Document Information

Date: 1866-06-26
By: Province of Canada (Parliament)
Citation: Province of Canada, Parliament, Scrapbook Debates, 8th Parl, 5th Sess, 1866 at 25-28.
Other formats: Click here to view the original document (PDF).
Note: All endnotes come from our recent publication, Charles Dumais & Michael Scott (ed.), The Confederation Debates in the Province of Canada (CCF, 2022).

Click here to view the rest of the Province of Canada’s Confederation Debates for 1866.

LEGISLATIVE ASSEMBLY

TUESDAY, June 26, 1866[1]

The Financial Statement

Alexander Galt [Sherbrooke, Minister of Finance] moved the House into Committee, and said when he last had the honour of addressing the Committee he had to review a year of a less promising character than the past. Then there had been a deficiency of $100,000. Now the position was much more satisfactory. We had passed through a year rather remarkable both in a commercial way through the abrogation of the Reciprocity Treaty[2], and he ought almost to say a in a military point of view through the attacks made on its integrity by lawless invaders. Providentially owing to the excellent harvest of last season we were in a very much better position every way than that we occupied a year ago, and could encounter a trying ordeal with much better resources. The accounts were in the hands of hon. members, and they showed that during the year there had been an expenditure of $12,106,786, of which $270,393 had been applied to the reduction of the public debt, leaving as ordinary expenditure the sum of $11,836,393.

On the other hand, the income had been $12,432,548. Consequently, after meeting all charges, there was a surplus of $590,655, and after making provision for reducing such of the public debt, we had carried to the credit of the country no less than $325,962.

Some Hon. Members—Hear.

Alexander Galt [Sherbrooke, Minister of Finance]—The expenditure he had mentioned included he was happy to say, all the unexpected charges incurred in defending the country against lawless invaders.

Some Hon. Members—Hear.

Alexander Galt [Sherbrooke, Minister of Finance]—It would be satisfactory to the country to know that this would include the charges that have been defrayed, and that had to be paid in connection with the last serious inroads. It was proper to refer to the principle sources whence this increase was derived, which he did with satisfaction. It was just those receipts which had increased which show the people to be prosperous.

The customs had realised $7,293,248, against $6,160,000, or an excess of more than a million. On excise they had realised $183,575, over the estimate at $150,000.

With reference to the former, various causes had undoubtedly operated to cause the increased imports. Stocks had been low, but the great excess was altogether unexpected. With regard to excise, the Government had received duties on 4,030,000 gallons, instead of 3,250,000. With regard to minor articles for tobacco receipts did not much vary from estimates, many estimated that expenditure for militia would have been covered by $500,000 it really reached $1,638,868. Had this come upon the country under less favourable circumstances it might have involved us in great difficulty, but he was delighted to say that all this expenditure has been met by the ordinary revenue.

Some Hon. Members—Cheers.

Alexander Galt [Sherbrooke, Minister of Finance]—With regard to the trade of the country he thought the statements must be satisfactory, comparing the trade of eleven months for which he had returns for those of the previous year and making an estimate for the twelfth. It appeared that in 1864 and 1865 there was an import trade of $44,620,469 against one of $53,034,045 in 1865 and 1866.

Some Hon. Members—Hear.

Alexander Galt [Sherbrooke, Minister of Finance]—There was consequently an excess of imports as compared with that year of nearly eight millions and a half.

Some Hon. Members—Hear.

Alexander Galt [Sherbrooke, Minister of Finance]—Had this excess not attended with a corresponding increase of exports we ought to have feared that the country had gone beyond a prudent course of action. But he was glad to point out that the exports for the 12 months were $51,984,375 against $42,181,151 in previous year.

Some Hon. Members—Hear.

Alexander Galt [Sherbrooke, Minister of Finance]—Consequently though the import trade had been large the exports trade had more than met it, and the people of the country were justified in purchasing in foreign markets to the extent they had done; And the province need not apprehend any embarrassment from the trade it had carried on. If Canada were as prudent in the future, as she had been in the past, he thought she might pass, without anxiety, through the financial storms which periodically recurred, and caused so much anxiety in other countries.

The whole volume of trade had increased from $87,112,620 to no less than $105,018,420, a difference of nearly 18,000,000 in the value of trade the country had carried on in 1864-5 and 1865-6 and an amount exceeding by much more than $10,000,000 any previous year, making a step in advance very gratifying to the House.

Having other subjects which he desired to bring at length before the House, he would not dwell at greater length upon this subject, but pass into the statement of expenditure for the next year, of which he had distributed a summary to hon. members. By reference to that statement it would appear that the total expenditure, including the redemption of the public debt, was put down by the officers of the government at $12,376,150.

With regard to the items, he might remark that many of them were increased from the same causes that caused the increase of last year. A continual increase must arise in the cost of civil Government by the promotion and increase salaries to which the civil servants were entitled under the act, only reduced when from age or death they ceased to be servants of the Crown. It had also been found desirable to make an addition for contingencies, for it had been found that we could not live in a large house so cheaply as in a small one.

Some Hon. Members—Laughter.

