and men.

The active militia numbered 36,650 men, with 3,736 horses, and the Government expenditure in 1897-'98 was $1,681,613. Gen. Hutton, as commander of the militia, during the year made strenuous efforts to improve the spirits, the training, and the drill of the force. The annual drill throughout the country was the most successful ever held. The general's annual report to the Government was a widely discussed and most important document. In it he says: "The existing condition of the military forces of the Dominion can only be characterized as unsatisfactory in the extreme. The troops themselves generally are endowed with a profound patriotism, gifted with an excellent physique, and infused with that zeal and aptitude for military service which is an historical attribute of the Canadian people. The Canadian militia consists of a number of small units of cavalry, artillery, and infantry, of varying strength and of a varying condition of discipline and efficiency. Valuable as such a force may be in the fighting qualities of its personnel, it is useless for military purposes in the absence of a trained general staff, in the absence of administrative departments, and in the absence of an adequate supply of those stores of arms, ammunition, and equipment which are indispensable to the maintenance of an armed force intended for military operations. The militia force of Canada is not, under the existing system, an army in its true sense; it is but a collection of military units without cohesion, without staff, and without the military departments by which an army is moved, fed, or ministered to in sickness. There are no officers of the Canadian militia who have received training in the higher functions and responsibilities of the general staff of an army. I need hardly remark that it is the staff which constitutes the brains and motive power of an army. There are no military administration departments at present in existence. With the exception of blankets and tents, there are not sufficient stores to enable a military force of any size to be placed in the field. A reserve of arms and ammunition is required, based upon a recognized scale. There are no stores of reserve clothing. I am not in a position to report fully upon the standard of military proficiency attained by the whole of the troops under my command. The fact, however, that the training of rural battalions has in the past been spasmodic and uncertain renders the efficiency generally of the whole of the militia an undetermined factor of defense. Until the training of the rural troops is an annual fixture it would be folly to suppose that the militia of Canada as a whole can attain any satisfactory standard of military knowledge, or be reckoned upon as a solid and dependable military force. It may be assumed that two factors govern the future organization and administration of a Canadian army, as follows: (a) The defense of Canadian soil; (b) the power to participate in the defense of the British Empire. It was justly elaimed for Canada that she is now a nation. In establishing this claim it must equally be accepted that with her birth as a nation are indisputably born the responsibilities of self-defense. The defense of its own territory is the primary duty of a state. As a most important element in the defense of Canada, I can not but impress the necessity of the naval defense of Lakes Erie and Ontario. The militia act of 1886 contemplated the formation of a naval militia brigade, and I strongly recommend that steps should be taken with that intention. Training ships with an instructional staff might be ob

tained from the Admiralty. I feel sure that the formation of such a force would be productive of most valuable results, not only as a strong and most important element of defense, but as a means of educating the seafaring population and of improving the shipping interests of the inland waters of Canada. For the power to participate in the defense of the British Empire it will be obvious that the field troops above alluded to could be made quickly and readily available. Active operations could thus be undertaken conjointly with other British troops in whatever part of the empire it might be the desire of Canada to employ them.

"Under the existing circumstances considerable increase to the present strength of the militia force is inadvisable, but I wish most strongly to urge that a complete though gradual change should be effected in the organization and administration of the whole force, so as to conform to the requirements of the principles which I have ventured to submit. This change can be effected with comparatively small increase to the yearly budget. It will be of interest to note that the Canadian people, who have a frontier of 3,260 miles contiguous to a foreign state, pay less per head of its population toward the defense of its own soil than any other country in the world. It has been estimated that, exclusive of capital expenditure upon guns, stores, etc., an expenditure of $1,650,000, or 33 cents per head of the population, would be sufficient for the requirements of the force proposed during the next financial year. This will be an increase of $130,000 upon the estimates of 1897-'98. A comparison of the military expenditure with that of other self-governing colonies of the empire will make it apparent that the annual outlay of $2,000,000 upon her defenses will be the lowest expenditure to expect of the Dominion in the near future, with its vast resources, its increasing wealth, and its ever-widening responsibilities. The creation of a militia army upon the lines indicated will transform existing militia units into a military force which shall in some degree, at least, be worthy of the Canadian nation, and be equal to maintaining the rights and liberties of the Canadian people. It will be in its true sense a national army, and will as such be able not only to keep inviolate the integrity of Canadian soil, but it will be capable of contributing to the military defense of the British Empire in a manner and with a power which will place Canada in a position of unparalleled dignity and influence among all the possessions of the Crown." Canada and South Africa. The pivotal point of Canadian history in 1899 was the sympathy shown to fellow-subjects in South Africa, the wave of imperial sentiment which swept over the country, and the sending of the Canadian contingent. On July 30 the following resolution was passed unanimously by the House of Commons on motion of the Premier, seconded by Mr. G. E. Foster, and approved by a letter from Sir C. Tupper:

