Europe and Asia The United States Reciprocity

The early years of the Laurier regime brought Canada into the visual range of the outside world. During the middle years the business of the country’s internal development overshadowed everything else. Then in the later years the relations of Canada with other countries came to occupy an increasingly important place on the political stage.

At last, Canada’s rising star compelled the attention of foreign countries beyond the seas. Some of these countries sent capital, and no Canadian objected. Some sent goods, and manufacturers and producers raised the questions of protection and reciprocal tariff privileges. Others, as we have seen, sent men. Some of these immigrants Canada welcomed indiscriminately, some she took with qualms, while against others she erected high barriers, with half a mind to make them still higher.

First, as to trade and tariffs, which were the chief subjects of discussion with European governments. The original Fielding tariff of 1897 had adopted the minimum and maximum principle, with the intention that a few low-tariff countries should share with Great Britain the advantages of the lower rates. Treaty complications made this impossible, and the lower rates were confined to the Empire. Then in 1907 came the intermediate tariff as a basis for bargaining. The Government turned first to France. Mr Fielding and Mr Brodeur, associated with the British ambassador at Paris, negotiated a treaty, giving France the intermediate and in some cases still lower rates, and receiving advantages in return. The treaty, though made in 1907, was not ratified until 1910. Owing to existing British treaties with most-favoured-nation clauses which bound the colonies, the concessions given France had to be extended to Austria, Denmark, Norway, Sweden, Spain, and Switzerland. Belgium and Holland, both low-tariff countries, received many of the same concessions, and in the same year (1910) a special convention was made with Italy. All the latter negotiations were carried on direct between the Canadian Government and the foreign consuls-general in Canada. In the agreement with Italy the parties were termed ’the Royal Consul of Italy for Canada, representing the government of the Kingdom of Italy, and the Minister of Finance of Canada, representing His Excellency the Governor-General acting in conjunction with the King’s Privy Council for Canada.’

Meanwhile less friendly relations had arisen with Germany. Angry at the action of Canada in giving British goods a preference, Germany in 1899 withdrew her minimum rates on Canadian products, imposing the much higher general rates. The Laurier Government protested that the British preference was a family affair, and that so long as Germany was given the same rates as other foreign countries she had no excuse for retaliation. But this soft answer did not turn away Teutonic wrath; so in 1903 Canada retorted in kind, by levying a surtax of one-third on German goods. The war of tariffs lasted seven years. While it hampered the trade of both countries, German exports were much the hardest hit. Germany took the initiative in seeking a truce, and in 1910 an agreement was reached between Mr Fielding and the German consul-general. Germany dropped her protest against the British preference, and gave the Dominion the minimum rates on the most important dutiable exports in return for, not the intermediate, but the general tariff rates. So ended one of the few instances of successful retaliation in all the chequered annals of tariff history.

Secondly, as to men. This was the issue with Asiatic powers. The opposition to Asiatic immigration, so strong in Australia and South Africa as well as in the United States, prevailed in Western Canada. Working men demanded protection against the too cheap and too efficient labour of the Asiatic as validly as manufacturers objected to the importation of the products of European ‘pauper labour.’ Stronger, perhaps, was the cry for a White Canada based on the difficulty of assimilation and the danger to national unity of huge colonies of Asiatics in the thinly peopled province beyond the mountains.

Chinese navvies first came to Canada to aid in building the government sections of the Canadian Pacific Railway. An immediate outcry followed, and in 1885 a head-tax of $50 was imposed on all Chinese immigrants not of the official, merchant, or scholar classes. During the nineties slightly over two thousand a year paid the price of admission to the Promised Land. Then growing prosperity attracted greater swarms. Doubling the tax in 1901 only slightly checked the flow, but when it was raised to $500 in 1904 the number willing to pay the impost next year fell to eight. But higher wages, or the chance of slipping over the United States border, soon urged many to face even this barrier, and the number paying head-tax rose to sixteen hundred (1910) and later to seven thousand (1913). These rising numbers led British Columbia to demand total exclusion; but, thanks to the diffusion of the Chinese throughout the Dominion, their lack of assertiveness and their employment for the most part in industries which did not compete with union men or the smaller merchants, the agitation did not reach great proportions.

