The terms upon which the money grants from the Dominion to the province were based, are contained in the following clauses of the Manitoba Act:

"24. Inasmuch as the Province is not in debt, the said Province shall be entitled to be paid, and to receive from the Government of Canada, by half-yearly payments in advance, at the rate of five per centum per annum on the sum of four hundred and seventy-two thousand and ninety dollars.

"25. The sum of thirty thousand dollars shall be paid yearly by Canada to the Province for the support of its Government and Legislature, and an annual grant in aid of the said Province shall be made, equal to eighty cents per head of the population, estimated at seventeen thousand souls; and such grant of eighty cents per head shall be augmented in proportion to the increase of population, as may be shown by the census that shall be taken thereof in the year One Thousand Eight Hundred and Eighty-one, and by each subsequent decennial census, until its population amounts to four hundred thousand souls, at which amount such grant shall remain thereafter, and such sum shall be in full settlement of all future demands on Canada, and shall be paid half-yearly, in advance, to the said Province.

"2G. Canada will assume and defray the charges for the following services: (1) salary of the Lieutenant-Governor; (2) salaries and allowances of the Judges of the Superior and District or County Courts; (3) charges in respect of the Department of the Customs; (4) Postal Department; (5) Protection of Fisheries; (6) Militia; (7) Geological Survey; (8) the Penitentiary; (9) and such further charges as may be incident to and connected with the services which by the British North American Act, 1867, appertain to the General Government, and as are, or may be, allowed to the other Provinces."

The clauses of the act, which deal with the special customs regulations for the province, are:

"27. The Customs' duties now by law chargeable in Rupert's Land,-shall be continued without increase for the period of three years from and after the passing of this Act, and the proceeds of such duties shall form part of the Consolidated Revenue Fund of Canada.

"28. Such provisions of the Customs' Laws of Canada (other than such as prescribe the rate of duties payable) as may from time to time be declared by the Governor-General in Council to apply to the Province of Manitoba, shall be applicable thereto, and be in force therein accordingly.

"29. Such provisions of the Law? of Canada respecting the Inland Revenue, including those fixing the amount of duties, as may be from time to time declared by the Governor-General in Council applicable to the said Province, shall apply thereto, and be in force accordingly."

It will be seen from the above clauses that, after defraying the expenses specified in clause 26, the aggregate of the money grants paid to Manitoba, by the Dominion would be $67,204.50. The province had little or no revenue from other sources, for the crown lands within its borders, the minerals, the timber. and the fisheries were all controlled by the Dominion. Probably none of the' men, who agreed to the terms of the act on behalf of Manitoba, realized how insufficient such a meagre income would be for the needs of a province, especially a province whose institutions were just being organized.

At the close of the first session of Manitoba's first legislature Attorney-General Clarke was appointed a representative of the province at the Immigration Conference which met at Ottawa during September, 1871. At this conference he urged that the province should receive special financial assistance from the Dominion, inasmuch as it had been left without other resources by being deprived of its public lands, minerals, and timber, but was nevertheless spending considerable sums to promote immigration—a thing done by no other province in the Dominion.

The inadequacy of the income of the province became more apparent as the population increased and new institutions were established. In 1873 the people of Manitoba, regardless of party, joined in the demand for "Better Terms." When the provincial legislature assembled on February 5, the member for Ste. Anne's, Mr. John H. Mactavish, introduced the matter, and in the discussion which followed it was plain that the members were almost unanimous in thinking that the Dominion had not dealt fairly with Manitoba. It was charged that the Ottawa government bad injured the province by its dilatory policy in administering the crown lands, by its neglect of immigration, and by its niggardly appropriations for public works and buildings. It was claimed that the annual subsidy of $67,000 was utterly inadequate to the needs of the province. The opinion of the members was formulated in the following clause of the report of the committee on public accounts: "Your committee strongly recommend that the government be requested to adopt such measures as they may deem best for the purpose of urging on the government of Canada the necessities of the position of the province, and to adopt such measures as may best tend to secure an augmentation to the present subsidy, and also the fulfilment of all promises made to this province previous to the transfer."

