Reciprocity With Canada

I

THERE is in all history no better illustration of the advantage, to all concerned, of free and unrestricted trade over a large area of country than that presented by the growth in population and in wealth of the United States within the last century, and especially within the last fifty years. Including the territory west of the Mississippi River, which barely one hundred years ago was foreign soil, and Alaska, which less than fifty years ago was foreign soil, the United States covers an area of 3,500,000 square miles, of which 500,000 square miles are in Alaska. At the beginning of the nineteenth century it contained a population of 5,300,000, which had grown in the first fifty years to upwards of 23,000,000, and at the end of the century to upwards of 75,000,000, and which now numbers about 92,000,000.

For the first fifty years of the century the increase in population and in wealth was comparatively slow, for the reason that transportation of heavy freights for any great distance had to be carried on almost entirely by water. Transportation by teams, which, before the introduction of the railway system, was the only means of inland transportation, was too expensive to admit of the profitable cultivation of farms or of the building up of manufacturing enterprises in places even a little remote from the watercourses. It is probably fair to say that a team of horses, or pair of oxen, could not move more than one ton of freight over the average country road of a century ago a greater distance than twenty miles in one day. If the team were to make its return journey in half the time, it would involve a cost of transportation of a day and a half for a man and team. At present, the cost of the team to do this work would be about $5 a day, or $7.50 for the day and a half; in the olden time it could probably have been done for, say, $4.50. Reckoning 33 bushels of grain to the ton, that would mean that it would cost 14 cents a bushel to move grain to the watercourse from a farm twenty miles away. Mr. W. C. Brown, president of the New York Central Railroad, has stated that the cost of transportation by teams from Buffalo to the Hudson River previous to the opening of the Erie Canal was $100 per ton, which was reduced to $11 a ton on the opening of the Canal, or, say, 34 cents per bushel on grain. Hence the cost of moving grain from a farm twenty miles from Buffalo to the Hudson River amounted to nearly 50 cents a bushel, which was probably all that the grain was worth at that time at the river point.

But with the introduction of the railway system this condition of things was entirely changed. Heavy freights are now carried one thousand miles by rail at the cost of twenty miles by teams. The railroads have been the pioneers and chief factor in the development of the resources of the country, and unless hampered by restrictive or hostile legislation, they will continue to be so for many years to come. All sections of the country have shared in the benefit of this development, and have alike been prosperous.

The area of trade in the United States is in remarkable contrast to those of the different countries of Europe. For illustration: Great Britain has an area of 121,000 square miles, which is equal to that of the New England States, New York, and New Jersey. The area of France is equal to that of Pennsylvania, Maryland, Virginia, West Virginia, Ohio, and Michigan. Germany has an area equal to that of North and South Carolina, Kentucky, Indiana, and Illinois. The area of Spain is equal to that of Florida, Alabama, and Mississippi; of Italy, to that of Louisiana, Arkansas, and Missouri; of AustriaHungary to that of Iowa, Wisconsin, and Minnesota. Sweden and Norwaytogether have about the same area as Arizona, Utah, and Montana; Portugal is something less in area than Oklahoma. The Netherlands, Belgium,Switzerland, and Greece have together an area of about 66,000 square miles — somewhat smaller than that of either Kansas or Nebraska.

These fourteen different countries occupy an aggregate of about 1,500,000 square miles, or about one-half the territory of the United States, exclusive of Alaska; and the remainder of the territory in the United States, including Alaska, is equal to the area of European Russia.

All of these countries, with the sole exception of Great Britain, are hemmed in by hostile tariff walls, each against the others, which limit their trade largely to the territory occupied by each. In addition, they are animated largely by feelings of racial hostility toward one another. They support large standing armies for protection against their neighbors, involving burdensome taxes, and have a system of compulsory military service, which is also very burdensome.

