ican fishermen desert their own fishing grounds and fish in American waters. In return for the right given Americans to navigate the river St. Lawrence and the Canadian Canals, the Canadians were given the right to navigate Lake Michigan with their vessels. The United States government also agreed to urge upon the State governments that they permit the Canadians to use their State canals on terms of equality with the American.1 This latter privilege, however, was never accorded to Canadians.

In 1855 the treaty was carried into effect by acts passed by Congress, and by the Legislatures of the United Kingdom, Canada, Prince Edward Island, New Brunswick, Nova Scotia, and Newfoundland. In spite of its ratification by their legislatures, the Reciprocity Treaty of 1854 was never popular in the Maritime provinces, and especially was this true of Nova Scotia, whose people did not think they had been sufficiently consulted." There followed, however, an era of prosperity for both countries which would appear to be largely the result of the Reciprocity Treaty. The Americans had "a balance of trade in their favor" amounting to twenty millions according to United States returns, and ninety millions according to provincial returns.3

The people of the western states were now given a choice between two natural trade routes, the Great Lakes and the St. Lawrence, and the Erie Canal and the Hudson. The Canadian Government sought to induce the Americans to use the Canadian route by the offer of a refund of 90 per cent to those vessels which had paid tolls for the use of the Welland Canal upon their entrance to the St. Lawrence.

1O. D. Skelton, The Life and Times of Sir Alexander Tilloch Galt, p. 292.

A. H. U. Colquhoun, Chronicles of Canada, vol. xxviii, "The Fathers of Confederation,” p. 14.

3 O. D. Skelton, The Life and Times of Sir A. T. Galt, p. 295.

The American Government claimed that this was unfair discrimination in favor of the Canadian route, and was in direct violation of the treaty.

At the time of its passage the Canadian tariff was moderate, but within five years there was a rapid growth of protectionist sentiment. The United States complained that Canada, the sole offender among the British North American possessions, by the adoption of a protective tariff on manufactured goods had violated the treaty. In his defence of the imposition of higher rates on manufactured goods, Galt, finance minister of Canada, claimed that they were absolutely necessary in order to meet the heavy expenditure of the provinces, and were levied to aid Canada, not to injure the United States; moreover there could be no violation of the treaty, since in it there had been no mention of manufactured goods, and the United States had insisted upon a strict interpretation. With regard to the charge that discrimination was involved in the change from the specific to the ad valorem basis of levy duties, he claimed that

the change made in 1859 was merely a reversion to the basis which existed when the treaty first went into force, and contended that it merely put Montreal on a level with New York instead of being discriminated against as formerly. The provision for refunding canal tolls, further, gave an advantage to the Canadian route, indeed, but left United States and Canadian vessels on an equality, and it was equality as to vessels that the treaty prescribed. Moreover, the United States had not carried out nor tried to carry out, the treaty provision of urging the separate states to open their canals to Canadian vessels; until they did and until they abolished the tolls, they had no standing in court.1

The few newspaper comments in British North America on the election of Buchanan as president in 1856, seemed to

1

1 Ibid., pp. 297, 298, Despatch of Galt, March, 1862, to Privy Council.

indicate that the people of British North America generally regarded his election as favorable to the further extension of trade between the two countries, since the Democrats had declared themselves opposed to a protective tariff. There was, however, the prevalent feeling in British America that the Southern Democrats who had been instrumental in securing its passage had approved the Reciprocity Treaty for a political, not a commercial reason, and therefore might sacrifice their traditional trade policy of low tariff for the same reason.1 Both the Liberal and Conservative press in the fifties favored a policy of reciprocity with the United States. No Canadian administration, either Liberal or Conservative, was willing to admit the principle of direct protection. To the charge of the Globe that the Canadian Government controlled by the Conservatives in 1858 had adopted the policy of protection favored by the manufacturers, and opposed by the farmers, the Leader, a Conservative newspaper of Canada West, replied that the higher Canadian tariff was necessary to meet the increased governmental expenditure on public works, and was in no sense an imitation of the preferential tariff of the United States. In referring to the appointment of Mr. Hatch by the United States government to investigate the alleged violations of the Reciprocity Treaty, the Leader contended that before no impartial tribunal could Canada be found guilty. No narrow interpretation of the treaty such as the Americans had shown in the imposition of consular fees which amounted to a tax, had been permitted by the Canadian government.*

