and the probable effect of that change. It is quite natural that Eng- land should be desirous that the Free-trade policy which she has inaugurated with such success should be adopted by other nations, and especially by her own colonies ; but allowance ought to be made for circumstances which render it difficult, even for those most desirous of maintaining friendly relations with her, to imitate her example. In a late reply to a deputa- tion from the Association of the Chambers of Commerce, Lord Salisbury is reported to have used the following language, which is strictly applicable to the case of Canada :—" The easiest way to get money, galling your subjects least, is to raise it by in- direct taxation; and when Governments want money by indirect taxation, and when manufacturers want protection by indirect taxation, the Government and the manufacturers come together, and there is a force . which nothing can resist." Even Free- trade journals acknowledge the correctness of Lord Salisbury's utterance on the subject, and it may be hoped that they will be charitable enough to be as lenient to Canada as they are to the United States, which country, although mainly responsible for the protective character of the Canadian tariff, is not believed by all English statesmen to be in such a deplorable condition as that in which Mr. Bright considers it to be. In a recent letter addressed by that distinguished states- man to Mr. Cyrus Field, of New York, he affirms that "monopoly is a milder form of slavery," and he defines " monopoly " to be the obstruction placed in the way of a free exchange between the English manufacturers and the Ameri- can farmers by protective duties. While I sincerely wish, as well for the sake of the United States, as of Canada, that the former would adopt a more liberal commercial policy, I cannot be blind to the fact that, notwithstanding its protective system, the United States have been able to compete successfully with the United Kingdom in the Canadian market in several manu- factured articles. Another eminent English statesman, Mr. Gladstone, in a recent article in the North Anterkan Review, entitled, " Kin Beyond Sea," has treated the vexed question as " the friendly controversy between the leanings of America to Protectionism, and the more daring reliance of the old country upon free and unrestricted intercourse with all the world." He refers to "the menaces which in the prospective development of her re- sources America offers to the commercial pre-eminence of Eng- land." He gives it as his opinion that the " United States alone at a coming time can, and probably will,wrest from us that com- mercial primacy," will become " the employer of all employed, because her service will be the most and ablest." He has even altered a well-known line of Horace to indicate the future of the United States,-
" 0 matre forti, filia fortior!"
Such is Mr. Gladstone's opinion of the present and future of the great Republic which adjoins the Dominion of Canada from the Atlantic to the Pacific, which has a population twelve times as large, and the imports from which were in 1878-79 greater than those from Great Britain by over $11,000,000, while in 1872-73 those from Great Britain exceeded those from the United States by more than $20,000,000.
I have alleged that the United. States are mainly re- sponsible for the protective charm- ter of the Canadian tariff. For a period of about eleven years, there was ab- solute Free-trade between the United States and Canada in all natural products, and moderate revenue duties in Canada on her imports generally. That Treaty was abro- gated by the United States, and no efforts have been spared by Canada during the last twelve years to obtain its renewal, either in its old form, or with such modifications as might be agreed to by the contracting parties. Those efforts have been wholly unsuccessful, although on one occasion, about five years ago, a negotiation took place between the British Minister, assisted by a prominent Free-trade Canadian statesman, the Hon. Senator Brown, and the Government of the United States, which resulted in a proposal, :which was transmitted by the
President to the Senate for confirmation, but which was dropped without any public discussion. I am well aware that English Free-traders would contend that Canada, notwithstanding the protective policy of the United States, should make no change in her own fiscal policy. It is, however, impossible to convince the Canadian people that England would maintain a Free-trade policy under similar circumstances. The great Free-trade agitation in England was for the repeal of the Corn Laws, which was really a measure for the protection of her manufac- turing and mining industries, by affording cheap food to her people. The duties on the imports of manufactures were re- moved, when they were almost, if not wholly, inoperative. England could not now obtain a revenue from duties on manufactures, even if she desired it. The revenue de- rived from Customs in the United Kingdom is about twenty-five per cent. of the whole, while in Canada it is nearly sixty per cent. That revenue has been mainly derived from an ad valorem rate on the principal articles imported, but in some cases, specific, and combined specific and ad valorem, duties were imposed; while a vast number of articles, including raw materials, were either on the free list, or admitted at a lower rate than the general list of unenumerated articles. It is to be observed that as regards the general principle of obtaining the bulk of the revenue in the mode stated, there is really no differ- ence of policy between the Canadian Protectionist and Free- trade parties. The Free-trade Ministry raised the general ad valorem rate from 15 to 171 per cent., and this rate has been raised by the present Ministry to 20 per cent. for revenue pur- poses. That rate is really much lower than it was some years ago, owing to the serious fall in the value of goods. Before 1867, the general rate was 20 per cent. ; it was then reduced to 15 per cent., then raised to 171, and has now been again raised to 20. This is not looked upon by any one as a protective duty, and yet it is the duty at which English goods will be chiefly admitted, as I shall explain. It was absolutely necessary to raise an additional revenue of $2,200,000, owing partly to the falling-off of the revenue, consequent on the reduced value of imports. I feel assured that in the leading articles of cottons and woollens the duty per yard will not be higher under the present tariff, than it was a few years ago under a lower ad valorem. rate.
