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THE early sessions of
the first Liberal administration of the Dominion were not marked by
any factious opposition on the part of Macdonald. Many useful
measures were brought forward by the government in the wisdom of
which he fully concurred, while to others he proposed amendments
increasing their value but not destroying their principle. Never had
his vigour of intellect and splendid buoyancy of spirit shown to
greater advantage than when leading an almost forlorn parliamentary
hope. He had offered, when defeated, to resign the leadership of his
party, but his followers with absolute unanimity had refused even to
think of serving under any one else. Consummate tactician that he
was, he abstained from exposing the weakness of his party-following
in the House by frequent divisions, and devoted himself to careful
legislative criticism, to study of the electorate, and to patient
waiting for that revulsion of popular feeling in his favour which he
was confident would come.
Raillery, rather than
the more violent methods urged by some of his friends, marked his
attacks on the government. "Give the Grits rope enough," was his
reply to such suggestions, II and they will hang themselves." To say
that the event justified his predictions might perhaps not be
altogether fair to his Liberal opponents, against whom circumstances
worked which had no connection with any defects of policy or errors
of judgment on their part. Still, in the light of events, Macdonald
appeared to his friends to have spoken in the spirit of prophecy;
and there is little doubt that his dictum was founded on a certain
insight into the characteristics of the Liberal party of his day as
well as a profound understanding of the temper of the Canadian
people. A great general's success often depends as much upon his
power of anticipating the errors of adversaries as upon any
combination of his own. So it was in the battlefield of politics
with Macdonald.
The leading members
of the Liberal party of that day, it is generally admitted, had high
ideals of political purity and honesty in administration, though the
rank and file were probably as ready as any other to win elections
by such means as came to their hands. Macdonald himself would
perhaps have agreed that Alexander Mackenzie and Edward Blake had
standards of political morality stricter in some particulars than
his own. At any rate they claimed them, and on that claim had come
into power. But they were cautious even to timidity. No temper could
be less fitted to win popularity and secure power in the young and
ambitious Dominion during the early years of Confederation.
Macdonald clearly foresaw that their attitude on more than one great
public question foredoomed them to failure in 'the task of
satisfying popular desires.
The refusal to carry
out the terms of the agreement to build within ten years a
transcontinental railway, alienated the West and drove British
Columbia to the verge of secession. Mackenzie himself, than whom no
more high-minded and indefatigable man ever served a British colony,
lacked Sir John's skill in cabinet making and in the arts by which a
political majority is held together. Nor did he ever secure in an
equal degree the loyalty of colleagues. Discontent became rife among
his followers ; dissensions became frequent in the cabinet and were
more than once fought out on the floor of the House. Meanwhile
Macdonald was not relying alone upon the mistakes of his opponents.
He was steadily shaping a large constructive policy and skilfully
appealing to the electorate on lines adapted to stir popular
enthusiasm. To the development of the North-West and the fulfilment
of the bargain with British Columbia, he stood pledged. To these
planks of his platform he was soon to add another of even more vital
consequence, and greater attractiveness. In this he was singularly
favoured by the circumstances of the time. Though the reciprocity
treaty negotiated by Lord Elgin in1854 had come to an end in 1866
owing to its denunciation by the government of the United States,
the early years of the new Dominion were years of prosperity. The
farmers gathered in excellent crops; the European markets were
favourable; and the perfect freedom of trade between the provinces
which came with Confederation greatly enlarged the field for the
nascent manufacturing industries of the towns. But about 1873 a tide
of economic depression swept over the whole North American
continent. In great measure it was one of those commercial crises
which can neither be foreseen nor prevented. It did not originate in
Canada, and was not confined to her borders. But the undeveloped and
struggling colony was far less fitted to bear the industrial strain
than her powerful neighbour, and the conditions of the crisis in the
United States greatly increased her distress. The protective policy
of that country gave no hope to the Canadian manufacturer, and was
beginning to cripple also the lumbermen and the farmers. In the
opinion of many, perhaps of most, Canadians that policy was, in part
at least, intended to drive Canada into union on such terms as
Washington might impose. On the other hand, manufacturers of the
United States, whom a protective policy had stimulated to
over-production, finding in the prevailing depression large surplus
stocks on their hands, threw them upon Canada as a slaughter market,
or in the language of a later day, as a dumping ground. The Canadian
manufacturer was thus ground between the upper and nether millstones
of an unfair competition, while the farmer found his home market
contracted and his foreign market rendered precarious and uncertain.
