"3. But A Crown Colony With Such A Federation As Would Not Alter The
Political Balance Of Upper And Lower
Canada, and with a system of free
trade with Canada, would appear to solve the whole difficulty; and if
so,
The scope of the federative principle would be matter to be settled
between Canadian statesmen and the Colonial Office. The interchange
between the North-west and Canada appears to be an absolute necessity
in the interest of the latter. As Government, however, would require
taxation, the new Colony must, in all probability, have its Custom-
house; and it should be considered whether the Custom-house of Canada
would not serve, as far as the eastern frontier is concerned, for the
new Colony. If so, why should not duties, on a scale to be agreed upon
under constitutional powers to agree, be levied on imported foreign
goods, by Canada, and the duties be divided between the two powers in
agreed proportions? Were this done, at least in the beginning, expense
would be saved to the new Colony, a revenue would be easily collected
for it, through existing machinery, and Canada would obtain the revenue
and trade. Of course the scale of duties must be moderate, so as not to
excite dissatisfaction, by establishing dear prices, and it would be
the interest of Canada to make them so, for the more she stimulated the
growth of the new customer, the better for the trade. On the other
hand, the new Colony would be insured a market and an outlet for its
own productions, and would be content, therefore, to accept a
reasonably high scale of duties, levied for revenue purposes only, on
its articles of foreign consumption."
I discussed the question involved at length with the Honorable George
Brown and with his brother Gordon, at Toronto.
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