Council had passed a Resolution in favour of the proposal and forwarded copies to the members of the Government. They had also communicated with similar bodies throughout Nova Scotia and had received a strong support. "The proposal would mean much for the Maritime Provinces if enacted."

Meanwhile, on March 15th, the Legislature of New Brunswick, on motion of Messrs. C. J. Osman and A. B. Copp, passed the following Resolution unanimously: "That it is the opinion of this House that the Province of New Brunswick will be materially benefited in a commercial sense if the present Dominion Tariff Law be so amended that the Preferential clause now applying to British goods imported into Canada shall apply only when such imports are made directly through a Canadian port." The St. John Sun of the succeeding day supported the suggestion on the ground that in 1900 Canada imported through American ports $24,000,000 worth of goods produced in other countries than the United States, and of which two-thirds was British. The total product brought in under the Preference was only $27,000,000 in value. "If half these goods are entered through foreign ports it is surely time to do something to change their destination.' The Toronto Board of Trade considered the subject on May 15th and came to a different conclusion. The proposal was declared ill-advised as being an attempt to force freight through irregular routes at an additional cost of time and money and with the result of minimizing the value of the lower duties. It would affect goods coming from other Colonies by steamship lines arriving in New York and might also be considered as unfriendly legislation by the United States.

There were some important British comments upon the Preference during the year. The London Daily News, of March 29th, expressed pleasure at the refusal of Sir Michael Hicks-Beach to "tamper with our Free Trade policy in order to reward Canada for the 333 per cent. Preference at present enjoyed by British goods." Every Englishman appreciated the loyalty and good-will which inspired that action, but the Dominion, according to this view, did not want any return, and Sir Charles Tupper, who had fought the recent elections on that issue, had been signally defeated. "Sir Wilfrid Laurier has held all through that the British Government cannot be expected to give any reciprocal advantage." The only way to do so would be by imposing duties on the rest of the world, and pleasure was expressed that Sir Michael had refused "to palter with that pernicious proposal."

Speaking in the House of Commons on June 20th, the Chancellor of the Exchequer declared that there had been no great improvement in trade between Canada and Great Britain as a result of the Preference. "The Preference still left a protective duty as against the British manufacturer in favour of the Canadian manufacturer, and the result was that although our trade in Canada had largely increased, the trade of the United States with Canada had also largely increased." On the other hand, Mr. W. H. Holland, of York, told the House that since the Preferential treatment was

accorded "he had done considerable business with Canada which was not previously possible." Sir Charles Howard Vincent, M.P., in a letter to the Toronto Globe, on August 1st, also approved of the policy. "Canada has been enabled to take the first practical step in the great movement which will result in giving a preference to all British goods in all British markets. That will never be forgotten by the people of England."

Amongst other matters which came up frequently during the year in connection with the Preference was the claim of the Conservative press that its effect was practically annulled, so far as any beneficial influence upon British trade was concerned, by a manipulation of duties prior to its inauguration. Incidentally to this assertion the London Free Press, of October 31st, gave a table to illustrate the charge that duties had been increased in 1897 upon a variety of British goods in order to meet the coming decrease through the Preferential tariff. The only proof adduced was a list of a number of items which included cutlery, grey unbleached cottons and handkerchiefs and the following:

Various references were made to the subject in public speeches. Speaking on November 6th, as the President of the Canadian Manufactures' Association, at their annual meeting in Montreal, Mr. P. W. Ellis referred to what he thought should be the general character of a Preferential tariff. "The duty of the Government is to legislate first for Canada and for Great Britain afterwards; in other words that the Preference should give the British manufacturer a substantial advantage over his foreign competitor but not over the Canadian; and that when any Canadian industry has suffered, attention should be given promptly and fairly." During an address in Toronto on November 11th, Mr. R. L. Borden, the Conservative Leader, declared that the Preference had not originated in loyalty or devotion to Imperial interests but in a desire to conciliate the warring Free Trade and Protection elements in the Liberal party and Government. At a great party reception, in the same city, to the Hon. William Mulock, on December 18th, Sir Wilfrid Laurier claimed that the Preference had opened wider than ever the open door of the British market and, through the kindly feeling induced, had immensely increased the trade of Canada with Great Britain. "It was the wisest policy ever adopted in this country." As to its origin and objects he also had something to say :