The trade with Great
Britain in perishable agricultural products which has since become
so important, was not then possible, since the cold storage system
on which it depends had not been developed. Every interest, indeed,
was depressed. The result was speedily apparent in the falling
revenue of the country. The Liberals, whose watchward was economy
and whose goal was free trade, were compelled by sheer necessity to
raise the tariff. Even so there was a yearly deficit, which in
1876-7 amounted to nearly two million dollars. In the same year the
customs dues from which one half the revenue was derived fell from
$15,351,000 to $12,546,000. In the words of the finance minister,
Mr. (afterwards Sir Richard) Cartwright, "a commercial crisis, great
and almost unparalleled in severity "reigned throughout the country.
It was under such circumstances that on March 10th, 1876, Sir John
Macdonald brought forward in the House a resolution in favour of a
"National Policy" of increased protection to mining, manufacturing
and agricultural interests, and in doing this he received the united
support of the Conservative opposition. He had struck the true note
of Canadian feeling. After thirty years experience in carrying out
the system then proposed, his countrymen are practically unanimous
in thinking that he had also found the true line of Canadian
interest.
The previous tariff
history of Canada presents few features of interest. Nova Scotia and
New Brunswick before Federation had a low tariff for revenue
purposes, with an extensive free list. Canada in 1859, under the
guidance of Mr. (afterwards Sir A. T.) Galt, introduced a rather
high tariff, with a distinct leaning to protection. The Duke of
Newcastle, the colonial secretary, under pressure from manufacturing
constituencies in Great Britain, protested and threatened
disallowance, but Galt stood firm. In 1866, on the eve of
Federation, this tariff had been lowered in order to render possible
a compromise with the Maritime Provinces, and in 1867 the Dominion
tariff had been fixed at a rate which roughly amounted to fifteen
per cent. ad valorem, with a free list of moderate extent. From that
date the desire for a distinctly protective policy had been steadily
growing, and since 1870 petitions in its favour had been coming in,
frequently coupled with the idea of retaliation on the United
States.
The very name,
"National Policy," had been used as early as 1871 by Sir Francis
Hincks, and is usually supposed to have been adapted and applied to
the policy of protection by Sir Charles Tupper.
Macdonald did not now
place himself at the head of the movement without careful study of
the Canadian situation, nor until he was convinced that the time was
ripe for change. Some of his supporters were impatient with his
deliberation. "Sir John was timid unto death of protection, had to
be bullied into it, led into it, committed to it by others. But when
he thought it grown, he used it as a bridge to reach the power he
liked to wield," wrote in after years one of his parliamentary
followers. A view such as this scarcely does justice to Macdonald's
record on the question. He had argued for incidental protection in
1846; had associated himself in 1850 with the British American
League, which aimed at framing a commercial national policy ; had
supported Galt, when, as finance minister in 1858, he had announced
protection to native industries as the policy of the government ;
and had advocated readjustment of the tariff to favour home
manufactures in the general elections of 1861 and 1872.