When the legislature was prorogued in March, Messrs. Clarke, Howard, Royal, and Bird proceeded to Ottawa, and on the 31st they submitted a memorandum to the Dominion government in which the following claims of the province were set forth:

"1. To change the terms of the financial arrangements entered into between Manitoba and the Dominion of Canada, by taking for the base of the annual Dominion subsidy the number of the population of Manitoba at an estimate of 70,000, and to be allowed the interest at the rate of 5 per cent, on the sum of $1,943,900; to give for the support of the Government and Legislature the annual sum of $60,000.

"2. To commence immediately to push forward as quickly as possible the construction of the Public Buildings of the Province, to wit: Parliament House, residence of the Lieutenant-Governor, the Departmental offices, five Courts of Justice, Prisons, Penitentiary, and to provide for the erection of a Provincial library.

"3. To organize, equip, and send to Manitoba, a body of well and carefully-chosen mounted Dominion Police, over which the government of Manitoba would have control while stationed in the Province; the number to be stationed at all times in the Province not to be less than fifty, part of the expenses for the maintenance and support of the said number being defrayed by the Province.

"4. To postpone the Canadian Tariff, except on spirituous liquors, until railroad communication with Lake Superior, through Canadian territory, is established.

"5. To have the free carriage for immigrants over the Dawson Road from the port of Collingwood to Fort Garry, and the extension of the said road to the western boundary of the Province adjoining the North-West territories, and the maintenance of the same.

"6. To provide for the creation of a tribunal in Manitoba to settle all questions as to claims for occupancy of lands, the issue of patents for land, and all conflicting claims to Crown lands and questions of like character, in pursuance of the letter and spirit of the Manitoba Act.

"7. To provide immediately for the appointment of Immigration Agents in the Province, and at Duluth, Collingwood, Windsor, Sault Ste. Marie, and in Europe.

"8. To provide for a fair and just compensation for the damages done to several printing offices in September, 1872, during the Dominion election riots.

"9. To appoint a Chief Justice for the Province.

"10. To provide as soon as possible, for the extension and improvement of the postal service in the Province of Manitoba."

On April 24, the delegates from Manitoba presented another memorandum to the Ottawa government, asking for an extension of the boundaries of the province, an increase of $60,000 in the sum allowed for the support of the provincial government and legislature, and a per capita grant based upon an assumed population of 200,000 instead of 17,000. This would have made the total subsidy paid to the province about $213,600.

The Dominion authorities showed a disposition to grant the request contained in clause 4 of the flrst memorandum, and extended the period for the imposition of the special duty of four per cent, on goods imported into Manitoba until July, 1874. Spirituous liquors were not included in the articles admitted under this unusually low tariff.

The request in regard to a force of mounted police was also met in a modified form. The establishment of such a body of constabulary had been urge( upon the government for some time. In 1870 Mr. Donald A. Smith had recommended that a force of mounted men should be sent into the North-West to keep turbulent Indians in check and to preserve order in the more remote districts. This became doubly necessary after the rule of the Hudson's Bay Company ceased, for traders began at once to smuggle liquor into the country and sell it to the Indians to their utter demoralization. In 1872 Captain Plainval of the Manitoba police submitted to Sir John Macdonald a plan for the organization, equipment, and distribution of a force of mounted police, and it was so satisfactory that the premier adopted it. The act passed to establish such a force received the assent of the governor-general on May 23,, 1873 and while most of the men were to be employed beyond the boundaries of Manitoba, the province had the benefit of their service where it was needed. The following clauses of the act show the conditions on which Manitoba received the protection of the force:

"The Commissioner and every Superintendent of Police, shall be ex officio a Justice of the Peace within the Province of Manitoba; and the constables and sub-constables of the Police Force shall also have and exercise within the Province of Manitoba all the powers and authority, rights and privileges by law appertaining to constables under the laws of the Dominion, for the purpose of carrying the same into effect.

"The Governor-in-Council may from time to time enter into arrangements with the Government of the Province of Manitoba for the use or employment of the Police Force in aiding the administration of justice in that Province, and in carrying into effect the laws of the Legislature thereof; and may in any such arrangement agree and determine the amount of money which shall be paid by the Province of Manitoba in respect of any such services of the said Police Force.

