Minister of Finance had not proposed a reduction of taxation upon certain articles that might be mentioned, as he did not see that there was at present any immemediate expenditure of a serious kind to be provided for.

Hon. Sir A. T. GALT was sure the House and country agreed in the congratulations regarding the prosperous state of the country. He thought that, looking at the public works which it was proposed to undertake, the Minister of Finance was quite right in not dealing with the surplus, Although he felt sure that there would be a steady increase, he did not think the enormous revenue of the present would continue in future years. He hoped that, taking warning by the past, the country would not be led into more extravagant expectations of the future than circumstances would warrant. He deprecated the partial introduction by the Minister of Finance of the Washing. ton Treaty. He thought it should be dealt with separately, and discussed on its merits. It was not fair to ask the House to express an opinion on only part o an arrangement. With regard to the concluding part of his hon. friend's speech, he (Sir A. T. Galt) thought as he proceeded, that he referred to a political change, but found that his intention was simply to point the finger of scorn at those who did not share the same political opinions as himself. He did not wish to terminate the connection with Great Britain recklessly or suddenly, and he was not prepared to say that we were dependent upon the Imperial Government, but so long as the connection lasted he was prepared to do his duty in all matters concerning the Empire. He proposed certain resolutions last year, and he thought many hon. gentlemen who requested him to withdraw them would now agree that we should have been in a better position to day, had he gone on with them. If the connection with England required that sacrifices should be made by Canada, let the Government come down and ask the House, and they would make the necessary sacrifice. He did not expect to be assailed by the Minister of Finance for holding the views he did. His hon. friend had denounced him as a protectionist.

Hon. Sir F. HINCKS said he referred to that class of persons who are advocating Independence with the special object of having a Zollverein and free admission of American manufactures into this country, and our manufactures into the United States.

Hon. Mr. McDOUGALL was sorry to hear the observations of the hon. gentle

man opposite in announcing the policy to which the Government were committed. He understood the hon. gentleman to say that it was utterly impossible for the United States to make arrangements with us for the introduction of commodities from that country on any better terms than from Great Britain. He thought there should be some arrangement between this country and the United States for the interchange of certain articles of manufacture, such as stoves, agricultural and other machinery adopted to this country. We should be emancipated from such an arrangement as the present, and negotiations should be entered into with the Mother Country with a view to obtaining freedom in our commercial arrangements.

Mr. JOLY quoted from the Washington Treaty correspondence to show that the Government had not used every measure and exertion possible to obtain a renewal of the Reciprocity Treaty.

AFTER RECESS.

Hon. Mr. BLAKE referring to the remarks made by the Minister of Finance on the subject of the Washington Treaty, regretted that the first Minister who had taken part in the negotiations had not seen fit to explain the events connected with the making of the Treaty, but should have left it to the Minister of Finance to make a sort of apology for the concession made on behalf of Canada. In looking at the financial aspect of the Treaty, he would preface his remarks by saying that he agreed with the honorable member for Lambton that it ought not to be a question of money at all, and he fully agreed with the Ministers of the Crown when they told the Imperial Go. vernment that the principle of a money payment was repugnant to the people of Canada. But if it was to be treated as such, if we were to be told that a sufficient price had been paid, then it became material that the figures of the honorable gentleman should be correct. He then entered into an examination of the figures to show that there would be no such difference between the annual charge payable under the guarantee, and that which would be paid if there were no guarantee. In any case it must be remembered that whether we borrowed under a guarantee or not, the country was pledged to repay the loan and interest, and it must be paid. We had to consider, also, that in carrying out the financial terms of the Treaty, it would be necessary for Parliament to take steps to reimburse the Province of New Brunswick in the

sum lost by reason of the repeal of the export duty on lumber. When that was done, it would be found to trench largely upon the profits from the guarantee. He had been told that a reasonable compensa. tion for this loss would be $100,000. How. ever that might be there could be no doubt that the people of New Brunswick would have to be dealt with fairly, and it would involve a very considerable annual charge. He maintained therefore that the real di. minution would fall far short of the amount claimed by the honourable gentleman opposite, so that the rose colored picture which the honorable gentle. man had drawn this afternoon upon view of which we were called upon to sacrifice our feelings and sell our fisheries, was far from a truthful one (hear, hear).

Mr. CARTWRIGHT deprecated the mixing up of matters connected with the Treaty in this discussion, the more so as the financial statement made this after noon was one which all members ought to regard with great gratification. We were all aware that fears had been entertained, when the Confederation scheme was un der discussion, that the financial arrange. ments were likely to be a source of dan ger to our young nationality, and he, for one, was glad to find that those apprehensions had been

or

more

less frustrated by the extraordinary expansion which had lately attended the commerce and resources of the country. He considered that this was not due to the Government alone, although he was willing to admit that they were entitled to some credit, but that all who supported the scheme of Confederation could also claim such credit. He thought that the Finance Minister had understated the extent of the liability which he was about so impose an this country for the future. The engagements likely to be assumed he stated at $3,000,000. This represented about $60,000,000 of capital, but considering the gigantic works that were about to be undertaken, he consids ered that in naming three millions as the amount likely to be added to the interest on our debt, the honourable gentleman had by no means estimated the probable result. He would again remind the House that the present remarkable expansion could not be expected to cons tinue, as periods of great prosperity were almost inevitably followed by periods of depression; and he had condemned the financial arrangements of the Finance Minister, not because they would cause mischief at the moment, but that they had not made provision for the future dis asters which might overtake us. He con

adjacent

tended the large increase in the Customs and Excise during the last three years amounting to $6,000,000, was not likely to be maintained, it was more likely to be diminished. He considered that it must be attributed in a great measure to the state of things existing in the Republic. A very considerable portion of our re venue from woollens, silks, satins, &c., was in consequence of the great demand for those articles by Americans in the frontier towns, and he argued that there were peculiar reasons connected with that fact calculated to cause the revenue to increase more rapidly than it would under ordinary circumstances. As he had told the hon. Minister of Finance on a previous occasion, if he had been in Canada during the years between 1857-8 and 1865-6, he would have known that in this country above all others, periods of great prosperity were very apt to be followed by periods of depres sion, and that it was not wise to judge of the state of the public revenue by calculations made during a time when we were really spending a large amount of our capital.

