Incidentally to the process of granting pref erential treatment to Great Britain, Canada has secured complete fiscal independence, being no longer bound by the commercial treaties negotiated between Great Britain and other countries, unless she explicitly agrees to accept the terms of any treaty. Incidentally to the same process of tariff emancipation. Canada found herself involved in a tariff quarrel with Germany. This lasted for some seven years, from 1903 to 1910, ending in favor of the Canadian contention. During this period most German imports reached Canada as Dutch, Belgian or British goods, and Cana dian supplies went to Germany through similar channels.
Of late years Canada has virtually established an independent consular service under the guise of a system of trade commissionerships. They were established at first chiefly with Great Britain and other portions of the British em pire, but now extend to several foreign coun tries with which it is desired to promote direct trade relations. This system is certain to be more fully developed after the war.
Railways.— As a condition of Confedera tion, in the East, the Intercolonial Railway, con necting the Maritime provinces with Canada, was constructed by the government at a cost of upward of $20,000,000. A corresponding condi tion of western federation was the construction of a transcontinental line to British Columbia. This was ultimate), realized in the Canadian Pacific Railway, begun in 1881 and completed in 1885 at a cost to the country of $62,000,000 in cash and 25,000,000 acres of land.
The rapid development of Canadian rail ways since 1900 centres upon the actual and prospective needs of the immense inland areas west of the Great Lakes. The need for addi tional facilities for main line transportation has been largely incidental to the need for ex tended systems of branch lines for the settle ment and development of so extended an area. A solution of the problem has been largely effected, but unfortunately without any very obvious regard to either economy or efficiency. The combination of transcontinental and local service has been attempted, and, so far as con struction is concerned, has been largely realized by three independent and competitive systems, the Canadian Pacific Railway, the Grand Trunk and Grand Trunk Pacific Railway and the Canadian Northern Railway. In various por tions of the western provinces other more or less independent but chiefly provincial lines have been partially constructed, largely on the basis of liberal financial assistance by the re spective provinces in which they are located.
Most of the larger railroad extensions in the East, including the government Transconti nental Railway, have been necessitated by the western developments of the three larger com panies. Since 1870 the mileage of the railroads has increased as follows : 1870, 2,617 miles; 1880, 7,174 miles; 1890, 13,151 miles; 1900, 17,657 miles; 1910, 24,731 miles; 1915, 35,582 miles.
The total capitalization of the Canadian railways in 1914 was $1,808,820,000, nearly evenly divided between stocks and bonds. In addition the Dominion government has sub sidized the railway systems to the extent of $178,834,000 in cash. It also granted to them 31,864,000 acres of land and has guaranteed their bonds to the extent of $127,965,000. The Dominion government has also expended $323, 596,000 in building or purchasing certain rail road lines of its own, chief of which are the Intercolonial Railway and the Transcontinental, both built entirely by the government. The provincial governments have subsidized the rail roads to the extent of $37,023,000 in cash, and 23,876,000 acres of land, and have guaranteed their bonds to the extent of $107,500,000. To these subsidies must be added the cash con tributions of the municipalities, amounting to $17 914,000.
The outbreak of the European War naturally disturbed the calculations of the railroads as to their normal prospects, affecting them both as to their capital financing and their traffic earn ings. The results, however, have not always been adverse, since in many lines their earnings have been greatly increased, owing to the ex ceptional Western crop of 1915 and the great transportation needs incident to the war. All of the Canadian . railways, and especially the Canadian Pacific Railway, found the year 1915 16 an exceptionally profitable one. The net earnings of the Canadian Pacific Railway sys tem for that year amounted to over $49,000,000, being more than $15,000,000 in excess of the net earnings of the previous year. At the same time the Grand Trunk Pacific and the Canadian Northern railroads experienced difficulties in connection with their capital financing, which forced them to come to the government for assistance and which it has not been found pos sible to resist. At present a commission is investigating the whole railroad problem of the country with a view to some permanent re organization of the internal transportation system of Canada.