Colonel French was appointed commissioner of the force of mounted police^ and its organization began in September. Later in the autumn about 150 men were sent to Manitoba by the Dawson Route and passed the winter in Lower Fort Garry. Early in the following year it was decided to increase the force to the full strength of 300 men, as contemplated in the act, and about 200 recruits of fine physique and character were sent west via Chicago, St. Paul, and Fargo. From the last town they marched to Pembina; and from that point the whole body started on July 10 for Fort Pelly, Fort Ellice, and other points at which detachments were to be located. Three years later there were 329 constables in the force, and they occupied eleven stations scattered over the North-West Territory as far west as Calgary and as far north as Fort Saskatchewan. It is impossible to give in the space of a few paragraphs the subsequent history of the force or to mention in detail the services which it has rendered to western Canada. These inestimable services have more than justified the high expectations of the men' who first advocated the: establishment of the force.

It is impossible to say what answers the Dominion government would have made to the other demands contained in the two memoranda presented by Premier Clarke and his fellow delegates. Before it had time to formulate' a policy in regard to them, the so-called "Pacific Scandal" had arisen, and in the government's struggle for existence Manitoba's demands were forgotten. Before the close of the year Sir John Macdonald and lus ministers had resigned, and the Mackenzie government found itself in power. Early in 1874 it was endorsed by the people's Verdict at the polls, and shortly afterward delegates from Manitoba renewed the requests made a year before.

As soon as the delegates returned, the legislature was summoned to meet on July 2 to hear their report. Before it was presented, Mr. Clarke had been forced to resign, and Hon. Mr. Girard became premier. As soon as possible the reply of the Mackenzie government to Manitoba's demands for better terms

was presented to the legislature by tlie new government. The requests for an extension of the provincial boundaries, for an increase in the grant for maintenance of the government, and for a per capita grant based on an assumed population of 200,000 were all refused. A. paltry special grant of $25,000 was made to tide the province over its most pressing necessities, but out of this the Dominion carefully deducted some $10,000, which had been advanced a year or two earlier to purchase seed wheat for settlers whose crops had been destroyed by grasshoppers. The requests for public buildings for the province were refused; and the government declined to pay for damage,s done to printing offices during the election riots of 1872, on the ground that it was not responsible Li any way. Some of the other matters had been attended to, some would be considered. The Dominion had practically refused the most important of Manitoba's demands—that for an increased subsidy—, and the province had to commence anew its struggle for better terms. The Girard government was confronted with the problem of managing the affairs of a province with an income which was wholly inadequate; and when it resigned in December, the succeeding Davis ministry could not do otherwise than adopt a policy of general retrenchment.

The first session of Manitoba's second parliament opened on March <£t, 1875. In his speech from the throne the lieutenant-governor announced that the executive council, impressed with the serious financial condition of the province, had represented to the privy council of Canada that the financial arrangements fixed by the Manitoba Act placed the province in a position greatly inferior to those occupied by Prince Edward Island and British Columbia, and had urged that the financial terms of the act should be revised and that the boundaries of the province should be extended. He also announced that, as a result of these negotiations, the privy council had offered to grant the province a subsidy of $100,000 until 1881, charging the increase to Manitoba as a debt, but that the provincial government had not considered the plan a wise one, and would ask the- legislature to concur in an address to the governor-general and the privy council, asking for a revision of the existing financial relations between the Dominion and the province.

The proposed address was passed and negotiations with the Ottawa government were renewed once more. During the summer of 1875 Hon. Alexander Mackenzie invited the government of Manitoba to a conference upon the question of better terms. Messrs. Davis and Royal accordingly went to Ottawa and succeeded in affecting a modification of the terms under which the Dominion subsidy was paid. The fixed grant for the maintenance of the provincial government was not changed, but the other grants were increased, so that the total amount paid to the province would be $90,000 per annum until 1881. A number of accounts, amounting to $120,000, which the province owed the Dominion, were adjusted, and thus Manitoba entered upon the year 1876 with no debt. During the two remaining years of Mr. Davis' administration the province was free from financial embarrassment.

