CHAPTER XVIII

RECIPROCITY WITH CANADA

The Treaty of 1854; It Provides for Free Trade with Canada on Natural Products-It Is Repealed by Congress in 1866; Debate in the House, in Favor of Repeal, Justin S. Morrill [Vt.], Frederick A. Pike [Me.]; opposed, Elijah Ward [N. Y.]-Reciprocity Provisions Are Embodied in Various Tariff Bills-President William H. Taft Negotiates a Reciprocity Treaty in 1911-Samuel W. McCall [Mass.] Introduces in the House from the Committee on Ways and Means a Bill "To Promote Reciprocal Trade Relations with the Dominion of Canada"Report of the Minority of the Committee-Robert F. Broussard [La.] Presents Separate Report in Opposition to the Bill-Debate on the Bill: in Favor, Ebenezer J. Hill [Conn.], Oscar W. Underwood [Ala.], Champ Clark [Mo.], Mr. McCall, Isaac R. Sherwood [0.]; Opposed, Eben W. Martin [S. D.], George W. Norris [Neb.], J. Hampton Moore [Pa.], George W. Prince [Ill.], Andrew J. Volstead [Minn.], John Dalzell [Pa.], Gen. J. Warren Keifer [0.]-Bill Is Amended and Passed by House-It Fails to Come to a Vote in the Senate-The President Calls a Special Session of Congress-Mr. Underwood Reintroduces the Bill in the House and also a "Farmer's Free List Bill"-Debate on the General Reciprocity Measure: in Favor, Paul Howland [0.], Mr. Hill, Mr. McCall, Mr. Underwood; Opposed, Asher C. Hinds [Me.], Joseph W. Fordney [Mich.], Mr. Dalzell-Bill Is Passed by House It Is Passed by Senate and Approved by the President-"Farmer's Free-List Bill' Is Passed by House and Senate-It Is Vetoed by the PresidentHouse Sustains Veto-Treaty for Reciprocity Is Rejected by CanadaCanadian Debate on Reciprocity: in Favor, W. S. Fielding, Ralph Smith, Sydney Fisher: Opposed, Z. A. Lash, T. Chase Casgrain, Prof. Stephen Leacock, Clifford Sifton.

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S early as 1848 a bill proposing reciprocity with Canada passed the House of Representatives. It was defeated in the Senate, however, because of the uncertainty then prevailing as to Canada's attitude toward American shipping on the St. Lawrence.

In 1853 Congress passed a resolution authorizing the President to arrange reciprocity by means of a treaty. On June 5 of the following year a treaty was signed by representatives of the two governments, and was subse

quently validated by the national legislatures. It became a law by the signature of President Franklin Pierce on August 5.

This treaty provided for free interchange of natural products, settled the question of fisheries, and fixed the rights of navigation on the St. Lawrence.

In May, 1864, a joint resolution was introduced in the House of Representatives from the Committee on Commerce, authorizing President Lincoln to give notice for terminating the treaty, and negotiating a new one "based on the true principles of reciprocity."

Justin S. Morrill [Vt.] moved as an amendment to the bill that the Government simply give notice of the termination of the treaty.

Frederick A. Pike [Me.] supported the amendment. He was opposed to the renewal of the treaty on any terms. He said the old treaty operated adversely to our fishing interests, brought the balance of trade in favor of Canada, and caused a serious loss of revenue. He said:

Of course, if the treaty has failed in the respects I have mentioned, it must be regarded as a business failure. If our total exports have lessened since it went into operation, and particularly if our export of manufactured articles has diminished, and if in the meantime our commerce has not been benefited by additional employment, if the large fishing interest is anxious to put an end to this arrangement because of the detriment it receives from it, and if the revenue suffers greatly by its continuance, then I say as a commercial arrangement it has not answered the expectations which gave it existence, and it should be abrogated.

Elijah Ward [N. Y.] spoke in favor of a continuation of the treaty. He quoted statistics to show that, during the operation of the treaty, the excess of our exports to the Canadian provinces ($171,628,779) over imports therefrom ($144,183,096) was $26,445,683.

He continued:

It is argued that the treaty has deprived us of revenue. During the last year the imports and exports between the

United States and Canada of articles free under the treaty were nearly equal. If we levy duties on their productions they may do the same on ours. This principle is a two-edged

Or they may admit our products free of duty as they did before the treaty, and thus be the carriers of a considerable portion of our produce as well as of their own. When a revenue was paid to our Government on Canadian productions the provincial railroads and means of communication were imperfect and its population was comparatively scanty. By renewing the duties we shall drive away the trade and render our people less able to pay taxes. The utmost amount of revenue the Government can derive from duties on colonial productions is inconsiderable compared with the loss of commerce we shall sustain, and the consequent loss of employment to the laborer and profit to the merchant or capitalist.

