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UBC Theses and Dissertations

British Columbia's campaign for better terms, 1871-1907 Johns, Harold Percival 1935

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i l M s 1 BRITISH COLUMBIA'S CAMPAIGN FOR BETTER TERMS, 1871-1907, by Harold P e r c i v a l Johns A Thesis submitted f o r the Degree of MASTER OF ARTS i n the Department of HISTORY THE UNIVERSITY OF BRITISH COLUMBIA A p r i l , 1935 TABLE OF CONTENTS Chapter I. From Colony to Province • Chapter I I , Recurring D e f i c i t s • • • • Chapter I I I . The Dunsmuir Delegation and Its Aftermath .«,«••«.(••••»<3eeae«. Chapter IV. The P r i o r Regime ..«.«.>....».«> .<»»,• Chapter T. EKe E a r l y E f f o r t s of the McBride Government Chapter VT. The Int e r - P r o v i n c i a l Conference, 190b .. Chapter ¥11, McBride»s Mission to London , Appendix Bibliography ••••••••«•••••»•••••••••••••••••• 1 BRITISH COLUMBIA'S CAMPAIGN FOR BETTER TERMS, 1871-1907 . CHAPTER I . From Colony to Province* "It s h a l l be lawful for the Qjieen, by and with the advice of Her Majesty's Most Honourable Privy Council, on Addresses from the-Houses of Parliament of Canada, and from the Houses of Newfoundland, Prince Edward Island, and B r i t i s h Columbia, to admit those Colonies or Provinces, or any of them, into the Union on such terms and conditions i n each case as are i n the Addresses expressed and as the Qjieen thinks f i t to approve, subject to the provisions of t h i s Act It was by virtue of t h i s section of the B r i t i s h North America Act, 1 8 6 7 , that on May 16, 1 8 7 1 , Her Majesty Queen Y i c t o r i a assented to the "Terms of Union" by which B r i t i s h Columbia emerged from the Co l o n i a l to the P r o v i n c i a l status. Inasmuch as i t i s the purpose of t h i s thesis to discuss the development of the movement i n the P a c i f i c Province f o r the r e v i s i o n of these Terms, p a r t i c u l a r l y as they a f f e c t the f i n a n c i a l interdependence of the fe d e r a l and l o c a l governments, the chief features of the agreement of 1 8 7 1 are here set f o r t h : " 1 . Canada s h a l l be l i a b l e for the debts and l i a b i l i -t i e s of B r i t i s h Columbia e x i s t i n g a t the time of the Union. "2. B r i t i s h Columbia, having not incurred debts equal to those of the other Provinces now cons t i t u t i n g the Dominion, s h a l l be e n t i t l e d to receive, by half-yearly payments i n advance, from the General 2. Government, in t e r e s t at the rate of f i v e per cent, per annum on the difference between the actual amount of i t s indebtedness at the date of the Union and the indebtedness per head of the popu-l a t i o n of Hdva Scotia and New Brunswick (27.77 d o l l a r s ) , the population of B r i t i s h Columbia being taken at 60,000. "3. The following sums s h a l l be paid by Canada to B r i t i s h Columbia for the support of i t s Govern-ment and Legislature, to wit, an annual subsidy of 35,000 d o l l a r s , and an annual grant equal to 80 cents per head of the said population of 60,000, both half-yearly i n advance; such grant of 80 cents per head to be augmented i n proportion to the i n -crease i n population, as may be shown by each sub-sequent decennial census, u n t i l the population amounts to 400,000, at which rate such grant s h a l l thereafter remain, i t being understood that the f i r s t census be taken i n the year 1881. tty. Canada w i l l assume and defray the charges f o r the following services: A. Salary of the Lieutenant-Governor: B. Salaries and allowances of the Judges of the Superior Courts and the County or D i s t r i c t Courts: C. The charges i n respect to the Department of Customs: D. The postal and Telegraphic services: E. Protection and encouragement of f i s h e r i e s : F. Provision f o r the M i l i t i a : G. Lighthouses, buoys, and beacons, shipwrecked crews, quarantine and marine hospitals, inoluding a marine h o s p i t a l at V i c t o r i a : H. The Geological Survey: I . The penetentiary. And such further charges may be incident to and connected with the services which, by the " B r i t i s h Forth America Act, 1867", appertain to the.General Government, and as are or may be allowed to the other Provinces* "7, It i s agreed that the e x i s t i n g Customs t a r i f f and exise duties s h a l l continue i n force i n B r i t i s h ( Columbia u n t i l the railway from the P a c i f i c Coast / and the system of railways i n Canada are con- / nected, unless the Legislature of B r i t i s h Columbia should sooner decide to accept the t a r i f f and i exise laws of Canada. When Customs and exise duties, are, at the time of the union of B r i t i s h Columbia with Canada, l e v i a b l e on any goods, wares, or merchandises i n B r i t i s h Columbia, or i n the other Provinces of the Dominion, those goods, wares and merchandises may, from and a f t e r the Union, be imported into B r i t i s h Columbia, on proof of the payment of the Customs and exise duties, l e v i a b l e thereon i n the Province of ex-orta t i o n , and on payment of such further amount i f any) of Customs or exise duties as are le v i a b l e thereon i n the Province of importation* This arrangement to have no force or e f f e c t a f t e r the a s s i m i l a t i o n of the t a r i f f and exise duties of B r i t i s h Columbia with those of the Dominion. "11» The Government of the Dominion undertakes to secure the commencement simultaneously, within two years from the date of the Union, of the construction of a railway from the P a c i f i c towards the Rocky Mountains, and from such point as may be selected, east of the Rocky Mountains, towards, the P a c i f i c , to connect the seaboard of B r i t i s h Columbia with the railway system of Canada; and, further, to secure the completion of such railway within ten years from the date of the Union* And the Government of B r i t i s h Columbia agree to convey to the Dominion Government, i n t r u s t , to be appropriated i n such manner as the Dominion Government may deem advisable i n the furtherance of the construction of the said railway, a similar extent of public lands along the line of railway, throughout i t s entire length i n B r i t i s h Columbia, not to exceed, however, twenty (20) miles on each side of l i n e , as may be appropriated f o r the same purpose by the Dominion Government from the public lands of the North-West T e r r i t o r i e s and the Province of Manitoba: Provided that the quantity of land which may be held under pre-emption r i g h t or by Grown Grant within the l i m i t s of the t r a c t of land i n B r i t i s h Columbia to be so conveyed to the Dominion Government s h a l l be made good t o the Dominion from contiguous public lands; and provided further that u n t i l the commencement within two years, as aforesaid, from the date of the Union, of the construction of the said railway, the Government of B r i t i s h Columbia s h a l l not s e l l or alienate any further portions of the p u b l i c lands i n any other way than under right of pre-emption, requiring actual residence of the pre-emptor on 4. the land claimed, hy him. In consideration of the land to he so conveyed i n a i d of the con-st r u c t i o n of the said railway, the Dominion Government agree to pay to B r i t i s h Columbia, from the date of the Union, the sum of 100,000 d o l l a r s per annum, i n ha l f - y e a r l y payments; i n advance* "12• The Dominion Government s h a l l guarantee the intere s t f o r ten years from the date of the completion of the works, at the rate of f i v e per centum per annum, on such sum, not ex-ceeding 100,000 s t e r l i n g , as may be required f o r the construction of a f i r s t class graving-dock at Esquimalt* "13* The charge of Indians, and the trusteeship and management of the lands reserved f o r t h e i r use and benefit s h a l l be assumed by the Dominion Government, and a p o l i c y as l i b e r a l as that hitherto pursued by the B r i t i s h Columbia Government s h a l l be con-tinued by the Dominion Government a f t e r the Union* To carry out such p o l i c y , t r a c t s of land of such extent as i t has hitherto been the practice of the B r i t i s h Columbia Government to appropriate f o r that purpose s h a l l from time to time be conveyed by the l o c a l Govern-ment i n t r u s t for the use and benefit of the Indians, on a p p l i c a t i o n of the Dominion Government; and i n case of disagreement be-tween the two Governments respecting the quantity of suoh t r a c t s of land to be so granted, the matter s h a l l be referr e d f o r the decision of the Secretary of State f o r the Colonies* "14* The Constitution of the executive authority and of the Legislature of B r i t i s h Columbia s h a l l , subject to the provisions of the ' B r i t i s h Forth America Act, l867», continue as e x i s t i n g at the time of the Union u n t i l a ltered under authority of the said Act, i t being at the same time understood that the Government of the Dominion w i l l r e a d i l y con-sent to the introduction of Responsible Government, when desired hy the inhabitants of B r i t i s h Columbia, under authority of the Secretary of State for Colonies, to amend the e x i s t i n g c o n s t i t u t i o n of the Legislature hy providing that a majority of i t s members s h a l l be ele c t e d . " ( l ) In addition to the above conditions, the Federal Government further agreed to provide f o r t n i g h t l y service between V i c t o r i a and-San Francisco, and twice weekly boats between V i c t o r i a and Olympia; to provide suitable pensions f o r Her Majesty's servants: i n the colony whose po s i t i o n s would be affected by the p o l i t i c a l changes; and to use i t s influence to secure the continuance of the Haval Station at Esquimalt. The remaining sections of the "Terms of •Union" dealt with B.C. f s representation i n the two Houses of Parliament. The question of the f i n a l i t y of such a settlement has but one answer. The framers of the Union may or may not have regarded the compact between the several Provinces as f i n a l ; but almost from i t s acceptance i t was not treated as such and i n truth could not be so. As S i r W i l f r i d Laurier himself said, i n moving the address for the r e v i s i o n of the "B.H.A. Act" i n 1907, "There i s no other f i n a l i t y i n these matters but the w i l l of the people, the w i l l of Parliament i t s e l f " . ^ Treaties between p o l i t i c a l groups are subject (1) See "Standing Orders of the L e g i s l a t i v e Assembly of B r i t i s h Columbia", 1?30; pp. 149-154. (2) Canadian Hansard, 1907; pp. 5393-5395. to r e v i s i o n ana are i n t h e i r essence d i f f e r e n t to agreements between i n d i v i d u a l s i n that respect. Precedents f o r t h i s statement are not wanting i n Canada. When Bdva Scotia's demand f o r better terms was being debated i n the Dominion House of Commons, Edward Blake declared that any a l t e r a t i o n of the e x i s t i n g act by the Canadian Parliament was impossible because the Confederation Act was an Imperial statute and eould be al t e r e d only by that body, and further that any a l t e r a t i o n of the e x i s t i n g r e l a t i o n between the Dominion and a p r o v i n c i a l government was i n j u d i c i a l because i t would do i n j u r y to the other provinces of the u n i o n . ^ ^ The House, however, sustained the Government i n the matter and the terms were a l t e r e d . Again, when the b i l l changing the terms came before the Senate, Senator Sanborn moved an amendment "that inasmuch as i t involves a change of the basis on which a l l the provinces entered Confederation, such change cannot with safety be made except upon consent of each Province so confederated and by the action of the Imperial Parliament"* The amendment was defeated 32 to 12. I t cannot therefore be said that the significance of t h i s a l t e r a t i o n and the reper-;* cussions involved were not duly considered by Parliament. Thus both Houses had committed themselves i n the matter of (1) See footnote Ho. ( l ) on p. 7* (2) Journals of the Senate of Canada, 1869$ V o l . I I , pp. . 223, 224, 225* a l t e r i n g the Confederation Terms before the Dominion waa two years old; both had declared emphatically that the B.H.A. Act was not " f i n a l and unalterable 1*. Again the following year, Blake l e d an Opposition attack upon the Eova S c o t i a amendment, urging the Commons to p e t i t i o n Her Majesty to cause a measure to be submitted to the Imperial Government providing that the Canadian Parliament " s h a l l not have power to., disturb the f i n a n c i a l r e l a t i o n s established by the B.H.A. Act between Canada and the several Provinces, as al t e r e d by the Act respecting Eova Scotia'*. (1) Speaking i n reply, S i r John A. Macdonald sai d that while the opinions of the Law O f f i c e r s i n England were not i n f a l l i b l e , " s t i l l they must be li s t e n e d to with every res-pect". But, quite apart from t h i s , Responsible Government, by i t s very nature, insured Parliament oomplete control of i t s own finances; otherwise i t was meaningless. I t gave the l e g i s l a t u r e "the r i g h t to do what i t l i k e d with i t s own, to raise such revenues as i t thought proper, to expend that money as i t thought proper, to misuse i t i f i t thought (1) Dominion of Canada Parliamentary Debates; Third Session . (1870), 7/ol. I, p. 768. E r i n t e d by the fimes P r i n t i n g and Publishing Co. of Ottawa. An unbroken series of Canadian Hansard i s not ob-tainable u n t i l a f t e r 1875. For the session of 1869 no such p u b l i c a t i o n i s obtainable; consequently Blake's objections, referr e d to on p. 6, must be v e r i -f i e d elsewhere. Blake's, arguments i n l8t>9 are discussed i n the debate of 1870-in detail,howev,er. (Op.cit.pp. 7^8-792) 8. proper. Eo authority could prevent i t , and i t would he an infringement of the p r i n c i p l e s of responsible government i f " A l l had heard of the struggles of nations f o r l i b e r t y ; and of the English p a t r i o t s not f e a r i n g to wade through blood and war. They (the Opposition) saw how the Col o n i a l system had grown up from a bureaucracy to responsible government, won by per-s i s t e n t exertions. But hist o r y was s i l e n t on any case but t h i s , where a people said they had too much l i b e r t y and were not f i t to be trusted with t h e i r own money, l i k e a l u n a t i c , f e e l i n g the f i t coming on him, asking to be manacled. A people which considers i t s e l f a nation which sometime thought f i t to walk alone, they (the Opposition) asserted was not f i t to spend i t s own money."(2) Assuming therefore that the "Terms of Union" are sub-j e c t to r e v i s i o n , the problem remains one of method. In the bargaining which any such change would obviously necessitate, are the provinces to be regarded as a group act i n g c o l l e c -t i v e l y , and agreeing as a body with the f e d e r a l government respecting the terms of one another? Is i t within the cornr petence of the provinces to dict a t e terms which another province must accept at the hands of the nat i o n a l govern-ment? Or i s each province subject to a separate and i n d i v i -dual tre a t y with the general government i n which i t i s the Inalienable right of each to negotiate and sanction changes with the other party to the agreement. The objections of ( l ) Dominion of Canada Parliamentary Debates, I87O, V o l . I, the case were otherwise." (1) Continuing, the Prime M i n i s t e r counselled: p. 781. (2) Ib i d . , p. 782. 9. Mr, Blake to the a l t e r a t i o n of l o v a Scotia's terms and Senator Sanborn's amendment seem to foreshadow these ques-tions and the d i f f i c u l t y with which the Canadian people attempted t h e i r solution, These are questions, however, which i n 1871 lay with the future alone. More timely, perhaps, i s the question: llfhy did B r i t i s h Columbia accept union and the terms offered? One urgent reason was doubtless the-necessity of "going somewhere" f o r f i n a n c i a l assistance. Poor business condi-tions, and a burdening c o l o n i a l debt, increased by an ex-orbitant C i v i l L i s t n a t u r a l l y urged those i n the colony to consider any new arrangement with some sympathy. Attorney-General Crease, i n moving the consideration of the Union Terms, described these conditions: S "The circumstances, p o l i t i c a l , geographical, and / s o c i a l under which we are at present placed, compel / us to p o l i t i c a l movement i n one d i r e c t i o n or another, \ and the question i a now - In what d i r e c t i o n s h a l l we \ go? ..... We are not prosperous. Population does 1 not increase. Trade and commerce languish; coal /mines do not advanoe; agricul t u r e , though progressive / does not go forward as i t might. The settlement of / the country, though increasing, yet f a l l s short of / just expectations. Kb p u b l i c works f o r opening the country are on hand, and the general lack of progress (that i s , proportional to the extraordinary resources of the Colony; i s everywhere apparent. And why i s t h i s ? I t i s not, as some allege, because of the p a r t i c u l a r form of government we at present enjoy ( i f i t were, Confederation i n that would e f f e c t a - change). I t has among other things a Public Debt altogether.dispr©portioned to our means."(1) ( l ) "Debate on the Subject of Confederation with Canada", - reprinted King's P r i n t e r , V i c t o r i a , 1912. P. 7»~ 10. B r i t i s h Columbia's Publio Debt at Confederation was given at #1,000,40.5^) and the actual population of the new province was made up of but 8,576 whites. There were 462 negroes, 1,54-8 Chinese, making a t j ^ l _ o f _ l 0 , 5 8 6 , apart from (2) the estimated 35 to 40,000 Indiana. 'Even more s u r p r i s i n g r was the sum spent annually on s a l a r i e s . The Yale Convention of 1868 had comprehensively complained of t h i s e v i l . The expenditure of $560,159 i n 1867, compared with an income of #475,250 i s t y p i c a l * And of t h i s amount only #52,000 was ( 3 ) expended i n pub l i c works. ' Such conditions were obviously ^ i n t o l e r a b l e . Some found the remedy i n annexation, while pothers had consistently urged union with B r i t i s h Forth (America as the only s a t i s f a c t o r y s o l u t i o n . I t was the active support of Governor Musgrave and the Imperial Govern-ment which undeniably p r e c i p i t a t e d acceptance of ;the latter/ plan, just as Governor Seymour's opposition had postponed i t . And one suspects that Attorney-General Crease was quite as aware of the Imperial Government's wishes i n the matter i n drawing his gloomy picture as he was of any (1) Commons Sessional Papers, Ho. 18, V o l . 4, 1871. (2) Report of Hon. H. L. Langevin, C.B.; Sessional Papers (Ho. 10) A-1872, Ho. 6. pp. 23-24. (3) Discussed f u l l y i n Howay and Sc h o l e f i e l d , " B r i t i s h . . Columbia1*, 1914, pp. 283-286. 11. immediate danger of annexation.^) It waa the hope of forever eliminating Imperial intervention and ridding the Colony of that very type of government, which Mr. Grease thought did not i n any way account f o r conditions, that was so i n d e l i b l y imbedded i n the minds of a large proportion of the population aa an advantage offered by Confederation which could not l i g h t l y be turned aside. In an e d i t o r i a l ®n the eve of the great change, the B r i t i s h Colonist echoed these f e e l i n g s : "Half c of what the people of B r i t i s h Columbia have^in&ured would have driven most peoples s i m i l a r l y situated into the bosom of the neighbouring r e p u b l i c . But the present occasion i s more suggestive of joyous hopefulness i n the future than a. disagreeable retrospect of circumstances that one would f a i n bury with a departing system."( 2^ Why? The next day's e d i t o r i a l "Confederation Complete" held the answer: " I t w i l l release us from the red-tape and sealing wax of Downing St r e e t " , — a n d the Colonist added, with a rare touch of prophesy—"but then i t w i l l draw us nearer to the t h r o n e . " ^ (1) One of the government appointees paid under the " C i v i l L i s t " , Mr. Crease had opposed other Confederation resolutions (Confederation. Papers, p. 15)• He also opposed a motion proposing that the majority of the Council be elected members ( B r i t i s h Colonist, Dec. 23, 1868). (2) The"British Colonist", July. 19, 1871, p. 2. The " B r i -. - . t i s h Colonist", l a t e r the " V i c t o r i a D a i l y C o l o n i s t " w i l l hereafter be referred.to as "Colonist". (3) Colonist, July 20, 1871, p. 2. 