"When Mr. Norquay succeeded Mr. Davis as premier of Manitoba in the autumn of 1878, he decided to announce the policy which would guide his government and appeal to the people. As stated in an address which he made to the electors of his own constituency (St. Andrew's South), the leading features of that policy were the following: 1. The granting of charters to local railways by the provincial government, government aid in their construction. and the granting of power to municipalities to aid these railways; 2 An advance grant from the Dominion to meet the increasing needs of the schools of the province; 3. An increase in the Dominion subsidy; 4. The extension of the provincial boundaries. This platform met with popular approval, and when the general election was held in December, the government carried about two-thirds of the constituencies of the province.

The first session of the third legislature opened on February 1, 1879, and on the 7th an adjournment was made in order to give Messrs. Norquay and Royal an opportunity to confer with the Dominion government upon some of the important matters which entered so largely into Mr. Norquay's policy. The conferences lasted for several weeks, and it was not until May 27 that the legislature re-assembled to hear the report of the delegates. A further delay was caused by the ministerial crisis mentioned in the preceding chapter; and it is possible that had it not been for the excitement due to this crisis, some of the replies of the Dominion government to Manitoba's requests would have met with vigorous protests instead of tacit approval.

Manitoba's delegates had asked for the following: 1. The construction of the public buildings at "Winnipeg, which had been promised by the Dominion government; 2. Its approval of Mr. Norquay's railway policy; 3. Its approval of his plan with regard to the income from school lands; 4. Provision for the drainage of marsh lands; 5. An arrangement for repayment of seed grain and provisions supplied to settlers in 1875; 6. An arrangement in regard to the expense of keeping lunatics in the penitentiary of Manitoba; 7. An advance to the province oil capital account of sums to provide for the administration of justice, drainage, etc.

In its replies the Dominion promised to put in the estimates for the next session of parliament sums for the construction of a government house and a legislative building. The last was greatly needed, for the old legislative building had been destroyed by fire on the night of December 3,'f 1873. School lands were to be withdrawn from sale until they had reached their approximate maximum value, the sales were to be conducted by the Dominion, and it was to hold the sums received from them in trust for the province, paying to it the interest only. Satisfactory terms were offered in regard to repayments of seed grain and provisions, and the Dominion agreed to pay fifty cents per day for each lunatic sheltered in the Manitoba penitentiary, provided he came from some place outside the province, and to provide at the next session of parliament an appropriation for building a lunatic asylum near 'Winnipeg. The Dominion ministers did not think that the drainage of swamp lands was a necessity at that time, and they disapproved strongly of Mr. Norquay's plan of securing increased railway facilities for the settlers by chartering and aiding local lines. The request for an increased subsidy had been referred to the Hon. Leonard Tilley. minister of finance, and he had made the following recommendation, which his colleagues had adopted: "That the annual allowance of $90,000 be increased until the end of the year 1881 to $105,653.04, being made up as follows:—$30,000, cost of government; $56,000, being at the rate of eighty cents per head on an assumed population of 70,000; and $19,653.04, being interest on balance of capital at 5 per cent. With respect to the request that advances be made from the capital account of the province for drainage purposes, the undersigned regrets that he cannot recommend that the application be entertained."

Mr. Norquay and his followers in the legislature appear to have accepted the offers made by the Dominion government as fairly satisfactory for the time being, and they seem to have satisfied most of the electors of the province, for, when the legislature was dissolved in November and a general election held on December 16, 1879, the government was sustained by a large majority. The house met in January, 1880, and among the important enactments of the session there was a Drainage Act. To make this law operative it was necessary for the province to expend a very considerable sum of money, and therefore Messrs. Norquay, Brown, and McMicken went to Ottawa in March to ask that Manitoba be allowed to withdraw $100,000 on capital account in order to construct drains through some of her marshy lands. They also renewed the request for public buildings. The Dominion government seemed disposed to make the advance on capilal account, which had been asked, but it would do little more.

All the readjustments in the financial relations between Manitoba and the Dominion, which had been made up to this time, had been considered by provincial statesmen as temporary in character, and they expected that a general revision of them would follow the census of 1881. Mr. Norquay claimed that the great and increasing influx of settlers into Manitoba laid unexpectedly heavy burdens upon the province at the time, inasmuch as it-compelled the government to expend large sums in the immediate construction of roads, bridges, and drains, and that, as the Dominion had deprived the province of the means of raising the necessary funds from its natural resources, it was only just that it should receive special grants from the Dominion treasury or else be given the public lands within its boundaries. His position was very ably stated in an address which he made in Winnipeg during the month of March, 1881.