Alexander Galt [Sherbrooke, Minister of Finance]—With regard to administration of justice the Government has adopted the supposition that the administration of criminal justice would be larger this year than before. To show the likelihood of this, he need only refer to the large number of prisoners now in our gaol for a piratical invasion of the Province. Besides, some additional

• (p. 26)

precautions had to be taken to preserve the peace of the country, for it was better to be prepared than to be found unready.

Some Hon. Members—Hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—The same remark applied to the item of Police. With regard to the item of Legislation the sum voted last year was considerably in excess of what was used. This year it included the expense of the election of Legislative Councillors in the fall, but it was not likely that this Parliament would ever have to provide means for another general election. The consolidation of the union was now so far advanced that it would be accomplished before the time for another general election came round.

Some Hon. Members—Hear.

Alexander Galt [Sherbrooke, Minister of Finance]—Passing over other items he came to that of the militia. He regretted to have to say that the Government would not hold themselves responsible for the safety of the country unless a sum largely in excess of what was voted last year was voted now. Instead of asking for $50,000, the Government felt it their duty to say that they wish to be empowered to spend a sum of no less than $1,500,000. They felt the responsibility they had incurred this year in violating the law, and expanding more than their estimate for last year, and desired not to be obliged to do so again. The explanation would more properly come from the Minister of Militia [John A. Macdonald]; but he might say that it was desirable that the magnificent Volunteer force, to which the country owns so much, should receive further developement, and the Government would like power to our man equip 35,000 Militia, instead of 25,000.

Some Hon. Members—Cheers.

Alexander Galt [Sherbrooke, Minister of Finance]—Connected with this was the necessity of placing within the reach of the people of the country depots of arms, for enabling them, in case of need, to resist in their own defense. Again it was necessary to maintain, in perfect and regular efficiency, the military schools that were training the young to be officers of our force.

Some Hon. Members—Hear.

Alexander Galt [Sherbrooke, Minister of Finance]—We were alongside of a friendly country. We recognise the way in which the United States had acted in reference to the raids after overt acts had been committed, but after all the safety of a country was in its own power, and it must depend upon itself rather than on a foreign nation for maintaining the integrity of its soil. The House should remember that the Fenian[3] snake had been scotched not killed. At any moment the country might again be called upon to send its young men to meet this lawless foe, and it was desirable that they should be able, by numbers and the perfection of their equipment, to do this thoroughly.

Some Hon. Members—Cheers.

Alexander Galt [Sherbrooke, Minister of Finance]—Referring to the item for public works, he said that a large proportion of the expenditure was in connection with the Parliament Buildings. From the item for roads and bridges care had been taken to exclude anything of a purely local character. He only asked the usual votes for colonization roads this year. The next, he hoped, would fall under the jurisdiction of the local governments. He also asked for the means to complete the military road which was the reason of the increase from $20,000 to $60,000. The seignorial indemnity was simply not called for in previous years, and he was obliged to anticipate a demand for the amount in the estimate for this year.

He had now endeavoured briefly to explain the several items of expenditure likely to attract the special intention of the house. There would be an opportunity hereafter to discuss fully each separate item. He would now proceed to consider the provision to be made for this proposed outlay. He had already stated that the amount to be provided for exclusive of redemption of debt, was $13,376,000. In calculating the means of providing that amount it was proper first to consider the items not subject any considerable change such as revenue from Post Office, American postage, Public Works, and territorial and miscellaneous resources, the latter including the Municipal Loan Fund Law and Stamps.

According to the estimates of officers in his Department, these would yield only [text missing] and they were all sources of revenue except Customs and Excise. There remained, therefore to be provided from these two sources, or from loans, no less than $8,450,417. In the present condition of affairs he could not base his estimate of revenue to be collected under the present law upon that of the current year for various reasons. That was exceptional if looked at from the point of the United States at the end of its civil war, and the exhausted stocks of goods and excessive prices prevailing then, that would account in some measure for the very large purchases made in our markets during the past nine months and the threatening of repeal of the Reciprocity Treaty[4] had also materially stimulated our export trade.

When all this was considered it must be seen that we cannot accept that as the normal condition of trade which had yielded $7,000,000 from customs. Now our markets were full, and we must anticipate more or less derangement of trade an interference with the productiveness of the revenue. He thought we must not expect more than $6,000,000 from customs, and we could not hope for more than the estimate of last year, $1,550,000, from excise, instead of $1,700,000 received this year.

Having to provide then $8,500,000 with only $7,500,000 of an estimated revenue it was obvious that some farther provision is necessary to be made by Parliament. The whole difficulty arose out of having to make additional expenditure for defense. If the Government could conscientiously content themselves with asking only $500,000 for militia, as in the previous year, the whole difficulty would vanish at once, but they could not honestly do this, and he was sure they would be sustained by the House and country and asking for the larger sum placed in the estimates.

