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conveniently be supplied from elsewhere. The competitor against the United Kingdom in the coal supply of this country is Canada. The Canadian market would not be prejudiced by the Convention as regards coal. The eight classes of articles mentioned above are: hardware, dry goods, small wares, ready mades, tea, hemp yarn, groceries, fruit.

Of hardware the United Kingdom supplies 46 per cent., Canada 16 4, and the United States 33 2. There is a tendency to increase these imports from the United States, at the cost of the trade with Canada and the United Kingdom.

The United Kingdom has almost a monopoly of dry goods, having contributed to the supply for the last fiscal year 77.5 per cent., while Canada sent 7 1, and the United States 14.8 per cent.

What change takes place in regard to dry goods is a tendency to increase the United States trade. The United Kingdom maintains its position in small wares at 87 1 per cent., Canada having 76, and the United States 5.1 per cent.

The United Kingdom holds the same position in respect of ready-mades that she has in regard to dry goods, namely, 77.8 per cent.; with Canada 6.3 and the United States 15.1.

The supply of tea and fruit could hardly be influenced in any way by the Convention.

In hemp yarn the importations appear so erratic that one cannot arrive exactly at the imports. They were from the United Kingdom 77.7 last year, and 20 9 from the United States, from which there was no import the preceding year. Groceries to the extent of 47 2 per cent. come from the United Kingdom, 14 6 from Canada, and 36·1 from the United States.

The item of machinery a large one, though not in the above category. It is already practically lost to the United Kingdom. During the last fiscal year the values imported were: from the United Kingdom $37,818, Canada $106,621, United States $233,877. The total importation was $381,229.

This distribution of trade seems to be a natural one, probably about what one would expect on theoretical considerations. It does not appear that it would be seriously upset by a Convention that granted no trade preference to imports into this Colony. It is a distribution that has arisen without preference being given to imports from any country. It should not, therefore, be greatly upset by an arrangement that proposes no preference in future.

any

The substantive advantages to the United States under the Convention would be those offered in Article I., which would allow their vessels to purchase any kind of bait at any time, and to trade on the coast on practically the same terms and footing as Newfoundland vessels. These concessions by this Colony could not to any appreciable extent prejudice trade with the United Kingdom. On the other hand, the extended market which this Colony would have with the United States could not fail to strengthen the purchasing power of Newfoundland, which would then buy more English dry goods, hardware, small wares, ready mades, and

yarn, than at present.

14. Should a perusal of these few facts fail to convince you of the great importance of the Convention to Newfoundland; or should it be thought that my sympathy with the Colony has unduly influenced my judgment, I would respectfully call your attention to the report, forwarded in my despatch. No. 11, of the 31st instant, on the trade of this country which I have pre- pared within the last few weeks from the official records of this Government. I hope that it may be found that the report in question, with the different tables attached to it, will be sufficient to enable you to form an independent opinion as to the whole question of the trade of Newfoundland as far as that may be supposed to bear on the matter of the Convention.

•

[Cd. 2480], May, 1905.

I have, &c.,

WM. MACGREGOR,

29118.

f

SIR,

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No. 11.

The GOVERNOR-GENERAL OF CANADA to the SECRETARY

(No. 250.)

OF STATE

(Received August 14, 1905.)

[Copy to Board of Trade, August 24, 1906, L.F.] [Answered by Nos. 12 and 18.]

Sydney, Cape Breton,

July 31, 1905. I HAVE the honour to forward herewith, for transmission to the Governor-General of Australia, a copy of an approved Minute of the Privy Council inquiring whether the Australian Government would be willing to enter into negotiations with this Government, with the object of establishing preferential trade relations between the Dominion and the Commonwealth, and, if so, whether it would be prepared to offer stated tariff concessions to Canada, or would prefer to make the subject one for consideration by conference between delegates representing the two Governments.

I have, &c.,

GREY.

Enclosure in No. 11.

EXTRACT FROM A REPORT OF THE COMMITTEE OF THE HONOURABLE THE PRIVY COUNCIL, APPROVED BY THE GOVERNOR-GENERAL ON THE 22ND JULY 1905.

On a Report, dated 30th June 1905, from the Minister of Finance, submitting that under the provisions of the Customs Tariff, 1897, and amendments thereto, the benefits of the preferential tariff were, by Orders in Council of the 28th June 1897 and 14th July 1898, extended by Canada to the Colony of New South Wales.

The Minister states that upon the union of the Australian Colonies, New South Wales ceased to have a separate tariff, and came under the operation of a tariff adopted for the Commonwealth generally. In consequence of such change, the Orders in Council above referred to were rescinded on the 23rd January 1903.

The Minister of Finance deems it desirable that the Government of the Commonwealth of Australia should be invited to consider the advisability of entering into preferential tariff arrangements between Australia and Canada. The terms which Canada is able to offer at present are set forth in the present Canadian Customs Tariff.

The Minister observes that, in accordance with announcement made some months ago, it is the intention of the Canadian Government to cause an inquiry to be made at an early date into the operation of the Canadian tariff, with a view to the making of some revision at the next Session of Parliament. The Minister further observes that while some, tariff changes may thus be brought about, it is not the present intention of the Canadian Government to depart from the principle of British preferential trade already established.

That the revised tariff may therefore be expected to include a preference to the products of the United Kingdom, and to those of such British Colonies as may be prepared to make favourable trade arrangements with Canada,

The Committee, concurring in the report of the Minister of Finance, advise that his Excellency be moved to inquire whether the Government of the Commonwealth of Australia would be willing to enter into negotiations with the Government of Canada, with a view to establishing preferential trade relations between the two countries, and, if so, whether the Australian Government would be prepared to offer stated tariff concessions to Canada, or would prefer to make the subject one for consideration by conference between delegates representing the Australian and Canadian Governments.

All which is respectfully submitted for approval.

JOHN J. MCGEE, Clerk of the Privy Council.

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