The caution which now
marked his course when the rising aspirations and settled judgment
of the country had to be translated into practical legislation, was
an essential element in his statesmanship. As in the case of
Federation he did not catch with facile enthusiasm at the idea
floating in the popular mind, nor hastily grasp it as a party
weapon. But once adopted, he urged it with a power, a versatility,
and a tact which makes him in a very real sense the father of the
National Policy. He was splendidly helped by his lieutenants,
especially by Sir Charles Tupper and Sir Leonard Tilley. The Nova
Scotian leader fought with the almost reckless valour which had
marked his struggle for free schools in 1863 and for federation in
1865. But for his unflinching hopefulness it is doubtful whether Sir
John would have come triumphantly through the dark days of 1874 and
1875. Sir Leonard Tilley's rare power of financial exposition and
commanding weight of personal character were of almost equal
service.
No time was lost in
putting the new policy before the country, and an original device
was hit upon for doing this. During the summer of 1876 a series of
political picnics was held throughout the Dominion, more especially
in Ontario, under the auspices of the local Conservative
associations, and were addressed by Macdonald, Tupper, Tilley,
Thomas White and other prominent members of the Opposition. The
success of this new experiment in political agitation led to its
repetition in 1877, and won the tribute of imitation from the
Liberals. Many factories were closed or were but in partial
operation at this time, owing to the industrial depression, and so
the hands were free to be present at the Conservative picnics, and
to hear of the tall chimneys which, as by a wave of the enchanter's
wand, were to rise in every province from Halifax to Vancouver. The
sympathetic owners of factories still in operation closed their
establishments for the day, and encouraged their men to attend.
Special rates were given by the railways, and excursion trains were
run from all the neighbouring towns, so that immense crowds were
drawn together for discussion. At the gathering in London in June,
1877, it was estimated that twenty thousand were present. On such
occasions Macdonald's winning personality, his natural sociability,
his ready wit, his marvellous power of remembering faces, were far
more valuable assets than his speeches, which, read in cold blood,
hardly match his reputation, being largely devoted to attacks,
sometimes humorous, sometimes keenly satiric, often abusive, on his
political opponents, poor stuff enough when divorced from the jaunty
toss of the head, the glancing smile, the shrewd and meaning twinkle
which once carried them off. Indeed throughout his career, save on
great occasions, he seems to have taken pleasure in leaving to
trusted lieutenants the weightier arguments of his case, reserving
for himself the lighter parts in the political play. Yet he seldom
failed to put before his country audiences, in simple language and
without the flowers of eloquence, the pith of the question with
which he had to deal. A few passages from his speech at the Norfolk
picnic illustrate the simplicity of his style and argument.
"We are in favour of
a tariff that will incidentally give protection to our
manufacturers; that will develop our manufacturing industries. We
believe that that can be done, and if done it will give a home
market to our farmers. The farmers will be satisfied when they know
that large bodies of operatives are working in the mills and
manufactories in every village and town in the country. They know
that every man of them is a consumer, and that he must have pork and
flour, beef and all that the farmers raise, and they know that
instead of being obliged to send their grain to a foreign and
uncertain market they will have a market at their own door. And the
careful housewife, every farmer's wife, will know that everything
that is produced under her care—the poultry, the eggs, the butter
and the garden stuff—will find a ready and profitable market in the
neighbouring town and village.
"No country is great
with only one industry. Agriculture is our most important, but it
cannot be our only staple. All men are not fit to be farmers; there
are men with mechanical and manufacturing genius who desire to
become operatives or manufacturers of some kind, and we must have
means to employ them, and when there is a large body of successful
and prosperous manufacturers, the farmer will have a home market for
his produce, and the manufacturer a home market for his goods, and
we shall have nothing to fear. And therefore. I have been urging
upon my friends that we must lay aside all old party quarrels about
old party doings. Those old matters are matters before the flood,
which have gone by and are settled forever, many of them settled by
governments of which I was a member. Why should parties divide on
these old quarrels? Let us divide on questions affecting the present
and future interests of the country.
"The question of the
day is that of the protection of our farmers from the unfair
competition of foreign produce, and the protection of our
manufacturers. I am in favour of reciprocal free trade if it can be
obtained, but so long as the policy of the United States closes the
markets to our products we should have a policy of our own as well,
and consult only our own interests. That subject wisely and
vigorously dealt with, you will see confidence restored, the present
depression dispelled, and the country prosperous and contented."