12. Other- advantages offered hy Confederation were f r e e l y discussed at the time, such as the increased p u b l i c c r e d i t i t would affor d , the p o s s i b i l i t y of trade_ expansion and the probable a t t r a c t i o n of population, the greater prpjtection i t o f f e r e d — a n d above a l l , indeed at the very basis of these, the o f f e r of an e a r l y r a i l connection with the Eastern Provinces* But obviously i n 1871 these advantages were but mere hopes f o r the future. The r e a l e f f e c t of Confederation i n operation was s t i l l very much a matter of conjecture, f o r the union of sparsely developed provinces separated by an almost unbroken wilderness, was a "leap i n the dark" into an unknown almost without p a r a l l e l i n h i s t o r y . There was no chart for such a hazardous f i n a n c i a l course as i t involved. It i s conceivable therefore, that each govem-^ ment had obligated i t s e l f to f u l f i l agreements f o r which ^ there was no guarantee of i t s a b i l i t y to do so. Time was to prove that both had. The Government of B r i t i s h Columbia on i t s part, I found i t s e l f unable to l i v e within the means prescribed f o r ^ i t by the Union Terms. E a t u r a l l y the Province oame i n time to regard the d i f f i c u l t y to be i n some inherent i n e q u a l i t y , within the Terms themselves, and therefore to seek a more equitable arrangement with the Dominion Government. To combat t h i s request f o r a s p e c i a l consideration 13. , of her d i f f i c u l t i e s , there was a s u r p r i s i n g l y strong f e e l i n g / i n Eastern Canada that the P a c i f i c Railway already constituted > a s p e c i a l treatment such as no other province enjoyed and \aras a f i n a l settlement i n that r e g a r d — a gigantic public enterprise undertaken s o l e l y f o r B r i t i s h Columbia as the price of that Province's entry into Confederation and that as such i t stopped the Province from seeking further favours, f i n a n c i a l or otherwise. Shis eastern Canadian complex i s not hard to understand. "A very general opinion was that i t (the Railway) would cost §200,000,000 i n cash and there were estimates as high as §360,000,000. Such expenditure was un-thinkable at the time, and f a r beyond the resources of the country. A large section of the people and many of the public men of the day were of the opinion, that the railway was f o r the especial and exclusive benefit of B r i t i s h Columbia; that the cost was e n t i r e l y beyond the f i n a n c i a l a b i l i t y of the Dominion; that the railway was to be con-structed through a country that was almost wholly a wilder-ness, and that i t s operation would involve a great annual l o s s ; that B r i t i s h Columbia, owing to sparsity of population ^ and rugged ex t e r i o r , would not pay i t s way i n confederation, ) (1) ' and would remain a perpetual charge on the rest of Canada.tt In an admittedly extreme way, Mr. Blake's speech at Forth ( l ) Report' of the Royal Commission: Reconveyance of Land to B r i t i s h Columbia; Ottawa, 1928. p. 33« 14 York represents that body of public opinion. Here he said: "The B r i t i s h Columbia section of the railway, even i f . i t turn out to be practicable as an engineering work w i l l involve an enormous expenditure, approxi-mately 1360,000,000 and a f t e r the construction w i l l involve an enormous annual charge., on the revenue of the country for i t s running expenses, and I doubt i f that section can be kept open a f t e r i t i s b u i l t . I think that the chief importance that B r i t i s h C Columbia w i l l derive from the enterprise w i l l c^on-\ s i s t i n the c i r c u l a t i o n of money and the p r o f i t s of ) mercantile operations attendant on the construction, \ and that,Canada w i l l be a f r i g h t f u l l o s e r by the 1 a f f a i r . " ( 1 ) Such an enterprise would surely change the whole com-plexion of the l a t e r better terms movement, and B r i t i s h Columbia, already having received so much at the hands of .. a benificent federal government, would most c e r t a i n l y be the s p o i l t c h i l d of the Confederation family to ask for s t i l l greater consideration. But time, which has eroded the very foundations of E r . Blake's objections, has likewise erased j~ the fears of economic p a r a l y s i s which they begot. The curious thing i s that i t has not also e n t i r e l y removed .the old conception of the Canadian P a c i f i c Railway. ( l ) He added: "Of course, there must be railways to connect the sheets of water and eventually a through l i n e , but I am confident a bushel of wheat w i l l never go to England over an a l l r a i l route from Saskatchewan to the seaboard, because i t w i l l never pay to send, i t . " Quoted i n Gosnell, R.E., "Memorandum f o r His Lordship, Hon. Mr. Justice Martin", 1927, P« 8. This same declaration was repeated at the more f a -mous "Aurora Speech" on Oct. 3, 1874 (see "Reminis-cences" by S i r John-Willison, i n ''Canadian.Magazine", July 1918, p. 236}. Though quoted often, no d e f i n i t e date i s given f o r Blake's address at Horth York. I t waa probably about the same time as his Aurora speech, however. 15. This thesis does not propose to discuss i n any d e t a i l the i n t r i c a t e negotiations involved i n the settlement of the transcontinental railway d i f f i c u l t i e s . But inasmuch as i t ^ would seriously weaken B r i t i s h Columbia's moral r i g h t to better terms i f the railway were of the nature urged by Blake, enough f a c t s to refute such an i n t e r p r e t a t i o n of the , Union Terms must be here stated at the outset. The attitude i /'represented by Mr. Blake i s based on two assumptions: f i r s t , \ that the railway was constructed e n t i r e l y f o r B r i t i s h i I Columbia's benefit, secondly, that i t would constitute a \ { permanent t o l l on the federal treasury. Even before the Confederation of I867, the Canadian Provinces looked to union and communication involving the en t i r e westward expanse of the continent. The sixty-ninth r e s o l u t i o n of the Quebec Conference i s proof of that f a c t . It read: "The communication with the Horth-westera. T e r r i -tory, and the improvements required f o r the develop-ment of the trade of the Great West with the sea-board, are regarded by t h i s Conference as subjects: of the highest importance to the Federated Provinces, and s h a l l be prosecuted at the e a r l i e s t possible period that the state of the finances w i l l permit." t l ) Communication and trade with the West was regarded 0/by the very Conference which drafted the basis of the union ! of the Eastern Provinces i n 1867 to be of the "highest (1) Whelan, Hon. Edward: "The Union of the B r i t i s h . . . Provinces", 1927, p. 248. 16. ( importance" to those very sections. I t must be remembered too, that the B r i t i s h Columbia delegates i n t h e i r proposed; terms asked only f o r immediate waggon road oonnectiori^-^the delegates at Quebec could hardly have been thinking of l e s s i n passing t h e i r r e s o l u t i o n — a n d that the idea of immediate^ r a i l communication eminated_from the Dominion. The a t t i t u d e /of the Imperial Government to the problem of land communica-p t i o n as well as union i s not without s i g n i f i c a n c e too. This portion of the now famous despatch of E a r l G r e n v i l l e , Secretary f o r the Colonies, to Governor Musgrave i s eloquent i n i t s expression of the Imperial a t t i t u d e : "They (the Imperial Government) anticipate that the.interest of the other provinces of B r i t i s h Forth America w i l l be more advanced by enabling the wealth, c r e d i t , and i n t e l l i g e n c e as a whole to be brought to bear on every part than by en-couraging i t i n the contracted p o l i c y of taking care of i t s e l f , possibly at the expense of i t s neighbour. Most e s p e c i a l l y as i t i s true i n the case of i n t e r n a l t r a n s i t , i t i s evident that the establishment of a B r i t i s h land communication be-tween the A t l a n t i c and the P a c i f i c i s f a r more fea s i b l e by the operations of a single government responsible for the progress of both shores of the Continent than by a bargain negotiated between separate—perhaps i n some respects r i v a l — g o v e r n -ments and l e g i s l a t u r e s . Her Majesty's Government are aware that the distance between Ottawa and V i c t o r i a presents: a r e a l d i f f i c u l t y i n the way of immediate union; but that d i f f i c u l t y w i l l not be without i t s advantages i f i t renders easy (1) B. C. Sessional Papers, 1871, V o l . IV, Ho. 18, p. 6. 17. oornmunication and. forces onward the operations which are to complete i t . " ( l ) Both the sixty-ninth resolution and the above Impe--r i a l despatch conceived land communication to be i n the int e r e s t of the Eastern Provinces; the s p e c i a l benefit of B r i t i s h Columbia was not being considered i n eith e r case* Both the r e s o l u t i o n and the Imperial communication oonsti-tute a statement of polioy and both likewise preceded Section 11 of the Terms of Union. And the Report of Hon. H. L. langevin indicates c l e a r l y that the o f f i c i a l govern-ment p o l i c y had not a l t e r e d i n 1872 a f t e r the negotiation of the Terms. He writes: "The Canadian P a c i f i c Railway i s the moat exten-sive public undertaking, i n connection with B r i t i s h Columbia, that Canada has promised to see c a r r i e d i n t o e f f e c t , and i t i s also that from which we mayNi expect to reap the greatest advantage, f o r by i t / a l l the Provinces of the Dominion w i l l be united, \ and form one and the same nation, i n the trus sense) of the word. The trade of Europe and A s i a must ^ necessarily be attracted to that road, and moreover,* i n making accessible the vast and b e a u t i f u l t e r r i - f t o r i e s of the Forth-West and Columbia, the emigra- j t i o n of Europe, and, i t may be, Asia, w i l l see I thrown open to i t an easy route by which to reach / those valuable p r a i r i e s and r i c h mineral lands, ) bringing i n i t s t r a i n that reinforcement of.popula-; t i o n and riches of which we stand i n need."v2; j (1) Papers on the Union of B r i t i s h Columbia, p. 30. S i r John Young, the Governor-General of Canada, i n a des-patch which followed t h i s one, urged Governor Musgrave to take such steps as he properly and c o n s t i t u t i o n a l l y could do to promote favourable consideration of the question. He thereby added the consent of the Canadian Government to the above despatch. (2) Federal Sessional Papers, 1872, V o l . V, Fo. 10. 18, F i n a l l y , aa Hansard quotes S i r Francis Hincks on March 30, 1871, as saying: "Ho one had answered the argu-ment that the railway was not e n t i r e l y a bargain with B r i t i s h Columbia, f o r i f that colony had not consented to j o i n the Union would not a railway to the Rocky Mountains s t i l l have been a necessity, " d ) With regard to the second premise—-that the earnings of the railway-would never- justify-4ts--existence--one need look no further than the Annual Reports of the Canadian ' P a c i f i c Railway Company. They contain an answer which i a quite unequivocal. This whole matter has been discussed by the learned judge i n the Royal Commission appointed to investigate B r i t i s h Columbia's claim for the return of the Peace River Block. His conclusions are, perhaps, not e n t i r e l y without intere s t i n a discussion of the nature of the o r i g i n a l trans-Canada railway bargain. The report concludes: "When viewed i n the l i g h t of subsequent events, the many predictions f o r the f a i l u r e of the enter-p r i s e , and the fears of f i n a n c i a l d i saster, were e n t i r e l y unwarranted. The success of the Canadian ^ P a c i f i c Railway, almost from the beginning, has vbeen phenomenal, and i t s influence upon the develop-ment of the whole country has surpassed even the most sanguine expectations of those who had c o n f i -dence i n the enterprise. I t rendered possible the opening up and the development of the great North-west, the most productive wheat-producing area i n the world, i n t o which hundreds of thousands; of immigrants have gone, c u l t i v a t e d the lands, ) Dominion of Canada Parliamentary Debates, 1871, V o l . I I , p. 722. 19. /-produced wealth, and created a market for the manu-C factured products of other portions of Canada. She railway was f o r many years the one connecting l i n k between east and west, and was during that time the greatest unifying factor i n the country. While i t /has undoubtedly benefited B r i t i s h Columbia, aiding ( i n i t s development and furnishing an outlet for i t s ^products, i t has., as a great national undertaking, (benefited the whole country to a much greater ex-Hent. Notwithstanding the national character of /the undertaking, B r i t i s h Columbia has borne the / burden of contributing large areas of her pu b l i c \ lands to a i d i n i t s c o n s t r u c t i o n — l a r g e l y on 1 account of the predicted f a i l u r e and burdens to be 1 created—and to-day i s the only province of Canada \which granted lands towards the building of the railway, national i n i t s character."Cl) m retrospect, the a f f e c t of the CYP.R. d i f f i c u l t i e s was not so much to £stop B r i t i s h Columbia's claim f o r further consideration as to e s t a b l i s h an actual precedent fo r the reform of the o r i g i n a l Union Terms, This the fed e r a l government did not hesitate to do under the aegis of necessity. By Paragraph 11 of the Terms, the railway should have been completed within ten years; a c t u a l l y i t was not f i n i s h e d u n t i l November 7, 1885—four years a f t e r ^the l i m i t agreed upon. The a l t e r a t i o n of the o r i g i n a l Terms: consisted not only i n postponing the completion date, but i n increasing the Province's land grant as well, to the extent of 3,500,000 acres i n the Peace River Block, i n l i e u of alleged d e f i c i e n c i e s i n the grant of 1871.^2) ( l ) Report of the Royal Commission: Reconveyance of Land to . . B r i t i s h Columbia; Ottawa, 1928, p. 34. (2) See Ch. I I , p. 34. 20 I t would seem, therefore, that we may s a f e l y assume B r i t i s h Columbia's case f o r a re-adjustment of the f i s c a l r e l a t i o n s of the f e d e r a l government with that Province to r e s t e n t i r e l y upon i t s own merits, unencumbered by the e a r l y railway negotiations, whioh i n themselves constitute quite a d i s t i n c t chapter i n our h i s t o r y . The r e a l better terms movement did not begin u n t i l almost the close of the century, by which time a l l doubts of the economic and p o l i t i c a l wisdom of the Canadian P a c i f i c Railway were re--moved, and with them too, a l l idea that the enterprise was f o r the especial benefit of B r i t i s h Columbia should have vanished. But the f i n a n c i a l d i f f i c u l t i e s which eventually prompted that movement existed from the Province's forma-t i o n , and to a study of those we now turn. o 21. CHAPTER I I . Recurring D e f i c i t s . As was noted, i n the preceding chapter, the net debt of the Colony at Union was §1,000,405. This being assumed by the Dominion Government, B r i t i s h Columbia began i t s p r o v i n c i a l existence free of f i n a n c i a l encumberances. In moving the acceptance of the Terms of Union, Hon. J . W. Trutch, one of the delegates to Ottawa, gave expression to a f e e l i n g of optimistic expectation f o r the future so c h a r a c t e r i s t i c of the Province at the time. B r i t i s h Columbia ceded §563,500 of i t s revenue by the Terms to the Federal Government, he claimed, leaving the new p r o v i n c i a l assembly with the remainder, or §170,450. The proposed grants from Ottawa t o t a l l e d $212,908. This together with the sources of revenue l e f t B r i t i s h Columbia, gave the Province §383,358, out of which only §236,075 would be r e -quired for l o c a l government.^) With the f u l l e s t expectations and confidence too, B r i t i s h Columbia's f i r s t p r o v i n c i a l l e g i s l a t u r e met on February 15, 1872. A r t i c l e 7 of the Terms of Union had given the Brovinoe the right to remain under i t s e x i s t i n g customs and exise duties u n t i l the completion of the r a i l -way, unless the l e g i s l a t u r e should at an e a r l i e r date (1) Colonist, Jan. 19, 1871, p. 3« 22. decide to accept those of Canada. This the assembly decided •> to do, passing the "Canadian Customs Laws Adoption Act, 1872" on March 1 4 t h . T h i s , i t may be remarked, leaves no doubt of the confidence which the p r o v i n c i a l l e g i s l a t o r s had i n the Federal Government and i t s i n t e n t i o n of f u l f i l l i n g a l l agreements promptly. The exploratory surveys for the railway had already commenced and seemed to guarantee the e a r l y construction of t h i s most coveted enterprise. This, however, was not to be. For v/as the Province to experience the good fortune i n f i s c a l matters forecasted fo r i t by Hon. Mr, Trutch, f o r responsible government brought with i t troubles apparently as insurmountable as those which had characterized the c o l o n i a l days. For the f i r s t s i x months of Confederation, B r i t i s h Columbia was happily able to l i v e within i t s income; thereafter, i t s budgets show a remarkable s e r i e s of d e f i c i t s , ranging as high as §1,010,899 i n 1895. 1872 showed & loss of §104,867, and the following year added §2,478 to the public debt. To t h i s already large sum, 1874 contributed a d e f i c i t of §210,938 and 1875 another §263,4l8.^2) And thereafter f o r the remaining years of the century, the story i s much the (1) Journals of the L e g i s l a t i v e Assembly, 1872, pp. 20-21, 28, 41. Also see text of Act - "B.C. Acts, 1872", Ho. 3. (2) B. C. Sessional Papers, 1899, p, 516-A. (Table Ho. I) 25. ^same, d e f i c i t s appearing i n various amounts but with clock-\ l i k e r e g u l a r i t y . But the prime concern of the p r o v i n c i a l government throughout these years was not the regular recurrence of these unbalanced budgets. During these early days of Gon-^ federation, the dominating p o l i t i c a l issue was unquestionably ^the problem of securing the transcontinental railway promised by the Terms of Union. ^ So f a r as B r i t i s h Columbia i s concerned, the h i s t o r y / o f Federal-Provincial r e l a t i o n s , during the period from 1872 \^to 1896, f a l l s into three d i v i s i o n s . In each of these, the p o l i c y adopted by the p r o v i n c i a l government towards the Dominion i s d i f f e r e n t , yet i n each i t i s mainly determined by the same motive,—the desire to see the C.P.R. completed. In the f i r s t , the objj^ctive was_naturally the fu l f i l m e n t of the " O r i g i n a l Terms'*. With the default of the Federal C Government i n these, the p o l i c y became one of h o s t i l i t y and! open c r i t i c i s m , or, as i t was c a l l e d at the time, the ' "Fight Canada P o l i c y " . But at the root of the " f i g h t i n g " was the annoyance over the non-fulfilment of the railway terms. With the evident f a i l u r e of t h i s programme to b r i n g the desired r e s u l t s , the two governments adopted a more con- ' c i l i a t o r y attitude towards each other, and began a l i q u i d a -t i o n of t h e i r disputes. Thus the t h i r d period, that of •«Compromise_jrith Ottawa" began. These years witnessed the 24 successful completion of the transcontinental; "Compromise"*, however, remained the watchword of the p r o v i n c i a l government i n i t s dealings with TOttawa, down to 1896• One thing, however, i s common to each of these periods and that i s the constant f a i l u r e of the p r o v i n c i a l govern-ment to reach an equilibrium between revenue and expenditure* It i s perhaps sur p r i s i n g that t h i s did not give r i s e to a serious d i s s a t i s f a c t i o n with the f i n a n c i a l terms of the Union Act. There were, as we s h a l l see, occasional outrr bursts against Confederation; but the f a c t that these never developed into a d e f i n i t e revisionary movement i s only ex-plained by the dominating influence of the desire for r a i l connection and a f t e r i t s completion, the strength and un-broken tenure of o f f i c e of the party of compromise* Throughout the period under consideration, the l o c a l 'governments rather than the Union Terms bore the blame f o r the Province's f i n a n c i a l p l i g h t * The early attitude of the press i s well i l l u s t r a t e d by the Colonist's e d i t o r i a l , published at the beginning of the second session, which de-clared that Confederation had "carri e d c e r t a i n revenues to Ottawa; but i t , at the same time, saddled the Federal revenue with a large portion of the expense of c o l l e c t i o n and administration. To the Province was l e f t a c l a s s of duties l i t t l e more than municipal They found the treasury with nearly half a m i l l i o n d o l l a r s i n i t . They 25. thought they could never get to the bottom."