From all these hindrances to trade the United States has been and is still free. The citizens of one state are free to travel and to trade in every other state, and friendship and friendly interests prevail. This absolute freedom of intercourse, this freedom from military service, and these lighter taxes, together with the opportunity for acquiring land and homes wherever one may see fit to settle, have invited immigration from all parts of the world; and for the last fifty years immigrants have been coming in increasing numbers. These immigrants have left behind them their racial feeling of hostility, they have ceased to be Germans, or Austrians, or Swedes, or Norwegians, and have become loyal and enthusiastic Americans. Were the territory of the United States divided into separate nationalities, as in Europe, there would have been no such rapid growth of cities, no Boston, or New York, or Philadelphia, no Baltimore, or Pittsburg, or Chicago, as we know them to-day. The growth and development of these centres of commerce and industry is wholly due to the absolute freedom of intercourse and community of interest over the enormous area of 3,500,000 square miles.

Assuming that the spirit of private enterprise and the development of the railway system are not to be checked by unwise legislation, what is likely to be the population of the United States in the century to come? The average increase for the nineteenth century was three per cent a year. For the last twenty years the growth was twenty per cent every ten years, or two per cent a year; about fifteen per cent of which was due to reproduction, and five per cent to immigration. It seems to me that for the next fifty years the population will increase in like ratio, in which case we shall have in 1920 a population of 110,000,000

1930 132,000,000

1940 158,000,000

1950 190,000,000

1960 228,000,000

and assuming thereafter for the next forty years an increase of one and one half per cent a year, or fifteen per cent every ten years, we should find ourselves at the end of the century with a population of 400,000,000.

This would give us in 1960 an average population of 75 persons to the square mile, not including Alaska, and in the year 2000 about 140 to the square mile. Considering that Germany, France, and England have now a population of 300 to the square mile, that Massachusetts already has a population of 367 per square mile, and that the states of New York and Pennsylvania have about 150 persons per square mile, there would seem to be plenty of room for even the larger population. The chief concern would be how they should be fed and wherewithal they should be clothed.

II

Turning now to the development of our manufacturing enterprises, it is seen that the growth in this direction has been no less remarkable than the growth in population. The Census Reports do not give details of manufacturing enterprises further back than the Census of 1850. At that time, 1850, the value of products was $1,000,000,000; there were 123,000 manufacturing establishments, having a capital of $533,000,000, and wage-earners numbering 957,000. In 1900, the value of products was $13,000,000,000; the number of establishments had grown to 512,000, with a capital of $9,831,000,000 and wage-earners numbering 5,314,000.

Manufacturing enterprises, which at the beginning, and indeed until the end of the first half of the century, were almost wholly confined to the eastern section of the country, have moved westward, along with the march of population, until at the present time the capital invested and the number of men employed are nearly or quite as large in some of the western agricultural states as in the older states of the East, where manufacturing is, and always has been, the chief occupation. Having so large an area to trade over, without let or hindrance of any kind, manufacturers have been enabled to specialize their products, and to produce more cheaply than if they were confined to a limited trade-area, as are most of the countries in Europe to which I have already referred.

As showing the growth of manufacturing enterprises in the West, take for illustration the following statistics from the Census Report, —

MANUFACTURING ESTABLISHMENTS

Slate Year Number Capital Wage-earners

Illinois 1850 3,162 6,217,000 11,559

1900 38,360 770,000,000 395,110

Wisconsin 1850 1,262 3,382,000 6,089

1900 16,187 330,000,000 142,000

Minnesota 1850 5 94,000 63

1900 11,114 165,832,000 77,234

Massachusetts 1850 8,852 177,461,000 89,000

1900 29,180 823,000,000 497,000

The number of persons engaged in agricultural pursuits in the State of Illinois in 1900 was 462,781, as compared with 395,110 wage-earners in manufacturing establishments.