"That this House has viewed with regret the complications which have arisen in the Transvaal Republic, of which her Majesty is suzerain, from the refusal to accord to her Majesty's subjects now settled in that region an adequate participation in its government.

"That this House has learned with still greater regret that the condition of things there existing has resulted in intolerable oppression, and has produced great and dangerous excitement among several classes of her Majesty's subjects in her South African possessions.

"That this House, representing a people which has largely succeeded, by the adoption of the principle of conceding equal political rights to every portion of the population, in harmonizing estrangements, and in producing general content with the existing system of government, desires to express its sympathy with the efforts of her Majesty's imperial authorities to obtain for the subjects of her Majesty who have taken up their abode in the Transvaal such measure of justice and political recognition as may be found necessary to secure them in the full possession of equal rights and liberties."

The Senate passed a similar resolution. As soon as it became apparent that war was in evitable private offers for military service were made to the Canadian and Imperial governments in large numbers, sometimes whole regiments of fering. The reply was issued, both in Canada and in Australasia, that no troops were needed. Then, on Oct. 2, at a large meeting of officers that was held in Toronto, the following resolution was passed:

"That the members of the Canadian Military Institute, feeling that it is a clear and definite duty for all British possessions to show their willingness to contribute to the common defense in the case of need, express the hope that, in view of impending hostilities in South Africa, the Government of Canada will promptly offer a contingent of Canadian militia to assist in supporting the interests of our empire in that country."

There was some hesitation on the part of the Government at first. No precedent existed, and they did not know how the step would be taken by the French Canadians. The Premier made a tentative announcement that he could not do anything without a meeting of Parliament, and, as every one believed, that would make the offer too late. Within a few days the sentiment from one end of the country to the other was SO strongly shown, and the Opposition, led by Sir C. Tupper, so clearly expressed its willingness to any action taken, that the Government gave way and at once organized with efficiency and dispatch the contingent of 1,000 men, which was all the Imperial Government would accept. A political storm was raised, however, by Mr. J. Israil Tarte, Minister of Public Works, insisting, in behalf of the French-Canadian element, that the order in council should include words declaring that the action ought not to be considered a precedent. It was decided that the expenses of the contingent should be paid to Cape Town only, although vigorous protests against this decision were made. There was no question of loyalty or disloyalty in the matter. Mr. Tarte, as the Liberal party leader in Quebec, expressed himself in a published correspondence as being really in favor of imperial federation, and as believing that the French Canadians themselves would support it when it was fully placed before them. But he regarded the sending of the contingent as practically a part of imperial federation, and he did not wish to be rushed into the policy without parliamentary consideration and public discussion. This slight and vague opposition helped to raise the popular feeling to an intense degree of enthusiasm, and it is doubtful if any event in Canadian history has aroused such manifestations as the raising and departure of the volunteers from the different Canadian centers-Vancouver, Winnipeg, Halifax, St. John, Toronto, Montreal, and Quebec. The contingent sailed on Oct. 30, and arrived at Cape Town on Νον. 29.