Where, then, were they to seek for increased revenue? The great agricultural interest and population, the very stem and trunk of the prosperity of the country, as the largest consumers now, have the greatest weight of taxation. That interest is to be more or less affected by the repeal of the Reciprocity Treaty as the obstacles thrown in the way of their access to their readiest market for their productions. Now, if the increased burthens were laid on this class, at the same time that their market was thus taking away, it was clear injustice would be done. It became the duty of the government, if possible, to reduce the burthens and procure a new market. He would have been glad for various reasons if the necessity for this revision of the system were not forced on the government now. He would indeed, but for two reasons, have considered a readjustment of our system of finance.—

One was the state of our commercial relations with the United States pending the threatened repeal of the Reciprocity Treaty; the other the approaching Confederation of the colonies, rendering further revisions and assimilation of tariffs necessary. For these reasons he had not invited the House during the past two years to revise the revenue system, but parliament had met now after the refusal of the United States to renew the treaty, and after they had imposed onerous duties on many of our products, and when owing—he would not say to the fault of the authorities of that country—but certainly to the disturbed state of society there, more repressive measures of defence from aggression thence were forced upon us. It became imperative upon us, therefore, to consider if we cannot so rearrange our customs and excise as to yield us the largest amount of revenue with the least oppressive burthens on the great body of the people. If content to simply delay an additional taxes on those already sufficiently burthened.

There were several methods from which the increased revenue might be desired. But it was manifestly our duty to attempt to raise this additional revenue in a way likely to cheapen the cost of living, and providing that would procure near markets for our productions. In any readjustment of our taxation we had to choose between American and European systems. He said European because the principles of British taxation were gradually spreading and they could no longer avoid making the choice. If they took the American system of protecting every interest by high duties, he did not believe the people of the country would approve of that.

If they adopted the European as opposed the American it was calculated to bringing people from abroad with capital seeking homes and employment in this new world. He did not believe that the United States could long continue to absorb population from foreign countries, in the face of the present burdens and the present injurious method of laying them on. If we, on the other hand, offer cheap land, cheap living, and equal security for life and property, then we might reasonably hope to direct to these shores a considerable portion of surplus population.

We all look forward to a separate nationality on this continent, and we can only do this in one way—If, in all respects, we merely imitate our neighbors, and adopt their system, such a policy must end in assimilation and absorption . If, on the other hand, we believe this continent large enough for the existence upon it of two or more great nations, and he believed that was the opinion of the House and country,—

Some Hon. Members—Hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—we could not do better, in organising a fiscal system for ourselves, than seek light from the great nations of Europe, and so make this a better country, governed by wiser financial principles.

And there was this further satisfactory view of the case, that in any assimilation of our system to the European system we should also be assimilating our taxation to that of our sister colonies, and depriving the opponents of union and those colonies of one of the chief arguments against it, of the [text missing] of one of the obstacles now in its way. It was hardly to be expected that our past tariff would be acceptable to other colonies.

When union comes we must change it, and a partial change now would make the shock to trade of future changes much less than if a larger were made at once. Farther he felt that a change in the fiscal policy may fairly be advocated as tending to assimilate our policy to that of the Mother Country and to give her people in government satisfaction.

Looking to Britain for defence, as we did, asking aid of all her forces to protect our frontier, are inland waters and our fishermen on our coasts, we may well consider whether we should not make her fiscal policy more in accordance with hers, and whether we are not able to do what would be at once graceful towards her and beneficial to ourselves; and you might go farther and take occasion to say one word also about our commercial relations with our best European customers after the Mother country—France.

Many of our people were bound to hurt people by the ties of a common lineage, language and history, and no country in Europe could furnish us with so profitable a market except Britain, none can be so useful to us. Following up the treaty with Britain she reduced the duties on all our staple products, imposing on them now little more than a mere statistical duty. Nay, he was in a position to announce a new concession in the same direction. He had been informed by the Consul General of France that his Government had reduced the duty on ships from 20 francs per tonne to 2 francs. He congratulated the shipbuilding and lumbering interests on this important concession. There seemed, indeed, scarcely a limit to increase of trade with France except that it was almost all on our side; That we exported so much an imported so little in return.

No trade could obtain a healthy growth and less it was in some measure reciprocal. The import trade with Great Britain in 1865 was $31,000,000; with U.S. $19,500,000, and other countries $6,000,000. Free goods from the US were represented by similar goods exported there. The amount of dutiable goods exported to the States during the war was reduced to four million dollars, and that amount they were nearly two million composed of West Indian and English goods; Therefore, the amount of goods we were able to send the states was only about $2,000,000.

He also referred to the trade with the Lower Provinces, the quantity of flour consumed in New Brunswick, according to the statements of Mr. Brydges was 256,000 bbls, Nova Scotia 355,000, and Prince Edward Island 32,000, Newfoundland 202,090, making a total of 874,000 bbls, about the amount covered by trade with the United States under the Treaty[5].

It would be evident that by using the existing sources of trade we now have we might look forward to finding markets equal to that of the United States. He then went on to refer to the result of the Commission to the West Indies[6], and the trade of the United States with those countries, to show the great opening which existed for us there. The amount of fish, for example, consumed there was over a million of dollars; House furniture upwards of half a million; ice $100,000; and a variety of other articles in proportion. The export trade of the United States with those countries was sixty million dollars; and therefore he did not see why it was assuming too much to suppose that with the intelligence of our community we might have an opportunity before long of engrossing a very considerable proportion of that trade.

Luther Holton [Chateauguay]—Has there been any obstacle heretofore to our obtaining that trade?

Alexander Galt [Sherbrooke, Minister of Finance] did not know that there had been, but we had a market at our door in the United States.

