CANADA, BRITAIN, AND THE UNITED STATES. T HE new Canadian Tariff
Act will be generally welcomed by the business interests of England, for it will have the effect of stimulating English trade in a healthy way, while at the same time developing the resources of England's oldest and greatest Colony. All British goods which arrive at Canadian ports will now be admitted at 14 per cent, less duty than is levied on goods arriving from countries which grant no special terms to Canada. After July 1st, 1898, this reduction will become 25 per cent., so that we may fairly look forward to a con- siderable increase in the trade between ourselves and Canada. This is the part of the new Tariff Law which especially effects England's trade interests, though the economist who considers matters of this kind from other than a purely national point of view will see with much satisfaction that large reductions are also made in the rate of taxation, and that a whole array of heavy duties, mixed, specific, and ad valorem, is entirely swept away. The law does not establish Free-trade, but it goes a long way in that direction ; as far, we suspect, as is compatible with the present political and financial system of Canada. This wide-reaching reform will of itself render the Laurier Cabinet memorable, and we are fully persuaded that it must have a most important effect on the economic development of Canada.
We do not perhaps, in this country, appreciate the difficult problem which confronted the Liberal leaders in Canada when they came last year into office after such a long sojourn in the wilderness of opposition. In Canada, as in France and. Germany, and even more so in the United States, the cause of Protection has been closely blended with that of patriotism and loyalty. We in England know little or nothing of that side of the Free-trade question. When we adopted Free-trade it was so obviously a national advantage for a country deficient both in food and in raw material, that it was impossible for the landlords who Opposed Free-trade to pose as a specially national party in the same way as the Republican party poses as a great national party when its spokesmen declaim against the "pauper labour of Europe,"—a phrase which is worth many thousands of votes in an exciting campaign. But in Canada the conditions were even more peculiar than in the United States, for the party in Canada which professes the more exuberant loyalty towards the Mother-country has for years subtly woven the general question of the Tariff with the question of Canada's relations both towards the United States and England. It was represented that any lowering of the Tariff must have the double effect of loosening the bond which binds Canada to England and of aiding the American capitalist in his effort to capture and hold the Canadian market. The Liberal leaders had, therefore, to meet a twofold opponent. On the one hand was the protected manufacturer, whose workmen were taught to believe that their services would soon no longer be needed if the country intrusted its affairs into the hands of the Liberal party ; while on the other hand. were all those quite sincere and enthusiastic loyalists who were made to believe that a Liberal victory must mean, sooner or later, annexation of Canada to the United. States, and that that was the real goal of Liberalism.
The electorate, however, could not fail to discern that things were not going well under the party of Pro- tection. The population did not grow as might have reasonably been expected, and there was consequently no effective demand for the products of the mills which Protection had forced into being. The dangerous portent of an unemployed class was appearing in a great and rich country containing less than two persons to a square mile. The Debt, both Dominion and Provincial, was growing at a rate out of all proportion to a country whose resources were so ineffectively developed, and whose years in the history of the world were so few. This it was which gave to Mr. Laurier his opportunity,—this combined with the conviction that the subsidised railways and protected industries necessarily meant not a little jobbery. Some of that jobbery had been found out, but there was more behind, and the people felt it as they feel it in France with reference to the Panama scandals. Mr. Laurier was therefore placed in office ; but his work was not of an easy nature. His task was to develop Canadian resources while not compromising Canadian relations with the United States, and without in any way offending that sentiment of attachment for the Old Country which is an undoubted force in Canada. The Liberal leaders could not possibly approve of that rather dangerous rivalry which Sir JohnMacdonald so powerfully stimulated,—the rivalry with the United States. On the other hand, they could not afford. to lay themselves open to a charge of any lack of genuine Canadian feeling. In short, the Liberal problem was how to combine these three factors,—healthy economic con- ditions, which were quite inconsistent with high Protec- tion, loyal regard for England, especially in view of England's liberal,fand indeed generous, policy, and at the same time perfectly friendly relations with the great Republic to the south. Few more difficult problems could come before any statesmen than those thus confronting Mr. Laurier and his colleagues. The problem was not a merely economic one, but one in which economics and politics were blended in an unusually subtle degree.
