This sharp reversal of the movement of the previous decade immediately revealed it self in the trade statistics the country. The surplus of imports of $298,000,000 in 1913 was reduced to $171,000,000 in 1914, was further reduced to $26,000,000 in 1')15 and in 1916 was converted into a surplus of exports of $149, 000,000. In the trade returns for the last two years, the export and import of bullion has been eliminated as it was abnormally influ enced by financial arrangements between Great Britain and the United States with which Can ada had no special concern.
Britain and the United States have con tinued throughout to be the all-important fac tors in Canadian foreign trade. Thus Britain is the chief market for Canadian exports, while the United States furnishes the chief source of supply for Canadian imports. The Canadian trade with all other countries combined makes but a relatively small showing in comparison with the trade carried on with either of these two countries. In the decade between 1904 and 1914, out of a total of $2,892,000,000 of exports, Great Britain took $1,447,000,000 and the United States $1,157,000,000, leaving only $287,000,000 as taken by all other countries, including the other sections of the British empire. During the same period Canada imported for home consumption a total of $4,160,000,000, of which the United States furnished $2,601,000,000. and Great Britain $952,000,000, leaving only $605, 000,000 as supplied by all other countries, whether within or without the British empire.
Such being the case, the tariff relations be tween Canada and her two chief customers, Great Britain and the United States, are of chief interest in this field. Until the outbreak of the European War, however, few changes were made in the tariffs applicable to these two countries. Treaties had been negotiated with several of the British West Indian Is lands on the basis of mutual preference. As already indicated, however, for the past cen tury and more, many attempts have been made to break the natural trade relations originally established between the West Indies and the Atlantic States when they were British colonies. The British island colonies on the Atlantic Coast are loath to invite unfavorable tariff treatment from the United States by grant ing special favors to Canadian trade. Hence,
while some of the smaller islands accepted the Canadian offer, the larger colonies of New foundland, Bermuda, Jamaica and British Honduras declined to respond to the Canadian preference extended to them for three years from 1912.
On the other hand, as regards Canadian tariff relations with the United States, the situation for Canada has considerably im proved since the opening of the century. On the one hand, Canadian pwducts have been coming ever more fully into world markets; while, on the other, the increasing population and industries of the United States have ren dered the Canadian supplies of raw materials and food products a matter of undoubtedly in creasing Importance. Further, the Canadian market for American raw material such as coal, cotton, corn, etc., and for many, important lines of manufactured goods has been steadily increasing. These changing relations naturally affected the traditional attitudes of the respec tive countries toward the perennial question of reciprocity. The discussion of this question was renewed in 1910, and, after considerable negotiation, centring around the higher and lower schedules of the Payne-Aldrich tariff, there emerged the reciprocity agreement of 1911, which followed fairly closely the previous treaty of 1854. The new treaty was passed by the United States Congress in July 1911, but was successfully blocked by the opposition in the Canadian House of Commons in the expir ing days of the parliamentary term of 1911. The general election which necessarily fol lowed largely turned on this issue, and revealed the strength of the growing Canadian senti ment in favor of maintaining not only political but commercial independence. The existing government was defeated in the election of September 1911. In consequence the treaty was not confirmed and the tariff relations be tween the two countries remained upon the basis of the ordinary tariff legislation of each country.
Such modifications as have been made in the general Canadian tariff since 1911 have been due to special local interests. The changes introduced since the outbreak of the war have been determined almost entirely on revenue grounds and will be dealt with under the sec tion on PUBLIC FINANCE.