THE RECIPROCITY TREATY OF 1874

Mr. Brown's position in regard to reciprocity has already been described. He set a high value upon the American market for Canadian products, and as early as 1863 he had urged the government of that day to prepare for the renewal of the treaty. He resigned from the coalition ministry, because, to use his own words, "I felt very strongly that though we in Canada derived great advantage from the treaty of 1854, the American people derived still greater advantage from it. I had no objection to that, and was quite ready to renew the old treaty, or even to extend it largely on fair terms of reciprocity. But I was not willing to ask for a renewal as a favour to Canada; I was not willing to offer special inducements for renewal without fair concessions in return; I was not willing that the canals and inland waters of Canada should be made the joint property of the United States and Canada and be maintained at their joint expense; I was not willing that the custom and excise duty of Canada should be assimilated to the prohibitory rates of the United States; and very especially was I unwilling that any such arrangement should be entered into with the United States, dependent on the frail tenure of reciprocal legislation, repealable at any moment at the caprice of either party." Unless a fair treaty for a definite term of years could be obtained, he thought it better that each country should take its own course and that Canada should seek new channels of trade.

The negotiations of 1866 failed, mainly because under the American offer, "the most important provisions of the expiring treaty, relating to the free interchange of the products of the two countries, were entirely set aside, and the duties proposed to be levied were almost prohibitory in their character." The free-list offered by the United States reads like a diplomatic joke: "burr-millstones, rags, fire-wood, grindstones, plaster and gypsum." The real bar in this and subsequent negotiations, was the unwillingness of the Americans to enter into any kind of arrangement for extended trade. They did not want to break in upon their system of protection, and they did not set a high value on access to the Canadian market. In most of the negotiations, the Americans are found trying to drive the best possible bargain in regard to the Canadian fisheries and canals, and fighting shy of reciprocity in trade. They considered that a free exchange of natural products would be far more beneficial to Canada than to the United States. As time went on, they began to perceive the advantages of the Canadian market for American manufactures. But when this was apparent, Canadian feeling, which had hitherto been unanimous for reciprocity, began to show a cleavage, which was sharply defined in the discussion preceding the election of 1891. Reciprocity in manufactures was opposed, because of the competition to which it would expose Canadian industries, and because it was difficult to arrange it without assimilating the duties of the two countries and discriminating against British imports into Canada.

In earlier years, however, even the inclusion of manufactures in the treaty of reciprocity was an inducement by which the Americans set little store. The rejected offer made by Canada in 1869, about the exact terms of which doubt exists, included a list of manufactures. In 1871 the American government declined to consider an offer to renew the treaty of 1854 in return for access to the deep sea fisheries of Canada. The Brown Treaty of 1874, which contained a list of manufactures, was rejected at Washington, while in Canada it was criticized as striking a blow at the infant manufactures of the country.

The Brown mission of 1874 was a direct result of the Treaty of Washington. Under that treaty there was to be an arbitration to determine the value of the American use of the Canadian inshore fisheries for twelve years, in excess of the value of the concessions made by the United States. Before the fall of the Macdonald government, Mr. Rothery, registrar of the High Court of Admiralty in England, arrived in Canada as the agent of the British government to prepare the Canadian case for arbitration. In passing through Toronto Mr. Rothery spoke to several public men with a view to acquiring information as to the value of the fisheries. Mr. Brown availed himself of that opportunity to suggest to him that a treaty of reciprocity in trade would be a far better compensation to Canada than a cash payment. Mr. Rothery carried this proposal to Washington, where it was received with some favour.

Meantime the Mackenzie government had been moving in the matter, and in February 1874, Mr. Brown was informed that there was a movement at Washington for the renewal of the old reciprocity treaty, and was asked to make an unofficial visit to that city and estimate the chances of success. On February 12th, he wrote: "We know as yet of but few men who are bitterly against us. I saw General Butler, at his request, on the subject, and I understand he will support us. Charles Sumner is heart and hand with us, and is most kind to me personally." On February 14th, he expressed his belief that if a bill for the renewal of the reciprocity treaty could be submitted to congress at once, it would be carried.

