The
Commission Also Includes This Subject In Their Report.
Their report
(dated January, 1866,) says:
-
"'In accordance with the resolutions of Congress and the notification
of the Executive, the commercial arrangement known as the "Reciprocity
Treaty," under which the trade and commerce between the United States
and the British Provinces of North America have been carried on since
1854, expires on the 17th day of March, 1866. The consideration of the
effect which the termination of this important commercial arrangement
is likely to have upon the revenue, as well as upon the trade and
commerce of the United States, has legitimately formed a part of the
duties devolving upon the Commission; and has also been especially
commended to their attention by the Secretary of the Treasury. The
Commission do not, however, propose to present in this connection any
review of the history of the treaty, or of the circumstances which, in
the opinion of Congress, have rendered its termination expedient. This
work has already been performed, under the auspices of the Treasury
Department, by E. H. Derby, Esq., of Boston, to whose able and
exhaustive report the Commission would refer, without, however,
endorsing its conclusions. There are, however, certain points connected
with this subject to which the Commission would ask special attention.
"'The first of these is, that during the continuance of the Reciprocity
Treaty the trade and commerce between the United States and the British
North American Provinces has increased in ten years more than
threefold, or from seventeen millions in 1862 to sixty-eight
millions in 1864: so that at present, with the exception of Great
Britain, the commercial relations between the United States and the
British North American Provinces outrank in importance and aggregate
annual value those existing between this country and any other foreign
state. [Footnote: The value of the import and export trade of the
United States with the following countries for the year ending June
30th, 1864, was, according to the Treasury Report, as follows (in round
numbers):
Great Britain ...................... $317,000,000
British North America .............. 68,000,000
Spanish West Indies ................ 57,000,000
France ............................. 29,000,000
Hamburg and Bremen ................. 29,000,000
Mexico ............................. 20,000,000
Brazil ............................. 19,000,000
China .............................. 19,000,000
British West Indies ................ 12,000,000]
"'It may also, they think, be fairly assumed that taking into
consideration the growth of the two countries in population and wealth,
(that of Canada for the last ten years having preserved a nearly equal
ratio in this respect with that of the United States,) the trade as at
present existing is really but in its infancy, and that the future may
be expected to develop an increase equally as great as that of the
past.
"'A change in the conditions under which a reciprocal commerce of such
magnitude is carried on, and is now developing, ought not, therefore,
to be made without the most serious consideration.
"'As regards the present treaty, the Commission, as the result of their
investigations, have been led to the conclusion that its continuance,
under existing circumstances, unless accompanied with certain important
modifications, is not desirable on the part of the United States.
"'They, however, are also unanimous in the opinion, that, in view of
the close geographical connection of the United States with the British
Provinces - rendering them in many respects but one country - and of the
magnitude of the commercial relations existing between them, it would
be impolitic and to the detriment of the interests of the United States
to decline the consideration of all propositions looking to the re-
establishment of some future and satisfactory international commercial
arrangement. Such a course would be in entire opposition to the spirit
of the age, the liberality of our people, and the policy of rapidly
developing our resources as a means of diminishing the burden of our
public debt.
"'In view of such an arrangement, the question of whether either of the
parties to the treaty has, or has not, conformed to the spirit of its
stipulations, is of little importance. It is the future, not the past,
that we are to consider; and if advantageous terms for the future are
offered - terms which are calculated to promote the development of the
trade and commerce of the United States, encourage good feeling and
prevent difficulties with our neighbours, and at the same time protect
the revenues of the country from serious and increasing frauds - it
would be, in the opinion of the Commission, most impolitic to disregard
them.
"'The offer on the part of the provincial authorities to re-negociate
in respect to the commercial relations of the two countries, is in
itself an expression of desire to make an arrangement that must be, in
every respect, reciprocal; inasmuch as it is evident that no treaty
can, for any length of time, continue that does not conduce to the
benefit of both parties.
"'It is evident that the necessities of the United States will for many
years require the imposition of high rates of taxation on many
articles, and that with the production of such articles free, or
assessed at low rates of duty, in the British Provinces, the
enforcement of the excise laws on the borders will be a matter of no
little difficulty, annoyance and expense; and under all ordinary
conditions a large annual loss of the revenue must inevitably occur.
The experience of all the nations of Europe has shown that to attempt
to wholly prevent smuggling, under the encouragement of high rates of
duty, is an utter impossibility. If, however, such an arrangement can
be made with the British Provinces as will ensure a nearly or quite
complete equalization of duties - excise and customs - it must be
apparent that all evasions of the revenue laws by smugglers would
instantly come to an end; and that the attainment of the above result
would be of immense advantage to the United States in a revenue point
of view.
"'Again: it is also urged that under the existing system the products
of American industry subject to high rates of excise, are injuriously
brought into competition with similar products of provincial industry
which are subjected to little or no excise, and then admitted into the
United States free of duty.
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