^) The Colonist was, of course, an opposition d a i l y at t h i s time and f r e -quently indulged i n such verbal chastisements of the DeCosmos Government. Yet the sentiments which i t here expresses were unquestionably held by a large body of the electorate. Typical too of the dominating influence of the desire f o r an early completion of the C.P.R. and the suspicion of the Dominion's s i n c e r i t y i n that regard, whioh even then was r a p i d l y gaining ground, i s the tide of opposition which developed to DeCosmos' plan i n 1874 of c a p i t a l i z i n g the difference between B r i t i s h Columbia's debt at Union and that of Fova Scotia and Few Brunswick, on which i n t e r e s t was allowed by the Terms of Union at 5 per cent. DeCosmos pro-posed applying t h i s sum, $945,878, to the Province's p u b l i c debt which was even then assuming alarming proportions. The explanation of the opposition i s not d i f f i c u l t . The scheme was not attacked upon i t s f i n a n c i a l merits, whioh deserve (0) some favourable consideration. v ' The root of the opposition was the Province's f e a r of any reopening of the Union Terms, fo r i t was f e l t that suoh a move would open the way f o r the f e d e r a l government to a l t e r i t s pledges i n regard to the (1) Colonist, Dec.20, 1873, p. 3« (2) The opposing party, headed by E l l i o t , proceeded three years l a t e r (1877), when i t gained power, to nego-t i a t e a loan of 150,000, on whioh i t was required to pay 6 per cent, on the 1945,878 debt allowance the Dominion was only paying 5 per cent, to the Province. 26. railway. The opposition placed the slogan "The O r i g i n a l Terms'1 f i r m l y against DeCosmos* " C a p y j a l i ^ Dr. J. S. Helmcken, who had heen l i v i n g i n a well-earned retirement from p o l i t i c a l b a t t l e s , suddenly came forward to champion the opposing forces i n a series of able pen-duels. On January 23, 1 8 7 4 , he wrote i n an open l e t t e r , "The treaty i s binding and cannot be a l t e r e d i n any subsequent session without the consent of both contracting p a r t i e s , and i n t h i s l i e s the reason why the people and not the present ( 1 ) Local Legislature should be consulted." On February 6, 18?^ a public meeting was held at which DeCosmos was c h a r g e ^ ^ i t h ^ s e l l i n g ^ t h e province out", and four days l a t e r a p e t i t i o n was presented to the l e g i s l a t u r e opposing the scheme. The b i l l e n t i t l i n g the government to draw on the money i n question was not f i n a l l y passed u n t i l l 875»^ 2 ) and only then a f t e r the following saving clause had been inserted: "This act s h a l l not be construed to apply to, vary, or invalidate any other Section or A r t i c l e of the Terms of Union. ( 1 ) Colonist, Jan. 2 5 , 1 8 7 4 , p. 3« ( 2 ) B . C. Statutes, 1 8 7 5 , Ho. 4 . (3) Colonist, March 4 , 1 8 7 5 , P » 2 . / A. f a r cry t h i s from the better terms a g i t a t i o n of l a t e r years. Yet strangely enough, one voice was r a i s e d i n the debates which even then i n part accurately forecasted the future. It was that of Hon. J. F. McCreight, the f i r s t Premier of the Province, whose unheeded prophesy was that "the Canadian Government had not kept the terms and, probably never would. But we might use that f a c t to^ secure better terms i n other respects instead of being placed .under a (1) ruinous o b l i g a t i o n to the Canadian Government ." N ' The Walkem Government, whicji_succ^ De^osjmos up on the l a t t e r ' s resignation, proceeded on June 8, 1875, to draw |l89,l5..0_Qf. the fund. When, however, the Province sought a further sum of f150,000 i n October, the Federal Government advanced the money, but at the same time stating that i t would r e t a i n t h i s amount out of the subsidy payable a f t e r July 1, I876/ 2 ) Seizing upon t h i s , Hon. T. B. Humphreys, on January 26, 1876, moved the following r e s o l u -t i o n , which c a r r i e d by a vote of 13 to 10, defeating the Government: "That t h i s house strongly disapproves of the p o l i c y of.the government i n borrowing large sums of money from Canada at a,time when Canada i s a serious de-fa u l t e r i n respect to the most important obligations of the Treaty of Union, and t h i s house i s of opinion that in.pledging the annual subsidies of the province for money thus borrowed, thereby a n t i c i p a t i n g the (1) Colonist, Jan. 6, 1874, p. 3. (2) B. G. Sessional Papers, 1876, pp. 573-75* 28. stated revenues of the country, the government have exceeded the powers granted to them under Act l o . 4 of l a s t S e s s i o n . n ( l ) By now, the Province had an indebtedness of approxi-mately 1 7 5 0 , 0 0 0 , a n d already.it had become ser i o u s l y involved with the Dominion i n the matter of i t s finances, and t h i s , as the Opposition i n the l o c a l house warned, at a (3) very inopportune time, i n view of the railway d i f f i c u l t i e s . ' The f i n a n c i a l p l i g h t required immediate and serious attention on i t s own part. This the incoming E l l i o t Government a t -tempted to solve by taxation; road t o l l s were restored; a l i g h t tax was placed on r e a l and personal property; a school tax was instituted.^ 4") The E l l i o t Government c e r t a i n l y (1) Colonist, .Jan. 26, 1876, p. 2. (2) This was made up as follows: #339,150 due to Canada (#189,150 advanced on account of the §940,000 proposed to be ca p i t a l i z e d ; §150,000 borrowed on secur i t y of the annual subsidy); §162,890 due contractors; §99,558 due on account graving dock.; §147,524 borrowed on temporary loan account: T o t a l §749,122. (3) In August, 1878, the E a r l of Duffe r i n v i s i t e d B.C. and was greeted by mottos of "Carnarvon Terms or Separar t i o n " on the Island. Discontent there centred on the Senate's defeat of the Island Railway B i l l of Mr. Mackenzie (see Howay and Sohdlefield, op.cit. , ~ T o l.II, pp. 367-68 f o r text of Carnavon Terms.) (4) See Colonist, May 29, 1876. Other taxes were: a t o l l of l / 2 cent a pound on a l l goods crossing Alexandra Suspension Bridge; a t o l l of l / 2 cent a pound on goods leaving C l i n t o n f o r Cariboo; a t o l l of 1 cent a pound on a l l goods (except miners' packs, Indian goods, and mining machinery) taken over the t r a i l from Telegraph Creek to the Cassiar Mines. (See B.C. Statutes, 1876, Hos. 3 and 70 2 9 . increased the revenue; but i t i n no way solved the problem of p r o v i n c i a l finances. When Hon. Wm, Smiths rose i n A p r i l 1 8 7 7 to give his f i n a n c i a l accounting for the year previous, i t was to announce that the revenue had increased to §407,000 per annum. Yet the t o t a l d e f i c i t for the three preceding years was §717*6.50.82, or §239,216.94 a year. I876 alone showed a d e f i c i t of § 2 1 0 , 1 3 9 . 4 6 . ^ ) To meet the urgent ) needs of government, the E l l i o t administration introduced a and the general f i n a n c i a l s i t u a t i o n paved the way f o r the / government's defeat. A f t e r receiving an adverse vote i n the (3) House and struggling through the session, E l l i o t unsuccess-f u l l y appealed to the electorate. Throughout that campaign, finances were widely discussed, and the government bore the blame f o r i t s f i n a n c i a l embarrassment. I t d i d not occur to Mr. E l l i o t and hi s colleagues, even as a plausible p o l i t i c a l argument of some use under the circumstances, to fasten the blame on any i n e q u a l i t i e s of the f i n a n c i a l arrangements of \ Confederation. (1) See Colonist, A p r i l 11, 1872. p. 3» The r e a l property tax whioh yielded §9,229 i n 1876, gave §25,697 i n 1877; the personal property tax furnished §8,129 i n 1876, as against §12,755 i n 1877- See "FinancA Report",1878,p. 86. . (2) Mr. Walkem declared i n the house that the issue would only , . s e l l for 90 cents. By the end of the year i t was s e l l i n g at 110 1/2 on the London Exchange. See Colonist, Feb. 16, I878, p. 2. (3) Curiously, i t waa on the matter of the appointment of a , . physician f o r the Lunatic Asylum. (2) This 30. With the second Walkem Government, v/hich was now formed, the hist o r y of Federal-Provincial r e l a t i o n s moves in t o i t s second stage. The reason f o r the change i s not f a r to seek. By the end of 1877 the railway s i t u a t i o n had become acute. The default of the Federal Government i n the o r i g i n a l terms, the re f u s a l of the Province to deal with the Edgar Mission, the award of the Carnarvon terms and the r e f u s a l of the Senate to accept t h e m — a l l these events had served to develop an almost insolent attitude i n the Province. The Walkem Government's p o l i c y towards Ottawa, soon came to bear the name of the "Fight Canada P o l i c y " , and with good reason. To the already dangerous f u e l of discontent was added the highly combustible problem of Chinese i m m i g r a t i o n . O n August 21, I878, matters reached a climax when Premier Walkem introduced a memorial addressed to the Queen, praying Her Majesty that unless the Dominion began construction by May, I878, " B r i t i s h Columbia s h a l l thereafter have the r i g h t to ex c l u s i v e l y c o l l e c t and r e t a i n her Customs and Exise duties and to withdraw from the Union; and s h a l l also, i n any event, be e n t i t l e d to be compensated by the Dominion f o r the losses sustained by reason of past delays and the f a i l u r e of the Dominion Government to carry out t h e i r railway and other-(1) The deci s i o n of Mr. Justice Gray i n the case of Tai Long . i n September, 1878, f i n d i n g the government's "Chinese Taxation B i l l " unconstitutional, was badly-timed to quiet the discontent over the railway. See Colonist, Sept. 28, I878, p. 2. 31 obligations: to the Province. l , v ' On the following day the res o l u t i o n passed 14 to Fortunately the document was temporarily l o s t sight of during the change of governments at Ottewaf^aud d i d not preach Downing Street u n t i l March of 1879, by which time the j flood-tide of discontent, marked by the passage of the reso-\ l u t i o n , had considerably receded. With S i r John A. Macdonald again i n o f f i c e confidence i n the P a c i f i c Province began to 0 return, and conversely the popularity of the "Fight Canada P o l i c y " waned. In May 1879, on motion of S i r Charles Supper, the Federal Government went on record "that i t i s necessary "* to keep good f a i t h with B r i t i s h Columbia, and to commence the j - ( l ) B. C. Journals, 1878, pp. 10.5-7; also see Colonist, Aug. " ... - 22, .I878, p. 2. (2) B. C. Journals, I878, p. 110. (3) The document reached Ottawa on October 11, 1878, at a time when the Mackenzie Government, having been de-feated i n September, were merely i n o f f i c e awaiting t h e i r successors. With respect to Walkemrs actions, Gosnell takes the p o s i t i o n that i f i t was necessary f o r the Dominion, one of the parties to the Carnarvon "treaty", to r a t i f y the changes made i n the o r i g i n a l t r e a t y , . i t was equally necessary f o r the other party — t h e P r o v i n c e — t o r a t i f y them and t h i s the Walkem Government had not done. The Senate's at t i t u d e In de-fe a t i n g the Carnarvon terms was p a r t l y due to Walkem's own attitude towards those terms and his i n t e r p r e t a -t i o n of them.CSee Gosnell, R.E. "Sixty Years of Pro-gress, B r i t i s h Columbia", pp. 85, 86.) In his summation of the period, Gosnell*is probably not.far astray. His verdict i s that Walkem's attitude was one of subtle p o l i t i c a l expediency. Hx>-matter hew much his p o l i c y was one of narrow s e l f i s h opportunism, i t i s f o r that very reason i n d i c a t i v e of the popular d i s t r u s t of the Dominion at the t i m e , — a sentiment of which he took advantage. 32. construction, of the railway i n that province as early as i t i s practicable."^"-*) With that assurance the Walkem p o l i c y of h o s t i l i t y l o s t i t s r e a l reason f o r existence f o r the majority of B r i t i s h Columbians. But other d i f f i c u l t i e s s t i l l faced the p r o v i n c i a l cabinet. To the f i s c a l puzzle, which had already once defeated a Walkem Government, (2)the problem of financing the graving dock added new troubles. To t h i s too was added the i n a b i l i t y of the government to success-f u l l y pass a law taxing the Chinese. Curiously the f i r s t - o f f i c i a l complaint of the in e q u a l i t y of the f i s c a l provisions of Confederation arose out of the discontent consequent upon ' the Chinese problem. I t i s contained i n the budget speech of Hon. Robert Beaven i n March, 1881, and deserves some c o n s i -deration, p a r t i c u l a r l y t h i s portion: "By the terms on which t h i s province was admitted to.the Dominion the funds derived from the i n d i r e c t taxation went to the Dominion while the product of direct taxation was reserved for the use of the pro-vince. Tinder the system the Chinese and Indians escaped d i r e c t taxation while the Dominion reaped JL large r e s u l t s from the dutiable goods consumed by 4 the two classes. ..... I t took a larger s t a f f to co l l e c t the meagre p r o v i n c i a l revenue than was r e -quired by the Dominion to. c o l l e c t $500,000 of §600,000 i n i n d i r e c t taxes which i t drew annually (1) Canadian Hansard, 1879, p. 1895. (2) The r e s u l t of the f i r s t Walkem Government borrowing on the c a p i t a l i z e d debt allowance was to reduce the annual subsidy'from #229,977.69 to |208,086.23. The 5 per cent, o r i g i n a l l y amounted to §46 .977 .69 . By l88l, due to withdrawals, i t was §25,086.23* (See Colonist, Jan. 30, l88l, p. 2.) (5) I b i d . , March 11, 1881, p. 2. from 33. / The p o l i c i e s of the Walkem Government had l e d the rovince into a tangle of unsettled disputes. They were so |numerous that t h i s new complaint was completely l o s t i n the battle-smoke of the."war 1 1 with.Canada. B u t ^ j f i ^ g ^ wa^a^pJL^nly, losijag..its^pop^arity. During the 1882T session, on March 23 and again on A p r i l 1, only the Speaker's casting vote saved the administration from defeat. I t needed only a general e l e c t i o n to prove that the voters outside the -assembly had had enough. After the e l e c t i o n , Robert Beaven, who succeeded to the premiership on Walkem's elevation to the Bench, attempted to carry on. He met the house, but on the second day of the session he was defeated on a want of confidence motion.(I) Wm. Smi^the immediately formed a government, i n which Hon. John Robson was Finance Minister. I t was a new government with a new p o l i c y . "Compromise" replaced "Fight Canada" as i t s watchword i n fe d e r a l matters. With i t s l i n e a l des-cendants, the administrations of A. E. B. Davie, Robson, Theodore Davie, and Turner, the Smithe Government l a s t e d u n t i l 18?8. Of that time the years from 1883 to 1896 f o m a d i s t i n c t period i n the his t o r y of Fe d e r a l - P r o v i n c i a l r e l a t i o n s , the t h i r d which we have so f a r noted, i n whioh On January 29, 1883, Premier Beaven resigned. Hon. (1) Colonist, Jan. 27, 1883, p. 2. The vote was 16 to 8. 34. "Compromise with Ottawa" waa the guiding p r i n c i p l e . The Smithe Government assumed o f f i c e with the express purpose of l i q u i d a t i n g the outstanding disputes with the Dominion—the Island railway, the opening of the railway lands, assisted immigration, the Chinese question, the Dry-dock. To end the open h o s t i l i t y that had characterized the / / i l a s t four years was the administration's, task, to secure, \as John Robson termed i t , "an Honourable Peace". Both at Ottawa and V i c t o r i a early sessions were held at the close of 1883 to discuss the "Settlement B i l l " , which „ had been the outcome of the v i s i t of S i r Alexander Campbell (1) and the consequent negotiations between the two governments. B r i e f l y , i t provided that an area of 1,900,000 acres, i n the south-eastern portion of Vancouver Island should be granted to.the Dominion, which, together with a bonus of §75°»°OQ to be contributed by the Federal Government, would be given fo r the construction and operation of the Esquimalt and Hanaimo railway. The Dominion agreed to take over, complete, and operate the graving dock, repaying the Province the money already expended thereon, §182,000, and a fur t h e r sum of §250,000. In l i e u of de f i c i e n c i e s i n the railway b e l t , the Province agreed to tra n s f e r 3,500,000 acres, known as the Peace River Block, to the Dominion. ( l ) S i r Alexander Campbell was Minister of Justice i n the Dominion Cabinet at that time. 35. This waa B r i t i s h Columbia's "Honourable Peace". The term i s c e r t a i n l y suggestive of the open h o s t i l i t y which had preceded, i t ; and one reading the debates i n the l o c a l house almost suspects that the peace was accepted as a matter of necessity by the weaker of the two contestants \ rather than i n the broad s p i r i t of compromise that had been ^hoped f o r . Theodore Davie, who of course voted for the B i l l , spoke of the bargain i n terms which were used over and over again i n the debate l e s s e f f e c t i v e l y . "Canada had grossly v i o l a t e d a l l t r e a t i e s with t h i s province", he argued. "Had B r i t i s h Columbians known then what they do now confederation would never have been" but, he added, "the 'Fight Canada' p o l i c y had heen productive of nothing but f a i l u r e The people of B.C. could not af f o r d the present state of things to continue*"^ 1) Hon. John Hobson i s only hal f convincing i n his en-thusiasm f o r the measure when he declares, " I f i t was only a quarter of a loa f i t would be wise to take i t instead of \ (2) 1 continuing the 'Fight Canada' p o l i c y . " v Yet he i n s i s t e d (1) Colonist, Dec. l b , 1883, p. 3. (2) I b i d . Dec. 16, 1883, p. 3. The speech of Mr. Grant i s of some interest i n view of l a t e r developments: " B r i t i s h Columbia had kept her contract under the terms of union, Canada had not kept hers. He showed that f o r the year ending June, 1882, §1 ,200,000 had been paid i n customs duties and i n t e r n a l revenue, and the advan-tage derived by Canada and the purchase by us of Cana-dian goods that came i n fr e e . The transcontinental railway was b u i l t i n the interest of Canada at large and not i n the interest of any p a r t i c u l a r province." Muoh discontent was due to the absence of any acceptable settlement for the Chinese tax d i f f i c u l t y . 36 that i t was not an unconditional surrender• A better mea-sure of his opinions, and conditions i n the Province generally, i s to be found in. h i s budget speech, which the government d a i l y at the c a p i t a l describes as f o l l o w s : — "He reminded the house that the moment the p o l i c y of.the government was made known a year ago every-thing took an upward tendency. The moment there was a hi t c h i n the negotiations f o r a-settlement that moment the values dropped. When S i r Alexander Campbell came and there was a reasonable prospect of the Settlement B i l l being accepted by the Dominion government, prices again advanced and now „ the moment i t s h a l l be announced here that the Settlement B i l l i s safe at Ottawa that moment-there would be a boom i n r e a l estate and commerce."(1) Mr. Robson, of course, being Finance Minister, was es p e c i a l l y interested i n the f i s c a l aspect of the agreement. It not only r e l i e v e d the Province of a serious burden i n the graving dook, but at the same time gave i t a considerable sum i n return. Government accounts show the graving dock to have cost the Province the sum of §584,512.66 up to 1883. From the Dominion under the Settlement Act, B r i t i s h Columbia received $384,512. The Province therefore f o r a l l {.1J Colonist, Feb. 12, lo»4, p. 3* ' (2) The Province had also received another #47,660.22 i n 1882. . . The sums were received as follows: "In July 1881, the province of B r i t i s h Columbia received from the Dominion of Canada the sum of #9,891. In November, 124,581.97. In June, I882, §13,187.25, October, 1883, §134,512.66, making up i n a l l §182,172.88; the refund i n May, 1884, of §250,000 made a t o t a l ©f §432,172.88. This amount was paid into the consolidated revenue and expended as shown by the public accounts." - Simeon Duck i n answer to a question i n the Le g i s l a t u r e . (See Colonist, Feb. 9, 1886, p. 3.) 