There is no reason to suppose that this tendency of manufacturing enterprises to draw nearer to the centres of population in the western countries will not continue. Gradually around these industries in the West will grow up a class of mechanics equal to those that are found in the eastern states, and the western establishments will grow with their growth and strengthen with their strength, and competition with the eastern manufacturer will be keener and keener as the years go by. And if the time shall come when, added to this natural competition, transportation shall be based upon mileage, and freight carried 2000 miles shall be compelled to pay ten times as much as freight carried 200 miles, the eastern manufacturer will be likely to be absolutely cut off from his customers in the distant West. It is, therefore, not only desirable, but, in my judgment, absolutely essential, that the eastern manufacturers should be able to avail themselves of the possible customers to the north and cast of us with whom we are in such close proximity. Montreal, the Chicago of the Dominion, is but 350 miles from New York, or Boston, or Portland, while Chicago of the United States is 1000 miles away, St. Louis 1200, Omaha and Kansas City 1500.

The Dominion of Canada is entering upon a development closely resembling that of the United States one hundred years ago. Her population at the beginning of the present century was very much the same as that of the United States a century earlier, namely, in 1800. Although the climatic conditions in Canada are less favorable than those in the United States, her railway development is now assuming large proportions, and it is more than likely that in the next forty years she will grow more rapidly than the United States grew in the forty years from 1810 to 1850. Immigration into the United States from 1820 to 1830 aggregated less for the ten years than 150,000 people, while at the present time there are probably double that number entering Canada every single year.

Her territory lies along that of the United States for nearly 4000 miles. The natural outlet and inlet for exports and imports of the Dominion is through the territory of the United States. Her Atlantic ports of Halifax and St. John are several hundred miles farther from Montreal than either Boston, or New York, or Portland; and in addition to the shorter distance, the greater attractions of the ports would draw the trade of the Dominion to the United States ports, if trade were allowed to flow freely, without the intervention of the tariff wall. The people of the United States would be the very best customers for the varied Canadian products. The people of the United States would be glad to join with the people of Canada in developing this great territory; and, as in the case of the territory of the United States, it could be developed to the mutual advantage of all concerned. That territory in the United States lying west of the Mississippi River, which barely one hundred years ago was a howling wilderness, now contains a contented and prosperous population of more than twenty millions of people, and there almost every day new manufacturing enterprises are being established on an enduring basis.

The free and unrestricted trade which has prevailed over the territory of the United States to the mutual advantage of everybody concerned would be equally beneficial to the territory of the Dominion if the tariff barrier between the two countries were absolutely removed. Manufacturing enterprises would gradually find their way to the western sections of Canada, just as they have to the western sections of the United States; and all along from Ottawa to the Pacific would be found cities like Milwaukee, St. Paul, Spokane, Denver, Salt Lake City, and Sacramento. And this development would be more rapid if brought about by the united capital and energy of the American people and of the Canadians.

III

The establishment of friendly trade relations with Canada— and by friendly trade relations I mean trade that shall be as free and unrestricted between these two countries as that between the separate states of the United States — would lead to friendly social relations, and a bond of union would be woven between the United States, Canada, and the British Empire. The outcome might be an alliance for mutual protection which would have in it great possibilities of good for those immediately concerned, and perhaps for the whole human race.

Such an alliance as I have referred to might come to be of much importance to the United States, if we are to continue to play our rôle of a world power in the affairs of the East. The unfortunate legacy left us by the Spanish War has opened for us a Pandora’s box of evils and responsibilities, of which the masses of the people are but very dimly conscious. If any great power in Europe, or in the East, should think the Philippines worth taking, it could appropriate them, for all we could now do to prevent, pretty nearly as easily as Dewey captured Manila. If it is to be the settled policy of the United States to retain possession of the Philippine Islands, we must get ourselves in a better position than we are now to hold them; otherwise, we shall be nothing in this connection but a laughing-stock to the world, as in all probability we are now. We must seek alliances with other world powers. We cannot ‘go it alone’ there. But to be in any position to protect these islands, or to be of value to any European power as an ally, we must have a much more powerful navy than we have now, must have at our command a large fleet of army transports, and must have a much larger army. If we are not prepared to do all of these things, we must find some way to get out of our eastern complications and devote our energies and our resources to home development and home protection.