Hon. Mr. MORRIS did not intend to speak at any great length, but he wished to refer to one or two statements of the leader of the Opposition. It was gratify. ing to find that that hon. gentleman took so encouraging a view of the position of the country. It was refreshing to hear him stand up and declare that we were in a position to pay our way. Everything was couleur de rose from the point of ob. servation to-day. But it had not always been so, for the hon. gentleman was overwhelmed last Session with alarm, and had attempted to excite the public mind of the Dominion in regard to Our financial condition. He had stated that the proposed engagements respecting the Pacific Railway would add to the burdens of the country one hundred mil lions. To-day how the scene had changed. To-day when the Government have in. formed the House that the British Government are prepared to help us in carrying out great public works he declares that we are too rich to accept such assistance (hear, hear.) The honorable gentle. man last session threatened the House with an increase of taxation, in view of the construction of the Pacific Railway and other public works, but this year when we are asking our people to encourage these great undertakings and assist in developing the resources of our country, he attacks the Government because they are not prepared to recom

mend a reduction of taxation. He (Mr. Morris) had been amused at reading a speech made by the hon. gentleman before Parliament met last year in which he had pledged himself that no matter what Government came into power there would have to be an increase of at least five per cent in taxation. He would quote | the words he had then used. The speech was made at London during a pilgrimage through the country and was as follows: He (Mr. Mackenzie) would like to give those present an honest and fair statement of the increase in our public debt, but he would tell them frankly that it was impossible for any man to take up the public accounts and ascertain the amount of that debt. We knew the amount that bore interest in England. We knew the amount of a certain kind of stock that carried interest in Canada; but that was about all. Our debentures of all kinds amounted to nearly 94 millions afloat, but Government knowing that there was an annual deficit, knowing that if they put on taxation to the extent necessary to meet the public requirements they would be called to account-sought to hide our indebtedness. He ventured to say, and he knew he would be able to prove the assertion when Parliament met, that if we were called on to pay all our debts since 1867, we would have to impose a rate of five per cent additional to our present taxation. Whatever Government came into power there was a serious financial difficulty before them, be they what they may." That was the forecast of the the honourable gentleman of the financial condition of the Dominion, and he had heard the reply to day. He had heard that instead of there being a deficiency since Confederation there had been a steady increase of our revenue, and that now there was a large surplus in existence. He had told the people there that it was impossible for any man to form an opinion of what our debt was, intimating that the Government tried to conceal the true state of the debt; but when he came down to the House, he found out from the public accounts for himself what the debt was. He (Mr. Morris) liked honesty and fair play, but he would ask what sort of honesty it was that represented matters in such a light as that. The member for South Waterloo had also given some attention to the financial position of the country. From a paper published by that honorable gentleman on the resources of the Dominion, it would appear that he had no difficulty in finding out the debt from the accounts. The member for Lambton had told the

people that so great was the embarrassment in our finances, that the Government must come down and add five per cent. to the taxation of the country. But what was the result? Instead of adding five per cent., no less a sum than $800,000 had been taken off last session, and notwithstanding that, the Government met the House with a large surplus, and with resources to justify them in undertaking the large works necessary in the Do. minion. He (Mr. Morris) had thought it right to call the attention of the House to the changed position of the honorable gentleman. Right glad would he be if he found him in the future standing forward with those who desire to consolidate this Dominion. Right glad would he have been if instead of opposing every measure submitted to this House he had endeavored to stand by the party who have the weal and welfare of the Dominion heartily before them. But this pleasure was denied him, for he (Mr. McKenzie) had set his face against every effort to conciliate Nova Scotia, he had resisted the terms for the admission of British Columbia, and had opposed the construction of the Pacific Railway. He had resisted in every case measures that had been proposed and which time was proving to have been in the interests of the Dominion. He [Mr. Morris] would like to see the hon gentleman with his great talents working with those who hope to make this Dominion worthy of its position as a portion of the great British Empire.

Hon. Sir FRANCIS HINCKS said with reference to the statement of his having unnecessarily introduced the Treaty of Washington into his speech, that it must be admitted that under the circumstances it was utterly impossible for him in making his financial statement to avoid all reference to that Treaty, and with reference to the charges of his having omitted to mention necessary matters he could only say that he had endeavored to confine himself to the financial question as much as possible. As to the expres sion of regret of the hon. member for Sherbrooke that his resolutions of last year had not carried, that hon. gentleman must admit that they could not possibly have influenced the proceedings at Washington. The Canadian Government had no responsibility whatever in the matter of the Washington Treaty, and he believed the first Minister would have acted in the most dishonorable manner towards the Imperial Government if he had joined the Commission with the deliberate intention

of not conform