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. That such is the fact cannot be denied; and
is itself a reason why the abrogation or modification of the present
Reciprocity Treaty has become imperative. But if it were possible to
effect such an arrangement with the British Provinces as would allow
the imposition of duties equivalent to the American excise on all
articles of provincial production passing into the United States, it
seems clear that the afore-mentioned objection would be entirely
removed.
"'As the whole subject, however, is now before Congress for
consideration, the Commission do not consider it as within their
province to submit any specific recommendations; but would content
themselves with merely pointing out that, under certain circumstances,
conditions of great advantage to the United States, in a revenue point
of view, might be secured.'
"Mr. Derby's report contains much that is sensational, and many curious
admissions, but its general tenor is strongly in favour of a new
treaty, regard being had to the revenue necessities of the United
States; i.e., that articles admitted into the United States from
Canada should pay a duty equivalent to the internal revenue tax on the
same articles charged in the States.