Mr. Laurier has shown no little skill in dealing with this complex problem. He first of all used such language towards the Mother-country as to disarm Conservative criticism. Rightly declaring himself to be a Canadian first and foremost, zealous for the orderly growth of his country, and anxious to combine the two races who inhabit that country in one great nationality, he fully acknowledged the generosity and wisdom of British policy, and declared that Canada. had all the liberty she needed. His loyalty could not, therefore, be impeached. Working on this basis of affection and esteem for England, the Liberal leader also entertained. the old generous Liberal belief that it is quite possible to build up the prosperity of one country without injuring another. Canada's interests lead her, and must lead her, to a good understanding with her great Southern neighbour, just as her sentiments are all for English friendship and union. Therefore, Commissioners were at once sent to Washington to see what views were enter- tained by the American authorities and to come to some reasonable terms. It so happened, however, that, just as a blow had been dealt at high Protection in Canada, the party of high Protection had, under very peculiar circum- stances, scored a gigantic victory in the United States. One of the leading exclusionists of the century had been elected to the Presidency, a Tariff measure was before Congress, and it was generally complained by the victorious party that that measure was too moderate. In the new Congress, Protection had both Houses in its grasp—one by an enormous majority—and the Executive was now in harmony with the legislative branch of the Government as had not been the case for several years. Under the cir- cumstances, therefore, it was not very hopeful to transact a satisfactory arrangement. Had the new Administration been disposed to make some arrangement, there was Congress, fresh from the country with a huge Pro- tectionist majority which would not be likely to give itself away, and the attitude of the Senate towards England was not unlikely to be farther marked when it came to be a question of England's chief Colony. The American Protection party, moreover, has a rooted conviction that Canada must come to terms with the United States because of her economic dependency on the Union, and that those terms must be dictated by the United States. This was, in substance, what Mr. Blaine told the Canadian Government years ago, and it represents the prevailing American conception.
Having done all he could, therefore, in Washington, Mr. Laurier turned once more to England, seeing that England could, at present, give more to Canada than any other country. The terms of the new Tariff Law, due to the ability of Mr. Fielding, once Premier of Nova Scotia, now the Dominion Finance Minister, are the outcome. By this new arrangement both England and Canada -will be benefited, and at the same time an object- lesson will be furnished to the ultra-Protectionists both at Washington and Ottawa. That object-lesson is probably not likely to be lost on President McKinley, for it will be remembered that in his inaugural Address the President advocated, along with a high Tariff, special provisions for reciprocity, such as were inserted in his own Tariff measure of 1890 at the instance of Mr. Blaine. We may expect, therefore, that during the present year negotiations between Washington and Ottawa will result in some kind of reciprocal arrangements between Canada and the United States. At least, that is how the situation looks to us. America is notoriously grasping at the trade supremacy of the world, and while it seems as though the carrying trade of the world would long remain predominantly in English hands, we may expect the industrial supremacy of the United States to become a fact within the lives of people now living. If this is the goal of American ambi- tion, it would indeed be strange if the American Govern- ment were insensible of the gain made by England in securing special Canadian terms, and indifferent towards securing special terms for the United States in what is bound to be a growing market. The only alternative would be a Tariff war, which, as we have indicated, would also call forth that very warm—nay, often glowing—English feeling which has been such a potent factor in keeping Conservatism in power these many years in Canada. We do not doubt America's ability to largely mould the economic destiny of Canada, but when increased trade is to be had on easy terms, a kind of "law of parsimony" would, one supposes, lead the United States to take the simpler course. Should such turn out to be the case, Mr. Laurier will indeed have won a remarkable victory. He will have solved his threefold problem. He will have been in- strumental in building up the resources of Canada, he will have secured the good will of those who feared that he was indifferent to the English connection, and he will have greatly improved Canadian relations with the United States. He will indeed have done the very thing his opponents said was impossible. If the Canadian Liberals can effect all this, they will have shown that they are fufilling a function vital to the wellbeing of England and America. Canada has too often been the rock of offence as between this country and the United States. But is it necessary that she should always play such an unhappy role ? Might it not conceivably be given to Canadian Liberalism to act as a cementing force between two con- tinents? English in origin and. sympathies, American in ideas, may not a great future be reserved for the pro- gressive Liberalism of Canada ?
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