The Alaska Boundary. This question produced much international discussion. The general failure of the Joint High Commission, after its prolonged sessions at Quebec and Washington, was due to difficulties in this connection, and on Feb. 20, 1899, Senator Fairbanks and Sir W. Laurier issued the following statement from the United States capital:

The commission adjourned, to meet at Quebec on Aug. 2, unless the chairmen of the respective commissions shall agree upon another date. The commission has made very substantial progress in the settlement and adjustment of many of the questions upon which it has been earnestly engaged. But it has been unable to agree upon the settlement of the Alaskan boundary. The problem has been a complicated and difficult one; but the commissioners, acting in the utmost friendliness and cordiality, have been unable to agree upon a satisfactory adjustment. The difficulties, apart from the immediate delimitation of this boundary by the commission itself, arise from the conditions under which it might be referred to arbitration.

They

The British commissioners desired that the whole question should be referred on terms similar to those provided in the reference of the Venezuelan boundary line, which, by providing an umpire, would insure certainty and finality. The United States commissioners, on the other hand, thought the local conditions of Alaska so different that some modification of the Venezuelan reference should be introduced. thought the reference should be made to six eminent jurists, three chosen by each of the high contracting parties, without providing for an umpire, they believing that finality would be secured by a majority vote of the jurists so chosen. They did not see any present prospect of agreeing to a European umpire, to be selected in the manner proposed by the British commissioners, while the British commissioners were unwilling to agree to the selection of an American umpire in the manner suggested by the United States commissioners. The United States commissioners further contended that special stipulations should be made in any reference to arbitration, that the existing settlements on the tide waters of the coast should in any event continue to belong to the United States. To this contention the British commissioners refused to agree. It was therefore deemed advisable to adjourn to a convenient date, in order to enable the respective governments to consider further the subject with respect to which no conclusion yet has been reached."

The commission did not meet again, and during the entire summer negotiations proceeded between the three governments. Charges were very freely made by the American press that Canada was blocking the way; that she wanted American territory, and was generally aggressive and unreasonable. On July 23 the Canadian Parliament was the scene of an international sensation. Sir Charles Tupper spoke at length upon the subject of the boundary, and in vigorous language declared that it must be settled in one way or another; and Sir Wilfrid Laurier replied in carefully chosen words, of which the following paragraph aroused wide discussion:

"Under such circumstances there are only two methods of settling the difficulty on fair and honorable terms. One is, giving and takingCanada surrendering a little of her pretensions and the United States surrendering a little of her pretensions-but I have no hope up to this moment, or very little hope, that we can settle the question by any compromise at all. If we have

no hope that we can settle the dispute by compromise, there are only two other ways in which we can settle it. One would be by arbitration, and the other would be by war. I am sure that no one would think of war; and everybody would agree that, though sometimes our patience would be sorely tried, though sometimes we might believe that our opponents were taking undue liberties with us and undue advantage over us, still everybody would agree that we must exhaust all peaceful means of reaching a settlement by arbitration."

The idea set forth by Sir Charles Tupper was, in substance, that it was time to do more than indulge in amiable and endless palaver with our American cousins. They, being in practical possession of the disputed territory, were only too willing to keep up the discussion indefinitely, while in the meantime American miners were taking out most of the gold and American traders were enjoying all the commercial advantages of the Yukon. Sir Charles paid his respects to English statesmen in a manner which probably did not afford them any great pleasure. He told them, in good round terms, that his long years of experience and observation had taught him that the abiding weakness of the powers that be in England is a tendency to consult the feelings and wishes of the United States altogether too much. He congratulated the Canadian Government upon its determination to have no more meetings of the Anglo-American Commission unless and until this question was in a fair way of settlement. By way of meeting the situation as it now stood, he suggested that the Government take power to construct a railway from Kitimat Arm in British Columbia to Dawson via Teslin lake, and also to provide that no mining licenses should be issued to any but British subjects. He assured the Government of hearty support from the Conservatives in whatever might be done to uphold the interest and the dignity of Canada.