By a vote of 77 yeas to 72 nays the bill was postponed until the next session.

During the next session Congress repealed the exist ing treaty, the House voting against it on December 13, 1863, by a vote of 85 yeas to 57 nays, and the Senate voting against it on January 12, 1865, by 33 yeas to 8 nays. The treaty expired during 1866.

Following the repeal of the treaty no legislation on the question of reciprocity with Canada was enacted until 1890, when, as we have seen in the debate on the McKinley tariff bill, certain provisions for reciprocity on a limited number of articles were adopted. Similar provisions were incorporated in the Dingley bill (1897) and the Payne-Aldrich bill (1909).

President William H. Taft in his second annual message, December 6, 1910, referred to the question of reciprocity with Canada as follows:

The policy of broader and closer trade relations with the Dominion of Canada, which was initiated in the adjustment of the maximum and minimum provisions of the tariff act of August, 1909, has proved mutually beneficial. It justifies further efforts for the readjustment of the commercial relations of the two countries so that their commerce may follow the channels natural to contiguous countries and be commensurate with the steady expansion of trade and industry on both sides

of the boundary line. The reciprocation on the part of the Dominion Government of the sentiment which was expressed by this Government was followed in October by the suggestion that it would be glad to have the negotiations, which had been temporarily suspended during the summer, resumed. In accordance with this suggestion the Secretary of State, by my direction, dispatched two representatives of the Department of State as special commissioners to Ottawa to confer with representatives of the Dominion Government. They were authorized to take such steps for formulating a reciprocal trade agreement as might be necessary and to receive and consider any propositions which the Dominion Government might care to submit.

Pursuant to the instructions issued, conferences were held by these commissioners with officials of the Dominion Government at Ottawa in the early part of November.

The negotiations were conducted on both sides in a spirit of mutual accommodation. The discussion of the common commercial interests of the two countries had for its object a satisfactory basis for a trade arrangement which offers the prospect of a freer interchange for the products of the United States and of Canada. The conferences were adjourned to be resumed in Washington in January, when it is hoped that the aspiration of both Governments for a mutually advantageous measure of reciprocity will be realized.

On January 26, 1911, the President sent a special message to Congress, in which he noted the success of the negotiations.

On the 7th of the present month two cabinet ministers1 came to Washington as representatives of the Dominion Government, and the conferences were continued between them and the Secretary of State. The result of the negotiations was that on the 21st instant a reciprocal trade agreement was reached, the text of which is herewith transmitted with accompanying correspondence and other data.

In accordance with the plans of the administration Samuel W. McCall [Mass.], on January 28, introduced in the House a bill "to promote reciprocal trade relations with the Dominion of Canada. It was referred to the Committee on Ways and Means.

'See speech of W. S. Fielding, one of the Canadian negotiators of the treaty, on p. 457.

'Philander C. Knox.

Early in February the bill was reported back with amendments. The report of the minority of the committee was filed by John Dalzell [Pa.]. It said in part:

The minority of the Committee on Ways and Means regret that the bill has been prosecuted by its advocates with such undue and precipitate haste that many of its features remain obscure and without explanation.

Up to the time when the President's message informed Congress that he had entered into a trade agreement with Canada, the House of Representatives-where all "bills raising revenue" must originate under the Constitution-knew nothing about it. It is safe to say that no member of Congress had been consulted as to it or its terms.

By the terms of the bill four general classes of products are affected:

First. Leading food and agricultural products, rough lumber, some raw materials, and printing paper. These are put on the free list.

Second. Secondary food products, such as fresh and canned meats, flours, and partly manufactured food preparations, upon which rates are reduced and made identical.

Third. Manufactured commodities, such as motor vehicles, cutlery, sanitary fixtures, and miscellaneous articles, on which rates are mutually reduced.

Fourth. A small list of articles on which special rates are given by each country. Canada reduces the duty on coal and cement, and the United States reduces the duty on iron ore and aluminum products.

The bill revises our tariff law in part, involves millions of the national revenue, involves also our commercial relations with other nations, and comes to us to be voted on after a week's deliberation.

We protest against its passage for the following, among other, reasons:

(1) It renews a trade agreement with Canada similar to one that heretofore existed from 1854 to 1866, and the operation of which proved disastrous to the United States.

As a business proposition it is wholly indefensible. Advantages under it will accrue to Canada without any corresponding advantages to the United States. It is uncalled for by any great body of our people.

(2) It is un-Republican. It proposes reciprocity in com