"We brought that policy forward for several purposes. One

purpose was that we wanted it in order to obtain the denunciation of the Belgian and German Treaties, but England would not do it. We gave her the option of choosing between Germany and Belgium and ourselves with what result you know. The second justification of our policy of a Preference to Great Britain is in the fact that it has proved the best measure of tariff reform to the consumer of Canada. We established a system by which we gave relief to the consumers and did not injure the industries."

Sir Charles
Tupper on
Preferential
Trade

During the year this veteran leader in Canadian politics and Imperial policies was interviewed upon a number of occasions in connection with current events and discussions. At Winnipeg, on August 11th, he dealt at length, to the Toronto Mail and Empire correspondent, with the relations of Canada and the United States. He was in England on September 12th and spoke to the London Daily Mail in most emphatic terms: "Preferential tariffs are bound to come. You will soon have a federated South Africa, the Commonwealth of Australia and the Dominion of Canada all pressing you for Preferential tariffs on a reciprocal basis; you will have to give way. Look after yourselves and your own Empire." To the Montreal Gazette, of November 4th, he declared, upon returning to Canada, that public opinion in Great Britain was being rapidly educated in the direction of a Preference; that public men were recognizing the trend of affairs; that the brightest Reviews and newspapers were now favourable; that the pressure of taxation for the war and of $600,000,000 worth of United States goods coming into the country free of duty, in return for heavy American tariffs and a four billion dollar steel trust; were having their effect upon the minds of the people. "Is it then to be wondered at that the idea should work itself into the British mind that instead of making the income and other taxes very burdensome to provide means to carry on the war, revenue should be secured from American and other products-especially when they come to realize that the price of these articles to the British community would not be increased?"

Speaking to the Halifax Mail, on November 7th, Sir Charles made a suggestion along this line for the benefit of Sir Michael Hicks-Beach in connection with his heavy war-debt and taxes. There was one ready means of meeting the difficulty. "This is the imposition of a moderate rate of duty upon the products of all foreign countries which are now sent into Great Britain in competition with, and in many cases seriously damaging, their own manufacturers. The public mind is being turned in this direction and when such a customs duty-a Preferential duty-is applied to foreign countries, leaving the Colonies on a favoured footing, they will find them all ready to do what as yet only Canada has done-give to the Mother Country a Preferential tariff." In Toronto, on November 20th, Sir Charles Tupper told the Mail and Empire that the feeling in England regarding Free trade was rapidly changing. The necessity for widening the basis of taxation in order to meet the war expenses and the desirabilty of helping the

Colonies by reciprocal trade arrangements were the chief causes of this change. He believed the Canadian one-sided Preference had injured the movement in England. "Had the Dominion Government stated that they were prepared to make substantial reductions upon British products coming into this country provided the products of Canada were received upon more favorable terms than those accorded to France, Germany, Russia and the United States, a great incentive would have been given to bring that about." In an interview with the Winnipeg Telegram, on November 26th, he reiterated these views; pointed to the great influx of settlers into the North-West which would follow upon a British duty of even five shillings a quarter upon foreign wheat; expressed the belief that such a policy would provide many more men to fight for the Empire if needed; and declared that no more protective measure had ever been enacted than the exclusion of Canadian live cattle from Great Britain. The burden of British taxation would be lessened, the prosperity of the Colonies increased, the military strength of the Empire greatly enhanced by such a policy.