Sir Wilfrid Laurier evidently thought that the remarks made by Sir Charles with reference to a railway were a weak point in the argument, and he enlarged upon it at some length in an attempt to show that the leader of the Opposition had repudiated the Senate's action of the preceding session in rejecting the MackenzieMann scheme. As to the Alaskan boundary, the Premier pointed out, as above, that there were only three possible modes of settling such a controversy-compromise, arbitration, or war. The attempt at compromise had failed, and nobody contemplated the possibility of war. Only arbitration remained, and Sir Wilfrid's remarks on the point were of the nature of the physician's statement that "while there's life there's hope." From his general tone it was evident that he did not expect to see in the near future any agreement reached between Great Britain and the United States. There was a distinct note of discouragement in his appeal to the people of Canada to be patient for a few months longer. While discouraging the proposal to exclude American miners from the Yukon country, he did not say that it would be impossible for circumstances to arise under which such a policy might be contemplated. He confined himself to a contention that such action would almost certainly lead to retaliation, to be followed very probably by nonintercourse. On July 30 was published an elaborate defense of the Canadian position by the Hon. David Mills, Minister of Justice, and from it the following is quoted:

"The United States obtained a cession of this

territory from Russia at a time when the Alabama claims were unsettled, and the long strip of territory extending from Mount St. Elias along the coast of the southeast of Prince of Wales island ought undoubtedly to be a Canadian possession. If a similar strip of territory lay between the mainland of the United States and the sea, I am quite sure its acquisition by us would be regarded as a menace to that country. But it is too late to consider how far this is injurious to this country. Under the treaty of 1825 the line drawn between the recognized territory of Russia and Great Britain was begun at the southeast of Prince of Wales island, and from that point was to ascend north along the channel called Portland channel. This could hardly be the channel called Portland channel in modern maps, because Portland channel of this day lies due east from the southern extremity of Prince of Wales island, a distance of 130 miles. The line was to ascend the channel to a point on the coast on the fifty-sixth degree of north latitude. Now what is known as Portland channel falls short of that point. The line was also to extend north in such a way as to leave Prince of Wales island to Russia. If the boundary started from the south extremity of Prince of Wales island and ran due east, it would have left the whole of the island to Russia; but if drawn north from the south extremity, it would have cut off a small portion of the southeast end of the island. So the treaty would indicate a line drawn up that channel which is east of Prince of Wales island to the fifty-sixth degree of north latitude, a point which could not be reached by what is known as Portland channel. So you see the initial point of the boundary is in controversy. The boundary when it reached the fiftysixth degree was to follow the summit of the mountains, which extend in a line parallel to the coast from the fifty-sixth degree to the intersection with the one hundred and forty-first parallel; but when the mountains prove to be more than 10 marine leagues from the coast, the limit between the British possessions and the coast was to be a line parallel to the coast, but which should never exceed a distance of 10 marine leagues. It is clear that the makers of the treaty assumed that there was a mountain range which for the most part was within 10 leagues of the coast. The treaty also provides that neither contracting party shall form settlements within the territory of the other. The United States received all the right of Russia, and no more. But the United States authorities seem to think that not only have they the right to form settlements on our side, but also that when they do so the territory ought to be considered as theirs, and under no reference to arbitration should the sovereignty over our territory thus encroached on be open to question. I return again to Lynn Canal. Bear in mind what the treaty says about the line, which should follow the coast, being within 10 leagues of it. If a line were drawn around the head of Lynn inlet, as the United States contends it should be, the point where it passed that inlet would be at least 20 leagues from the coast. There is a well-defined coast line from the one hundred and forty-first meridian to Cape Spencer, on the fifty-seventh degree of north latitude, and by the terms of the treaty the boundary could not be more than 10 leagues from the coast. It must, in fact, be much nearer, because the range in this latitude sets in near the coast. The United States refuse to arbitrate unless we abandon our claim to the Lynn Canal. Why should we abandon it? The