37. p r a c t i c a l purposes may be said to have received i t s c a p i t a l expenditure i n return. At that, however, the value of the Settlement B i l l as a business bargain i s debatable. Gosnell i n s i s t s that the lands ceded had a combined value of $55,000,000; these, he argues, were given up i n return f o r seventy-five miles of railway and a drydock, neither of which public works the Province was bound to provide f o r by land subsidies. As such i t was f a r from good business on the part of the l o c a l government. I t s value l i e s i n the fact that i t ended a most unsatisfactory state of a f f a i r s and gave a de f i n i t e assurance of the early completion of these public enterprises. It was i n that s p i r i t that i t was. accepted by the Province,—as an "Honourable Peace". The / debatable point i s the price which the Province was forced | to pay fo r peace, a point on which Mr. Justice Martin's. (2) judgment throws some l i g h t . In another way too, the year 1883 marked a fresh beginning f o r B r i t i s h Columbia, which, i n order to consider the event i n i t s true chronological sequence, makes i t necessary to diverge s l i g h t l y from our narrative at this, (1) See 5cholefield,E,0.S. and ;Gosnell, R.E., "A History of B r i t i s h Columbia" (Sixty Years of Progress), p. 129. (2) See p. 7, Ch. I. Had the advice of the Colonist been. followed, compensation for f a i l u r e to complete the C.P.R. i n the a l l o t t e d time would have been included too, i n the form of a lump sum or a yearly increase i n the subsidy. (See Colonist, 1'eb. 6, I083, p. 2.) 38. . + CD point. In 1873, a b i l l e n t i t l e d , "An Act to readjust the Amounts Payable and Chargeable against the several Provinces of Canada by the Dominion Government so f a r as they depend (2 on the Debt with which they respectively entered the Union" was passed by Ottawa. She effect of th i s act was to s t r i k e off the §10,506,088.84 excess over the o r i g i n a l debt allow-ance of Ontario and Quebec, on which they had been paying 5 per cent, interest to the Dominion. In order to equalize the p o s i t i o n of the other provinces, their various debt allowances were increased i n the same proportion per ca p i t a . Thus, B r i t i s h Columbia received an increase i n her allowed debt of ^280,084. In 1884 a simi l a r b i l l was introduced, the purpose of which was to make the increased allowances r e t r o a c t i v e . She speech of S i r Leonard S i l l e y i n moving that the House resolve i t s e l f into committee on thi s occa-sion i s noteworthy, coming as i t does from a leading federal statesman, i n that i t proposes what cannot be considered otherwise than as a fundamental change i n the (1) In s t i l l another way, B. C. achieved a measure of success i n 1884. Shis was i n the r e s t r i c t i o n of Orie n t a l immigration. A Royal Commission was appointed that year to enquire i n t o the Province's grievances i n that t connection. As a re s u l t of the in v e s t i g a t i o n an act was passed at the following Dominion session, placing a §50 tax on Orientals entering Canada. She Province was to receive one quarter of the revenue thus c o l l e c -ted from immigrants entering at B.C. See Statutes of Canada, 1885, V o l . I, Ch. 7, PP. 208-212. (2) Statutes of Canada, 1873, P« 94 (Ch. 30). 39. f i n a n c i a l r e l a t i o n s of the provinces and the Domini on© AneL the reason given f o r the change proposed hy t h i s gentleman i s the dire f i n a n c i a l s t r a i t s i n which the provinces had come to f i n d themselves* Apparently the Federal Government of the day considered i t part of i t s duty to care f o r the f i n a n c i a l well-being of the provinces, even i f such required a r e v i s i o n of the o r i g i n a l basis on which union was consum-mated. In part, S i r Leonard's speech f o l l o w s : — "Y/e know that since that period (Confederation), such has been the desire on the part of the people i n a l l the Provinces to have railway extension, we know that the pressure has been such that these Provinces have had, from time to time, to y i e l d to that pressure, u n t i l there i s scarcely one Province that i s not embarrassed at t h i s moment, or i f not at t h i s moment, that w i l l not be embarrassed when the^engagements entered into i n the shape of sub-s i d i e s to roads not yet constructed are met. In 1873 that was the state of things, and the Govern-ment thought i t advisable, under the circumstances, to ask Parliament to assume the whole of the debt of Ontario and Quebec which then exceeded the amount they had assumed i n 1867," and to give to the other Provinces a sum equivalent i n proportion to t h e i r population. She proposition now before the House i s to ante-date, as i t were, the operation of the law of 1873, and to give the four old Provinces the benefit of t h i s amendment to the law by giving them the benefit of the int e r e s t on that increased debt from 1867 to 1873. t ttl) She actual r e s o l u t i o n a f f e c t i n g B r i t i s h Columbia read as follows: " 2 . — I n the accounts between the Dominion and the Provinces of B r i t i s h Columbia, Manitoba, and Prince . Edward Island, the amounts now calculated and allowed ( l ) Canadian Hansard, 1884, V o l . I I , p. 1383. 40 as the debta of the Provinces respectively, on which they are now paid interest by the Dominion, s h a l l be increased by amounts bearing the same proportion to the respective populations of the said Provinces, as ascertained by the Census of l 8 8 l , as the t o t a l of the amounts to be added under these Resolutions as c a p i t a l owing to Ontario and Qjuebe.c, Nova Scotia and Hew Brunswick, bear to the combined population of the four l a s t named Provinces, as ascertained by the s a i d Census of l 8 8 l ; and the amounts of such increases to the said Provinces of B r i t i s h Columbia, Manitoba, and Prince Edward Island respectively, bearing i n t e r e s t at the rate of 3 per cent per annum, which inter e s t s h a l l be payable to them as part of t h e i r respective subsidies from the Dominion on and a f t e r July 1, 1884."W . 5 Thus the p o l i c y of an "Honourable Peace" with Ottawa i began with some assurance of success. Yet i t would be / e n t i r e l y f a l l a c i o u s to consider the period of compromise ( as one i n which complaints were e n t i r e l y absent, ""from time to time disagreements appeared, some of which were not se t t l e d u n t i l a f t e r the commencement of the better terms negotiations. And with the yearly appearance of d e f i c i t s , I occasional outbursts against Confederation were heard, and { these increased i n number with the growing seriousness on that already large sum. The following table, prepared from the Public Accounts i s eloquent i n i t s proof of the sta t e -ment that the Settlement B i l l and "Honourable Peace1* must seek t h e i r chief glory i n having ended an ill-begun dispute; (1) Canadian Hansard, 1884, Y o l . I I , p. 1583. Each year added i t s quota, i n varying amounts, to 41. ) for i t most c e r t a i n l y offered no sol u t i o n to the Province's ^ f i n a n c i a l problem: Revenue Expense D e f i c i t 1884 § 503,173 I 790,629 4 87,456 1885 600,598 655,437 55,059 1886 514,719 772,211 257,492 1887 540,358 713,151 172,753 1888 608,678 745,975 137,297 1889 706,779 816,267 109,488 1890 845,522 911,408 65,886 1891 964,943 993,855 28,912 1892 1,038,257 1,370,431 332,194 1893 1,019,206 1,431,438 412,232 1894 821,660 1,514,405 692,745 1895 896,025 1,906,924 1,010,899 1896 989,765 1,614,725 624,958 1897 1,383,048 1,569,071 186,025 1898 1,439,625 2,001,031 561,408-W Unquestionably the extravagance of p r o v i n c i a l govern-ments i s i n part responsible f o r this amazing seri e s of d e f i c i t s . Expenditures were not always wisely made. Yet i t i s a f a c t that the older provinces were i n simila""? s t r a i t s . S i r Leonard T i l l e y had noted t h i s condition i n his speech on the Readjustment Act of 1884, and had given i t as a reason f o r that change. B r i t i s h Columbia might possibly plead inexperience; but the older provinces, being (1) See B.C. Sessional Papers, 1889, pp. 516A, 516B (Tables I and I I ) . Among the large expenditures for 1895 was an allowance of §191,867 f o r the new Parliament Buildings, and a grant of §425,629 for roads e t c. Figures f o r these respective outlays i n 1894, the preceding year, were §55,954, and §262,478; f o r 1896 f i g u r e s were §257,903 and §238,225. 42. more schooled i n the obligations and dangers of self-govern-ment, can hardly offer t h i s excuse. But are excuses necessary? A f t e r a l l , extravagance, as i t applies to governments, apart from the d e f i n i t e l y culpable, i s always debatable. I t i s d i f f i c u l t , i f not e n t i r e l y impossible, to accurately apportion blame or praise for the outcome of f i n a n c i a l p o l i c i e s of governments, to a l l o t chance and f o r e -sight t h e i r true share of r e s p o n s i b i l i t y . In t h i s case, the fact that i t was not the one but the many provinces whioh were experiencing f i n a n c i a l troubles at least p l a u s i b l y suggests that i n d i v i d u a l governments cannot be held s o l e l y responsible, that the true cause l a y i n matters beyond t h e i r c o n t r o l . The new premier o f Quebec, M. Mercier, f e l t t h i s i n 1887 when he issued an i n v i t a t i o n to the other provinces to /meet at Quebec f o r the purpose of considering f r e s h demands on the Dominion. (1) A l l the provinces with the exception of B r i t i s h Columbia and Prince Edward Island were represented at that conference. Hon. John Robson was i n the east at the time and could e a s i l y have attended. That he did not i s not surp r i s i n g . The "Honourable Peace" had been achieved by (1) See Colonist, March 20, I887, p. 2. See also "Minutes of the Proceedings of the Representatives of the Provinces i n the years I887, 1902, 1906, 1910, 1913, 1918, 1926"—published 1926. The l e t t e r i n v i t i n g Premier Davis to attend was dated Sept. 24, I887. For proceedings of conference see pp. 3-39• 43. d i r e c t negotiation v/ith the Dominion, and i n that manner the p r o v i n c i a l administration s t i l l proceeded to s e t t l e i t s 4-ifferences. Between Ottawa and Quebec i t chose the former; negotiating with the other provinces as a group from which i t was so distant was a new experience f o r the P a c i f i c Province and the government that had only recently reached a settlement by more di r e c t means. ./ Further, the subject of better f i n a n c i a l terms was one whioh that administration had no intention of embracing. Events i n the session which followed the Quebec Conference establishing that Mr. Robson*s report of his t r i p presented to the House during t h i s session suggests that the subjects of better f i n a n c i a l terms and the Quebec Conference were studiously avoided.^^ But another incident i s even more indi c a t i v e of the government's a t t i t u d e . The Speech from the Throne contained the following paragraph: — " I t i s now more than twenty years since the con-s t i t u t i o n of the Dominion was framed and brought into actual operation. It may be advisable f o r you to consider whether p r a c t i c a l experience of i t s working f o r nearly a quarter of a century has not revealed defects i n that c o n s t i t u t i o n which i t would be alike i n the inte r e s t of the Province and of Confederation to have remedied."(2) Whether the administration feared some attack from the opposition because of i t s f a i l u r e to recognize the (1) B.C. Sessional Papers, 1888, pp. 327-330. (2) Colonist, Jan. 28, 1888, p. 1. 44. /Quebec Conference and was taxing t h i s method of heading i t ( o f f or not, i s a matter of conjecture. But c e r t a i n i t i s the government had no intention of proceeding with so much as a discussion of such a p o l i c y as thi s p ortion of the Speech indicates. It was evidentally intended to "be f o r -gotten or overlooked, despite the Opposition. On February 9, the following resolution was introduced by Mr. Grant, and seconded by Mr. Seml i n : — "Past experience proves that many things i n the working of the ' B r i t i s h Forth America Act, 1867', and i t s a p p l i c a t i o n and i n t e r p r e t a t i o n by the f e d e r a l government, works unfavorably to the province and reduces powers whioh should be exercised by the pro-v i n c i a l a u t h o r i t i e s ; that the money subsidies from the f e d e r a l treasury are not commensurate with our requirements and the increasing cost of government, whilst at the same time the Dominion government draws a much larger sum from the province f o r eusr-toms revenue and other sources than that at the date of union, and we regret that your honor's ministers did not provide for a proper representation of the province at the i n t e r - p r o v i n c i a l conference held at Quebec during the l a s t summer of delegates from a l l the other provinces, with the exception of B r i t i s h Columbia and Prince Edward Island, more e s p e c i a l l y as one of your honor's ministers was i n Ottawa during the s i t t i n g of said i n t e r - p r o v i n c i a l conference, as . we consider so favorable an opportunity to present our p o s i t i o n to the representative men then assembled has never occurred since B r i t i s h Columbia united her destinies v/ith Canada."(l) The text of the resolution i s enough akin to l a t e r motions of a similar kind to evoke i n t e r e s t , andi one might •' expect i t to induce a de t a i l e d discussion of the whole matter of f e d e r a l - p r o v i n c i a l f i n a n c i a l arrangements i n view (1) Colonist, Feb. 10, 1888, p. 4. 4 % \ of the Quebec Conference, Mr. Robson's mission and the above <v> • - ' t paragraph of the Speech. But such a discussion was not forthcoming then, nor at any time during the session. With (^surprising speed the whole incident was disposed of and the ^amendment defeated 16 to 6. The speech of Mr. Dunsmuir,.in view of l a t e r history, provides an i n t e r e s t i n g commentary on the p o l i t i c s of the day. Had the government representative gone to the i n t e r - p r o v i n c i a l conference, Mr. Dunsmuir de-clared, "the opposition v/ould have asked what business he had there". He did not think B r i t i s h Columbia "should dance attendance at a c a l l of M. Mercier, and could not have sent a representative without f i r s t having consulted the legislature".'* 1) And thus the incident was closed, without so much as a v/ord on the subject of p r o v i n c i a l contributions to the federal treasury or the Dominion subsidies. As the session went on, i t became increasingly doubtful i f the matter would even be mentioned again. At l a s t , on March 12, the leader of the Opposition arose and asked what had become of that section of the Speech. Again faced with the problem, and once more by the Opposition benches, Hon. Mr. Robson r e p l i e d : "With regard to the statement that twenty years experience had demonstrated that there were defects i n the constitution, nothing d e f i n i t e was promised. The matter was at present under consideration, but i t was not p o s i t i v e (1) Colonist, Feb. 10, 1888, p. 4. 46, whether the house t h i s session would he asked to consider amendments. I t was not. As a matter of f a c t , such a proposal was not destined to he given serious consideration i n the p r o v i n c i a l l e g i s -lature f o r many years to come. It i s to the f e d e r a l house rather than the p r o v i n c i a l that we must look f o r develop-ments during the next few years. As early as February, 1893, -the Colonist had printed an e d i t o r i a l c a l l i n g a t t e n tion to the large per capita: contribution of B r i t i s h Columbia to fe d e r a l finances, "This Province", the e d i t o r i a l declared, ."contributes to the general revenue upwards of a m i l l i o n d o l l a r s a year more than i t s share, i f population i s made ( p) vthe basis'of P r o v i n c i a l contributions to the revenue," v" w This and other s i m i l a r statements evidence the growing f e e l i n g that the P a c i f i c Province was not being f a i r l y treated i n matters of f e d e r a l expenditures. In the House of Commons that same year we f i n d C o l . P r i o r d e c l a r i n g : — "There i s a general opinion p r e v a i l i n g i n the province from which I come that the people there are not receiving a f a i r share of the expenditure " of the Dominion Government, i n comparison with the revenue they pay into the Dominion treasury. .... We have been t o l d by some members of the Government that the expenditure of the province w i l l be based on population. That, we think, i s not a f a i r way of dealing with the subject. We are a small population, numbering, according to the census, only 9 7 , 0 0 0 odd, including Indians (1) Colonist, March 13, 1888, p. 1 ( 2 ) Ibid., Feb. 24, 1893, p. 4. and Chinamen, and yet we pay the enormous sum of §l,656,lj56 i n revenue to the Dominion per annum, which i s equal to $16.97 per head of the popula-t i o n , n l j C o l . P r i o r ' s immediate aims beyond perhaps that of a good representative endeavouring to secure a greater expen-diture of federal moneys for his Province and constituency are not cl e a r . By 1895, however, federal members i n both ^nouses had become convinced that the only way B r i t i s h Columbia would receive the treatment they believed i t r i g h t -f u l l y deserved was by securing representation i n the guiding council at Ottawa, thereby i n a measure overcoming the disadvantage of distance from the national c a p i t a l . Thus, there began.aL^cjampaign_ f or cabinet representation f o r B r i t i s h Columbia and the Province's claim for such recogni-t i o n was based on its. large per capita contribution to federal revenues. Three times during the session C o l . P r i o r asked f o r a de t a i l e d return of government revenue and expenditure i n B r i t i s h Columbia.^ 2) At the end of the session, those r e -turns had s t i l l not been brought down, but he took occasion to demand cabinet representation for his Province, proceeding to show B r i t i s h Columbia's f i s c a l and trade importance. He noted that i t s exports and imports were the largest of any (1) Canadian Hansard, 1895, p. 2248. (2) Ib i d . , 1895, V o l . I, P« 299; V o l . I I , pp. 5114, 5818. 48. province i n Canada per head during the years 1892, 93 and 94, the yearly average f o r those years being §69.12 and §56.08 respectively. In that her nearest r i v a l i n each case was Quebec with §37*87 and §38 .67 . In customs duties B r i t i s h Columbia contributed §1 ,274,271 as an average i n those years, or §12.99 per head, being the largest per capita tax and the t h i r d i n actual amount In the Upper House, Senators Macdonald and Mclnnes were e s p e c i a l l y active, urging the government that "taking into consideration the amount of revenue we are contributing, and the distance we are from the c a p i t a l , i t was only r i g h t and proper that the premier, i n forming his cabinet, should have taken into i t a member from B r i t i s h Columbia."^ 2) f"' The campaign f i n a l l y achieved success i n 1896 with ' the appointment of C o l . E. G. P r i o r , who had been a leader i n the movement from i t s commencement, as "Collector of \ Inland Revenue" i n the federal cabinet. The^importance of thi s struggle to the l a t e r better terms demands l i e s i n the use of the i d e n t i c a l arguments that were l a t e r expanded and used by the Province i n the_negotiations for special r a i l -way subsidies, the forerunner of the r e a l better terms movement• (1) Canadian Hansard, 1895, V o l . I I , p. 4786; pp. 4788-4789. (2) Canadian Senate Debates, 1895, p. 24. 49, Curiously, the campaign, f o r representation i n the federal cabinet produced s t i l l another argument that was l a t e r to be moulded into use i n the revisionary movement. Unwittingly, Gol. P r i o r and his associates had r a i s e d a question which was to be seized upon by the L i b e r a l Opposi-t i o n i n B r i t i s h Columbia and used against the Ottawa adminis-t r a t i o n i n the by-election whioh followed the cabinet appointment and i n the general e l e c t i o n of the same year. William Templeman, who l a t e r became a senator and a member of S i r W i l f r i d Laurier's cabinet, was C o l o P r i o r ' s opponent i n the by-election at V i c t o r i a i n 1896. Though using the same grounds as his opponent had i n endeavouring to secure I cabinet representation, Mr. Tempieman attempted to prove I that the r e a l f a u l t l a y with the National P o l i c y t a r i f f , which he alleged took 17.50,000 i n excess of a l l f e d e r a l ex-penditures from the Province i n 1893, and an even greater sum i n d i r e c t l y i n the form of higher prices paid to Eastern \ Canada i n purchases because of the protected market.