I shall proceed to notice the articles which have been sub- jected to protective duties, the most objectionable of which are coal and bread-stuffs. I am persuaded that there is hardly a Canadian who does not desire free-trade in these articles, and that a great number of those who feel constrained to accept the present tariff would have been better pleased had the Government felt itself able to place them on the free list. It so happens that the Canadian collieries in the maritime provinces have their natural market in the North-Eastern States of the Union, while the inland provinces of Canada can be supplied more con- veniently by Pennsylvania and Ohio. The United States have 'excluded the Nova Scotia coal by a duty of 75 cents a ton, while Canada has admitted United States coal duty-free. Much the same statement may be made regarding bread-staffs. Now, it cannot be denied that the duties to which I have referred are to a certain extent retaliatory, as provision is made for their re- moval, whenever the United States shall remove theirs. My chief object being to explain the effect of the new tariff on trade with the United Kingdom, I desire to point out that agri- cultural products are not imported from the United Kingdom ; while as regards coal, the value of the imports from the United 'States in 1877-78 was $2,672,502, against $389,265 from the -United Kingdom. The anticipated revenue from the agri- cultural products and coal is $525,000, and from the increase in the revenue rate of 20 per cent. $750,000, making $1,275,000. To these must be added $210,000 increase in spirits and wines from customs and excise.
I shall next consider the protected articles of cottons and woollens. A great point has been made that these duties are directed against England, but on a careful examination of the tariff, it will be found that the description of cotton goods chiefly imported from England will only be subject to 20 per cent. ; while on the cheaper fabrics, in the manufacture of which Canada and the United States are competitors, there are combined specific and ad valorem. rates. Under the head, "Jeans, Denims, and Drillings," the value of imports from Great Britain in 1877-8 was $28,528, against $138,165 from the United States. -These articles, and the cheaper descriptions of "bleached and unbleached cottons," are manufactured in Canada; but, on the
other hand, England exports "printed, painted, or coloured cottons" largely in excess of the United States, and these are ad- mitted at the revenue rate of 20 per cent. With regard to woollens, the protection will operate against low-priced goods from England, but the better qualities will be supplied as be- fore. A number of articles hitherto on the free list have been subjected to duty, and as many of these were used as materials in the manufactures of the, country, it became necessary to in- crease the duty on the perfectly manufactured articles, and especially as coal was removed from the free list. In this class pig-iron is a prominent article, and all other iron manufactures have been increased. Pig-iron has been imported from Great Britain more than from the United States, and a revenue of $60,000 is anticipated from it, while about $351,000 is ex- pected from other manufactures of iron. The estimate of the value of goods on which increased duties have been placed is about $18,000,000 from Great Britain and $28,500,000 from the United States, the aggregate increase of duty being $2,642,000. The anticipated reductions amount to about $550,000 ; $260,000 is on sugar, $100,000 on molasses, $90,000 on tea, and $100,000 for drawbacks. The change in the sugar duties will chiefly operate against the trade with the United States. Owing to the drawback system, combined with the importation of crystal- lised Demerara sugar of a very dark colour at a low rate of duty, and the use of glucose, the United States refiners have been able to secure the bulk of the Canadian trade, and to close our refineries. Under the new tariff, the ad valorem duty will be levied on the long price, but this will not affect the trade with the United Kingdom. The amount of the protection afforded to Canadian manufacturers has been very much exaggerated by the opponents of the Government, while in several instances complaints have been made that, owing to the increased revenue duties imposed on their materials, the manufacturers are not as well off as when those materials were admitted free, or at a 5 per cent. duty. My impression is that 35 per cent. is about the maximum rate on low-priced cottons and woollens, while in the United States the duties range from 45 to 65 per cent. I have not written the foregoing remarks with the slightest expectation of inducing British exporters to Canada to modify their complaints of the new tariff, though I am not without hope that they will be convinced in time that in its practical operation it will affect them, comparatively speaking, very slightly. The United States, which will be most affected by it, has, on the whole, been very reasonable, if the Press may be taken as an index of public opinion. Wide differences of opinion prevail in Canada, but great allowance must be made for the rivalry of political parties. The cry of increased taxation will doubtless have its effect with many, who do not realise the absolute necessity of obtaining more revenue which necessitates the imposition of increased burthens on the people.—I am, Sir, &c.,
F. HINCKS.
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