Luther Holton [Chateauguay]—It might be very desirable to secure this trade , but how do you propose obtaining it?

Alexander Galt [Sherbrooke, Minister of Finance] went on to say the Government intended increasing duties on certain articles and reducing on others, and it was there hope this would conduce to the prosperity of the country and would not imperil any existing interest. It would be admitted that there was no source of income which we were more entitled to levy duties upon than excise.

The Government believed that it would be in the public interest that there should be a large increase in the excise duty on spirits. It would be his duty to double this or increase it from thirty to sixty cents. With regard to beer it was not proposed to make any increase. The duty now was equal to that of the United States. As to Tobacco it was not proposed to make any change in the excise. The Government would have done so had arrangements been more complete for preventing frauds on the revenue. He did not assume that in increasing the excise on spirits we would have equal consumption to last year. The consumption

• (p. 27)

under the new duties would give $2,550,000.

He next came to the change in the tariff. Some changes were rendered necessary by the changes in the excise, but he proposed going beyond that, and make specific duty on brandy, whiskey, &c., and a uniform one of seventy cents a gallon or ten cents more than the excise duty. He believed the effect would be to increase the import of a better article of brandy than was formerly used, and also of leading to the consumption of less injurious beverages. With regards tobacco unmanufactured it would still be admitted free, nor was it intended to impose duty on other tobacco higher than the excise duty now levied. On Indian corn, Coarse Grains, &c., imported from the United States, there would be a duty of 10 cents a bushel, and he proposed asking the House to authorize the Government to remit this duty if the states altered their policy towards us. On flour the duty would be 50 cents a barrel.

In regard to free ports, it was the conviction of the Government that under existing circumstances they could not be retained.  On tea, Government proposed adding to the present specific duty 3 cents per pound, making the duty on tea as nearly as possible 12 or 12 ½  cents per pound instead of 9 cents as at present. It was also proposed to levy a small export duty on saw logs, 25 cents per standard log. It was also proposed to change the method of levying duty which we hereafter be levied on the accumulated charges at the port of shipment. This change would give the increased amount of $260,000. The total amount received from changes he had mentioned on spirits, tobacco, free ports, Reciprocity Treaty[7] goods, saw logs, and change on levying duty, would give a revenue of $2,910,000.

The Reciprocity Treaty goods amounted to $311,000; The total estimated amount of customs at existing rates with changes he had mentioned, would be $7,244,902 dollars, and excise $ 2,550,000, making together $9,794,902; And , with the items of Crown Lands, Post Office, &c., mentioned before, the total estimated income would be $13,720,235, against an estimated outlay of $12,374,150; Consequently the charges he had mentioned would leave at the disposal of the Committee the amount of $1,374,085; and when the Committee found how that sum would be applied he thought it would entirely justify the changes proposed by way of increase.

In the first place it was proposed to make changes on the duties on sugar. Great difficulties arose from these duties not being uniform. They were similar to none in other countries, and were not known in the countries where we bought sugar. After getting the best information on the subject from skilled officers an otherwise, the Government had come to the conclusion that the interests of the country would be best promoted by adopting the English standard of duties for all kinds of sugar — a standard that was known to most sugar producing countries, and which, while simpler, differed not vary materially from our duties.

By adopting the English tariff on sugar then we should lose probably about $100,000, a sum about equal to the increased duty proposed to be put on tea. This alteration in the sugar duties would render necessary a small alteration in the duties on molasses, by which there would be an increase of about $70,000.

The duties on sugar, it was proposed, would be as follows:—Candy, brown or white refined sugar, or sugar rendered by any process equal in quality there to; manufacturers of refined sugars, or sugar rendered by any process equal and quality there too, and manufacturers of refined sugar $3 per 100 pounds, white clayed sugar, or sugar equal to white clayed $2.60; yellow muscovado and brown clayed $2.25; brown muscovado $2; any other sugar, $1.75. The duty on Cane Juice it was proposed to make $1.50 per gallon, and on Molasses $1 per gall. The Committee would see that this was precisely the scale of sugar duties adopted in England, which, by levying on weight instead of capacity would better prevent fraud.

He now came to the Wine duties. He thought it advisable to encourage consumption and wine in order to lessen the consumption of spirits. The duties were not high now, but they were open to objection that being ad valorem[8] the Government did not get the real amount of revenue that ought to be derived from the importations of the article. Under the present system a considerable amount of fraud was committed.

The standard adopted by England in the treaty with France was one based on strength rather than capacity, and was the result of most intricate inquiry by skilled officers of the British Customs in all of the wine growing countries of the world. It was that standard he proposed to adopt and this country by proposing a specific duty of 10 cents per gallon on wine in wood, containing not over 26 degrees of proof spirits over proof, and of 25 cents per gallon in wine containing over 26 degrees and not more than 42 of proof spirits; on wine in bottles except sparkling wine it was proposed that $1.20 per dozen should be levied, with a corresponding rate for pints and half pints. But as a large proportion of sparkling wine imported was found to be spurious, it was proposed to protect the public by imposing on this article increase duties. It was proposed, therefore, to impose a duty of $3 per dozen on genuine sparkling wine, if accompanied by a certificate of origin and growth, and a $4 per dozen if not accompanied by such certificates.