A British commission was issued on March 17th, 1874, appointing Sir Edward Thornton, British minister at Washington, and Mr. Brown, as joint plenipotentiaries to negotiate a treaty of fisheries, commerce and navigation with the government of the United States. This mode of representation was insisted upon by the Mackenzie government, in view of the unsatisfactory result of the negotiations of 1871, when Sir John A. Macdonald, as one commissioner out of six, made a gallant but unsuccessful fight for the rights of Canada. Mr. Brown was selected, not only because of his knowledge of and interest in reciprocity, but because of his attitude during the war, which had made him many warm friends among those who opposed slavery and stood for the union.

Negotiations were formally opened on March 28th. The Canadians proposed the renewal of the old reciprocity treaty, and the abandonment of the fishery arbitration. The American secretary of state, Mr. Fish, suggested the enlargement of the Canadian canals, and the addition of manufactures to the free list. The Canadian commissioners having agreed to consider these proposals, a project of a treaty was prepared to form a basis of discussion. It provided for the renewal of the old reciprocity treaty for twenty-one years, with the addition of certain manufactures; the abandonment of the fishery arbitration; complete reciprocity in coasting; the enlargement of the Welland and St. Lawrence canals; the opening of the Canadian, New York, and Michigan canals to vessels of both countries; the free navigation of Lake Michigan; the appointment of a joint commission for improving waterways, protecting fisheries and erecting lighthouses on the Great Lakes. Had the treaty been ratified, there would have been reciprocity in farm and other natural products, and in a very important list of manufactures, including agricultural implements, axles, iron, in the forms of bar, hoop, pig, puddled, rod, sheet or scrap; iron nails, spikes, bolts, tacks, brads and springs; iron castings; locomotives and railroad cars and trucks; engines and machinery for mills, factories and steamboats; fire-engines; wrought and cast steel; steel plates and rails; carriages, carts, wagons and sleighs; leather and its manufactures, boots, shoes, harness and saddlery; cotton grain bags, denims, jeans, drillings, plaids and ticking; woollen tweeds; cabinet ware and furniture, and machines made of wood; printing paper for newspapers, paper-making machines, type, presses, folders, paper cutters, ruling machines, stereotyping and electrotyping apparatus. In general terms, it was as near to unrestricted reciprocity as was possible without raising the question of discriminating against the products of Great Britain.

Mr. Brown found that American misapprehensions as to Canada, its revenue, commerce, shipping, railways and industries were "truly marvellous." It was generally believed that the trade of Canada was of little value to the United States; that the reciprocity treaty had enriched Canada at their expense; and that the abolition of the treaty had brought Canada nearly to its wits' end. There was some excuse for these misapprehensions. Until confederation, the trade returns from the different provinces were published separately, if at all. No clear statement of the combined traffic of the provinces with the United States was published until 1874, and even Canadians were ignorant of its extent. American protectionists founded a "balance of trade" argument on insufficient data. They saw that old Canada sold large quantities of wheat and flour to the United States, but not that the United States sent larger quantities to the Maritime Provinces; that Nova Scotia and Cape Breton sold coal to Boston and New York, but not that five times as much was sent from Pennsylvania to Canada. Brown prepared a memorandum showing that the British North American provinces, from 1820 to 1854, had bought one hundred and sixty-seven million dollars worth of goods from the United States, and the United States only sixty-seven million dollars worth from the provinces; that in the thirteen years of the treaty, the trade between the two countries was six hundred and thirty million dollars according to the Canadian returns, and six hundred and seventy million dollars according to the American returns; and that the so-called "balance of trade" in this period was considerably against Canada. It was shown that the repeal of the treaty did not ruin Canadian commerce; that the external trade of Canada which averaged one hundred and fifteen million dollars a year from 1854 to 1862, rose to one hundred and forty-two million dollars in the year following the abrogation, and to two hundred and forty million dollars in 1873. In regard to wheat, flour, provisions, and other commodities of which both countries had a surplus, the effect of the prohibitory American duties had been to send the products of Canada to compete with those of the United States in neutral markets.