Parliament

and the

Tariff

The

In the House of Commons on February 27th, a discussion arose upon the question of trade with Italy, Preferential during which Mr. W. F. Maclean declared himself in favour of maximum and minimum figures in the Canadian tariff and as prepared to go even further than this. "I do not believe in one-sided trade even if it is with the Motherland. Preference we have to-day is a preference not given to Great Britain, but given to the manufacturers and workingmen of Great Britain at the expense of manufacturers and workingmen here in Canada. I am against that out and out. I believe that the Conservative party is against it out and out and I believe the Canadian people are against it." He thought a mistake had been made in not asking the Motherland for a preference in return for ours and trusted that when the coming Australian tariff had been formed the Canadian Government would endeavour to effect a preferential arrangement with the new Commonwealth. The Minister of the Interior-Mr. Clifford Sifton-followed and assumed, with every evidence of pleasure in his words, that Mr. Maclean had at last expressed the policy of the Conservative party regarding the Preferential tariff. The Government intended, however, to stand by it. "We go a little further and we say that it is the policy of the Liberal party of Canada to reduce the duties, and to remove, to some extent, the burdens of the excessive tariff which was imposed upon imported goods by the late Conservative Government."

On March 6th, in the House of Commons, Mr. E. F. Clarke asked the Government a series of questions regarding the operation of the Preferential clause in the tariff-particularly as it had affected goods of foreign origin coming into Canada via the United Kingdom. The Minister of Customs (Mr. Paterson) stated that "under the regulations and practice governing the Preferential tariff, manufactured goods, entitled to be admitted under such tariff, must be finally manufactured

in Great Britain, or her Colonies and Possessions entitled to the Preference, and there must have entered into the production of such articles British labour to the extent of at least 25 per cent. of the value of the articles in each case." Exporters of such articles to Canada were required to sign a declaration assuring these conditions. There was no record, the Minister added, of the amount of foreign material entering into the composition of these articles, nor of the countries from which the material came. Quite a number of manufactured articles imported under the Preference are, of course, entirely British, both in respect to material and workmanship." On March 11th Mr. Clarke returned to this subject by asking the Minister as to what proportion of goods coming in under the Preference had a certificate of origin attached. Mr. Paterson replied that a separate invoice was required with these articles, and in the certificate prescribed to accompany the invoice the exporter certified that all the articles included were bona fide produce or manufactures of the country named and entitled to share in the Preference, and that a substantial portion of the labour of such country had entered into the production of each article, to the extent of not less than one-fourth of the value of every such article in its present condition as ready for export to Canada.

Mr. Fielding, Minister of Finance, referred to this matter at some length during his Budget speech, on March 14th. It was, he stated, a subject for investigation and inquiry. "It was no part of our intention to extend the benefit of the Preferential tariff to foreign nations. But, of course, we have to remember that Great Britain imports great quantities of raw material, and articles in the first process of manufacture, and improves or finishes them." To make the tariff applicable only to goods of complete British origin would be to practically repeal it. He went on to say that if any evasions could be proved, the Government would be glad, as they had every desire to have the tariff carried out in good faith. Upon the details of the present arrangement of 25 per cent. being British in manufacture, he was open to conviction. Mr. E. B. Osler, in his criticism of the Budget, took strong exception to the existing arrangement. The Government, he declared, admitted German, Belgian, or Italian goods, the produce of cheap labour competing with Canadian labour, upon the sole condition that it should come via Great Britain and have 25 per cent. of British labour added to it. "Then the whole amount, of which threefourths is made by foreign cheap labour, comes into this country under a preference of 33 per cent." In reality the whole plan worked out so as to give cheap foreign goods a much greater advantage than was given to British manufactures.

Mr. Clancy argued that under this Preferential tariff the trade of foreign countries with Canada had increased, in proportion, much beyond the trade of Great Britain with Canada, and he gave the figures of percentage increases between 1896 and 1900 as an illustration. The exports to Belgium had grown 1121 per cent.; to Italy, 359 per cent.; to Portugal, 176 per cent.; to France, 136 per cent.; to Germany, 126 per cent.; to Great Britain, 61 per cent. Upon the