Luther Holton [Chateauguay]—Is that a European or American system?

Alexander Galt [Sherbrooke, Minister of Finance] said that it would be found to be the Canadian system.

Some Hon. Members—Laughter and hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—Next with regard to Coffee it was proposed to make the duty 2 cents per pound on green, instead of 5 per cent, and specific 3 cents, and on ground or roasted 4 cents instead of 30 per cent. and 3 cents.

He would next state what it was proposed to do with regard to manufactured goods. They were at present class principally under 25, 20 and 10 per cent list. There was one article under 15 per cent, two or three under 25 and one or two under 30, but most of them were under the 20 per cent rate of duty. The two articles under 30 per cent it was proposed to class with other manufactured goods; those not charged 25 per cent boots and shoes, harness, saddlery, clothing or wearing apparel, made by hand or sewing machine, it was proposed to remove from the separate list of 25 per cent , and class then with ordinary articles of manufacture. These changes made it would be found that the great bulk of our imported manufactured goods have a duty of 20 per cent, and in these it was proposed to make a reduction from 20 per cent to 15 per cent.

Some Hon. Members—Hear, hear, and cheers.

Alexander Galt [Sherbrooke, Minister of Finance]—At the same time it was proposed to deal with certain articles in the 10 per cent list, with the exception of Cotton Warp, by abolishing the duties and making them free.

Some Hon. Members—Renewed cheers.

Alexander Galt [Sherbrooke, Minister of Finance]—He might say that this 10 per cent list was composed almost wholly of articles that went into consumption in the manufacture of other articles, and were such as Iron, Steel, Lead, &c. The Government believed that, by making these articles free, all those classes of manufactures for which there was a duty of 20 per cent, and which were manufactured in this country would be produced more economically, whereby this advantage would be gained, that while manufacturers would be able to supply our own people with goods 5 per cent less than before they would have the same time by cheaper rate of manufacture be able to compete favorably with foreign manufacturers.

Some Hon. Members—Hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—He thought that these changes so far from injuring our manufacturers would place them in a better position.

Luther Holton [Chateauguay] (ironically)— By giving them higher protection.

Alexander Galt [Sherbrooke, Minister of Finance]—No, but by cheapening every article that went into their consumption as manufacturers; and, notwithstanding this near of the hon. member, he (Mr. Galt) wished that the Government was in a position now to abolish the customs duties on all these articles. He hoped that the day with soon come when, if not himself, the hon. gentleman opposite, or someone whom he could support, would be able to make a clean sweep of all duties on manufactured goods.

Some Hon. Members—Renewed cheers.

Alexander Galt [Sherbrooke, Minister of Finance]—That change cannot be made now, but when the Government was in a position to give very considerable relief to the people of the country in regard to a large class of articles which they consumed, he did not think they should be sneered at for giving that relief.

Some Hon. Members—Hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—The effect of the changes proposed would be a movement in the direction which he hoped hereafter would be followed; and it would have been his duty on this occasion to have proposed a reduction of duty to 12 ½ per cent on the bulk of manufactured goods, if the Government had felt that it could safely do so in the presence of the present state of affairs. It was the intention of his colleagues in himself to have proposes reduction had it not been for the large expenditure rendered necessary by the events of the last three or four weeks.

Some Hon. Members—Hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—Now the effect of the reduction proposed in their duties on manufactured goods would be to cause a reduction of $1,236,000 in the total duties, which with the reduction on the sugar duties would make a total decrease of $1,316,000. This estimate was not based on importations of the year about to close, which had been on this class of goods about $24,000,000, but upon an importation of only $20,000,000, for the Government had not thought it proper to assume that the importations next year would be within four millions as much as the present year. The effect, therefore, of the changes proposed would be to increase the excise duty by about a million, and increase the Customs by about $700,000; and it was in the belief that this decrease would tend to develope and enlarge our trade with England, while at the same time it would give to manufacturers articles which entered into their manufacturers at cheaper rates, and lessen the burthens of the farmers and people of the country generally that the Government proposed it to the Committee.

The hon. gentleman enlarged upon this point and said that it would be from want of manufacturing energy on the part of our people if they were not enabled by these changes to seek add obtain a profitable foreign market for their manufacturers. He went on to say it was his intention to ask the Committee to consent to these changes at once pro forma[9], not binding the House as to its ultimate decision, but to prevent in the meantime improper conduct to defraud and dry goods buy goods being taken out of bond, and to give authority to the Government to lay the increase duties on spirits immediately in the same way as authority had been given on former similar occasion.

Some Hon. Members—Hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—Of course if the changes were not finally confirmed by the House, the amount of increase duties collected would be refunded to the parties from whom they were collected; but if confirmed, his proposition would permit the public to reap the benefit of the new duties.

Some Hon. Members—Hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—The hon. gentleman then proceeded to stay what provision had been made to meet the portions of the public debt of the Province which would accrue this year. $1,500,000 would fall due within the year. This debt was contracted three years ago. There were also some other debts to meet within the year, making a total to be provided on 1st July of $1,889,000. The floating debt in England would be on the 1st July be £3,152,000. In regard to this amount £125,000 have been borrowed at 8 per cent payable in October next. There would be owing to the Bank of Montreal on 1^st July $750,000 borrowed at 7 per cent.