British commissioners offered to compromise. The United States rejected the offer, because it recognized our claim to Pyramid harbor and a strip of territory leading therefrom to what is indisputably our territory in the Yukon. Under this compromise the United States would have held both Dyea and Skaguay, which, we think, are in Canadian territory. Let me, in conclusion, recall history for the benefit of the American people. When the disputed boundary between Maine and New Brunswick was being discussed by the two governments we claimed territory south of the St. John's river, known as the Madawaska settlements, because it was a settlement of French Canadians, who had for a long series of years been under British protection. Did the United States consent to concede it for that reason, which is the same contention they are making about Dyea and Skaguay? Not at all. It claimed that as it was on territory which, in its opinion, was part of Maine, no matter how long it had been under British protection, it ought to be yielded up. Can any American statesman give any reason for the retention of Madawaska which would not at the present time apply to Dyea and Skaguay if found by a competent tribunal to be on Canadian territory?

Sir Wilfrid Laurier visited Chicago on Oct. 9, and in speeches delivered there dealt also at length with this issue. Eventually, the text of a modus vivendi as finally agreed upon and announced on Oct. 21 was as follows:

"It is hereby agreed between the governments of the United States and Great Britain that the boundary line between Canada and the Territory of Alaska, in the region about the head of Lynn Canal, shall be provisionally fixed, without prejudice to the claims of either party in the permanent adjustment of the international boundary, as follows: In the region of the Dalton trail, a line beginning at the peak west of Porcupine creek, marked on map No. 10 of the United States Commission, Dec. 31, 1895, and on sheet No. 18 of the British Commission, Dec. 31, 1895, with the number 6500, thence running to the Klehini (or Klaheela) river, in the direction of the peak north of that river marked 5020 on the aforesaid British map; thence following the high or right bank of the said Klehini river to the junction thereof with the Chilkat river, a mile and a half, more or less, north of Klukwan; provided, that persons proceeding to or from Porcupine creek shall be freely permitted to follow the trail between the said creek and the said junction of the rivers into and across the territory in the Canadian side of the temporary line wherever the trail crosses to such side, and, subject to such reasonable regulations for the protection of the revenue as the Canadian Government may prescribe, to carry with them over such part or parts of the trail between the said points as may lie on the Canadian side of the temporary line such goods and articles; and from said junction to the summit of the peak east of the Chilkat river marked on the aforesaid map No. 10 of the United States Commission with the number 5410, and on map No. 17 of the aforesaid British Commission with the number 5490. On the Dyea and Skaguay trails, the summits of the Chilkoot and White passes. It is understood, as formally set forth in communications of the Department of State of the United States, that the citizens who are subjects of either power found by this ar rangement within the temporary jurisdiction of the other shall suffer no diminution of the rights and privileges which they now enjoy. The Government of the United States will at once ap

point an officer or officers to meet an officer or officers to be named by the Government of her Britannic Majesty to mark the temporary line agreed upon by the erection of posts, stakes, or other appropriate temporary mark.”

Trade and Commerce. The external trade of Canada went up by leaps and bounds during the year. In 1898 it was $288,257,521; in 1899 it was $306,104,708. The imports rose from $130,698,006 to $152,021,058, while the exports decreased from $159,524,953 to $154,083,650. To Great Britain the exports for the year ending June 30, 1898, were $104,998,818; to the United States, $45,705,336; to France, $1,025,262; to Germany, $1,837,448; to Newfoundland, $2,167,860; to the West Indies, $2,749,080; to South America, $1,060,420; to China and Japan, $511,919; to other countries, $1,630,711. During the same year the imports from Great Britain were $32,500,917; United States, $78,705,590; France, $3,975,351; Germany, $5,584,014; West Indies, $1,080,266; South America, $1,425,653; China and Japan, $2,317,971.