It was otherwise with the newcomers from Japan. Their competition was more serious. Aggressive and enterprising, filled with a due sense of the greatness of Japan, aspiring to not merely menial but controlling posts, they took firmer root in the country than did the migratory Chinaman. At the same time Japan’s rising power, her obvious sensitiveness, and her alliance with Great Britain made it expedient to treat her subjects more warily than those of quiescent China. There was practically no Japanese immigration until 1904-5, when three hundred entered. In 1905 the Dominion Government decided to adhere to the Anglo-Japanese treaty in order to secure favourable terms in Japan’s market. A clause of this treaty provided for the free entrance of each country’s subjects into the other country. When asked by the colonial secretary whether they wished to reserve the right to restrict immigration, as Queensland had done, the Dominion authorities declared that they would accept the treaty as it stood, relying upon semi-official Japanese assurances of willingness to stop the flow in Japan itself. Then suddenly, in 1906 and 1907, a large influx began, amounting to seven thousand in a single year. This immigration, which was prompted by Canadian mining and railway companies acting in co-operation with Japanese societies, came via the Hawaiian Islands. Alarm rose rapidly in British Columbia, and was encouraged by agitators from the United States. The climax came in September 1907, when mobs attacked first the Chinese and later the Japanese quarters in Vancouver, doing much damage for a time, but being at last routed by Banzai-shouting bands of angry Japanese. The Dominion Government at once expressed its regret and in due time compensated the sufferers from the riot. To solve the larger question, Mr Lemieux was sent to Japan as a special envoy. Cordially supported by the British ambassador at Tokio, he succeeded in reaching a very satisfactory agreement. The Japanese Government itself agreed to restrict immigration direct from Japan, and to raise no objection to Canadian prohibition of immigration by way of Hawaii. This method was much more acceptable to Japan’s pride than direct Canadian restrictions would have been, and proved equally effective, as the number of Japanese entering Canada averaged only six hundred in the following years. The Dominion Government’s course was open to criticism in some points, but its earnest endeavour to safeguard imperial as well as national interests, and the success of Mr Lemieux’s diplomacy, were indications that the Dominion was rising to the demands of its new international position. Incidentally it was the Government’s unwillingness to agree to complete Japanese exclusion that in 1908 brought the loss of every seat, save one, in British Columbia.

After the Alaskan boundary had been settled, no critical issue arose between the two North American democracies for several years. There were still questions outstanding which in earlier days would have given opportunity for tail-twisting or eagle-plucking politicians to make trouble, but in the new era of neighbourliness which now dawned they were settled amicably or allowed to fall into blessed oblivion.

A remarkable change in the spirit in which the two peoples regarded each other came about in this period. The abandonment by the United States of its traditional policy of isolation, its occupation of the Philippines, its policy of the open door for China, its participation in the Morocco dispute, effected a wonderful transformation in the American attitude towards questions of foreign policy and compelled a diplomacy more responsible and with more of give and take. This led to incidents such as that in Manila Bay, when a British admiral lined up alongside the American fleet against a threatening German squadron which made it clear that Great Britain was the one trustworthy friend the United States possessed. The steady growth of democratic feeling in Britain, her daring experiments in social betterment, her sympathetic treatment of the Irish and South African questions, increased the friendliness and the interest which the majority of Americans felt at bottom for what was their motherland. Canada’s prosperity awakened respectful interest. A country which fifty or a hundred thousand good Americans every year preferred to their own must be more than the negligible northern fringe it once was thought to be.

Canada reciprocated this more friendly feeling. Prosperity mended her querulous mood and made her too busy to remember the grievances of earlier days. Her international horizon, too, had widened; the United States was no longer the sole foreign power with which she had to deal, though still the most important. Yet this friendlier feeling did not lead to a general desire for freer trade relations. Quite the contrary; confident in her own newly realized resources and in the possibility of finding markets elsewhere, dominated by protectionist sentiment and by the growing cities, Canada became on the whole indifferent to what had once appeared an essential goal. In Sir Wilfrid Laurier’s phrase, the pilgrimages from Ottawa to Washington had ceased: the pilgrimages must come, if at all, from Washington to Ottawa.

Washington did come to Ottawa. Notable was the visit of Secretary Root in 1907, to discuss outstanding issues. Notable too, in another direction, was the increased interest of the British ambassador at Washington in Canadian affairs. This was particularly true of Mr Bryce, who made it a point to visit Ottawa every year of his term, and declared that he was really more the Canadian than the British ambassador. His skilful diplomacy and his intimate knowledge of American politics served Canada in good stead, and quieted the demand which had frequently been voiced for a separate Canadian representative at Washington.

Among the fruits of the new friendliness and the more direct diplomatic discussion was the settlement of two long-standing fishery disputes. The much discussed Convention of 1818, in respect to the Atlantic fisheries, was referred to the Hague Tribunal in 1910, where it was finally set at rest. The controversy as to fur-sealing on the Pacific was settled by international agreement in 1911. Less success was met in dealing with the fisheries of the Great Lakes. A comprehensive treaty for the protection and development of these fisheries, drawn up in 1908, was not ratified because of the opposition of some private interests in the United States.

