even under normal conditions, but the ordinary protection against British imports is offset largely today by the premium which the overseas seller realizes on converting Canadian money into British currency. Canáda is still collecting customs duties on the basis of the par value of British and foreign currencies, and in this fact lies some small protection to the Canadian manufacturer against depreciated exchange. Nevertheless, Europe's net advantage is considerable in exporting to Canada, as is the case also with European exports to the United States.

In an effort to escape the burden of exchange in buying in the United States, the Canadian farmers' demands for a lowering of the protective tariff against British imports are gaining considerable support in other circles and to some extent by persons who should know better. It is not generally realized that, as Canadian overseas buying is practically financed through New York, all imports operate to enhance the exchange discount on Canadian funds in the United States. The problem of overcoming exchange cannot be solved except by reducing all imports: diversion of trade from the United States to Great Britain would help to improve British exchange, but unless there be an absolute reduction in Canada's trade balance with all countries, Canadian exchange will not be rectified. Indeed, it is only national sentiment that is blinding Canada to the growing menace from British manufacturers, produced by labor even yet receiving much less than is paid in this country, and under such conditions as to per

mit large scale and standardized output.1?

CANADA'S BOOT AND SHOE INDUSTRY. The Canadian boot and shoe industry, which is now seeking to consolidate the advances made, and the home market patronage gained during the war, is a product of the National Policy inaugurated in 1879. From Confederation in 1867 until 1874 the duty on imported boots and shoes was only 15 per cent, and considerable quantities were brought across the border and sold in the Maritime Provinces and in Upper and Lower Canada (now the Provinces of Ontario and Quebec). In 1874 the duty was increased to 17 1-2 per cent and, in the National Policy tariff of 1879, to 25 per cent.

The development of the manufacture in Canada of fine shoes dates from 1880-85. Previously the industry had been largely a hand trade, but now machinery began to be imported and the Canadian shoemakers made regular pilgrimages to the shoe centres in the United States to study styles and processes of production. Canadian manufacturers offered a well-made product with splendid wearing qualities, but imports both from the United States and the United Kingdom continued to increase. Institution of the British preferential rate in 1898 at 1-4 off the general customs duty of 25 per cent and increase of that preference in 1900 to 1-3 was followed by a marked gain in imports from the British Isles. This gain became even more notable when, about 1906 or 1907, the British manufacturers adopted American lasts.

Meanwhile, too, imports from the United States continued to grow. From a value of $233,452 in 1890, they increased to $529,281 in 1900, and to $1,107,100 in 1905. Although the bulk of the trade went to domestic manufacturers, the high grade demand was for imported shoes, due largely to the factory specialization in the United States, the availability of the United States product in all widths, and the somewhat superior finish of imported footwear. In the tariff revision of 1906-07, the manufacturers were granted a small concession, when the boot and shoe tariff was divided into two sections. The duty on boots and shoes, pegged or wire fastened, with unstitched soles, close edged was left at 25 per cent, with a British preferential rate of 17 1-2 per cent; but on all others the duty was increased to 30 per cent, with a British preferential rate of 20 per cent. The advance was so slight that there was no effect immediately apparent in the trade returns. Nevertheless, a few years later there was a marked improvement in the character of Canadian-made boots for men, and before the war imports of men's boots had commenced to decline. Moreover, there has been a needed development during the last ten years in the production of various widths in men's and women's shoes. War revenue requirements were responsible for the imposition of the special additional war tax of 5 per cent on all imports under the British preferential schedule, and 7 1-2 per cent under the general schedule. British imports fell off sharply, while the influx of United States boots and shoes was

checked. The special war tax was withdrawn early last summer, but the exchange premium on United States funds has operated much as a protective tariff. Imports of British boots and shoes in the fiscal year 1918-19 represented a value 3.31 times as great as in the preceding year, while imports from the United States were only 66.9 per cent as large in number of pairs and 78.4 per cent as valuable as in the preceding year.

The Canadian leather boot and shoe industry last year produced between fifteen and seventeen million pairs, valued at approximately $50,000,000 and now supplies 95 per cent of the requirements of the home market. During most of the war period and since, exports of Canadian-made boots and shoes have exceeded imports in value.

Boot and shoe manufacturing in the Dominion is probably entitled to be called "the most Canadian" industry, by reason of the absence of foreign control. It gives employment to some 14,000 persons with an annual wages and salaries bill of close to $10,000,000, and provides a market for the products of other industries (mostly Canadian materials) to the value of at least $28,000,000. During the war the boot and shoe factories in Canada supplied to the Canadian Government some 3,000,000 pairs of army boots and considerable quantities of other footwear, at prices much lower than those available elsewhere. In fact, the manufacturers' profits averaged only a few cents per pair, and some of the makers actually lost money on the government contracts.

