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therefore, had peculiar significance, and of all his friendly words none touched the Canadian more than those in which he said, “the bugaboo of annexation having become extinct long ago ...... let us go our own gait along parallel roads: you helping us and we helping you."

In accounting for the change the remarkable economic development of both countries during the last generation must not be overlooked. The United States has grown to be the richest and most powerful nation in the world. No longer is she sensitive lest she do not get recognition, nor does she desire to extend her imperial obligations. She does not challenge the place of the British Commonwealth in the world; in fact she is being criticized for having fastened her gaze so completely upon her own domestic interests. Moreover, Canada has made a success of her great experiment; she has even assumed a place in the world's Council Chamber, where the United States has so far refused to take a seat, and, as we proceed to show, has thriven commercially. The Ship of State is not drifting on the tide, to be cast helplessly upon her neighbour's shores, but is directing her own course as one of a fleet of vessels keeping together on a great expedition.

CHAPTER V

Trade and Commerce

URING the latter part of the nineteenth century

themselves in a very difficult position by reason of their contiguity to a large and prosperous nation. They were thinly settled and poor. With no great cities to supply markets for their farmers they had to seek foreign outlets for their natural products; in winter only two of their ports were open, Halifax and St John, and these were so distant from the centre of population that the upper provinces conducted most of their trade, while the St Lawrence was closed, through the ports of Portland and Boston. The United States, however, their advantageously placed neighbour, was continuously settled, a full stream of immigration was pouring in, cities were rapidly building and her abundant resources and varieties of climate were such that the needs and supplies of the sections of the country were complementary to one another; and her markets she kept to herself. But the Americans also sought foreign markets for their trade, most of which consisted of natural products similar to those of Canada, and they shipped all the year round from their ports. Whatever wealth Canada earned in the

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last century was in competition with a rival so much better situated than herself that she had time and again a hard struggle for her existence. It cannot be said that the United States was ever generous to her in trade; Canada has always taken far more from her than she sent to her, and would not have been able to make such heavy purchases had not Great Britain been a large importer of the products of the Dominion. We do not need, however, to discover any very unneighbourly frame of mind towards Canada in the protectionism of the United States; it was a policy that nearly all other countries but England had adopted; and the nation was still young and had not acquired the quiet assurance that comes with years and hereditary wealth. But Canada wished to trade with the United States, though she found her very unyielding. Why should not her provinces be as prosperous as New York, or at least as Ohio or New England? Why was business so much duller on the one side of the line than on the other? These questions, when put in hard times, brought the suggestion: Shall we secure this prosperity by compromising our independence? It was a severe temptation for Canada when she saw thousands of her best young men and women crossing the border in the hope of employment at higher wages than they could get at home. Within sight was a land of prosperity while her own trade and agriculture were languishing. But often as

the temptation has come Canada has averted her eyes, bowed her head and knit her muscles to resume her own self-appointed task. The words of the Hon. A. T. Galt, in his Budget Speech of 1866, might have been spoken in almost any year since then:

It is desirable, and indeed our manifest duty, to show (the Americans) not in a spirit of hostility, but certainly in that of independence, that while we value their friendship and value their trade, we will not conform to unreasonable terms and will not have either our commercial policy or our political allegiance dictated to us by any foreign country'.

Apart from the Atlantic Fisheries, hardly any trade question can be said to have existed between the British provinces and the United States until the introduction of Free Trade into England on the abolition of the Corn Laws in 1846 led to great dislocation in Canadian commerce. From the earliest days both the Maritime provinces and Canada had been too dependent upon Great Britian. Unlike the United States, they felt that in her they had one upon whom they had a claim, and this assumption had reduced their initiative. They were still in the colonial stage. After long negotiations the English government had agreed to admit wheat and flour exported from Canadian

ports into the home market at the nominal price of one shilling a quarter, while at the same time

Quoted by J. S. Willison, in Sir Wilfrid Laurier and the Liberal Party, II, p. 77.

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the Canadian legislature placed a duty on American wheat to prevent it from being shipped to England along their waterways and becoming a competitor. American wheat, however, was admitted free when imported to be turned into flour in Canada. This led to an almost mushroom growth of the milling industry in the years immediately preceding 1846. From 1840 onwards the waterways, especially the St Lawrence and the Welland canals, had been opened up at enormous expense to the colonies in the hope that the grain of Upper Canada, and even of the western states as flour, would find its

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preferential market of Great Britain more cheaply than by the Erie canal, which along with the American railways had taken away much of the trade that had hitherto

down the St Lawrence. Montreal was building itself on the hope of becoming a great emporium for wheat and flour. To its consternation the Corn Laws and all preferences were repealed in 1846. The disappearance of preferential duties on timber added to the outcry from Halifax to Ottawa, though Canada's supplies in quality and quantity gave her still a great advantage over the United States. To add to the grievances the historic Navigation Laws which confined British trade to British owned and manned vessels were repealed in 1849. The Home government recognized that if they removed preferential duties with the one hand they

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