Luther Holton [Chateauguay]—When was this amount borrowed?

Alexander Galt [Sherbrooke, Minister of Finance]—Within the last four weeks, but as yet, not all used, though a portion it would be. There was towards that a sum $674,000 in the Bank. Altogether, therefore, the Government had to provide for about $5,170,000. It required the most careful consideration to provide for this large sum. The Government already deeply considered the subject, they looked upon it that, in view of the disturbed state of Europe, and recent troubles here, it would be folly to attempt to meet this by foreign loans.

Some Hon. Members—Hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—They considered that any attempt to renew loans would meet with disastrous failure, therefore, there was but one course opened by obtaining a Canadian credit in Canada.

Some Hon. Members—Cheers.

Alexander Galt [Sherbrooke, Minister of Finance]—To do this the Government would have to resume the credit which they had devolved on the chartered banks of the Province.

Some Hon. Members—Hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—Although necessity now drove the government to this, they would be compelled to consider it any way.  If allowed to go on till 1870, it would be almost impossible to affect satisfactory settlement with the Banks. If the Government took matters into their hands now they would be able, very shortly, to submit such conditions as would be acceptable. The Government proposed issue legal tender notes to the extent of $5,000,000, and it was believed that by this the immediate requirements of the country might be met. Certain resolutions had been adopted by government by which when laid before the house[10] it would be found that sufficient inducements were offered to the monetary institutions of the country to make the willingly exceed to the propositions.

The hon. gentleman adverted to the position of the country and our hopes and prospects for the future. We were about to become a portion of a great Confederation Colony, and as the present would in all probability be the last Session of a Canadian Parliament, it would be a pleasing thing to have it to say to our sister provinces, when United, that we had overcome our financial difficulties unaided. We should always endeavour to approximate to that system of political economy which had borne such rich fruits in the mother country.

Some Hon. Members—Hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—In regard to the recent conduct towards us of our American neighbours, he was glad we had acted in a manner to show we had a disposition to extend towards them the Olive Branch. He thought, however, if there was one thing more effectual that another to bring our American friends around to a true sense of their duties, it was by showing them that we were to a very great extent independent of them.

Some Hon. Members—Hear, hear.

Alexander Galt [Sherbrooke, Minister of Finance]—It was, therefore, desirable to show them that, however much we might value their goodwill and trade, we should not

• (p. 28)

descend to unfair means to obtain either.

Some Hon. Members—Cheers.

The hon. gentleman resumed his seat amid loud cheers.

Formal resolutions were then submitted as follows:—

1^st. That it is expedient to increase the duties on spirits distilled in the Province as follows: On every gallon of spirits of strength of proof by Sykes’ Hydrometer from 30 cents per gallon to 60 cents per gallon.

2^nd. That it is expedient to repeal the existing duties of customs upon the following articles, and in lieu thereof to impose specific duties hereunder mentioned—that is to say: On every gallon of proof by Sykes’ hydrometer of Brandy, 70 cents per gallon; Gin, 70 cents; Rum, 70 cts.; Whiskey, 70 cts.; spirits of wine and alcohol not being whiskey 70 do; on cordials other than ginger, orange, lemon, gooseberry, strawberry, raspberry, elder and currant wines $1,20 per gallon.

3^rd. That it is expedient to increase the specific duty now imposed on the following articles, that is to say on tea from 4 cents per pound to 7 cents per pound; on Crude Petroleum from 4 cents per gallon to 6 cents per gallon.

4^th. That the duties of Customs now existing, and levied upon the following articles, be repealed, and that in lieu thereof specific duties hereinafter mentioned be imposed thereon, that is to say, cane juice $1,50 per 100 lbs; molasses, $1 do.

George Brown [Oxford South] regretted that the hon. gentleman should have made such a speech as he had done at the present junction. This was certainly a very bad time to make such propositions as had been laid down in the Budget. He (Mr. Brown) ventured to say when that scheme went before the country it would produce the wildest commotion. He was greatly surprised at the magnitude of the expenditure. The Hon. Finance Minister [Alexander Galt] had stated he would not have submitted the scheme now, had he thought it would throw any obstacles in the way of Confederation.

He, [Mr. Brown] certainly considered it most unfortunate that such a thing had been done on the Eve of the consummation of the union of the provinces. The scheme in many important particulars was bad. He considered that taking off a tax and putting on another was a way of robbing Peter to pay Paul. So far from ending matters, they had been made worse.

He [Mr. B] intended to meet the propositions at length at another time. He held at the scheme of the Hon. Finance Minister [Alexander Galt] would throw the country into political commotion which the Government had been formed to set at rest, and that putting forward such propositions at this time was little short of madness. By this, too, no one could say that the house would rise for months to come. All manufacturers in the country would come flocking down with petitions, &c., against the scheme. The proposition of the Government to issue legal tender notes[11], at old idea of the Finance Minister [Alexander Galt], he (Mr. Brown) did not think would work.

Alexander Galt [Sherbrooke, Minister of Finance] confessed surprise at the course taken by the member for South Oxford [George Brown].