The most significant achievement of these years, however, was a broad provision for the settlement of all disputes as to boundary waters. The pressure for the use of boundary rivers for the development of power, with all the difficult questions arising as to division of the power or obstruction to navigation, made necessary such a provision. In accordance with a suggestion from the United States a temporary Waterways Commission was set up (1905); and in 1910 a treaty was ratified providing for a permanent International Joint Commission, to consist of three Canadians and three Americans. The treaty provided, further, that any matter whatever in dispute between the two countries, quite aside from boundary-water issues, might be referred to the commission for settlement, with the consent on the one hand of the United States Senate, and on the other of the Governor-General in Council the Dominion Cabinet. Quietly, with little public discussion, the two countries concerned thus took one of the most advanced steps yet made towards the peaceful settlement of all possible sources of conflict.

The revival of the tariff issue was the most spectacular and most important episode in the new relationship. The revival started in the Republic. For some years a steadily growing agitation in favour of reciprocity with Canada had been carried on in the New England and Northwest states. Nothing might have come of the agitation, however, had not the Payne-Aldrich tariff of 1909 compelled official negotiation and opened up the whole broad issue. Under that tariff the system of maximum and minimum schedules was adopted, the maximum designed to serve as a club to compel other nations to yield their lowest rates. The president was directed to enforce these higher duties against all countries which had not agreed by April 1910 to grant the concessions demanded. The proposal partook of the highwayman’s methods and ethics even more than is usual in protectionist warfare; and it was with wry faces that one by one the nations with maximum and minimum tariffs consented to give the United States their lower rates. France and Germany were the last of European nations to accept. Canada alone remained. It was admitted that the preference granted other parts of the Empire did not constitute discrimination against the United States, but it was contended that the concessions made to France should be given to the United States.

Canada resented this demand, in view of the fact that the minimum tariff of the United States stood much higher than the maximum of Canada, and it was proposed to retaliate by a surtax on American goods. In the United States there was wide sympathy with this attitude; but under the act the president had no option but to enforce the higher duties if the concessions were not given. Fortunately he was left to decide as to the adequacy of such concessions, and this made agreement possible at the eleventh hour. President Taft proposed a conference at Albany; the Dominion Government accepted, and an agreement was reached on the 30th of March, the last day of grace but one. Canada conceded to the United States its intermediate rates on a few articles of minor importance china-ware, window-glass, feathers, nuts, prunes, and other goods and the United States accepted these as equivalent to the French concessions. Then, to complete the comedy, Canada at once made these lower rates part of its general tariff, applying to any country, so that the United States in the end was where it started enjoying no special concessions whatever. Canada had gone through the motions of making a concession, and that sufficed.

This agreement, however, was only the beginning. President Taft, who recognized too late that he had antagonized the growing low-tariff sentiment in the United States by his support of the Payne-Aldrich tariff, decided to attempt a stroke for freer trade. He proposed a broad revision of trade relations with Canada. In negotiations which began at Ottawa and were concluded at Washington in January 1911, an agreement for a wide measure of reciprocal free trade was effected. It was nearly as broad as the treaty of 1854. Grain, fruit and vegetables, dairy products, live stock, fish, hewn lumber and sawn boards, and many minerals were put on the free list. Meats, flour, coal and other articles free in the earlier agreement were subjected to reduced rates, a limited number of manufactured articles were included, some of them Canadian and some of them American specialties. The agreement was to be effected, not by treaty but by concurrent legislation for an indefinite period. The Canadian Government announced that the same terms would be granted all parts of the British Empire.

After the cabinets, the legislatures. President Taft had great difficulty in securing the consent of Congress. Farmers and fishermen, stand-pat Republicans and anti-administration insurgents, opposed this sudden reversal of a traditional policy. Only by the aid of Democratic votes in a special session of Congress was the measure adopted, late in July. Meanwhile the Opposition in the Canadian parliament, after some initial hesitation, had attacked it with growing force. They resorted to the obstruction which the Liberals had practised in 1896, and compelled the Government to appeal to the country, a week after Congress had accepted the agreement.

After parliament, the people. Apparently the Government anticipated that the bargain would be welcomed by nearly all Canadians. That expectation was not without warrant. It was such a treaty as Canada had sought time and again during the last fifty years, and such as both parties would have accepted without question twenty years before. Every important leader of the Conservative party was on record as favouring such an arrangement. Yet it was received first with hesitation, then more and more freely denounced, and finally overwhelmed.

On the economic issues concerned the advocates of the agreement apparently had a good case. The farmer, the miner, the fisherman stood to gain from it, not so notably as they would have done twenty years before, but yet undoubtedly to gain. It was contended that the United States was itself a rival producer of most of the commodities in question, and that Canada would be exposed to the competition of the British Dominions and the most-favoured nations. These arguments had force, but could not balance the advantages of the arrangement, especially to the western farmer. That this gain would accrue and a large trade north and south be created, to the destruction of trade east and west, was in fact made by the opponents of the treaty the chief corner-stone of their economic argument. It was held, too, that the raw products of farm and sea and forest and mine ought not to be shipped out of the country, but ought to be kept at home as the basis of manufacturing industries. And though the arrangement scarcely touched the manufacturers, the thin end of the wedge argument had much weight with them and their workmen. It would lead, they thought, to a still wider measure of trade freedom which would expose them to the competition of American manufacturers.