While Macdonald and
his followers were advocating what was at least a specious remedy
for the industrial depression, the Liberals had no alternative to
offer save the recommendation to the electorate to practice thrift
and to wait for the swing of the economic pendulum. The finance
minister carried his trust in the laws of political economy so far
as to say that it was as vain for governments or legislators to
claim credit for the commercial and industrial prosperity of a
country as it would be for a fly on a moving wheel to consider
itself the author of the motion—an unfortunate simile, as it won for
his party the nickname of "Flies-on-the-wheel," which was used to
good effect during the picnic campaigns. Besides this, protestations
of devotion to free trade sounded hollow coming from a government
which had been compelled to dissemble its love for the principle to
the extent of raising the tariff. Free trade has before now proved a
stimulating and successful party cry, but it was found difficult to
arouse any wide-spread enthusiasm for the inherent sanctity of a
tariff of seventeen and a half per cent. ad valorem. Nor were the
members of the government at one on the matter. Of the Liberal
leaders, Edward Blake was almost openly in favour of the National
Policy. On the other hand David Mills assured the London Chamber of
Commerce "that of all systems of taxation there is none more
objectionable than incidental protection." Mackenzie and Cartwright
both seemed for a time open to conviction. At the bye-election in
Montreal in 1876, resulting in the return of Mr. Workman, a strong
Liberal but a stronger protectionist, Mackenzie seemed almost
persuaded, and Cartwright's replies to a series of delegations in
the same year induced a general belief throughout the country that
the tariff would be raised to at least twenty per cent. Finally,
however, "in deference to their formula" as they were told by
Goldwin Smith, "they chose to be stiff-necked, and kicked
complaining industry into the camp of their opponents."
"In this country"
said Macdonald in 1876, "we are not called upon to break our heads
upon theories." The Liberal doctrinaires thought otherwise, and
succeeded in dominating their party, to their own overthrow, in the
election of 1878. It took eighteen years of opposition to repair the
fortunes shattered by this mistake, and when the Liberals again came
into power it was to exhibit themselves as practical converts to the
policy which Macdonald had established.
Turning again to
Macdonald, it should be noted that to the extreme protectionists of
his party, he steadily refused to commit himself. In June, 1878, he
endeavoured to assuage the anxiety of the Maritime Provinces by a
telegram stating that he had "never proposed an increase, but a
readjustment of the tariff," and his motion in the House of Commons
earlier in the same year was drawn with characteristic skill.
Unlike that of 1876
it does not mention protection, but states "that this House is of
opinion that the welfare of Canada requires the adoption of a
National Policy which, by a judicious readjustment of the tariff,
will benefit and foster the agricultural, the mining, the
manufacturing and other interests of the Dominion; . . . and moving
(as it ought to do) in the direction of reciprocity of tariff with
our neighbours, as far as the varied interests of Canada may demand,
will greatly tend to procure for this country, eventually, a
reciprocity of trade."
More than one breeze
of popular opinion was caught by this resolution. It appealed at
once to the deep-seated Canadian suspicion of the United States, and
to the strong desire of the farmers for the American market. It was,
in fact, a blow at the enemy with the ostensible object of forcing
him into a more friendly attitude. Equally important was its appeal
to the rising national sentiment of the Dominion, of which the
National Policy was the crystallization.
In 1870 an
association of able and ambitious young men, known as the "Canada
First" party, had been formed in Toronto. Their actual proposals
were of less importance than the stimulus which they gave to the
national aspirations: their call to Canada to depend not on British
or American patronage in commerce or politics, but on herself.