Railways. The annual report of the Department of Railways and Canals was presented to Parliament on March 23, 1899, by the Hon. A. G. Blair. When Canadian railways are mentioned the names of the three great trunk lines-the Canadian Pacific, Grand Trunk, and the Intercolonial-suggest themselves; but a reference to the official figures at this time shows that there were 146 railways in actual operation in Canada. Some of these are amalgamated or leased; but after allowing for them, and excluding the Government railways, there are 84 controlling companies in active existence. With all these separate interests it might be expected that the people of Canada would enjoy the boon of competitive rates, but the truth of the statement that competing railways do not compete has been learned to the sorrow and financial loss of many. The completed mileage is 16,870 miles, an increase of 183 miles during the year 1898. This total does not include 2,248 miles of sidings. The magnitude of Canadian railway interests is indicated by the following figures: The paid-up capital amounted to $941,297,037, an increase of $19,439,805. The gross earnings amounted to $59,715,105, an increase of $7.361,829; and the working expenses aggregated $39,137,549, an increase of $3,968,884 as compared with those of the previous year, leaving the net earnings $20,577,556, or an increase of $3,392,945. The number of passengers carried was 18,444,049, an increase of 2,272,711; and the freight traffic amounted to 28,785,903 tons, an increase of 3,485,572 tons. The total number of miles run by trains was 50,658,283, an increase of 4,977.432. The accident returns show 5 passengers killed.

The Government expenditure on railways prior to and since the date of confederation (1867) amounted on capital account to $123,551,091 (including a payment of $25,000,000 to the Canadian Pacific Railway Company), and for railway subsidies charged against the consolidated fund the further sum of $17,619.222.11, making a total expenditure of $140,834,731.29. In addition there has been an expenditure since confederation for working expenses of $73,029,631.74, covering the maintenance and operation of the Government roads, or a grand total of $213,863,363.03, all of which, with the exception of $13,881,460.65, has been expended on railways during the past thirtyone years. The revenue derived from the Government roads during the same period amounted to $64,510,650.18.

The Canadian Pacific Railway had under traffic during the year 6,334 miles of road. Its gross

earnings were $25,470,796.18 (against 6,314 miles of railway and earnings of $21,242,638.75 the previous year). The total expenditure for working expenses was $14,684,790.65, making the net earnings $10,786,005.53, an increase of $2,120,167.20 over the net earnings of the previous year. The company carried 3,327,368 passengers and 5,493,030 tons of freight. The gross earnings of all the Government roads - the Intercolonial, the Windsor branch, and the Prince Edward Island Railway-for the same fiscal year amounted to $3,313,847.10, and, compared with those of the preceding year, showed an increase of $253,772.72. The gross working expenses amounted to $3,577,248.88, an increase of $399,979.27. The net loss on the operations of the year was $263,401.78. These features included the sum of $70,000 rent paid for the extension of the Intercolonial into Montreal, under an agreement which became effective in March.

On March 1, 1898, the operations of the Intercolonial were extended to Montreal by means of leases obtained from the Grand Trunk and Drummond County Railway Companies, making an addition of 169.81 miles to the operation of the Government line, its length being 1,314 miles instead of 1,145. During the fiscal year there was an addition of $252,756.80 to the capital account expenditure, making the total expenditure chargeable to capital on the whole road up to June 30, 1898, $55,668,913. The additions made during the year included $56,651 for increased accommodation at Halifax, $93,943 for increased accommodation at Moncton, $19,820 for the extension to deep water at North Sydney, and $65,510.92 on rolling stock. The gross earnings of the year amounted to $3,117,669.85, an increase of $251,841; and the working expenses, exclusive of $70,000 rent paid for the extension to Montreal, to $3,259,648, an increase of $331,679.84, making the excess of expenditure $139,978. There was a profit of $19,045 in the operation of the Windsor branch, and a loss of $72,468 upon the Prince Edward Island Railway. Comparing the earnings with those of the previous year, the passenger traffic produced $1,053,864, an increase of $74,849; the freight traffic amounted to $1,857,740, an increase of $170,689; and the carriage of mails and express freight produced $206,065, an increase of $6,093. The earnings per mile were $2,594.53, an increase of $91.45.