Moreover, the industry has contributed to a large aggregate amount in taxation and in support of national, patriotic and municipal projects. No one who studies the facts can doubt that in this case at least the National Policy has been justified by raising up a creditable industry, which is an asset to the Dominion.

GROWTH OF ALLIED INDUSTRIES. Development of the boot and shoe industry has stimulated co-ordinate expansion in other manufacturing lines.

Formerly much of the raw and semi-manufactured materials had to be imported, but today the only imported supplies entering into the production of the highest grade Canadian-made calf shoes are the shank, eyelets, thread and, perhaps, a few materials such as shellac. Much of the glazed kid for fine shoes is still imported, but some is being manufactured in the Province of Quebec, and the capacity of existing plants is being enlarged. A tannery at London, Ontario, will be ready for the production of fine glazed kid by late spring or early summer. Still another Ontario tannery now producing sole leather is branching out in the manufacture of upper leathers. Much of the machinery employed in the boot and shoe industry is now being manufactured in Montreal, and a progressive development may be expected in this connection. Manufacture of boot and shoe findings in Canada is another industry which cannot long be delayed.

And what has been the cost of this development to the Canadian people? Prices of footwear in Canada under normal conditions admittedly are a

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little higher than in the United States or in Great Britain where great industries have been established-by protective policies-and where the economics of standardization and specialization have been made possible. Machinery costs in Canada are greater than in countries which have reached a higher degree of industrial development. Glazed kid has to be imported to a very considerable extent and duty paid on it at the rate of 15 per cent. Cotton for linings costs. more in Canada than in Great Britain or the United States, while findings and sundries still are imported.. Expenses of marketing are much higher in Canada. Nevertheless, the charge from the West that Canadian. manufacturers base their prices on foreign prices plus duty cannot be substantiated in the history of the boot and shoe industry. Competition has been exceedingly keen within the tariff wall, and profits have been moderate and even meagre. There is not a single millionaire in the industry. In proportion to national benefits derived, the national cost has been. exceedingly light. Moreover, the benefits will continue long after the cost has been paid in full.

AGRARIANS AND FREE TRADE.

Despite statements of extremists. there is no important element in Canada advocating free trade. The agrarian movement, which is partly po-litical, contemplates tariff reductions,. but the farmers' leaders in the Dominion Parliament and all responsiblenewspapers admit that some measure of protection must be retained. An embargo on luxury imports, in order to correct the trade situation and rec-

able to public utilities, except railroads, for which, the report explains, Congress has provided by legislation; and machinery is provided also for the prompt and fair adjustment of wages and working conditions of Government employes, "who should not be permitted to strike." The plan involves no penalties other than those imposed by public opinion, it does not impose compulsory arbitration, it does not deny the right to strike, and it does not submit to arbitration the policy of the "closed" or "open" shop, although under certain circumstances even this issue may be considered by an umpire. As described by the report, "the plan is national in scope and operation, yet it is decentralized, and is different from anything in operation elsewhere; it is based upon American experience and is designed to meet American conditions. It employs no legal authority except the right of inquiry. Its basic idea is stimulation to settlement of differences by the parties in conflict and the enlistment of public opinion toward enforcing that method of settlement."

COLLECTIVE BARGAINING FAVORED.

The report will be scanned with especial interest for its treatment, if any, of the issue presented by the labor union. Upon this point it is set forth simply that the system of employe representation is operating successfully in union, non-union, and mixed plants. To collective bargaining it adds an agency of co-operation within the plant, and it is in itself an agency of collective bargaining and co-operation where union agreements do not obtain. The hesitancy of

union labor to endorse shop organization is due in part to occasional misuse of the system and partly to a misconception of the possible and desirable relations between the union and the shop committee. That the two work harmoniously together has been proved beyond dispute when the organization is for the proper purpose. Upon this point the Conference makes the candid and practical admission that "it is idle wholly to deny the existence of conflicting interests between employers and employes.' But, it is suggested, there are wide areas where their interests coincide, "and it is the part of statesmanship to organize identity of interest where it exists, in order to reduce the area of conflict." The Conference frankly favors collective bargaining and says that on the question of policy the principal difference relates to the machinery through which the collective bargaining is carried out. No attempt is made to indicate a preference as to the method, whether through unions. through unions or otherwise; but with respect to the obligation to carry out a bargain when made, the report declares that collective bargaining does not lend itself readily to legal enforcement, and for the present enforcement must rest substantially upon good faith.

MANY SUBJECTS COVERED.

The report condemns child labor, declares that women in industry should receive equal pay for equal work, and while indicating the advantages of reasonably uniform hours, cautions against a working time so brief as materially to limit produc