John Sandfield Macdonald [Cornwall]—I am not.

Some Hon. Members—Laughter.

Alexander Galt [Sherbrooke, Minister of Finance] continuing, the hon. member for Cornwall [John Sandfield Macdonald] is past surprise of any sort. But he confessed surprised at the course of Mr. Brown. If there was any member who support he expected it was he—he has some farmers of Western Canada would approve his policy. He cared nothing for taunts about inconsistency, if the hon. gentleman would remember his financial statement of 1862 he would find it differed very little from what was now submitted. It mattered very little, however, what his previous views or those of the hon. member had been. The people would weigh both at their true value.

He cared not for any obloquy cast on him or inconsistency so long as he felt that the present course was right. The important thing was to deal according to correct principles with the present and future of the country. In order to prevent any unfair speculation, he would ask that the resolutions might be immediately passed, subject, of course, to the refunding of the duties collected if a bill confirming them was not subsequently approved of. He trusted that hon. gentleman opposite would have sent to that course.

Luther Holton [Chateauguay] said under ordinary circumstances he would do so. But in this extraordinary case he must refuse to commit himself to ascend to the resolutions as a whole but there was this further objection, the hon. member’s secret had not been well kept. He learned by telegram from a leading merchant in Montreal that rumours about a change in tea duties had been current there and it was asserted that a firm having business relations with a gentleman on the Treasury had been speculating on information about spirit duties. In justice there to the Mercantile community of Montreal and other Towns of the province he must decline to assent to resolutions now.

Alexander Galt [Sherbrooke, Minister of Finance] thought after the very extraordinary statement made by the member for Chateaugay [Luther Holton], he was bound to furnish the authority on which the statement was made. Of course it was impossible that such changes should be made without two or three departmental officers, as well as members of the Executive Council, being aware of it, but he was confident no one in his department had revealed it. no one knew in fact till within the last 48 hours. The resolution was only sent to printers this morning with sums in blank.

Luther Holton [Chateauguay] wished to furnish authority for the statement, and read a telegram from Mr. Cramp asking for information about the tea duties, as it was reported as sudden increased was to be made, and rumours were prevalent that Messrs. Gooderham & Worts had been speculating on the knowledge of the proposed increase of duties and spirits.

William Howland [York West, Postmaster General] said the latter charge, of course, referred to him; but the hon. member had not yet furnished authority for the statement. Mr. Holton had uttered an injurious slander against him—a slander such as no member of the house ought to utter—without notice or investigation , and he was bound to add he believed he never was connected in anyway with the firm of Gooderham & Worts. He was connected for some years with the firm of Gooderham, Howland and Co., but the partnership was dissolved before he became the member of any government; if you remembered a right, in 1857. He never in his life had any interest in the business of the firm in spirits. Mr. Cramp had evidently estimated him (Mr. Holton) at his true worth in telegraphing to him for information, relying on the fact that he was capable of revealing a secret if he knew it.

Antoine-Aimé Dorion [Hochelaga] said it was absurd to expect that he would have telegraphed to a leading member of the opposition for a Government secret. Mr. Cramp only wish to ascertain if the same rumour prevailed in well informed circles here. As for the explanations of Postmaster General [William Howland] they were perfectly satisfactory he was sure to every member of the house and to the country.

William Howland [York West, Postmaster General] reiterated that the charge had been made without any authority. No authority was now furnished for it, and he persisted in the view of Mr. Holton’s conduct just addressed.

George Brown [Oxford South] said that while it was a pity their attention should be drawn from the grave question before the chair by personal recriminations, yet for himself he was strongly suspicious of what the hon. gentleman intended doing. He was quite sure, however, that the Postmaster-General [William Howland] was utterly incapable of communicating a fact which he got as a member of the government; but the hon. member [Mr. Howland] was quite wrong in assuming that such stories had not got abroad as that mentioned by the member for Chateauguay [Luther Holton].

He [ Mr. Brown] had himself heard them. The finance minister proposed that we should agree to these resolutions pro forma[12] to-night, with the understanding that they should be open to future discussion, although he [Mr. B] thought they were very grave, as he was disposed to agree with him now. The Government was supported by a large majority. Perhaps not so large if the Confederation support were withdrawn.

Some Hon. Members—Laughter.

George Brown [Oxford South]—Yet they were entitled to support the Opposition would expect if they were on the Ministerial side. If any parties had obtained unfair advantage it was well to prevent any one else doing the same by agreeing to the resolutions to-night.

Thomas D’Arcy McGee [Montreal West, Minister of Agriculture and Statistics] strongly condemned the insinuation of the member for Chateauguay [Luther Holton], that a member of the Government had perjured himself by communicating knowledge obtained at the council board. As for the telegram from Montreal it amounted to very little.

Luther Holton [Chateauguay] was exceedingly obliged the hon. gentleman for saying that the telegram from Mr. Cramp was worth very little.