The total projected length of the Crow's Nest Railway in British Columbia is 344 miles; from Lethbridge to Knoknoack Station, Kootenay lake, 290 miles; and from Knoknoack Station to Nelson, 54 miles. The work of construction has so far been confined to the section between Lethbridge and Knoknoack Station, 290 miles, over which the track laying was completed on Oct. 8, and the line over this section is in safe condition for public traffic. A train transfer landing has been constructed on Kootenay lake at Knoknoack, so that cars with their loads can be transferred without transshipment from that point to Nelson, which will greatly assist mining operations through the Kootenay district. The amount of subsidy paid up to Nov. 1, 1898, was $2,162,190. Surveys have been made of the remainder of the line subsidized-viz., from the south end of the Kootenay lake to Nelson-but the final plans of location have not yet been filed in the department, as a revision of the location is in contemplation, with a view of reducing the severity of the curves in some instances.

A most important railway event of the year was the retirement of Sir W. C. Van Horne on June 12 from the presidency of the Canadian

Pacific Railroad, his election as chairman of the board, and the appointment of Mr. T. G. Shaughnessy as his successor.

Canals. The expenditure charged to capital on the original construction and the enlargement of the several canals of the Dominion up to June 30, 1898, was $72,504,401. A further sum of $15,067,096 was expended on the repairs, maintenance, and operation of these works, making a total of $87,571,498. The total revenue derived, including tolls and rentals of lands and water powers, amounted to $11,710,240. The expenditure for the fiscal year ending June 30, 1898, was as follows: On construction and enlargement, $3,207,249; and a further sum of $624,755 for repairs, renewals, and operation, making a total for the year of $3,832,005. The net revenue for the year was $407,662, an increase compared with the net revenue of the previous year of $22,882. The net canal tolls amounted to $344,057, an increase of $22,429; and the rents received to $44,050, a decrease of $549. The total expenditure on canal staff and maintenance, repairs, and renewals amounted for the year to $624,755, a decrease of $8,520, and the total net receipts amounting, as above, to $407,662. The amount of expenditure in excess of receipts was $217,093, compared with an excess expenditure the previous year of $248,495. The following features of the principal canal traffic during the season of navigation of 1897 will be of interest: On the Welland Canal 1,274,292 tons of freight were moved, a decrease of 5,695 tons; 1,050,093 tons passed eastward and 224,199 westward; 1,244,750 tons were through freight, of which 1,026,458 tons passed eastward. Of this through freight, Canadian vessels carried 345,977 tons, an increase of 4,847 tons; and United States vessels 898,773 tons, a decrease of 3,693 tons. The quantity of grain passed down the St. Lawrence canals to Montreal was 560,254 tons, an increase of 99,205 tons compared with the previous year. The further quantity of 43,023 tons of grain passed down the St. Lawrence canals only to Montreal, making the total 603,277 tons. Seven cargoes of grain, aggregating 2,324 tons, were taken down direct to Montreal through the Welland and St. Lawrence canals.

On the Sault Ste. Marie Canal the total movement of freight was 4,947,063 tons, an increase of 369,660 tons, carried in 4,268 vessels, the number of lockages being 2,604. Of wheat, 17,924,802 bushels, and of other grain 3,253,405 bushels, were carried; 1,093,456 barrels of flour, 3,572,854 tons of iron ore, and 7,799,156 feet, board measure, of lumber. All these items show a considerable decrease. The total traffic at the point accommodated by the two canals-the American and Canadian-amounted to 18,986,689 tons, an increase of 1,730,266 tons, carried in 17,080 vessels, a decrease of 1.497. The total quantity of wheat carried was 55,931,779 bushels, a decrease of 7,532,097; and of other grain 24,968,136, a decrease of 2,747,129. Of lumber the total was 802,240,156 feet, board measure, an increase of 113,366,356. As having an interesting bearing on the question of canal versus railway transport of grain from the West, it may be noted that, whereas grain and peas passed down to Montreal through the St. Lawrence canals to the extent of 560,254 tons, an increase of 64,386 tons over the previous year, the quantity carried to Montreal by the Canadian Pacific and Grand Trunk Railways amounted to 228,586 tons, an increase of 74,869. The quantity of grain carried to tide water on the New York State canals was 569,362 tons, a decrease of 183,677 tons, while