THE UNITED STATES). The special attraction for the United States was the freedom of ac cess to the Canadian fisheries (q.v.) ; though the Americans also enjoyed large local markets for agricultural products in many parts of the eastern provinces. According to the statistics of trade, Canada appeared to have the best of the bargain. But the statistics require interpre tation. Much of the Canadian export to the United States was really only a transit trade; either the same goods, or their equivalent, being shipped from Atlantic ports. Again, be tween 1854 and 1858 the decline in the amount of manufactures imported from the United States was due to the financial crisis of 1857 and the cessation of public works in Canada. Then, during the Civil War the United States was extensively purchasing supplies, and had little to sell. The Canadians themselves have been greatly deceived by the figures of the reci procity period, and imagined that a like result would flow from the renewal of reciprocal trade.
The other feature of importance in this pe riod was the increase in the Canadian tariff on manufactured goods, in 1858 and 1859. Owing to the large public debt contracted for the build ing of the canals, the interest on which was not offset by tolls as expected, and,*more imme diately, owing to the great obligations incurred in guaranteeing railroad investments, the Cana dian government was in great financial straits after 1856 and was therefore forced to seek a larger revenue. Accordingly, in 1858 the tariff on imports was raised the general rate being increased from about 12% to 15 per cent, and in 1859 it was still further increased to 20 per cent. The British merchants and manufacturers vigorously protested against such an increase of duties on the goods of the mother country, and the manufacturers of the United States con sidered the increase of duties a breach of faith, inasmuch as they had expected their advantage from reciprocity to come from the sale of man ufactured goods. The Canadian government replied that its sole object. was to relieve its financial obligations, not to check imports.
The abrogation of the Reciprocity Treaty in 1866 produced a strong effect upon the British North American provinces and undoubtedly precipitated Confederation. The Canadian tariff
of 1866 was lowered to a 15 per cent standard, as a concession to the freer trade leanings of the Maritimeprovinces, and became the first tariff of the Canadian Dominion. Canada re tained the general principles of a tariff for revenue until, in common with other countries, she suffered from the world-wide depression of 1875-78. An effort was made to secure the renewal of the Reciprocity Treaty. This failed, however, and a change of government took place on a promise of relief by means of a protective tariff. This new tariff of 1879 raised the general standard of duties from 17% to 20 per cent. Times revived throughout the world and the relief promised actually came. The tariff, however, did not prevent the country from suffering with all others dur ing the next period of depression, from 1884 to 1886, though the tariff had been raised some what in the interval. Nor did the country escape during the next depression, from 1894-96, when another change of government took place after a general election. The Liberal party being more or less pledged to a reduction of duties, found this more difficult to accomplish than to promise. In 1897, however, the tariff was considerably amended in the interest of the consumer,. and the happy expedient was de vised of offering to the world at large a reduc tion of 25 per cent on the general tariff, wherever Canada was treated with equal favor. As Britain was practically the only important country fulfilling these umversal conditions, the policy which was entered upon as a redemption of the party pledge ended in the preferential treatment of British goods only. This limita tion was explicitly recognized in 1900, when the preference on British imports was increased to per cent. Since, for various reasons, Canadian imports from Britain were declining, relatively at least, this concession did not ad versely affect important Canadian industries ex cept in the department of textiles. Accordingly in 1904 this part of the preferential tariff was amended and the duties were raised. At the same time a new principle of maximum and minimum tariffs was outlined for the future.