The people of the United States are ambitious to trade over a large area. If they had part or lot in the trade affairs of the whole of the British Empire, it would be their interest to help maintain the Empire in its integrity. I believe that the beginning of this much-desired end is a trade alliance between the United States and the Dominion of Canada. We have ourselves seen the benefit of free and unrestricted trade over an area of three million square miles. If Canada be joined with us we shall have a trade area of six million square miles. If the British Empire were added, we should have a trading area of fourteen or fifteen million square miles. It is likely, also, that other countries of Europe would be glad to join such an alliance, the beneficial effects of which can, perhaps, be better imagined than described.

In some respects, the question of reciprocity with Canada is more complicated than it was in 1897, when Sir Wilfred Laurier and his Cabinet came to Washington on their mission of reciprocity, and were so coldly received. The question as to the proper division of the customs and internal revenue under a common tariff, and under a system of free trade between the United States and Canada, would not be altogether easy of adjustment, but might, in the last resort, be left to the decision of arbitrators to be agreed upon beforehand.

It is amazing, and I think wholly without excuse, that the representatives in Washington of the New England States, to whom a reciprocity treaty with Canada is of such great, and indeed essential, importance, should have been so indifferent with regard to Sir Wilfrid’s proposition. It can only be accounted for by the fact that our own western country was developing at such a rate that nothing else seemed worth considering. And when one comes to realize that in the thirty years from 1870 to 1900, the number of farms in the United States increased upwards of three millions in number, with an acreage of upwards of four hundred and thirty millions, — a larger area in new farms in those thirty years than the whole area of France and Germany and Austria and Hungary combined, — it is not perhaps so strange.

In some respects the time is more opportune now than heretofore for favorable negotiation on the lines I have suggested. The tendency of to-day is in the direction of a lower scale of duties, and it would therefore be easier now for the two countries to agree upon a scale of duties more in harmony with Canadian ideas than it was in 1897, when Sir Wilfrid came to Washington, just previous to the inauguration of the Dingley tariff. I am well aware that there would be many difficult questions to settle, before the countries could unite on the basis of free and unrestricted trade relations. The fact that is thought by many Canadians to stand absolutely in the way is the preference on certain manufactured articles given by Canada to England. It could hardly be expected that the United States would grant England this preference over the trade of other friendly nations; but if the United States tariffs were to be substantially reduced on goods of English manufacture, this greater opportunity of trade with one hundred millions of people would go very far toward compensating England for some small loss in her trade with seven millions of people. If all the parties to these negotiations would approach the question in a spirit of fairness, animated by friendly feelings and by wise statesmanship, I see no reason for supposing that all the questions involved in this great arrangement might not be ultimately adjusted with reasonable satisfaction to all parties concerned.

IV

Some resolutions that were passed a few months ago by the Board of Trade and Chamber of Commerce of Montreal have been quoted far and near as evidence of the opposition of Canadians to reciprocity with the United States. One of the reasons given was that if Canadians were permitted to buy of the American manufacturers they would get their goods cheaper than if confined to the home market. Whether this would or would not be the fact, I am not prepared to say; but if such would really be the case, it would seem an argument, so far as the mass of the people are concerned, in favor of reciprocity rather than against it. Another objection, and the most important one, was that free-trade relations with the United States would tend to weaken the attachment of the Canadians to the mother country. This must not for a moment be considered. The interest that the mother country has in her colonies relates almost wholly to her trade affairs, and I see no reason why these should be disturbed to any great extent. As to this ‘attachment’ to the mother country, if it would be imperiled by friendly trade relations with the United States and if such relations would create a sentiment in favor of annexation, then the ‘attachment’cannot be very strong. The very objection carries with it inherent evidence of its weakness, and of the strength of the annexation sentiment.