^) i n an open l e t t e r which he and Dr. Milne, the other L i b e r a l candidate at V i c t o r i a issued to the electorate just p r i o r to the general elections of 1896, he declared: /'"""We are opposed to the 'bleeding process" whereby f the province of B r i t i s h Columbia has been forced V (l)See V i c t o r i a D a i l y Times, Jan. 11, 1896, p. 2. This d a i l y newspaper, hereafter referred to simply as "Times", was f i r s t published on June 9, 1884. In federal p o l i t i c s i t was a supporter of the L i b e r a l Party. 50. /Tor years to contribute to the Dominion treasury / i n customs, exise, f i s h e r y and. other dues, and I to eastern monopolists, over two m i l l i o n d o l l a r s \ a year i n excess of the sum returned to us f o r \ a l l purposes• t t(l) In r a i s i n g the question of addi t i o n a l contribution sent to Eastern Canada i n the form of purchases from highly protected markets, Mr. Templeman at least p a r t i a l l y (developed an argument that was l a t e r to f i n d use as an ^ a d d i t i o n a l reason f o r r e v i s i n g the Union Terms: that i s , ] that the Province deserved special consideration" as com-I pared to other members of Confederation because i t s products i ^were f o r the most part sold i n the open world-market, whereas \ ipurchases were from the more expensive protected markets of f Eastern Canada. Up to t h i s time, however, the P r o v i n c i a l Government, despite i t s yearly d e f i c i t s , steadfastly refused to take up the question raised by the Quebec Conference i n 1887 and echoed i n the Speech from the Throne at V i c t o r i a the next year« During the course of his budget speech i n the l a t t e r year, Hon. J. H. Turner declared: "I believe that with a vigorous and careful c o l l e c t i o n of a l l revenue, and c a r e f u l expendi-ture, we s h a l l soon get the finances into the p o s i t i o n of making both ends meet, i f . t h a t i s desirable. And at the same time I confess that the condition of our province i s such- as to make th i s a d i f f i c u l t matter. When we consider the vast extent of the country, and the endless demands from a l l parts f o r roads, bridges, ( l ) Times, June 11, 1896, p. 7« o 51. schools. ..... i t w i l l r e a d i l y be seen that i t i s a province that requires a large,expenditure i n order to open i t up and improve i t . " C I ; In 1892, he was s t i l l speaking of the "extensive public works .... without which the country w i l l stand s t i l l (2) or recede". ' For the following year the revenue increased to a t o t a l of $1,038,237, reaching the m i l l i o n mark for the f i r s t time i n the Province's h i s t o r y . (3) "The steady upward tendency of our revenue", declared the finance minister i n reporting this' achievement, "which i s derived from so many sources, c l e a r l y indicates that the Province i s s t i l l marching onward and on the right road".^4") / But there was no sign of an approaching equilibrium between revenue and expenditure. Yet the P r o v i n c i a l Govern-ment s t i l l exhibited no tendency to lay the blame fo r i t s financial_plight.jflth.Confederation as the other provinces had done, nor to seek assistance_from Ottawa i n the expensive task^ of developing the_ country. When, i n discussing f e d e r a l expenditures, a member urged the P r o v i n c i a l Government to "take a s t i f f e r stand and demand and not beg for t h e i r (1) Colonist, A p r i l 10, 1888, p. 1. (2) Ibid, March 4, 1892, p. 6. (3) B.C. Sessional Papers, 1899, p. 5l6"B" (Table Ho. 2) — The Dominion grant per capita increased t h i s year from 148,000 to $74,215. (4) Colonist, March 14, 1893, p. 6. 52. rights 1 1^- 1*'' Premier Davie was reported by the government press, as replying: "Such t a l k was nonsense. There were not as great grievances now as had existed. The r e a l remedy would not be had u n t i l population had l a r g e l y increased and the representation of the Province was larger, and the Province was thus given a louder voice i n the great council of the Dominion. As he had on a pre-vious occasion said, the Province when i t went into Confederation had married into a poor family, and i t could not be helped for the time being, i f f o r the \ general benefit of the Dominion, the Province put up ^ with some injustice."\2) Yet despite a determined opposition, which f i x e d i t s attack upon the f i n a n c i a l p o l i c i e s of the administration, and the foreboding presence of s t r i k e s and unemployment, always a matter of apprehension to l e g i s l a t o r s facing the electorate, the government succeeded i n carrying an e l e c t i o n i n June 1894.(3) But with that year there was a serious f a l l i n g o f f of the r e v e n u e . T h e administration promised (1) Colonist, March 14, 1893, p. 8. (2) I b i d . , March 15, 1895, p.'6. (3) At the same time the Leader of the Opposition, Hon. RobH Beaven, suffered personal defeat. (4) See Table p. 41. The Session of 1893-94 produced one r e -. . solution of some importance, praying the Lieut.-Governor to "again move the Dominion Government to increase the per.capita tax on Chinamen coming into the Dominion to #100 each; at the same time expressing strongly the opinion of t h i s house that three-fourths of a l l moneys received at B r i t i s h Columbia ports....should be paid to th i s province, as the chief i n j u r y from the presence of these Chinamen i s sustained by this province, and not the Dominion." See Colonist, Jan. 26, 1894, p. 3. The reso l u t i o n passed unanimously. This matter of a f a i r d i v i s i o n of the proceeds of the Or i e n t a l tax was l a t e r c l o s e l y associated with the better terms demands. A sim i l a r r e s o l u t i o n was passed without d i v i s i o n at the next session—see i b i d . , Dec. 23, 1894, p. 6. 5 3 * 'retrenchment, bat signs of a growing uneasiness with f i n a n -c i a l conditions were p l a i n l y evident. During the Session of 1 8 9 5 - 9 6 , the l e g i s l a t u r e ' s attention was turned to the subject of federal revenues i n the P r o v i n c e — a subject of considerable moment i n the federal houses at the time. This occurred i n a curious way. I t was brought up by Mr. K e l l i e , the member from West Kootenay, who had been chosen to second the Address i n Reply to the Speech from the Throne. During h i s remarks on t h i s occasion, he diverged from the actual contents of the Speech, and apparently, as succeeding events showed, he embarrassed the government not a l i t t l e . Mr. K e l l i e , i t seems, ventured the following remarks for himself, when he said he "wished to take up a matter that had not been spoken of, namely the d r a i n upon our resources by the Dominion Government", and to urge "that the representatives of B r i t i s h Columbia at Ottawa should unite, irrespective of party, i n demanding more l i b e r a l treatment," How strong even then was the tendency f o r the subject of f e d e r a l revenues to diverge into the f i e l d of party p o l i t i c s , and become a discussion of the e f f e c t s of the nationa l P o l i c y upon B r i t i s h Columbia i s shown by Mr. Semlin's remarks as Leader of the Opposition. He i s r e -ported as saying i n reply to the Seconder: "In the matter of Mr. K e l l i e ' s remarks upon the drain by the Dominion upon the revenues of the Province, he would leave the defence of the Dominion Government to the Ministers opposite, each one of whom he believed i s a supporter of that Govern-ment. Premier Turner cut the whole incident short by-r i s i n g to say he refused to be drawn into a discussion of Dominion p o l i t i c s , — u n d e r the circumstances a reply of un-doubted p o l i t i c a l wisdom and expediency. / The incident shows c l e a r l y the s i t u a t i o n at the pro-vincial c a p i t a l . Throughout the period under consideration / i n d i v i d u a l references to the subject of B r i t i s h Columbia's excessive contribution to federal finances, the p o s s i b i l i t y of r e v i s i n g some of the Union Terms, and the f a i l u r e of the Ottawa au t h o r i t i e s to a l l o t the Province i t s due share i n n a t i o n a l expenditures are not e n t i r e l y absent. Yet i t never became the o f f i c i a l government p o l i c y to attack the problem involved. One wonders why, e s p e c i a l l y i n view of the s t e a d i l y shrinking revenues of the l a s t few years. The o answer i s perhaps contained i n the incident i n the l e g i s -lature just mentioned. Though not admitting any p o l i t i c a l alignment with the federal administration, and even denying the existence of p o l i t i c a l p arties i n p r o v i n c i a l p o l i t i c s , the Turner cabinet was nevertheless on f r i e n d l y enough terms with Ottawa to avoid discussion of matters so c l o s e l y ( l ) For a f u l l report of t h i s incident see Colonist, Jan. 28, 1896, p. 6, from which the above quotations are taken. 55 ^ a f f e o t i n g i t s f i s c a l p o l i c i e s , and e s s e n t i a l l y i n v o l v i n g \ c r i t i c i s m . "Co get an e n t i r e l y true picture of the situation: lone must r e a l i z e that the federal L i b e r a l s i n the Province" [were basing t h e i r attack upon the Dominion Government on > t h i s very point. Irrespective of party, B r i t i s h Columbia's representatives at the national c a p i t a l had used the 0 Province's proportionately large contribution to the federal treasury as the chief argument i n t h e i r campaign for cabinet ^representation at Ottawa. As a result of t h e i r e f f o r t s C o l . ) E. G. P r i o r was appointed to the national cabinet, and was ^at t h i s very moment conducting his federal by-election cam-paign i n V i c t o r i a . His opponents had seized upon t h i s "excessive contribution" as ce r t a i n proof of the irreparable harm being done the Province by the Conservatives' "National / P o l i c y " . Mr. Turner p u b l i c l y supported C o l . P r i o r at t h i s time, just as l a t e r i n the year he supported his party i n v the general e l e c t i o n s . Many of his supporters did likewise. / I n 1896, to raise the cry of "excessive contribution" was / / . -1 undeniably to brand oneself as an unequivocal opponent of \ t h e Conservative administration at Ottawa. Thus Mr. K e l l i e ' s remarks placed Mr. Turner i n a d i f f i c u l t p o s i t i o n , a f a c t which Mr. Semlin was quick to r e a l i z e and take advantage of. Unquestionably, the Leader of the Opposition sensed Mr. K e l l i e ' s anxiety to be that of a large body of the electorate and i n thi s he was 56. c e r t a i n l y c o r r e c t . But with many anxiety had grown into discontent, and t h i s too Mr. Semlin probably also r e a l i z e d , ^ f o r i n the Dominion elections of June of that year, the ) Federal L i b e r a l s c a r r i e d the Province for the f i r s t time i n i t s h i s t o r y . The abrupt change i n the Turner government's attitude towards the new administration at Ottawa provides an in t e r e s t i n g commentary on the "non-party" p o l i t i c s of the p r o v i n c i a l l e g i s l a t u r e . The Laurier Cabinet was"-not a year i n o f f i c e when the Turner government showed signs of a change of heart: B r i t i s h Columbia, i t discovered, d i d con-/ tr i b u t e large sums to the federal treasury i n excess of VDominion expenditures i n the Province, and there was every ( reason f o r some of t h i s money being used i n developing the "Province. S p e c i f i c a l l y , t h i s "revenue i n excess of expendi-t u r e " was to be used as a basis for a demand for s p e c i a l subsidies i n a i d of railway construction. And t h i s p o l i c y was sponsored by the Turner government, the very administra-t i o n v/hich had turned aside s i m i l a r discussions so often i before! The matter was f i r s t broached during the seconding of the Address i n Reply to the Speech, when Mr. Stoddart of East L i l l o o e t said: "I hope that there w i l l be some expression from t h i s house regarding public works on the part of the Dominion of Canada. The revenue derived by . the Dominion from the province as a whole i s very large, both d i r e c t l y and i n d i r e c t l y , i n proportion to the amount of money which we receive i n return, 57. and therefore we should have the benefit of the surplus: f o r public improvements. We are at present paying out from §750,000 to §1,000,000 more than we receive back, a sum s u f f i c i e n t i f c a p i t a l i z e d at 3 per cent to b u i l d Q ) two railways to Kootenay at the estimated cost." But Mr. Turner's speech on A p r i l 14, i a the most s i g n i f i c a n t evidence of the change. He i s reported by the press as saying on t h i s occasion that "the Dominion was a s s i s t i n g public works i n the East, such as enlarging oanals, f o r which the province paid a share. He did not complain of that, but he wanted the claims of t h i s province c a r e f u l l y considered. It was well known that the payments: from t h i s province to the Dominion were 100 per cent larger than those of the rest of the provinces. As a matter of f a c t , the population of t h i s province was about one f i f t i e t h of the whole Dominion, and i t paid about one-twentieth of the whole revenue. He f e l t that was an un-answerable reason why the Dominion Government should help us i n such important w o r k s " ^ ) a a railways to further develop the province. This i s a strange statement coming from Mr. Turner. Apparently the government's conversion to the b e l i e f that B r i t i s h Columbia was contributing more than her share to national finances oame with the f r e s h demands for railway (1) Colonist, Feb. 11, 1897, p. 8. (2) Ibid., A p r i l 15, 1897, p. 6. 58. construction at various points i n the province, and the con-sequent c a p i t a l outlay involved. Curiously too, good times brought the-government to a p o l i c y which depression and de-creasing l o c a l revenues had f a i l e d to do, f o r business generally now was improving, mining e s p e c i a l l y was developing with s u r p r i s i n g speed and with t h i s returning a c t i v i t y the revenues of the province were again on the increase. Thus, the era of the "Honourable Peace", i n which cooperation with Ottawa had been a guiding r u l e , was at an end; a new one was beginning, and the very movement which Jvr&s ultimately to develop into an unqualified demand f o r (better terms was about to he inaugerated. A£ the moment, the th i n g which was most needed, even i n a demand for railway assistance, was a more thorough study of f a c t s and f i g u r e s , i n place of the here say type of evidence of the effect of fed e r a l taxation upon B r i t i s h Columbia. The debates on the Turner government's railway p o l i c y produced such an analysis—'the f i r s t of i t s k i n d — and the honour of being the f i r s t to acquaint the L e g i s l a -ture with a detailed analysis, the f i r s t thorough s i f t i n g of f a c t s ever presented to i t , goes to Mr. R. P. Ri t h e t . In a scholar l y speech, Mr. Rithet on A p r i l 14, 1897, pre-sented his findings to the Legislature, and they are them-selves deserving of a somewhat thorough consideration here. 59. Ehe following table showing the federal revenue f o r the preceding year from a l l sources i n B r i t i s h Columbia and the t o t a l expenditure—-the l a t t e r approximating §7*50 per person—was produced f o r the House's consideration. •*""") S i m i l a r l y by comparing a l i k e expenditure per person to the revenue secured i n other provinces, Mr. Rithet showed that with the exception of Quebec and Manitoba, the expenses exceeded revenues:— B r i t i s h Columbia Revenue: Customs. $1,406.,9J1.92 Inland Revenue.......», 295,264.57 Postal Revenue. 140,125.96 §1,842,321.45 or |l8.50 per capita. Expenditure: Population: 98,173-at §7 .50 , 736,297.00 Excess of Revenue...§1,106,024.45 Ontario Revenue: Gust cms.......,....»... §7 ,860,366.78 Inland Revenue.... 3,519,846.92 Postal Revenue 1,929,130.11 or §6.28 per cap i t a . ^13,309,343.81 Expenditure; Population: 2,114,321-at rate of §7*50 per head . §15 ,857 ,408 .60 Excess of Expenditure...§ 2,548,064.19 (1) Colonist, A p r i l 15, 1897, PP.6-7. A l l subsequent quo-tations i n t h i s chapter are taken from this source. 60. Similarly,he derived the following sums for the other pro-vinces: Quebec,—excess of revenue #447,540.50 Fova Scotia,—excess of expenditure §1 ,343,281.57 "lew Brunswick,—excess of expenditure §844,846.38 Prince Edward Island,—excess of expenditure §605,608.99 Manitoba,—excess of revenue §92,715*00 After t h i s preliminary analysis, Mr. Rithet proceeded:— "To prove the p o s i t i o n i n which i t i s claimed t h i s province stands with regard to the Dominion revenue and expenditure since confederation, a f t e r making f u l l allowances for a l l expenditures, ordinary as well as on c a p i t a l account, I have compiled the following figures under the heads of the revenues already taken. They are as follows: Customs from 1872 to 1896 §20,357,847.55 Inland Revenue, 1872 to 1896 (1875-75 estimated) 2,647,814.28 P o s t a l Revenue, l872-96.. 0 1,270,914.00 T o t a l §24,276,602.85 "Against t h i s the expenditure has been: 14.87 1 292,200. 5.23. • 313,800. 6.10.......o......o 366,000. 6 . 1 0 . . « . . 0 . • . 0 . . a . • 366,000. 5.20. a . 312,000. 5*86. e e . . 351,600. 5.76 345,600. 5.90. . . . . 354,000. 5 . 9 0 . . . . . . . . . . . . . . . 354,000. 5.88......... a . . . . . 352,800. 1872 on 60,000 at 1875 it n it 1874 tt tt it 1875 n it 1  1876 it n it 1877 it n it 1878 1  1  tt 1879 re n n 1880 « it 1881 1  61. 1882 on 80,000 at §6.18 $ 494,400. 1883 " " » 6.48 518.400. 1884 » » « 6.94 555,200. 1885 * I1 ? 7.72 617,600. 1886 i ' « » 8.50 680,000. 1887 ? » " 7.69 615,200. 1888 » » 7.84 611,200. 1889 " " 7.79 623,200. 1890 » •« » 7.32 601,600. 1891 " » » 7.50 600,000. 1892 » 100,000 » 7.50 750,000. 1893 " " " 7.42 742,000.. 1894 * " " 7.48 748,000. 1895 '-' " " 7.50 750,000. 1896 » » » 7.50 750,000. 113,064,800. "To whioh may he added as a l i b e r a l allowance f o r expenditure on public works i n the province, $200,000 for 24 years.. 4,800,000. "Making the t o t a l expenditure.. §17 ,864 ,800 . (' "It w i l l , therefore, be seen that there i s a sur-! plus up to 1896 of §6,411,812.83, a sum, when \ properly computed, almost s u f f i c i e n t to refund \ the expenditure f o r Canadian P a c i f i c railway I constructions and a l l other public works made by I the Dominion government i n B r i t i s h Columbia... Mr. Rithet was not s a t i s f i e d with presenting a n a l y s i s alone. He had a concrete suggestion to obviate such an un-equal d i s t r i b u t i o n of federal funds as evidenced by his f i g u r e s . He continued:— "Upon what basis can such an obl i g a t i o n be ad-justed? I admit i t i s not very easy to do t h i s , but i n order to bring i t into tangible shape I make the following suggestion. For convenience I w i l l take the Dominion Revenue and Expenditure f o r 1896, they are: Revenue: Customs §1 ,406 ,931 . Inland Revenue 295,265. Postal Revenue 140,125. $1,842,519. 62 Expenditure: Per Capita on $100,000 at §7-50 Estimated on c a p i t a l § 750,000. Surplus of Revenue account 200,000. | 950,000. § 892,319. '"Of t h i s surplus l e t our contribution to the {federal government he one-half, or say i§446,000, and l e t the other half be f o r pro-v i n c i a l development by rai l w a y s . " ( l ) This then was Mr. R i t h e t r s s o l u t i o n . He was a b u s i -ness man, and his suggestion i s testimony of that with i t s compromise and p r a c t i c a l a p p l i c a t i o n to immediate problems. But i n the even greater area of c o n s t i t u t i o n a l reform, i t marks a very d e f i n i t e milestone. Though he spoke only of railway subsidies, Mr. Rithet had come very near to the heart of the Better Terms Movement. On A p r i l 14, 1897, indeed, the Legislature at Jarnes Bay heard, unwittingly at the moment, the f i r s t r e a l l y p r a c t i c a l suggestion for a d i v i s i o n of the spoils, of federal taxation, f o r a s o l u t i o n of the f i n a n c i a l interdependence of Dominion and Province, which i s the basic problem involved i n B r i t i s h Columbia's claim f o r "Better Terms". ( l ) One other remark of Mr. Rithet during the Session 1897-98 i s perhaps of i n t e r e s t . Said he, during the budget debate, " I t , too, must be remembered that at Confedera-t i o n Canada took over the debt of §73,000,000 which Ontario and Quebec had spent i n developing t h e i r r e -sources, and that was the reason those provinces were out of debt to-day." Colonist, A p r i l 2, 1898. 