The census of 1881 was taken, but the Dominion government showed no disposition to do more for Manitoba than had been offered a y'ear earlier, although Mr. Norquay did not fail to renew the claims of his province. On this occasion he made a new request, namely, that swamp lands reclaimed by the provincial drainage system should be granted to the province. This was held over for consideration. But Mr. Norquay did not give up the struggle to secure for Manitoba what he considered her rights. Early in 1882 he and Mr. Lariviere went to Ottawa and, after much discussion with the Dominion ministers, secured an increase in the subsidy. The grant for legislation was raised from $30,000 to $50,000, the per capita grant of eighty cents a year was to be based on an assumed population of 150,000 and would therefore be $120,000, while $45,000 per annum would be allowed the province in lieu of her public lands. As she had withdrawn a part of the amount originally placed to her credit on capital account, the interest on this account was reduced to $12,153. Thus the total subsidy paid by the Dominion to the province under the arrangement of 1882 was $227,153. The Dominion declined to change the existing arrangement in regard to the school lands or to make a grant of reclaimed swamp land to the province. A request that salaries for two county judges be paid was granted.

The agreement made by Mr. Norquay and his colleague was ratified by the legislature; but it was not regarded as sufficiently satisfactory to be a permanent settlement, and before the end of the session a resolution was passed in which the right of the province to its public lands was reaffirmed. Later in the year the Dominion disallowed the railway acts passed by the provincial legislature, and this action, coupled with the Dominion's refusal to restore to the province her natural resources or to give more than a very meagre subsidy in lieu of them, roused great indignation among the people. In some quarters Mr. Norquay was severely blamed for failing to secure for the province what the people considered her just rights, and so he decided to appeal to the electors once more. Mr. Norquay once said on the floor of the house, "It is my policy to conform as far as possible to settled public, opinion," and he certainly gave the public many opportunities to express its opinion at the polls. The elections took place on January 25, 1883, and twenty out of the thirty members elected were supporters of Mr. Norquay.

The new legislature met on May 17, and in moving the reply to the speech from the throne, Dr. D. H. Harrison, the member for Minnedosa, intimated that the government meant to continue the struggle for the acquisition of the public, lands within the province instead of accepting a paltry $45,000 m lieu of them. In the discussion which followed Mr. Norquay reviewed the efforts made to increase the subsidies received from Ottawa, showing that they had been raised from $67,000 in 1871 to $227,000 in 1882 and that the last arrangement was not final but subject to revision at any time. He meant to keep up the agitation for better terms, and he hoped to enlist the aid of the other provinces. During the session he introduced the following resolution, which was carried without a dissenting voice ' That, in the opinion of this House, it is expedient in the best interests of the province, that a convention of delegates, composed of members of the Executive Councils of the several provinces of Canada, be asked to take into consideration the best means to be adopted to secure an equitable application of the general provisions of the British North America Act to the different provinces forming the Dominion, and to submit such amendments to the constitution as experience may suggest, with a view to securing greater harmony in the legislative jurisdiction of the Federal and Provincial Legislatures respectively; and also such rearrangement of the sources of revenue as will render uniform the basis upon which subsidies are granted to the provinces."

This resolution met with popular approval, although the contemplated conference of representatives of all the provinces did not take place at that time. Thenceforward the demand for more generous treatment in the matter of subsidies and public works for the province of Manitoba was always associated with demands for the possession of its public lands, for the extension of its boundaries, and for a recognition of its right to charter and aid railways within, those boundaries, and to some extent the original demand was overshadowed by there "Provincial Rights" took the place of ''Better Terms[gas the watchword of Manitoba in its dealings with the Dominion. Before telling the story of the attempts to secure full provincial rights, it is necessary to give an outline of the earlier efforts to secure an extension of the provincial boundaries and an outline of the struggle to secure the right of chartering provincial railways.

POST OFFICE, WINNIPEG (LEFT): OFFICE OF MANITOBA FREE PRESS (RIGHT)

LEGISLATIVE BUILDING, WINNIPEG