3

The Reciprocity Treaty of 1854 was ratified at a time when the free-traders of both countries were in the ascen

1 The Pilot, December 3, 1856.

2 The Globe, November 12, 1858. The Leader, November 19, 1858. Ibid.

dant. Soon there followed a reaction in both countries in favor of protection. The absence of the Southern Senators from Congress on the secession of the Southern States largely accounted for the change of official sentiment in the United States. As the Globe, July 22, 1861, truly remarked: "The Reciprocity Treaty was carried and has since been maintained by the influence of Southern statesmen, who believed that it would be a means of preventing the annexation of Canada to the Republic, a thing which they dreaded, and foolishly enough, thought likely to happen.”

Protectionist sentiment was increasing in both countries. In Canada, it was said, the tariff of 1859, and the tariff of 1858, of which it was an enlargement and expansion, were the first ever framed in this country for the avowed purpose of developing home manufactures, and in obedience to a popular demand." 1 The Canadian Government was very far indeed from accepting the protectionist principles advocated in a protectionist convention in Toronto, held in the spring of 1858 when it was apparent that some changes in the tariff were necessary. The Canadian Ministry resolutely refused to admit the principle of direct protection, and the principal opposition to the changes introduced in the tariff had its origin within the ranks of the protectionists. The refusal of Galt to recognize direct protection, and his adoption of a revenue tariff arranged with the various interests of the country in mind was a keen disappointment to the protectionists. To the Sheffield Chamber of Commerce, which believed that Canada should adopt the freetrade policy of Great Britain, the colony appeared to have

Compiled by John Maclean, The Tariff Hand-book showing the Canadian Customs Tariff, with the various changes made during the last thirty years, also the British and American Tariffs in Full and the more important portions of the Tariffs of France, Germany, Holland, Belgium, Italy and Switzerland, all taken from the best authorities, p. 52.

entered on a protectionist trade policy, while to the Canadian protectionist, the course was ruinous free trade.

An "Association for the Organization of Canadian Industry" had been organized in Toronto in 1858. This association included in its membership many of the influential manufacturers of Canada. They made certain formal demands on the Canadian Government for increased duties on manufactured goods. Galt, who was then finance minister of Canada, realized the need of increased revenue and therefore complied with the wishes of the manufacturers. The explanation of the tariff of 1859 may be found in Galt's own words:

The fiscal policy of Canada has invariably been governed by considerations of the amount of revenue required. It is no doubt true that a large and influential party exists, who advocate a protective policy; but this policy has not been adopted by either the Government or Legislature, although the necessity of increased taxation for the purpose of revenue has, to a certain extent, compelled action in partial unison with their views, and has caused more attention to be given to the proper adjustment of the duties, so as neither unduly to stimulate nor depress the few branches of manufacture which exist in Canada. The policy of the present Government in readjusting the tariff has been, in the first place, to obtain sufficient revenue for the public wants; and, secondly, to do so in such a manner as would most fairly distribute the additional burdens upon the different classes of the community; and it will undoubtedly be a subject of gratification to the Government if they find that the duties absolutely required to meet their engagements should incidentally benefit and encourage the production, in the country, of many of those articles which we now import. The Government have no expectation that the moderate duties imposed by Canada can produce any considerable development of manufacturing industry; the utmost that is likely to arise is the establishment of works requiring comparatively unskilled labor, or of those competing with American makers, for the production of goods which