63 CHAPTER I I I , The Dunsmuir Delegation and I t s Aftermath. On October 9, JL900, i n opening the negotiations which ultimately culminated i n the Ottawa Delegation which bears his name, Mr. Dunsmuir wrote to S i r W i l f r i d Laurier as f o l l o w s : — "During the Session of 1898, the p o l i c y of the Government of t h i s Province, as announced i n the House, was based on views to which, i n the main, i t s t i l l adheres, a p o l i c y rendered the more j u s t i f i a b l e and necessary by events of subsequent development and the more recent phases of the Alaska Boundary question. The then Premier ad-vocated- proceeding towards railway development, having i n view joint action based on some deter-mined r a t i o of assistance, and announced a p o l i c y of co-operation as between the two Governments. You are f a m i l i a r with the p o l i t i c a l events which, since that time, interrupted the proposed negotia-t i o n s . "(1; The story of the two years which followed Mr. Turner's enunciation of his p o l i c y of co-operation with the Dominion \Ln railway building i s one of unparalleled confusion, disas-terous to p o l i t i c i a n s and t h e i r p o l i c i e s a l i k e . Premier Turner' and his plans were no exception, following the elections of the previous month, he was summarily dismissed from o f f i c e on August 8, 1898, by Lieutenant-Governor Mclnnes, who claimed the government had l o s t the confidence (1) Dunsmuir to Laurier, Oct. 9, 1900; B.C. Sessional . - Papers, 1901, p. 549. 64. of the electorate. Thereupon Charles A. Semlin was i n v i t e d to form a ministry. The new cabinet, backed by a precarious ^ majority, managed to evade defeat during the following session, but l i t t l e of importance was accomplished. The ever-present problem of Oriental immigration and numerous proposals f o r new railway bonuses were the subjects of l i v e l y debates; but the Semlin Government, l i k e any adminis-t r a t i o n d a i l y faced with possible defeat, could not give these matters the vigorous and concerted attention they required. Thus the programme of development by means of sp e c i a l f ederal railway subsidies, c r y s t a l l i z e d during the 1898 Session, came upon the p o l i t i c a l doldrums, there to dwell f o r two years. Mr. Semlin*s p o s i t i o n was made even more d i f f i c u l t ' by his personal quarrel with Attorney-General Joseph Martin, which resulted i n the l a t t e r 1 s resignation. In spite of t h i s defection, Premier Semlin met the Legislature i n January, 1900, though only to be defeated and dismissed without the chance of appealing to the electorate. Thus by ) intervening to remove one ministry and i n v i t i n g Joseph ( \ Martin to form a new one, Lieutenant-Governor Mclnnes pre-( c i p i t a t e d the strangest c r i s i s i n B r i t i s h Columbia 1a h i s t o r y . The House immediately declared i t s lack of confidence i n Mr. Martin. To complete the picture, when the Lieutenant-Governor arr i v e d to dissolve the Legislature, i t s members 65. with a single exception, rose and l e f t the chamber i n pro-e t e s t , leaving the King's Representative to address an assembly of one member! The year 1900, however, wg.s not e n t i r e l y a l o s t one. On one front at least concrete; advance was registered, though even here success brought l i t t l e s a t i s f a c t i o n * During the 1900 session, the Federal Government raised the fee on -Chinese entering Canada to flOO.^ 1) V i c t o r y i t was, but the gain was n e g l i g i b l e . The Act of 1900 s t i l l l e f t the old i / r a t i o of d i v i s i o n , and the $100 fee was regarded from the f i r s t as useless by B r i t i s h Columbians. The d i v i s i o n of the rec e i p t s , giving the Dominion three-quarters to the Province's quarter, was b i t t e r l y attacked by Mr. P r i o r , but to no a v a i l . The chaotic conditions i n B.C. augured no early settlement 4 of t h i s and the several other ppints^at dispute between Ottawa and V i c t o r i a . Those hectic days i n the P a c i f i c Province, as we have seen, climaxed with Lieutenant-Governor Mclnnes' d i s s o l u t i o n of the House. In the elections which followed James Dunsmuir was induced to accept nomination f o r the South Hanaimo r i d i n g . His campaign was characterized by the following pledge: "In the general in t e r e s t s of the country I s h a l l replace the Chinese by white men so soon as I can get them." (1) Statutes of Canada, 1900, Ch. 32, p. 215. 66. On one occasion he went further, saying, "So soon as the other industries do away with them above ground, I ' l l get r i d of them all."'*"*') His name, an i l l u s t r i o u s one i n the Province's history, and his reputed business a b i l i t y and i n t e g r i t y bespoke him as the one best f i t t e d to the d i f f i -cult task of forming a ministry following the e l e c t i o n , ^Upon him the Province placed i t s hopes for stable govern-! ment. His cabinet consisted of Hon. J . H. Turner, who / became Minister of Finance, and Messrs. C:. Iff. Wells, D. M. 7 " . -Eberts, J. D. Prentice and Richard McBride. The Special Session c a l l e d by the new government met on July 19. Assembled for the purpose of voting the necessary grant of supply to enable the administration to carry on f o r the remainder of the year, the whole session i |was characterized by debates which evidenced a growing d i s -Icontent with the treatment B r i t i s h Columbia received at I fthe hands of Ottawa. Undoubtedly aggravated by the strike i ~ of the Fraser River fishermen, the Oriental problem formed the f o c a l point of-that d i s s a t i s f a c t i o n . From the reading of the following paragraph i n the Speech from the Throne, the new cabinet's attitude was clear: . " I t i s the inte n t i o n of my government to make strong / representations at Ottawa and i n Great B r i t a i n , with a view to protecting the in t e r e s t s of the laboring I classes against the consequences of what threatens to (1) Colonist, May 24, 1900, p. 8. 67. ! "be an alarming increase of the Japanese population." ' But discussions soon went beyond t h i s . In moving the Reply to the Speech, Mr. R. G. Tatlow, the t h i r d member for Vancouver, frankly admitted his d i s s a t i s f a c t i o n with the Federal Government's new Chinese R e s t r i c t i o n Act, and i n t h i s he unquestionably spoke for the majority. An increase of §50 i n the immigration head-tax was, he claimed, a l -together i n s u f f i c i e n t ; but at that, the year previous "had yielded §215,000 of which §52,000 had been returned to the (2) |province", a d i v i s i o n of the spoils which he f e l t was I -j t o t a l l y u n f a i r . On August 30, the House passed a resolution requesting the Dominion to pass l e g i s l a t i o n similar to the Hatal A c t . ^ ) <2he s i t u a t i o n with regard to Japanese immigra-t i o n was somewhat cleared by the following communication, which v/as read to the House at the request of the Japanese Consul: "Vancouver, B.C., August 7, i?00. "Hon. Premier Dunsmuir, V i c t o r i a , B.C. "Yesterday I received a cablegram from my govern-ment, to the effect that the l o c a l a u t h o r i t i e s (1) Colonist, July 20, 1900, p. 6. (2) Ibid., July 24, 1900, p. 6. (5) Ibid., August 51, 1900, p. 6. 68 "were instructed on the 31st ultimo to p r o h i b i t e n t i r e l y the emigration of Japanese from Japan to Canada, and also the United States. I hope you w i l l announce t h i s to the l e g i s l a t u r e . W i l l con-f i r m by m a i l . "Consul Shimizu" ( l ) The next complaint against Ottawa, again voiced by /Mr. Tatlow i n his speech of July 23, was the old grievance ( of the inequality of federal revenues and expenditures i n B.C. He charged that "out of a federal revenue of $3,184,000 i n 1889 the province received i n a l l but §1,380,000"^ 2 ^ leaving B.C. with a " c r e d i t " of nearly §2 ,000 ,000 . F i s h e r i e s alone he estimated yielded §45,800 of which only §3,756 was spent i n the Province. In another quarter too discontent was strongly voiced. / This was a growing d i s s a t i s f a c t i o n with the extent of the v l n d i a n Reserves i n the Province. Certain reserves had become Ibarriers to railway expansion, others were regarded as disproportionately large i n view of decreased numbers of Indians, and with a l l there ..was.,mu,o.h_anxi.j>.j>x.as .tp_the owner-ship and deyel^opment^jof^„the.,mine.ral»«resources. Upon these matters the cabinet received s t r i c t advice; on motion of Mr. * A. W. H e i l l of Alberni the House unanimously urged upon the (3) government the necessity of negotiating towards a settlement. (1) Colonist, August 8, 1900, p. 6. (2) Ibid., July 24, 1900, p. 6. (3) I b i d . , A p r i l 28, 1900, p. 6. 69. This advice was followed. I t was i n l i n e with the general p o l i c y which the government had already' expressed, but the scope of the discussions as they ultimately occurred was considerably larger than t h i s p a r t i c u l a r resolution con-templated, including as they did the many points at which the Province found i t s e l f at variance with the Dominion. On October 9, 1900, Mr. Dunsmuir opened negotiations, addressing a l e t t e r to S i r W i l f r i d l a u r i e r , outlining the various grievances of the Province and requesting a personal interview with reference to the same. The p r o v i n c i a l Premier's l e t t e r i s deserving of the most careful considera-t i o n , f o r i t opens a remarkable series of communications /and conferences which i n t h e i r scope eventually went f a r beyond the aims at f i r s t contemplated and gave r i s e .to a movement which has since at a l l times held an important place i n B r i t i s h Golumbia p o l i t i c s . With respect to the Oriental problem, Mr. Dunsmuir wrote as follows: "I am not at a l l clear as to whether the powers of.the Province can c o n s t i t u t i o n a l l y be applied to e f f e c t a remedy, but what I f e e l p a r t i c u l a r l y i s t h i s , that an unquestionable remedy l i e s with the Dominion a u t h o r i t i e s , and having promised the House that we would use our utmost influence with / your Government, and through the Dominion Govern-ed ment with the Imperial a u t h o r i t i e s , to bring about a settlement, I cannot too strongly urge upon your attention the great d e s i r a b i l i t y of dealing e f f e c -t i v e l y with representations. The theory upon which the r i g h t s of other nations are based i s un-doubtedly a strong argument against enacting the r e s t r i c t i v e measures which we are so desirous of 70 seeing enforced; but i t i s a condition, not a theory, with which we have to contend."Cl; One cannot but be impressed with the Premier's frank-ness as he outlines'his Province's p o s i t i o n . She "temptation to obtain the cheapest form of labour" w i l l , he prophesied, outweigh any possible e f f e c t of public sentiment. More r e s t r i c t i v e measures, sim i l a r to the Natal Act, alone w i l l s u f f i c e , and, he urged, "the opposition of the Imperial ( a u t h o r i t i e s must not be allowed to stand i n the way of the linterests of t h i s , an i n t e g r a l and most l o y a l part of the lEmpire, and i f s u f f i c i e n t remedies have been permitted to be exercised i n other colonies, they cannot consistently be refused to Canada, our case being a l l the stronger from the f a c t that by our direc t geographical r e l a t i o n as a high-way of t r a f f i c to the Orient we are p a r t i c u l a r l y exposed to the e v i l s of such immigration." Mr. Dunsmuir appended to his l e t t e r a l i s t of resolutions and references to the question taken from the Journals and Sessional Papers of the Province. One hundred and s i x i n a l l are recorded down to 1 8 9 9 . To this t o t a l the session of 1900 added a further sixteen references. (2) More p a r t i c u l a r l y j y i t h j r e g a r d to finances under the (1) Dunsmuir to Laurier, Oct. 9, 1900; B.C. Sessional Papers, - - - 1901, p. 547. For the f u l l text of the letter- and for quotations hereafter given from i t see pp. 546-50. (2) See "B.C. Sessional Papers", 1901, p. 351. 71 Chinese Immigration Act, Mr. Dunsmuir re i t e r a t e d the Pro-vince's demand that a l l moneys remaining a f t e r the expenses-of administering the Act are met should he returned to his government, inasmuch as B.C. "has to s u f f e r the whole of the e v i l s a r i s i n g from such immigration". The second point which the Premier proposed to discuss was the f i s h e r i e s and the apportionment of the revenues a r i s i n g therefrom. "We f e e l " , he writes i n t h i s connection, "that the necessity f o r the development of the f i s h e r i e s within P r o v i n c i a l l i m i t s demand that the revenues a r i s i n g Jout of l i c e n c e s should be shared by, i f not wholly trans-f e r r e d to, the Province. For instance, i n 1898-1899 the cost of the f i s h e r i e s was $8,^00, while the revenue from the licences was #46,000." But undoubtedly the chief concern of Mr. Dunsmuir was railway_ development and the f i s c a l r e l ations of the two governments, and these matters the Premier did not attempt to d i s t i n g u i s h . On t h i s point his l e t t e r demands d i r e c t quotation. He writes: "Perhaps, however, the most important feature of . p o l i c y a f f e c t i n g the re l a t i o n s of the two governments i s that of railway development. Ho other Province of the Dominion demands the same consideration i n t h i s respect. For one reason, the requirements of the other Provinces have, i n the past, been recognized to a much larger degree, ^ a n d for another, the physical features of B r i t i s h "l Columbia present obstacles not elsewhere encoun-t e r e d , and f o r s t i l l another and more important /reason, the per capita contribution, of B r i t i s h "Columbia to the Dominion Treasury, compared with 72. /the money we receive i n return, demands, i n f a i r -n e s s , that we should receive more l i b e r a l t r e a t -ment. It has been pointed out to your Government, and demonstrated over and over again by s t a t i s t i c s , taken from the Dominion Public Accounts, that the per capita contribution i s several times that of the average f o r the whole Dominion. Added to that, j we pay f r e i g h t , on a l l goods consumed, a sum many ^times greater than that of the consumer east of the < Great Lakes, which adds proportionately to the / burden of our contributions. Such facts as these, which have led i n l a t e r years to a d i s s a t i s -f a c t i o n yearly more and more f i n d i n g expression, and one that w i l l eventually develop into an em-phatic demand for better terms, suggest s p e c i a l reasons for your consideration of some systematic and comprehensive e f f o r t by the Dominion Government towards railway b u i l d i n g and other forms of develop-ment i n B r i t i s h Columbia." The statement i s direct and b r i e f , yet i t covers i n the main the basis of B r i t i s h Columbia's l a t e r claim f o r a r e v i s i o n of the Union Act, a demand which was to be advanced with emphasis during the years to follow; and i t i s equally important that, while foreseeing such a movement and even warning the federal government of i t s p o s s i b i l i t y , Mr* Dunsmuir d e f i n i t e l y divorced his proposed negotiations from any such Better Terms demand. On October 17, S i r W i l f r i d Laurier answered t h i s com-munication, suggesting a conference be arranged as soon as * possible, i n view of i t s importance and his own proposed t r i p i n November or D e c e m b e r . T h i s , however, did not f i t i n with Mr. Dunsmuir 1s plans and i t waa f i n a l l y agreed ( l ) Laurier to Dunsmuir, Oct. 17, 1900; B.C. Sessional - Papers, 1901, p. 556. 73. that the B r i t i s h Columbia delegates should meet the Prime Minister early i n January, 1901. (1) The delegation, consisting of Mr, B. M. Eberts and -'Mr. Dunsmuir, l e f t V i c t o r i a on January 5, a r r i v i n g i n the c a p i t a l on Saturday, the 11th. On that day they met S i r W i l f r i d Laurier and arranged for a conference on the following Tuesday. -Hews of the death of Queen V i c t o r i a , whioh was received shortly a f t e r t h e i r a r r i v a l , and the closeness of the approaching session, which n a t u r a l l y made large demands on the Minister's time, caused negotiations to extend over a longer period than was at f i r s t a n t i c i -pated. Subsequent to the preliminary interviews with the Prime Minister, conferences were held with Hon. David M i l l s , " Minister of Justice, S i r Louis Davies, Minister of F i s h e r i e s , Hon. A. G-. B l a i r , Minister of Hallways, and Hon. C l i f f o r d S i f t o n , Minister of I n t e r i o r . On January 31 a f i n a l i n t e r -view was had with S i r W i l f r i d Laurier and the members of his cabinet. On February 2 the delegation l e f t Ottawa. The subjects discussed were as follows: ^ « ( l ) Chinese and Japanese immigration. (2) The right of the Province to a greater share of . the revenues a r i s i n g out of the Chinese Immigra-t i o n Act. -^X3) The f i s h e r i e s . (1) Gosnell to Laurier, Dec." 7, 1900; B.C. Sessional Papers, 1901, p.-557. 74. ^-(4) The encouragement of ship-building on the B r i t i s h Columbia coast. /(j?) Readjustment of the lumber t a r i f f , i n the i n t e r e s t s of the l o c a l industry. ^ 6 ) F i n a n c i a l r e l a t i o n s of the Province of B r i t i s h - Columbia and the Dominion of Canada. :(7) Co-operation of the Dominion with the Province i n . the matter of railway development i n B r i t i s h Columbia. ~"(8) The settlement of the Songhees Indian Reserve. : >-(9) Readjustment of boundaries of Indian Reserves i n .. B r i t i s h Columbia. „('10) The r i g h t of the Province to administer the - minerals under Indian Reserves. Jc^L) The r i g h t of the Province to the foreshores, and - the minerals under the same. ,('12) The s a l a r i e s of Judges. •^ (13) The claims of Robert Angus for compensation f o r .. timber seized within the Dominion Railway B e l t . fv('14) Amendment of the N a t u r a l i z a t i o n Act,to prevent , fraudulent n a t u r a l i z a t i o n of A l i e n s . vC"X$) Claims f o r compensation i n connection v/ith smalls - pox quarantine along the International Boundary wide range of subjects considered at the conferences w i l l r e a d i l y be seen. Obviously a l l of the points discussed are not concerned with the development of the Better Terms Movement i n B r i t i s h Columbia. Many of them have no connec-t i o n whatever. But those discussions r e f e r r i n g to B r i t i s h From a cursory examination of the above l i s t , the ( l ) See "Report of the Delegation to Ottawa"; B.C. Sessional Papers, 1901, p.-545. 75 Columbia's share i n the Chinese tax and f i s h e r i e s revenue, together with those which centred about the f i n a n c i a l r e l a -tions of Province and Dominion, which were at t h i s time inserted i n the hope of securing additional a i d for railway development only i t i s true, do most c e r t a i n l y belong to that movement. Subsequent to the preliminary conversations, the 'delegates submitted memoranda on the various claims discussed. Of these, the document covering the f i n a n c i a l r e l a t i o n s of the two governments i s by a l l means the most important, This Mr. Dunsmuir submitted on January 28, In his o r i g i n a l l e t t e r , i t w i l l be remembered, the Premier made i t clear that he did /not seek any serious change i n the status quo of Federal-\ P r o v i n c i a l finances, but he made i t equally p l a i n that he jforesaw the inevitableness of such a demand—"an emphatic I demand for better terms", he c a l l e d i t—^unless a s a t i s f a c t o r y /settlement of some of the more grievous i n e q u a l i t i e s was not )soon achieved. In his l e t t e r on January 28, enclosing his memorandum, he again returns to that s t r a i n , reminding S i r W i l f r i d that the sense of i n j u s t i c e being done the Province "would ultimately result i n a P r o v i n c i a l a g i t a t i o n for better terms". In considering the subject, he argued that | the peculiar physical conditions i n the Province deserved ! s p e c i a l cognizance. These he enumerated as follows: A "(a) Its remoteness from the populated centres of Eastern Canada and the seat of Government. 76. ' "(b) Its vast extent, wide d i s t r i b u t i o n and d i v e r s i t y of resources, and i t s sparseness of population. <* tt(c) I t s rugged exterior and the physical obstacles .