What might ultimately be the political effect of the establishment of friendly trade and social relations between the United States and Canada, is a problem that had best be left to work itself out in the years to come. It is quite possible, indeed I think it quite likely, considering the number of questions of domestic and foreign policy which might arise under such a condition, that the two nations would in the end become politically one; but that would be a long way in the future, if it ever came to pass at all.

I do not, however, accept the expression of the Board of Trade and Chamber of Commerce of Montreal as expressive of the final opinion of the mass of Canadians. I have not forgotten how difficult it was in 1867 to bring the Maritime Provinces into the Confederation. These provinces are naturally allied with the United States in all their trade affairs, and I believe that a recognition of this fact, though unexpressed, is still very strong there. And I think it is not too much to say that if the Reciprocity Treaty with Canada, which was abrogated by the United States in 1866, had been continued, the task of bringing the Maritime Provinces into the Confederation would have been still harder than it was, and might have been impossible. A few years ago I was invited to speak in Toronto upon the subject of reciprocity. The atmosphere of the city was somewhat hostile to the idea, but while there I was waited upon by a committee from the Farmers’ Alliance of the Dominion, and invited to address the Alliance. I was unable to do so for want of time, but we had a pleasant half-hour’s talk together. I found them in entire sympathy with my own ideas, and they stated, as representing the Farmers’ Alliance, that if the time should come when the United States was prepared to offer to the Canadians reciprocity upon fair and equitable lines, the plan would find general support from the farmers of the Dominion.

I believe that this feeling still abides, and that when the opportunity arises, the farmers of the Dominion, and the Canadian people generally, will be found favorable to free and unrestricted trade with the people of the United States. There is no question that it is for the best interests of the two countries.

Of course, the first step in this direction must be taken by the people of the United States. I hope that the public sentiment of the people of this country will favor a movement in this direction at an early day. And if friendly trade relations could be established between the United States and Canada and the United Kingdom, it would conduce to the benefit of all concerned and promote the peace of the world.

v

Finally, if a reciprocity treaty on broad lines is not possible at the present time, owing to the attitude of the Canadians, why should we deny ourselves the advantage that would accrue to us from at once allowing the products of Canada’s fisheries, farms, forests, and mines to come here free of duty. These are things that we need, and soon must have from some outside source. If we were to admit Canadian grain free of tariff charges, much of it would stay with us for home consumption; a portion would go through our ports to foreign lands. In these days of high cost of living, what an absurdity it is to increase the burden by levying a duty of 25 cents per bushel on wheat, $1.50 per barrel on flour, 25 cents per bushel on potatoes, 6 cents per pound on butter and cheese, 5 cents on eggs, and so on. Open wide the door and let these things come in.

New York and Boston and Portland are the natural outlets for the foreign trade of Eastern Canada. St. John and Halifax are twice as far from Montreal as New York, or Boston, or Portland. The Canadian Atlantic ports are not to be mentioned in competition with the American Atlantic ports, for passenger business. Our steamers are larger, and social conditions count for very much with travelers. Under existing circumstances, what Canadian going abroad or coming from abroad would not prefer landing in New York, or Boston, or Portland, to disembarking in Halifax or St. John? And with the increasing size of the Atlantic liners and the growing attractions of our cities, the advantage will increase rather than diminish.

The elevators for storing and handling Canadian grain should be located on this side of the line, and the steamers of the Canadian Pacific and the Grand Trunk Pacific should, in the winter time at least, find their ‘home’ port in New York, or Boston, or Portland. And if, under a reciprocity arrangement or otherwise, the farm products of Canada were admitted free of duty, the Canadian government would be friendly, instead of hostile, to the use of American ports for Canadian business. My belief is that such a course would promote the cause of reciprocity on the broad lines of free trade between the two countries.