But it was the political aspect of the pact that the Conservatives most emphasized. Once more, as in 1891, they declared Canadian nationality and British connection to be at stake. Reciprocity would prove the first long step towards annexation. Such was the intention, they urged, of its American upholders, a claim given some colour by President Taft’s maladroit ‘parting of the ways’ speech and by Speaker Clark’s misplacedly humorous remark, ’we are preparing to annex Canada.’ And while in Canada there might be as yet few annexationists, the tendency of a vast and intimate trade north and south would be to make many. Where the treasure was, there would the heart be also. The movement for imperial preferential trade, then strong in the United Kingdom, would be for ever defeated if the American offer should be accepted. Canada must not sell her birthright for a mess of Yankee pottage.

The advocates of reciprocity denounced these arguments as the sheerest buncombe. Annexation sentiment in the United States they declared to be rapidly disappearing, and in any case it was Canada’s views, not those of the United States, that mattered. Reciprocity from 1854 to 1866 had killed, not fostered, annexation sentiment in Canada. And, if the doubling and trebling of imports from the United States in recent years had not kept national and imperial sentiment from rising to flood-tide, why now should an increase of exports breed disloyalty? Canadian financiers and railway operators were entering into ever closer relations with the United States; why should the farmer be denied the same right? The reciprocity proposed in 1911, unlike the programme of twenty years earlier, did not involve discrimination against Great Britain, but in fact went along with a still greater preference to the mother country. The claim that reciprocity would kill imperial preference was meaningless in face of this actual fact. Moreover, the British tariff reformers proclaimed their intention, if Mr Chamberlain’s policy prevailed, of making reciprocity treaties with foreign countries as well as preferential arrangements with the Dominions, so why should not Canada exercise the same freedom?

But elections are not won merely by such debate. The energy with which they are fought, or the weight of the interests vitally concerned, may prove more decisive than argument. And in this contest the Opposition had the far more effective fighting force and made the far stronger appeal. Mr Borden’s followers fought with the eager enthusiasm which is bred of long exclusion from office, while the ministerialists save only the veteran prime minister himself and a small band of his supporters fought feebly, as if dulled by the satiety which comes of long possession of the loaves and fishes. Outside the party bounds the situation was the same. The western farmers were the only organized and articulate body on the side of reciprocity, while opposed to it were the powerful and well-equipped forces of the manufacturers and the closely allied transportation and financial interests. Through the press and from a thousand platforms these forces appealed to the dominant beliefs and feelings of the people. Quite effective was the appeal founded on the doctrine of protection. In twenty years Canada had become a city-dominated land, and the average city-dweller had come to believe that his interests were bound up with protection a belief not unnatural in the absence for a decade of any radical discussion of the issue, and not to be overcome at the eleventh hour. But the patriotic appeal was still more effective. Here was a chance to express the accumulated resentment of half a century against the unneighbourly policy of the United States, now suddenly reversed. The chance could safely be seized, for Canada was prosperous beyond all precedent. ’Let well enough alone’ was in itself a vote-compelling cry. In fact, ’Laurier prosperity’ proved its own Nemesis. Jeshurun Ontario, having waxed fat, kicked. An American philosopher, Artemus Ward, has recorded that his patriotism was so worked up during the Civil War that he consented to send all his wife’s relations to the front. Many an Ontario patriot in 1911 was prepared to sacrifice the interests of his fellow-Canadians to prove his independence of the United States. And in Quebec the working arrangement between the Conservatives and Mr Henri Bourassa and his party told heavily against the Government.

The result of the elections, which were held on the 21st of September, was the overwhelming defeat of Sir Wilfrid Laurier’s Ministry. In Ontario the Liberals saved only thirteen seats out of eighty-six. In the rest of the country they had a majority, but not sufficient to reduce substantially this adverse Ontario vote. The complete returns gave 133 Conservatives to 88 Liberals. As usual, the popular vote was more equally divided than the parliamentary seats, for the Liberals secured 625,000 and the Conservatives 669,000 votes. The Liberal majority of only 5000 in Quebec, 3000 in the maritime provinces, and 20,000 in the prairie provinces was overcome by the Conservative majority of 63,000 in Ontario and 9000 in British Columbia. A fortnight later Sir Wilfrid Laurier tendered his resignation to the governor-general and Mr Borden formed his Government.