- - to communication and development." Mr, Dunsmuir's statement of the Province's p o s i t i o n , i t s claims upon the Dominion, and his own plans for develop-ment i s too detailed to be included i n i t s e n t i r e l y , the most s i g n i f i c a n t sections of that important document are, however, given -in the following quotation, which shows only too c l e a r l y how close Mr. Dunsmuir himself was at that time to embracing a f u l l y developed better terms demand: " A l l these things on the one hand have rendered the cost of l i v i n g greater, and the problem of development much more d i f f i c u l t , than i n the eastern Provinces; while, on the other hand, the wealth of natural resources and the p o t e n t i a l character of the population attracted to the country have had marked resu l t s f o r national as well as p r o v i n c i a l character.. "We claim that on account of the very large per capita contributions of the Province to the Dominion, as compared with the rest of Canada, i t i s e n t i t l e d to greatly increased recognition i n the way of ex-penditure on works of public development; but even i f the r a t i o of our contributions were not as three to one, as i t i s at the present time, the material r e -1 suits to the Dominion a r i s i n g out of the greater development of B r i t i s h Columbia would, as a business arrangement, more than'compensate f o r the outlay ]involved by reason of any comprehensive scheme that /might be mutually undertaken by the two Governments. "The problem, therefore, i s t h i s : -" F i r s t , the Province i s e n t i t l e d to increased aub-" s i d i e s or f i n a n c i a l assistance i n some form* "Second, the d i r e c t r e s u l t s to the Dominion w i l l " j u s t i f y increased expenditure without i n any way increasing the f i n a n c i a l burdens of the Dominion aa a whole 7 7 . nIf the Province of B r i t i s h Columbia had returned t o - i t each year a. f a i r proportion of the net revenue contributed, i t could i t s e l f undertake the problem of railway development, but I have hesitated for the present to concur i n a suggestion that has been made to o f f e r to the Dominion a commutation of a l l e x i s t -ing claims f o r an annual allowance of one m i l l i o n d o l l a r s a year f o r f i f t y years, to be applied to in t e r n a l development. My he s i t a t i o n i s due not to the extravagance of the proposal, because I regard i t as a wholly reasonable one, under the circum-stances, but to the apprehension that i t would so seriously disturb present Federal r e l a t i o n s as to be regarded as impracticable• Upon mature considera-t i o n the Delegation have decided to appeal upon the merits of.our cause to the Dominion f o r such a measure of increased expenditure, on the l i n e s suggested, as would f a i r l y compensate the Province i n the fu t u r e . " ( l ) Mr. Dunsmuir*s plan was for the development of a 1 • /system of l o c a l l i n e s of railway, to be accomplished by ^the combined action of the two governments. She Dominion, he suggested, should pay at the r a t i o of two-thirds to the Province's one-third of the cost. That i s to say, i f the t o t a l assistance decided upon were 112,000 per mile, the Federal Government should pay $8,000 of that amount, and the Province furnish the remaining §4,000. So support his statement that the Province was being u n f a i r l y treated, the Premier appended a detailed analysis of Federal Revenues and Expenditures i n B r i t i s h Columbia since 1872. Shese he showed to t o t a l § 4 2 , 4 7 5 , 3 4 9 and (1) Dunsmuir to Laurier; Jan. 28, 1901; "B.C. Sessional Papers, 1901, p. 559. For Memorandum see p. 5&3» 78. §28,968,091 r e s p e c t i v e l y . ^ The Delegation's claim f o r a greater share of the tax I c o l l e c t e d under the Chinese i n s t r u c t i o n Act was that the i Province bore the e v i l e f f e c t s of Chinese immigration, f o r * jwhile Chinese formed only one f i v e hundred and twenty-sixth Iof the population of Canada, i n 18-91, they formed one^ eleventh of B r i t i s h Columbia's population that year. (2) The f i s h e r i e s dispute was discussed at length i n a l e t t e r from Premier Dunsmuir to Louis H. Davies, dated January 23. Here again, the Premier q u a l i f i e d a l l his pro-p o s a l s with the observation that i n the past the administra-t i o n of f i s h e r i e s had not given complete s a t i s f a c t i o n to (1) See B.C. Sessional Papers, 1901, pp. 567-568; 568A; 568B. The following paragraph of the Dunsmuir l e t t e r quoted above, i s perhaps of i n t e r e s t : "In respect to the Customs, comparisons have frequently been made between the revenue contributed by B r i t i s h Columbia and the revenues contributed by other Proyinces, but, talcing the other provinces i n d i v i d u a l l y , i t i a impossible to arrive at any just or accurate state-ment of t h e i r contribution to the Dominion, f o r the reason that the goods entered at the various ports where the Customs c o l l e c t i o n s are made are d i s t r i -buted throughout the other Provinces by the wholer sale trade, but i n the case of the Province of B r i t i s h Columbia nothing imported through the Cus-toms i s exported to Provinces i n the East and there-fore everything imported i s consumed by, and the tax i s paid by the people of the Province." (See p. 563 of Sessional Papers, 1901.) (2) See i b i d , p. 568. the Provinoe. He showed that the fi s h e r y revenue c o n t r i -buted by B r i t i s h Columbia since 1872 had been about §300,000, while the expenditure within the Province, up to June 30, 1900, had been only about § 1 7 5 » 0 0 0 » Furthermore, he declared, expenditure i n the eastern provinces i n the past had each year many times exceeded the revenue. Since I872, the t o t a l f i s h e r y revenue of the whole Dominion had only amounted to §1 ,280 ,000 , while the t o t a l expenditure had been about #7,500,000, yet his Province i n d i v i d u a l l y had received le s s than i t had contributed.^ 1^ At the moment, the exact l i m i t of the respective rights of Pro-vince and Dominion was very much i n doubt. (2) However, Mr. Dunsmuir had the following observations to make on that subject, and further he had a suggestion which he believed might avoid any d i f f i c u l t y with respect to B r i t i s h Columbia. (1) For the f i s c a l year 1898-1899, the t o t a l f i s h e r i e s - , revenue f o r a l l of Canada was §76,447.75, of which B.C. alone contributed §45 ,801 .75 , or about three-f i f t h s . Expenditures on account of the f i s h i n g industry i n Canada for the same year t o t a l l e d §408,754.95, of which B.C.'s share was §12 ,195 .61 . (See "B.C. Sessional Papers", 1901, p. 570.) (2) Under the decision of the J u d i c i a l Committee of the Pri v y Council i n the "Fisheries Case" the respec-t i v e r i g h t s of the Province and Dominion were s t i l l very much i n doubt. (See I898 "Appeal Cases".) 80. "The right of the Province to fi s h e r y revenue a r i s i n g out of lice n s e s , so f a r as inland waters and r i v e r s are concerned, i s admitted, and I s h a l l not discuss that phase of the subject. The ri g h t ^ of the Province %o within t e r r i t o r i a l waters, or the three mile l i m i t , i s s t i l l an open question, with, I am advised, a strong p r o b a b i l i t y i n our favour i n case of a reference to the Courts. "It has been suggested, however, that on grounds of public p o l i c y an arrangement should be entered into whereby the Dominion would continue the ad-ministration and control of a l l the f i s h e r i e s of the Province, and the Delegation, are, subject to the w i l l of the Legislature, agreeable to negotiate terms of settlement on that b a s i s . .... "In view of present conditions and the p o s s i b i l i -t i e s of the future, based on the growth of industry i n the past, i t i s f a i r to assume that the revenue w i l l utlimately reach #100,000 per annum. ^ "We are agreeable, therefore, to recommend to the /Government of B r i t i s h Columbia that, i n l i e u of an I annual payment of $50,000 by the Dominion to the \Province, the control of the f i s h e r i e s be allowed I t o : r e s t e x c l u s i v e l y i n the Dominion."(l) When on February 1st, the House assembled at James Bay, the Speech from the Throne gave no hint of the measure of success attending the e f f o r t s of the Ottawa Delegation. As a matter of f a c t , there was l i t t l e the Delegates could report at that time, Mr. Dunsmuir, fo r his part, being aa much i n doubt as anyone e l s e . On March 6, 1901, he ( l ) Dunsmuir to Daviea, Jan. 23, 1901; B.C. Sessional . Papers, 1901, pp. 568-570. Mr. Dunsmuir also pro-posed a payment of §100,000 a year to aid ship-bu i l d i n g on the coast. This was i n l i e u of past damage done by the unfair" d i v i s i o n of f i s h e r i e s revenues. Also see Dunsmuir to Burdis. A p r i l 16, 1901; Premier's Letter Book (1900-1903)—a manus-c r i p t on f i l e in-the Premier's O f f i c e , V i c t o r i a . 8 1 . telegraphed to S i r W i l f r i d L a u r i e r aa follows: "Would be pleased to have your immediate and kind consideration of our communicationa. House i n Session and muoh depends on nature of your reply, p a r t i c u l a r l y with reference to railway development, f i s h e r i e s and questions Or i e n t a l immigration and B r i t i s h Columbia's share c a p i t a t i o n tax.Hi)• The answer brought l i t t l e assurance, the Prime Minis-te r simply stating that he would give an answer "as early as (2) possible". And as the Session progressed, so did the demands become more i n s i s t e n t that the cabinet acquaint the House with events at Ottawa. On March 12th, Mr. Dunsmuir again telegraphed S i r W i l f r i d , t h i s time seeking permission to bring down the papers connected with the Delegation. On (3) the same day, the Prime Minister wired h i s willingness and on March 25, 1901, the returns were published. However, the returns when published contained no i n t i -mation of the success or f a i l u r e of the delegates' e f f o r t s . Apparently w i l l i n g to wait no longer upon the Dominion to reply to requests for assistance to gauge i t s own p o l i c i e s , the l o c a l Government took the i n i t i a t i v e and introduced a (1) Dunsmuir to Laurier, March 6, 1901; B.C. Sessional . Papers, 1901, p. 586. (2) Laurier to Dunsmuir, March 6, 1901; B.C. Sessional . . Papers, 1901, p. 587. (3) Laurier to Dunsmuir, March 12, 1902; B.C. Sessional - Papers, 1901, p. 387• ( 4 ) See Colonist, March 26, 1901, pp. 9-12. 82. Loan B i l l f o r §5 ,000,000 on A p r i l 23rd f o r the purpose of aiding railway construction. That same day Mr. Dunsmuir telegraphed Ottawa with reference to the f i s h e r i e s c o n v e r s a t i o n s . T h i s was prompted < hy the actions of the l o c a l canners. On A p r i l l O t h a Memorial had been presented to the p r o v i n c i a l cabinet signed by Messrs. Alex. Iwen, E. J. Kerr, G. I. Wilson, ST. F a r r e l l , and D. B e l l Irving f o r s i x t y of the Province's seventy-four canners r e -questing the Government to "assume control of f i s h e r i e s and administer them". On A p r i l 23rd a sim i l a r Memorial was pre-sented, signed by W. D. Burdis on behalf of the B. C. Canners' Committee. Mr. Dunsmuir's telegram to Ottawa, stressed the need of action as the Session was nearing com-p l e t i o n , and warned the Dominion authorities " a l l of the canners, without exception have approached the government asking them to negotiate with you towards taking over the (1) See Colonist, A p r i l 24, 1901, p. 1. The Loan Act dls-' . - carded the idea of out-and-out bonuses, and put p r o v i n c i a l a i d i n the form of a loan repayable at the d i s c r e t i o n of the company receiving i t , but bearing 3 per cent i n t e r e s t f o r 5 years and 3 per cent thereafter. It also secured the government control of rates and supervision of contracts. (2) Dunsmuir to Laurier, A p r i l 23, 1901- see Colonist, . - - A p r i l 23, 1901, p. 7. Canadian (3) See/Hansard, 1?01; V o l . I I , p. 4091. 83. f i s h e r i e s of the province". The Prime Minister wired the following reply the same day: "Council has not heen able to consider f i s h e r y question yet. Your proposal to surrender p r o v i n c i a l r i g h t s f o r l i m i t e d number of years for f i x e d sum has not been recommended by Minister of F i s h e r i e s , who thinks that further decision of privy council on respective r i g h t s of Dominion and province on sea coast should be f i r s t • o b t a i n e d . Test case now being arranged with Quebec to decide these r i g h t s . This „ government could not entertain your alternative pro-posal to surrender Dominion f i s h e r y r i g h t s to the province."(l) / With t h i s reply the Government decided to take d e f i -introduced. This Act was expressly stated to apply to " a l l f i s h i n g and rights of f i s h i n g and a l l matters r e l a t i n g there^-to, i n respect of v/hich the Legislature of B r i t i s h Columbia has authority to l e g i s l a t e " , and provided f o r the appointment of a Board of Fishery Commissioners to make regulations f o r "better management, conservation and regulation" of f i s h e r i e s . Hon, D. M. Eberts, i n moving the second reading of the b i l l , said he had "no desire to antagonize the Dominion government, \ f i s h e r i e s and to enable the government to deal to the best advantage with t h i s most important industry". (1) Laurier to Dunsmuir, A p r i l 23, 1901; see Colonist, A p r i l , . 25, 1901, p. 7. (2) See Colonist, May 2, 1901; p. 6. A single Commissioner (Mr. J. P. Babcook) was substituted f o r the Board of Com-missioners provided by t h i s Aot. See'^olonisty June 15, 1902, p. 8, i n which the amendment is.discussed. (5) See i b i d , May 3, 1901, p. 6. On May 1st the "B. G. F i s h e r i e s Act, 1901" was (2) but only to secure the province a l l her r i g h t s i n the 84, Curiously enough, the day before t h i s act reached the Legislature for the f i r s t time, the Commons at Ottawa was debating B r i t i s h Columbia's claims. The Prime Minister had just moved that the House go into committee to consider the vote of supply required f o r B r i t i s h Columbia, when Hon. E. G. P r i o r rose i n his place and onoe again, as on so many pre-vious occasions, outlined his Province's grievances at length. His arguments were not new; but they were now backed by a delegation headed by the P r o v i n c i a l Premier which had journeyed from V i c t o r i a to Ottawa to place arguments of a s i m i l a r nature before the national cabinet. _Jfet the debate which followed shows c l e a r l y how l i t t l e B r i t i s h Columbia's casejKas_j^dej;st^od, even by the Prime Minister, or i f undejr^ojod^ As an eloquent word-picture, which gives indisputable evidence of what was r e -ferred to i n the opening chapter as the "eastern Canadian complex", the incident i s here rather f u l l y quoted. Mr. P r i o r had just explained B r i t i s h Columbia's ex-cessive contribution to the f e d e r a l treasury and remarked that the reverse was true of other provinces, when the following proceedings, taken d i r e c t l y from Hansard occurred: Mr. P r i o r : " I f that i s not the case, how i s i t that the public.debt has increased from §122,400,000 i n 1872, to §346,206,000 i n 1900, or an increase of §223,806,000. Hot one cent of that has gone to B r i t i s h Columbia, because we f i n d that she i s credited "with 113,000,000 odd. She has not only paid that $13,000,000 but she i s responsible for a share of the increase of the public debt." "An Hon. Member: 'What about the Canadian P a c i f i c Railway?' ";Hon. Mr, P r i o r : 'The Canadian P a c i f i c Railway i s not. taken into account, for the simple reason that It i s not a B r i t i s h Columbia railway. I t is just as much for the benefit of Prince Edward Island aa f o r the province of B r i t i s h Columbia, It i s a national highway.* "Mr, Clancy; 'Its construction was one of the conditions upon which B r i t i s h Columbia came into Confederation.' "The Minister of Finance: 'Would my hon. f r i e n d (Mr. P r i o r ) reverse the rule i n reference to the Prince Edward Island Railway, and say i t i s for the benefit.of B r i t i s h Columbia.' "Hon. Mr. P r i o r : 'I do not think i t i s . I do not think the railway b u i l t from V i c t o r i a to Hanaimo i s for the benefit of the rest of the Dominion.. But the 1750,000 given as a bonus to that railway by the Dominion government as part of the terms of Confederation, i s included i n the sum which I say has been spent i n B r i t i s h Columbia.' "Er. Gourley: 'The Canadian P a c i f i c Railway i s in-the same s i t u a t i o n . ' " ( l ) The Prime Minister's reply was lengthy, but remarkable f o r i t s lack of substantial answer to B r i t i s h Columbia's c l a i m — l a i d before him now not only by the Province's federal members, but by the p r o v i n c i a l cabinet as w e l l . ^Hansard" quotes S i r W i l f r i d as follows: (1) Canadian Hansard, 1901; V o l . I I , pp. 4085-4086. / "I think the House w i l l he of opinion a f t e r / l i s t e n i n g to the general tenor of the hon. \gentleman's remarks, that the grievances referred to are not very serious at a l l . ••• "The main complaint which my hon. f r i e n d (Hon. Mr. P r i o r ) makes i n one which i s very much to the credit of his own province. It i s that the people of B r i t i s h Columbia contribute l a r g e l y to the revenue of the country. That we are a l l aware of and that we are a l l proud of, and i f there i s one portion of our population which ought to be proud of i t more than another i t i s the people of B r i t i s h Columbia themselves. It must be admitted that man f o r man the people of B r i t i s h Columbia contribute more to our revenue than the people of any other portion of Canada, and i t i s very much to t h e i r ^ c r e d i t . It shows that they are an enterprising people and a wealthy people, and that they are not the long s u f f e r i n g people v/hich the hon. gentleman from V i c t o r i a would make them to be."(l) A. curious answer t h i s to Mr. Dunsmuir's claims and ./his predecessors' yearly f a i l u r e s to produce anything but a defecit i n the Treasury Department at V i c t o r i a * It can hardly be taken \as the Prime Minister's serious and con-sidered reply to B r i t i s h Columbia's problem. Rather, i t leaves him open to the c r i t i c i s m . o f not having, even then, considered that problem with the seriousness i t deserved. With regard to the Oriental immigration problem he made i t clear that whatever the report of the commissioners inve s t i g a t i n g the question found^ 2^a difference would be (1) Canadian Hansard, 1901; V o l . I I , pp. 4104-4105. (2) A- commission was at that time investigating the Oriental problem i n B r i t i s h Columbia, and i t s e f f e c t upon the people of the province. . -87. made by the Dominion Government between Japanese and Chinese immigration. He made i t equally clear that he Was not at a l l sure himself that r e s t r i c t i o n was even desirable, After a l l , ^"he remarked, and not i n j e s t , the steamship companies carrying Orientals must be c o n s i d e r e d I n one respect he did promise d e f i n i t e reform. In speaking of the one-quarter at present r I a l l o t t e d to B r i t i s h Columbia out of the Receipts sof the Chinr-\ ese Immigration Sax, he said the Government r e a l i z e d that \ h e proportion was "not perhaps absolutely f a i r , and they propose before the 1st of July to revise and increase i t . " ^ 2 ) / Gf the Province's request for assistance i n railway development, he had the following well guarded reply: •'Speaking i n d i v i d u a l l y , from the general observa-t i o n , and not expressing any p o l i c y on behalf of the government, i t seems to me only f a i r that the great and growing c i t i e s of the coast should have d i r e c t communication with the mining centres of B r i t i s h Columbia, .... And the Government at.the proper time .... w i l l consider that question."(3/ Small wonder i t i s that with the end of the B r i t i s h ^dolumbia Session, even auch a government supporter as the A Colonist, should thus have lamented the apparent f a i l u r e of (1) See Canadian Hansard, 1901; Vol . I I , p. 4106. (2) Ibid., 1901; Vol, I I , p. 4107. On the occasion of the - . P r i o r Mission i n 190J, the delegates were s t i l l asking for an increase, which had not been given up , to that time, two years a f t e r t h i s assurance was given. (See p. =jJ.Q.-v* , for an account of the immigration conversations of 1903.) (3) Canadian Hansard, 1901; Vol . I I , pp. 4107-4108. 