This memorandum was completed on April 27th and was immediately handed to Mr. Fish. It was referred to the treasury department, where it was closely examined and admitted to be correct. From that time there was a marked improvement in American feeling.

Brown also carried on a vigorous propaganda in the newspapers. In New York the Tribune, Herald, Times, World, Evening Post, Express, Journal of Commerce, Graphic, Mail, and other journals, declared in favour of a new treaty; and in Boston, Chicago, St. Louis, Cincinnati and other large cities, the press was equally favourable. A charge originated in Philadelphia and was circulated in the United States and Canada, that this unanimity of the press was obtained by the corrupt use of public money. Mr. Brown, in his speech in the senate of Canada denied this; said that not a shilling had been spent illegitimately, and that the whole cost of the negotiation to the people of Canada would be little more than four thousand dollars.

In his correspondence Brown speaks of meeting Senator Conkling, General Garfield and Carl Schurz, all of whom were favourable. Secretary Fish is described as courteous and painstaking, but timid and lacking in grasp of the subject, and Brown speaks impatiently of the delays that are throwing the consideration of the draft treaty over to the end of the session of congress.

It did not reach the senate until two days before adjournment. "The president" wrote Mr. Brown on June 20th, "sent a message to the senate with the treaty, urging a decision before the adjournment of congress. I thought the message very good; but it has the defect of not speaking definitely of this message as his own and his government's and calling on the senate to sustain him. Had he done this, the treaty would have been through now. But now, with a majority in its favour, there seems some considerable danger of its being thrown over until December." The treaty was sent to the Foreign Relations Committee of the senate. "There were six present; three said to be for us, one against, and two for the measure personally, but wanted to hear from the country before acting. How it will end, no one can tell." As a matter of fact it ended there and then, as far as the United States were concerned.

Of the objections urged against the treaty in Canada, the most significant was that directed against the free list of manufactures. This was, perhaps, the first evidence of the wave of protectionist sentiment that overwhelmed the Mackenzie government. In his speech in the senate, in 1875, justifying the treaty, Mr. Brown said: "Time was in Canada when the imposition of duty on any article was regarded as a misfortune, and the slightest addition to an existing duty was resented by the people. But increasing debt brought new burdens; the deceptive cry of 'incidental protection' got a footing in the land; and from that the step has been easy to the bold demand now set up by a few favoured industries, that all the rest of the community ought to be, and should rejoice to be, taxed seventeen and a half per cent, to keep them in existence."

Brown joined issue squarely with the protectionists. "I contend that there is not one article contained in the schedules that ought not to be wholly free of duty, either in Canada or the United States, in the interest of the public. I contend that the finance minister of Canada who—treaty or no treaty with the United States—was able to announce the repeal of all customs duties on the entire list of articles in Schedules A, B, and C,—even though the lost revenue was but shifted to articles of luxury, would carry with him the hearty gratitude of the country. Nearly every article in the whole list of manufactures is either of daily consumption and necessity among all classes of our population, or an implement of trade, or enters largely into the economical prosecution of the main industries of the Dominion." The criticism of the sliding scale, of which so much was heard at the time, was only another phase of the protectionist objection. The charge that the treaty would discriminate in favour of American against British imports was easily disposed of. Brown showed that every article admitted free from the United States would be admitted free from Great Britain. But as this meant British as well as American competition, it made the case worse from the protectionist point of view. The rejection of the treaty by the United States left a clear field for the protectionists in Canada.

Four years after Mr. Brown's speech defending the treaty, he made his last important speech in the senate, and almost the last public utterance of his life, attacking Tilley's protectionist budget, and nailing his free-trade colours to the mast.