With the most troublesome boundary questions out of the way, it became possible to discuss calmly closer trade relations between the Provinces and the United States.The movement for reciprocal lowering of the tariffs which hampered trade made rapid headway in the Provinces in the late forties and early fifties.British North America was passing out of the pioneer, self-sufficient stage, and now had a surplus to export as well as townbred needs to be supplied by imports.The spread of settlement and the building of canals and railways brought closer contact with the people to the south.The loss of special privileges in the English market made the United States market more desired.In official circles reciprocity was sought as a homeopathic cure for the desire for annexation.William Hamilton Merritt, a Niagara border business man and the most persistent advocate of closer trade relations, met little difficulty in securing almost unanimous backing in Canada, while the Maritime Provinces lent their support.
It was more difficult to win over the United States.There the people showed the usual indifference of a big and prosperous country to the needs or opportunities of a small and backward neighbor.The division of power between President and Congress made it difficult to carry any negotiation through to success.
Yet these obstacles were overcome.The depletion of the fisheries along the Atlantic coast of the United States made it worth while, as I.D.Andrews, a United States consul in New Brunswick, urged persistently, to gain access to the richer grounds to the north and, if necessary, to offer trade concessions in exchange.
At Washington, the South was in the saddle.Its sympathies were strongly for freer trade, but this alone would not have counted had not the advocates of reciprocity convinced the Democratic leaders of the bearing of their policy on the then absorbing issue of slavery.If reciprocity were not arranged, the argument ran, annexation would be sure to come and that would mean the addition to the Union of a group of freesoil States which would definitely tilt the balance against slavery for all time.With the ground thus prepared, Lord Elgin succeeded by adroit and capable diplomacy in winning over the leaders of Congress as well as the Executive to his proposals.The Reciprocity Treaty was passed by the Senate in August, 1854, and by the Legislatures of the United Kingdom, Canada, Prince Edward Island, New Brunswick, and Nova Scotia in the next few months, and of Newfoundland in 1855.This treaty provided for free admission into each country of practically all the products of the farm, forest, mine, and fishery, threw open the Atlantic fisheries, and gave American vessels the use of the St.Lawrence and Canadian vessels the use of Lake Michigan.The agreement was to last for ten years and indefinitely thereafter, subject to termination on one year's notice by either party.
To both countries reciprocity brought undoubted good.Trade doubled and trebled.Each country gained by free access to the nearest sources of supply.The same goods figured largely in the traffic in both directions, the United States importing grain and flour from Canada and exporting it to the Maritime Provinces.In short the benefits which had come to the United States from free and unfettered trade throughout half a continent were now extended to practically a whole continent.
Yet criticism of the new economic regime was not lacking.The growth of protectionist feeling in both countries after 1857brought about incidents and created an atmosphere which were dangerous to the continuance of close trade relations.In 1858and 1859 the Canadian Government raised substantially the duties on manufactured goods in order to meet the bills for its lavish railway policy.This increase hit American manufacturers and led to loud complaints that the spirit of the Reciprocity Treaty had been violated.Alexander T.Galt, Canadian Minister of Finance, had no difficulty in showing that the tariff increases were the only feasible sources of revenue, that the agreement with the United States did not cover manufactures, and that the United States itself, faced by war demands and no longer controlled by free trade Southerners, had raised duties still higher.The exports of the United States to the Provinces in the reciprocity period were greater, contrary to the later traditions, than the imports.On economic grounds the case for the continuance of the reciprocity agreement was strong, and probably the treaty would have remained in force indefinitely had not the political passions roused by the Civil War made sanity and neighborliness in trade difficult to maintain.
When the Civil War broke out, the sympathies of Canadians were overwhelmingly on the side of the North.The railway and freer trade had been bringing the two peoples closer together, and time was healing old sores.Slavery was held to be the real issue, and on that issue there were scarcely two opinions in the British Provinces.