He (Holton) said that amounted to a great deal. The intention of the Government had been allowed to leak out, and it became known on the streets of Montreal that changes in excise were to be made. That his (Holton’s) statement. His authority was challenged, and he gave it, and he challenged any hon. gentleman to doubt that authority. Mr. Cramp was a merchant in Montreal and what more natural than that he should ask for information as to the reports in circulation, his statement as to the rumours circulated, was supported by the statements of several hon. gentleman he (Mr. Holton) never intended to make any charge in reference to the Postmaster General [William Howland], but because these rumours had been circulated he felt himself justified in taking the responsibility of opposing the concurrence in these resolutions to-night. Further discussion followed.

Fitzwilliam Chambers [Brockville] bitterly attacked Mr. McGee for connecting his name with the New York Herald, and endeavouring to injure him in his constituency by throwing doubts on his loyalty. He believed his (Mr. Chambers’) loyalty would compare favourably with that of the member for Montreal West [ Mr. McGee.]

John Rose [Montreal Centre] enquired what was really proposed by the resolutions before the House.

Alexander Galt [Sherbrooke, Minister of Finance] said it was desired that the resolutions should be passed to-night, so that goods might not be taken out of bond. The old duty would be collected on goods to arrive.

John Rose [Montreal Centre] would agree to them tonight, reserving to himself the right to discuss all these changes.

It was agreed that the house should go on in Committee of Supply on Wednesday, private business being taken up on Thursday.

The resolutions—

1^st. That it is expedient to increase the duties on spirits distilled in the Province as follows: On every gallon of spirits of strength of proof by Sykes’ Hydrometer from 30 cents per gallon to 60 cents per gallon.

2^nd. That it is expedient to repeal the existing duties of customs upon the following articles, and in lieu thereof to impose specific duties hereunder mentioned—that is to say: On every gallon of proof by Sykes’ hydrometer of Brandy, 70 cents per gallon; Gin, 70 cents; Rum, 70 cts.; Whiskey, 70 cts.; spirits of wine and alcohol not being whiskey 70 do; on cordials other than ginver, orange, lemon, gooseberry, strawberry, raspberry, elder and currant wines $1,20 per gallon.

3^rd. That it is expedient to increase the specific duty now imposed on the following articles, that is to say on tea from 4 cents per pound to 7 cents per pound; on Crude Petroleum from 4 cents per gallon to 6 cents per gallon.

4^th. That the duties of Customs now existing, and levied upon the following articles, be repealed, and that in lieu thereof specific duties hereinafter mentioned be imposed thereon, that is to say, cane juice $1,50 per 100 lbs; molasses, $1 do.[13]

—were agreed to, and the Committee rose and reported progress, and asked leave to sit again.

 The house then adjourned at 12:30.

ENDNOTES

[1]      An expanded version of Galt’s speech below can be found in Appendix D. The expanded version of Galt’s speech comes from a stand-alone document that was found at the end of the Scrapbook Debates, entitled “Speech of the Honorable A.T. Galt.”

[2]      Canadian-American Reciprocity Treaty of 1854 (Elgin-Marcy Treaty). The United States passed a Joint Resolution abrogating the treaty in Jan. 1865. It was formally terminated on Mar. 17, 1866.

[3]      The Fenian movement gained strength in North America when British antipathy in the United-States were raised after American politicians blamed “unneutral” British interference during the civil war after it concluded and raids on the Irish Republican Brotherhood in Ireland in the Fall of 1865 angered American immigrated Irish. In America, membership in the Fenian movement swelled late-1865 and it aimed at invading British North American to encourage rebellion and free Ireland from English subjugation. While the movement itself did attempt actual invasions of British North America, these were inefficient and unorganized – compared to “a crowd of seedy theatrical extras, hired by the hour for some battle scene in a play or a film.” The Fenians are mentioned once in the “Confederation Debates” of 1865 by T. D’Arcy McGee on Feb. 9,^. 1865 when quoting a passage from Archbishop Connolly’s letter in favor of confederation published in the Halifax Morning Chronicle on Jan. 13, 1865. There Archbishop Connolly wrote: “A cavalry raid or a visit from our Fenian friends on horseback, through the plains of Canada and the fertile valleys of New Brunswick and Nova Scotia, may cost more in a single week than Confederation for the next fifty years; and if we are to believe you, where is the security even at the present moment against such a disaster?”

[4]      Canadian-American Reciprocity Treaty of 1854. Supra footnote 2.

[5]      Canadian-American Reciprocity Treaty of 1854. Supra footnote 2.

[6]      The Confederate Council of Trade Commission to the West Indies, Mexico, and Brazil consisted of McDougall, Ryan, Delisle, and Dunscomb for Canada, Macdonald and Levesconte for Nova Scotia, Smith for New Brunswick, and Pope for P.E.I. Their findings were presented in “Report of the Commissioners from British North America Appointed to Enquire into the Trade of the West Indies, Mexico and Brazil,” [No. 43] in Sessional Papers (1866).

[7]      Canadian-American Reciprocity Treaty of 1854. Supra footnote 2.

[8]      i.e. “according to value.”

[9]      i.e. “as a matter of form.”

[10]    The scheme—meaning the Currency Resolutions—the creation of a provincial currency was first considered in the Legislative Assembly, in Committee, on Aug, 3, 1866, p. 75, although Galt had presented them on Aug. 2, p. 71.

[11]    Supra footnote 10.

[12]    i.e. “as a matter of form.”

[13]    Reinserted for clarity from earlier in the debate.