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PUBLIC RECORD OFFICE

Reference :--

C.O. 885

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE "BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

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this country even apart from the preferential tariff.

But no man can say for certain how much has been due to the general increase in the prosperity of Canada, and how much has been due to the preference which is given by Canada to this country. All we can say is that the improvements has not be so marked as we might have hoped when we look at the great increase of traile between Canuda and foreign countries during the same period.

Sir WILFRID LAURIER: I think Mr. Paterson has just remarked that the great increase has been chiofly in goods which you could not sell us-raw materials.

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The SECRETARY OF STATE: Yes, but the increase in the importation of corn or other raw materials does mark the increase in the prosperity of the country and the gonoral devolopment of its industry, and other industrios ought to have developed and increased in the same proportion, not perhaps to the same amount, but in the same proportion.

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Mr. PATERSON: I can say at once that if our tariff were a prohibitory tarit, then you would be affected in common with all others, but I think, from figures that I will show you, I can establish that our tariff is not pro- hibitory, and if the trade with other countries, against whom we will say, for the purposes of illustration, there is a 35 per cout. duty-that is to say, if I may use the expression, that the foreigner has to pay 35 dollars on every 100 dollars or 351. on overy Hl. of goods that he sends into Canada, and while our English friends send it in for 231. thore is the advantage there. Now, if there was no increase of goods from foreigners it would argue, it scems to me, that our tariff has almost reached a prohibitory point, but when there is an increasing quantity of goods coming in from foreign countries that are paying 351. on every 100/., then is it the fault of the Canadian tariff if English goods are not increasing proportionately when we let them come in nt 231.? Do you catch my idea?

Tho SECRETARY OF STATE: Yos.

Mr. PATERSON: Our tariff is not prohibitory. Goods are increasing in proportion from other countries at 351 on the 1007. If they are not increasing from England, and those same goods come in at 231., 's that the fault of our tariff, or is the fault somewhere else?

The SECRETARY OF STATE: I quite follow your argument. If the goods at 357, come in the goods at 231, é fortiori ought to come in too.

Mr. PATERSON: The same lines that you are competing on in the

other.

The SECRETARY OF STATE: What we contend is that the 231. is in many cases a prohibitory tariff, and that we cannot send in at 237. any more than we could at 35., and that unless you reduce the protection which you now give to your industries, we cannot hope largely to increase our trade with you, and, as wo think, the result will be that neither shall we be able very largely to incroase our consumption of things which you wish to supply.

Mr. PATERSON; That would be an absolute conclusion to arrive at if our tariff were prohibitory, but where it is admitting and admitting in increased quantity-goods from other countries, as I said that are paying 357. on 100., it is not prohibitory.

The PRESIDENT OF THE BOARD OF TRADE: I think it is only right to observe that in many cases there is no real competition between us and

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foreign countries in respect to the goods on which the duty has been reduced. Germany, for instance, imports ono class of goods, we import another. There is no universal competition all the way through between Germany and ourselves, theroforr, so far as a considerable number of articles is concerned, the more fact that the duty has been reduced in favour of this country by one-third would not necessarily help us very greatly; it would leave us practically in the same position as before in cases where there was no real competition between ourselves and other nations.

The SECRETARY OF STATE: I suppose one may take an extreme case. Take the case of French wines, which, I presume, are consumed by the French Canadians in Canada; it is not the slightest use to us if you give us a preference of 50 per cent. or 75 per cent., as we do not make the wines we cannot sell the goods.

Mr. FIELDING: The preference does not apply to that class of goods; they are oxompted from the preference; spirits, tobaccos luxurios--because thoy do not enter into competition at all.

The SECRETARY OF STATE: I was only taking it as an_extremo illustration of our case. There are goods which come to you from Germany, for instance, which we do not supply and as to which, again, a preference, therefore, is of no advantage to us.

Mr. PATERSON: And that is the caso with the United States, who export to us very largely, articles which do not affect you.

The SECRETARY OF STATE: Yes.

Mr. PATERSON: And we were certainly in hopes when we gave this to you, and our desire was that if we could turn the trade more from the other countries, especially from the United States, who I may say are your competitors in many lines which are imported by us. A few years ago you had largely the iron trade. Well, there has been great development in the United States with reference to that, as you know, and it was our hope that the 33 per cent. would turn it in your direction, and this past year-I have not the details yet-I have no doubt your iron trade with us has very much increased; but possibly that may be owing to the fact that the United States' mills are very busy; but we were in hopes that: it would do that, and I might point out to you that if our goneral tariff was bigher than it is now. and yours was not raised, if you were left at the lovel you are now, and the tariff against the foreigner was higher, which would be virtually giving you more than 333 per cent., that would still more tend in that direction; but, of course, I am not prepared to speak how that would be. There is a very strong feeling in our country that we ought to have a higher general tariff than we have. Owing to the very high tariff of the United States, there is produced an irritation in Canada, and some of our people say, "Why let "them come in here at 25 and 35, while we have to pay 70 if we go over there?

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The SECRETARY OF STATE: Have you anything to say on the general discussion?

The PRESIDENT OF THE BOARD OF TRADE: I do not think so, beyond what you have said, with which I entirely agree,

Mr. SEDDON: It would be very pleasing to the Membora of tho Conference if Mr. Patorson would tako some of those items, such as wire, steel and iron, machinery and machines, and boots and shoes.

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