Canadian individuality, vigorously worked out on lines not
inconsistent with close imperial connection, was the key-note of the
party's policy. Around this ideal gathered a number of clever and
independent thinkers. For a time they were supported by the
distinguished name and skilful pen of Goldwin Smith. They exerted a
powerful influence over the course of events at the time of the
first North-West rebellion. In the 1878 campaign they were nearly
all on the side of Macdonald.
To another argument
not brought into his motion, but presented in his speech, Macdonald
probably attached greater importance than to the hope of bringing
the United States to its knees. This was the possibility of
obtaining a trade preference from Great Britain. After giving a
sketch of her unique commercial position at the close of the
Napoleonic wars in 1815, and of the subsequent gradual growth of
trade rivals and also of hostile tariffs, he said :-
"I am an old man, but
I think I may live to see the time when that cry may be successful
in England; the time when, if reciprocity in trade and equitable
commercial treaties cannot be obtained, the people of England will
say, 'we will not allow our industries and our accumulated capital
of so many years to be swept away by nations who do not give us a
chance of competing in their markets, and who, by their legislation,
specially exclude England.' "
On his return to
power Macdonald took steps to press his views upon the home
government. The appointment of his old finance minister, Sir A. T.
Galt, as high commissioner in London, had apparently a close
connection with this object, and there is reason to think, from a
debate on the subject in the Canadian House in 1880 that, had Lord
Beaconsfield's government been sustained, important developments
might have taken place. In 1891 Macdonald again urged upon the
mother country the policy of preferential treatment, and received
encouraging letters from the Hon. W. H. Smith, then leader of the
British House of Commons. But the feeling in favour of preferential
trade was not yet strong enough in the motherland to justify
responsible statesmen in making it a political issue. We need only
note here the foresight which anticipated the movement of late
years.
The general election
came on in September, 1878. The government had been warned by the
loss of a series of bye-elections—a most significant circumstance in
a country where the allotment of public works is openly made the
reward of support to the party in power. But the Mackenzie
administration was curiously confident in the strength of its
position, and so the triumph of Macdonald and the Conservative party
came as a great surprise. The Opposition swept every province except
New Brunswick, carrying in Ontario sixty-three seats out of
eighty-eight, and in the whole Dominion one hundred and forty-six
out of two hundred and six. Macdonald was himself defeated in his
old constituency of Kingston, but was elected in two western
divisions, and decided to sit for Victoria, British Columbia.
Early in the next
year Sir Leonard Tilley, as finance minister, introduced a bill to
give effect to the National Policy, which was frankly based upon the
theory of a qualified protection, its principle being "to select for
a higher rate of duty those articles which are manufactured or can
be manufactured in the country, and to leave those that are neither
made nor are likely to be made in the country at a lower rate." This
has ever since been the trade policy of the Conservative party of
Canada. As has been mentioned before, the Liberal party was
practically compelled to adopt it on coming into power in 1896.
From1874 to 1878 the rate charged on dutiable goods had been about
twenty per cent. The National Policy, usually spoken of as the N.P.,
raised it to about twenty-five per cent., while in many cases
substituting specific or compound duties for ad valorem. During the
following years a good many changes were made, some really
useful—others which seemed mere tinkering to meet special demands.
In 1887 important reforms were introduced, the average rate on
dutiable goods rising to nearly thirty per cent., and iron being now
for the first time specially protected, in order to still the
discontent of Nova Scotia, which indulged hopes of becoming in the
industrial system of Canada what Pennsylvania is in that of the
United States. From 1890 onwards until the Liberals came into office
in 1896 a slight tendency to reduction of duties may be traced, but
few changes of importance were made.
The advantage of the
system thus inaugurated is now scarcely a subject of discussion in
Canada. Under its stimulating influence business improved and the
revenue promptly expanded to such a degree that the government was
able to show a considerable surplus. A marked increase in prosperity
followed, even if it were not wholly created by, the new system.
Every department of national life revived, and it may now be safely
affirmed that the adoption of the National Policy went far to create
in Canada a higher and more confident national spirit. |
