extensive scale and will increasingly make her less dependent for fuel upon her neighbour, while in the West and in Nova Scotia her coal-fields are of almost limitless extent.

As we have seen, the United States takes from Canada more than any other country, and Canada is her second-best customer. So close, in fact, is the relation in trade between these two countries, that a recent commerce report of the United States Department of Commerce (November 3, 1924) states:

Economically and socially Canada may be considered as a northern extension of the United States, and our trade with Canada is in many respects more like domestic trade than our foreign trade with other countries. The movement of industrial raw materials from Canada into the United States and the return flow of a miscellaneous assortment of partly or wholly manufactured goods is not unlike a similar flow between the west and south, and the more industrialized north-eastern part of the United States.

The first words of this quotation would not be accepted by a Canadian as expressing the truth, for the American continues to exclude his neighbour as far as he may from his markets by an ever-rising tariff. The American farmer is afraid of his neighbour's wheat, other field products and cattle; and no wonder, for in the Chicago contests the Canadian has more than held his own for quality of production; but the American miller must get the wheat because it is required to make the best American flour. The price,

however, is now determined by the world at large and he must compete for Canadian grain as those from other countries do. The rapidly growing centres of industry in the United States with aggregations of population will, before long, take increasing quantities of food from Canada; they now absorb Canadian paper, pulp, lumber, furs, fish, asbestos and nickel, and in time much of these exports will take the form of manufactured or semi-manufactured materials. The Dominion is no longer a series of depressed provinces bargaining for markets with a powerful neighbour, but has become a world trader; and the American, ever quick to recognize material success, is realizing that he must accept the Canadian as a worthy rival in the world's commerce.

Notwithstanding this rapid growth in production and in wealth, mutterings of alarm have quite recently been heard in some eastern manufacturing centres lest the American is getting such a grip upon the Dominion that in a few decades by means of peaceful penetration Canada will be Americanized. This is merely another form of the old cry of Goldwin Smith as to manifest destiny. Even those Americans who under protection have established branch institutions in Canada have nothing to gain by annexation.

In considering economic relations between these two countries, several facts must be borne in mind. The most acute problems of Canada to-day arise from

the different needs of the widely separated parts of the Dominion. Ontario and Quebec are not merely great agricultural provinces but have become highly industrialized. The cities and towns depend upon manufacturing, and their ambitions lead them to expect stabilization and extension of present conditions. But manufacturers are excluded from the American markets for most of their finished products and therefore they wish to retain the trade of the whole Dominion. Even if they had free access to the United States they might be at a disadvantage owing to their distance from the coal-fields, though Canadian goods are winning their way in the wider markets of the world. Therefore they will continue to demand a protective tariff, and in this they will be supported by the great railway systems and by governments which have to finance the national debt. On the other hand both the Maritime provinces and the West would like freer access to the United States in order to sell and purchase in the larger and nearer market. There is much restlessness in these sections of the Dominion, partly due to a feeling that Ontario and Quebec are treating them unfairly, partly also to geographical situations difficult to ameliorate. To resolve these divergent interests constitutes one of the greatest problems for Canadian statesmanship. Whether even with growing friendliness and also the desire to get a share of the developing wealth of the

Dominion the United States will make any offer such as the manufacturing centres would accept and as would meet the demands of East and West is very doubtful. It may, however, be assumed with confidence that the Dominion will hold together and her economic policies be shaped to suit the will of her people; also that she will become more capable of holding her own in competition.

The standard of living of the average man in the United States has risen very rapidly by reason of the great prosperity of the War period and the succeeding years, and it is very difficult for the Canadian to keep up with the pace of his neighbour. In this respect evil communications are corrupting good manners; but it may be that the Canadian will find it necessary to live more simply and to be content with less. He has much heavier war taxation to bear and much less accumulated wealth to invest. His problem is to afford a reasonably comfortable living at home for those who will not abandon their inheritance unless the economic sacrifice involved in remaining proves too great.

Another fact is obvious to any person who knows his country's history: it has gone through two periods of much worse depression than exists at present. There is really no comparison between 1924 and 1849 or even the eighties; but in those years the people would not give ear to the charmers who

wished to lead them to the rich pastures of the South; and there is no reason to think that they would do so now. The common people of the provinces have always acted on their deepest instincts of loyalty to their own country as part of the Empire; these political convictions go very deep, and Canadian individuality is a more real power than ever. Acquainted with their own past and reassured by what they accomplished during the War, most Canadians believe that the character of the people, the resources of the country and a growing immigration ensure a brighter future.