88. ^ t h e negotiations which had taken the Premier and Hon. 2. M. L E b e r t s to Ottawa: "Doubtless they w i l l he taken up i n time, but the f a c t that none of them has been disposed of has un-questionably produced a f e e l i n g of disappointment with the res u l t of the session, so f a r as the r e l a -tions of the province and the Dominion are con-cerned, " ( l ) ^ In t h i s case, f a i l u r e produced re s u l t s possibly more f a r reaching than success would have done. In the nine monthsjwhij}h_el^^ met the House, a change, momentous^jin i t s proportions, occurred, /When the Premier opened negotiations i n October 1900, i t w i l l be remembered that he had d e f i n i t e l y disclaimed any idea of securing "better terms" for his Province. He sought ai d for railway construction; he asked for greater protection from the immigration of Orientals and increased compensation • f o r the havoc wrought by t h e i r presence; he attempted to secure a sympathetic hearing for the several other outstanding /' grievances of his Province; but he did not seek a r e v i s i o n of the terms upon which B r i t i s h Columbia entered Confederation. He was simply f u l f i l l i n g the p o l i c y which the Turner Govern-ment had l a i d down i n 1898, as he himself s a i d . With the f a i l u r e of his appeal to bring any tangible r e s u l t s , Mr. Dunsmuir completely changed f r o n t . In the nine months be-, tween the two sessions he adopted a p o l i c y c a l l i n g for a (1) Colonist, May 12, 1901, p. 4 8?. d e f i n i t e r e v i s i o n of the Union Terms. In part, the faots upon whioh he based, the Province's claim for such a reform were i d e n t i c a l with those he formerly urged as reasons f o r the Federal Government aiding his railway development pro-gramme; and they had heen discussed i n one way and another i n the Legislature many times since Confederation. But / t h e y were now for the f i r s t time adopted hy the Government Vas a basis of an attack on the Union Terms themselves. There i s a vast difference between seeking addi t i o n a l a i d and demandijag„rjev±sl^ agreement. ^ S o m e -where between the prorogation of the House i n May 1901 and the end of the year that change took place, and o f f i c i a l l y the BBejtter_Terms Movement1* received i t s p o l i t i c a l b i r t h i n B r i t i s h Columbia. Ho longer was i t hinted at by editors; no longer did l e g i s l a t o r s vaguely approach the subject under the guise of securing railway grants; "Better Terms fo r B r i t i s h Columbia" was now a p o l i t i c a l issue, f o r i t had become the G o v e r n m e n t j j ^ f f ^ The exact date of Mr. Dunsmuir's conversion to such a plan cannot be f i x e d with accuracy; but i t was on January 7, 1902, that he dispatched his l e t t e r to S i r W i l f r i d Laurier requesting a convention, to include the other pro-vinces i f necessary, to discuss a general r e v i s i o n of the Union Terms. This l e t t e r , unpublished i n any of the documents connected with the Better Terms Delegations, marks a d e f i n i t e milestone i n B r i t i s h Columbia's history, f o r i t 0 i s the f i r s t o f f i c i a l demand f o r a r e v i s i o n of the Union Act openly admits to S i r W i l f r i d "a f e e l i n g of disappointment i n not having had a d e f i n i t e r eply as to whether those represen-tations, i n whole or i n part, had received, or would s t i l l receive the consideration 1* <5f the Ottawa a u t h o r i t i e s . The p o l i c y of the p r o v i n c i a l government submitted at the Session of 1901 was, Mr. Dunsmuir explained, based on "reasonable hopes" of assistance from the Dominion. When there was no announcement of fe d e r a l p o l i c y forthcoming from the Minister of Railways, the l o c a l government v/as obliged to provide for conditions upon which a i d would be given to a s s i s t r a i l -way l i n e s . This did not preclude further negotiations with Ottawa. The p r o v i n c i a l government was quite w i l l i n g to a l t e r those conditions i f necessary to suit the federal authori-t i e s . This i s the p o s i t i o n v/hich his government s t i l l ^•maintained, but the problem as he now saw i t went f a r deeper j than mere railway subsidies. Then abruptly he turns to the ( theory he had so c a r e f u l l y denied one year e a r l i e r , pro-coming from the P a c i f i c Province # ( l ) xn i t , the Premier (1) See Dunsmuir to Laurier, Jan. 7, 1902; "Premier's Le t t e r , , , Book", 1900-1903. -91. "While i n Ottawa l a s t winter I had not f u l l y thought out a l l the matters a f f e c t i n g the r e l a t i o n s of the Province and the Dominion; hut i t occurred to me and I mentioned i t i n conversation that the claims of the province should he commuted fo r a yearly sum i n addi-t i o n to the subsidies received. I did not perhaps state the exact grounds, apart from the excess of re-venue paid to the Dominion over and above the appro-p r i a t i o n s made i n return—which i s yearly very large and growing larger, upon whioh such a proposal should be based. You, however, have only to consider the peculiar circumstances and conditions of this Pro-vince as compared with other provinces, to f u l l y appreciate our p o s i t i o n . .... ^~ "The Government of B r i t i s h Columbia i s working under ^conditions absolutely unique i n Canada, and must f o r I a l l time to come remain at a disadvantage as compared \with the Governments of other Provinces— I mean in,-,-[respect to equilibrium of revenue and expenditure. .>vi. "While a l l t h i s i s true, the sources of revenue pro-vided for under the c o n s t i t u t i o n are p r e c i s e l y the same as i n the East / "The p o t e n t i a l sources of revenue belong to the /Dominion. We have proved to you that we pay three \ times the average contribution of Canada to the s- Dominion, and get l e s s than half back ( l ) Mr. Dunsmuir mentioned as reasons f o r t h i s — • ^ ( a ) The population of B.C. can never be as large i n proportion to i t s area as other provinces. (b) Added cost of administration due to i s o l a t i o n of communities. y{<$) B.C. entered Confederation with roads, bridges, railways, etc., p r a c t i c a l l y unbuilt. In the older provinces these were "to a large extent completed*, and hence t h e i r public debts being assumed by the. Dominion, they started with "a clear sheet and greatly reduced r e s p o n s i b i l i t i e s . " , (d) The physical conditions: "Every road or railway costs three or four times per mile what i t does i n other parts of Canada". 92. •'What we now ask the Dominion Government to do is.without further delay, to take these matters se r i o u s l y into consideration and arrange for a f convention between the Province and the Dominion fo r the purpose of reviewing the whole facts of the case, and a r r i v i n g at better terms. Our object i s to reach a solution as the result of f a i r , open and impartial investigation, and by no argument other than i s just and equitable to appeal f o r decision." Mr. Dunsmuir*s l e t t e r i n reply to S i r W i l f r i d ' s acknowledgment of January 22nd leaves no doubt of the com-prehensiveness of his scheme. "Any settlement that may be arr i v e d at ought, i n our opinion, to be comprehensive and * complete and not i n any sense, piecemeal", he writes, adding, "The proposal involved i n my l e t t e r of the 17th ultimo ( i t was the 7th) was for a convention and not merely a conference, where our claims could be presented pro forma and j u d i c i a l l y considered and decided upon—a convention i n which, i f necessary, other provinces would be o f f i c i a l l y represented."^^ On February 12th Mr. Dunsmuir withdrew his o f f e r to f transfer the f i s h i n g rights of the Province to the Dominion for a payment of f i f t y thousand d o l l a r s per annum, ex-pl a i n i n g that as no further negotiations had taken place with reference to his proposal i t was his intention to renew the discussions during the proposedbetter terms conversations, which at that time were t e n t a t i v e l y scheduled to take place (1) See Dunsmuir to Laurier, Feb. 10, 1902; "Premier's Let t e r Book",-1900-1903. 95 a f t e r the present session of the Dominion House In the course of a defence of his p o l i c i e s , the / (Premier on January 12, 1902, addressed an open l e t t e r to jthe electorate of B r i t i s h Columbia, i n which his conversion \ta the Better Terms doctrine i s announced to the public i n /these terms: "With a population the smallest of a l l the pro-vinces, B r i t i s h Columbia is... the province that has done the. most for Canada. It has i n 30 years paid to the Dominion $15,000,000 more than i t has got back. During the same period the debt of the whole [ of the Dominion has been increased by over $125,000,000. \ What do.these f a c t s prove i f not the correctness of our contention? Impressed with the great weight of v circumstances against us under such an arrangement as at present e x i s t s , we have renewed the correspondence with the Dominion on the subject, pointing out c l e a r l y that owing to the pecu l i a r physical conditions of the province—-the greatly increased cost of administration as compared with other provinces (three times greater) 1 —under the Terms of Union i t i s d i f f i c u l t i f not \ impossible to maintain an equilibrium between revenue and expenditure. We have asked f o r a convention Ibetween the two governments to review the whole facts ,iof the case and by a f a i r , open and impartial invest Vtigation a r r i v e at a readjustment ."(2) When the Speech from the Throne v/as read on February 20th i t merely announced that negotiations with Ottawa had been continued and that an agreement.had been reached f o r the further discussion of "matters a f f e c t i n g the r e l a t i o n s (l)See Dunsmuir to l a u r i e r , Feb. 12, 1902; "Premier's . . Letter Book", 1900-1903. (2)Colonist, Jan. 12, 1902, p. 1. 94. of the province of B r i t i s h Columbia and the Dominion of Canada under the Terms of U n i o n " . M o r e s i g n i f i c a n t was the opening speech of Mr. Prentice, who had become Minister of Finance during the i n t e r v a l . He reviewed the f a m i l i a r grounds upon whioh the Province baaed i t s complaints, and then he went further to discuss the whole history of the Better Terms movement i n other Provinces. He outlined the ag i t a t i o n i n Hova Scotia and the r e v i s i o n granted that province i n 1869, quoting voluminously from the l e t t e r s of Howe and Macdonald. He c i t e d the co n s t i t u t i o n a l objections -of Edward Blake to any change i n the o r i g i n a l terms, t h e i r reference to the Law Offices of the Crown and the decision upholding the v a l i d i t y of the revisions by virtue of Section 31 of the B.H.A. JLct. Then he proceeded to review the several a d d i t i o n a l grants given to Hew Brunswick and Prince Edward Island as well as Hova Sc o t i a . These had established \ \ the right and willingness of the Dominion to eliminate i n - ] eq u a l i t i e s under Confederation. But why had B r i t i s h Columbia ^ been omitted from the benefits of such a policy? With a f l o u r i s h , he prophesied that the Dominion would be "forced to recognize the justice of B r i t i s h Columbia's claim f o r (1) Colonist, Feb. 21, 1902. I t i s noteworthy that three. „ days l a t e r a resolution asking f o r a r e v i s i o n of subsidies provided by Confederation was passed by the Quebec Legislature, and i t was th i s a c t i v i t y on the part-of the Quebec-government that preoipi - r tated the In t e r p r o v i n c i a l Conference of 1902. 95. better terms'*.^) Here was a rousing speech quite unpre-cedented i n the l o c a l House. Haver before had a speaker so thoroughly reviewed the history of the other provinces' claims for better terms, and the successes that had attended t h e i r e f f o r t s i n contrast to B r i t i s h Columbia's f a i l u r e to even obtain a " f a i r " share of federal expenditures. In a way, i t may be classed as the f i r s t better terms speech i n the l e g i s l a t u r e at James Bay. Even more convincing was his Budget Speech. Here he (?) announced that a conference had been arranged for the f a l l v ' to discuss B r i t i s h Columbia's claim f o r better terms. This demand for increased subsidies, he announced, was based on ^ ^ ^ J ^ J ^ o ^ i e ^ t i o n s : f I r s t i " the great d i s p a r i t y between the V revenues and expenditures of the Dominion i n B.C.; (second^ /\ that on account of the physical configuration of the ' country the cost of administration i s necessarily higher jthan other provinces;, t h i r d j "that on account of our remote-/ ness from the wholesale centres of the East, from which we receive a very large percentage of our supplies, the f r e i g h t rates impose an a d d i t i o n a l burden which i s not f e l t i n vEastern Canada." Again he ended with a challenge that a (1) Colonist., March 19, 1902, p. 6. (2) The Conference, however, did not take place then, due to . . . the detention of S i r W i l f r i d Laurier i n London f o r the Coronation ceremonies, and the l a t e r change of governments at V i c t o r i a . 96. l i k e demand had "induced the Dominion government to grant hetter terms to Hova S c o t i a " ^ ) and thereby could do no • less, for B r i t i s h Columbia* She session i t s e l f , the longest i n the Province's history up to that date, brought l i t t l e s a t i s f a c t i o n to a government pledged to railway development and a Province wearied of confusion. She Premier had offended certain of his supporters by his rapprochment with Joseph Martin i n September of 1901 as a re s u l t of which Mr. J. G. Brown had been i n v i t e d to j o i n the cabinet. Shis had necessitated the resignation of Hon. J. H. Surner, who was appointed < Agent-General i n London, and the s h i f t i n g of Hon. J. D, Prentice to the Finance Department. She result waa diaas-terous for the Dunsmuir government. She Premier's actions ^ / a l i e n a t e d the support of Richard McBride, who resigned from ^ the cabinet, and a large body of his followers. She former Minister of Mines threw the whole force of his s u r p r i s i n g p o l i t i c a l talents against the new cabinet minister i n the by-election which followed his appointment. She r e s u l t was Brown's defeat. Shus, meeting the House i n face of a cabinet member's defeat and another crossing the f l o o r of the House to become Leader of the Opposition, the Dunsmuir (1) See Colonist, A p r i l 29, 1902, p. 8. 97. Government's p o s i t i o n was precarious. On February 26, 1902, Gol. E. G . P r i o r , who had been unseated at V i c t o r i a as a ' f e d e r a l representative, was appointed Minister of Mines, and managed to carry the by-election by a small majority. But the Government was further embarrassed by the death of Speaker J. P. Booth which l e f t Forth V i c t o r i a vacant. Throughout the session the Administration was never secure ^ - l n i t s voting power, and continually subjected to b i t t e r ^ a b u s e by Mr. McBride and his followers. Prorogation alone f i n a l l y brought r e l i e f from four months of almost uninter-rupted harrassing. Wearied of the struggle, Mr, Dunsmuir f i n a l l y resigned on Hovember^l,,J.902. He was not a politically-minded man and his entrance into p r o v i n c i a l p o l i t i c s had not been of his own i n i t i a t i v e . When he was f i n a l l y induced to take the premiership, he had done so i n the hope that he might be permitted to bring the stable government which the country so sorely needed. He took o f f i c e with a f i r m determination to carry out the Turner Government's p o l i c y of expansion with federal a i d , which the two previous years of confusion had.halted. From the f i r s t his l o t was not an easy one, and the l a s t year must have convinced him that he had f a i l e d i n h i s task of bringing order and s t a b i l i t y out of chaos. Thus Mr. Dunsmuir did not long occupy the p o l i t i c a l ^ stage. Yet his leadership i s noteworthy i n a discussion of 1 98 | B r i t i s h Columbia's campaign for Better Terms. His t r i p to Ottawa and his f a i l u r e to secure the aid he desired turned his attention to a new and v a s t l y more important aspect'of the same problem, with the resu l t that he raised to p o l i t i -c a l prominence one of the few p o l i c i e s that have trans^ cended a l l p a r t i e s i n t h i s P a c i f i c Province—the claim for a comprehensive r e v i s i o n of the Treaty of Union. 99. CHAPTER 17. The P r i o r Regime. " F u l l y impressed, with the justness of our cause, i t i s not our inten t i o n to re l i n q u i s h i t s advocacy or depart from the course we consider i n equity to be our right and duty to pursue and I trust that no Government that may succeed the present w i l l do lesa."^"**) When Premier Dunsmuir wrote t h i s paragraph i n his h i s t o r i c l e t t e r of January 7, 1902, l i t t l e perhaps did he r e a l i z e that within a year and before the very conference which he himself arranged following t h i s communication could be held, he would be succeeded i n o f f i c e by another. In Hovember, 1902, as we have seen, he r e t i r e d from the premiership. I t must have afforded Mr. Dunsmuir some pleasure and /sa t i s f a c t i o n to know, when that event occurred, that i t was / C o l . E. £. P r i o r who was c a l l e d upon to form a Government. For C o l . P r i o r i n the past, as a federal representative, had abundantly expressed h i s convictions i n the matter of his Province's treatment and had schooled himself i n the d e t a i l s of i t s claims, andhe was therefore a man who could be expected to carry on with determination and vigor the work so ably begun by h i s predecessor. (1) Dunsmuir to Laurier, Jan. 7, 1902; Premier's L e t t e r . Book, 1900-1903. 100 Col . P r i o r sent h i s f i r s t message to S i r W i l f r i d Laurier, i n his new capacity, on November 28, 1902. It i s an earnest of his sincere sympathy with the cause espoused by his predecessor that Premier P r i o r was i n o f f i c e only one week when he took up- the matter of better terras. In his l e t t e r he explained the delay i n the proposed conference, due to Mr. Dunsmuir's detention at London f o r the Coronation Ceremonies and the l a t e r d i f f i c u l t i e s attendant upon the change of governments at V i c t o r i a , and expressed his desire f o r a meeting "at as early a date as can be arranged".^***) Meanwhile, on November 20, 1902, Hon. S. N'. Parent, / v yPremier of Quebec, dispatched a l e t t e r to the other provin-/ c i a l premiers, i n v i t i n g them to a meeting the purpose of which would be to adopt a j o i n t r e s o l u t i o n requesting i n -Increased subsidies from the Dominion. Mr. Parent had approached S i r W i l f r i d Laurier on the matter before the Prime Minister's departure for Europe, i n the preceding June, but at the l a t t e r ' s request the matter was l e f t i n abeyance u n t i l his return. The Quebec Premier i n h i a l e t t e r -took the ground that as a result of the increase i n popula-t i o n since Confederation the federal revenues had mounted stead i l y , whereas; the p r o v i n c i a l incomes had f a i l e d to develop i n commensurate proportion with the added cost of ( l ) P r i o r to Laurier, Nov. 28, 1902; Premier's Letter Book, 1900-1.903. ty"' .101. ( ^government whioh. the greater population brought. For t h i s state the one remedy was increased subsidies from the "D'oMnionJ,^) A resolution embodying t h i s b e l i e f , i t w i l l be remembered, was passed i n the Quebec l e g i s l a t u r e during the preceding session. (2) With th i s procedure, so f a r ,as i t went, B r i t i s h Columbia was h e a r t i l y i n sympathy; i t claimed, however, that aa a Province i t had a very special claim f o r increased consideration over and above what might possibly be granted to the other provinces. There i s no doubt C o l . Prior, would have attended the conference at Quebec had i t been possible and l a i d before i t his Province's case, but i t was an unfortunate incidence of conditions at V i c t o r i a that a (^) delegation was unable to go from that c a p i t a l . ' The message (1) Parent to P r o v i n c i a l Premiers, Nov. 20, 1902; B.C. Sessional Papers, 1903, p. K 29. (2) The Quebec resolution read: "That i n the opinion of t h i s House the revenues a l l o t t e d to the various pro-vinces by the B r i t i s h North America Act are i n s u f f i -cient to allow t h e i r npeting the requirements of the public service...." See Colonist, Feb. 23, 1902, p. 1. Also see Canadian Hansard, 1902, V o l . I, p. 441. ( 3 ) Mr. Parent's l e t t e r was sent to Premier Dunsmuir, who handed i t to h i s successor. C o l . P r i o r answered the Quebec Premier on Dec. 24, 1902, expressing his sympathy with the cause of better terms, b r i e f l y explaining his Province's p o s i t i o n and acquainting him with the f a c t that a conference between B.C. and the Dominion had been arranged f o r January. From t h i s . l e t t e r i t i s clear that Premier Prio r intended going to the i n t e r - p r o v i n c i a l conference. (See P r i o r to Parent, Dec. 21, 1902; Premier's Letter Book., 1900-I903.) . 102. n o t i f y i n g Premier P r i o r of the date of the meeting was only received on the afternoon of the day upon which i t would have heen necessary f o r him to have started i n order to reach Quebec i n time.^^ Faced with two by-elections and the added fa c t that several of his cabinet ministers were absent from the c a p i t a l at the time, attendance was out of the question. In any case, however, i t would have been almost impossible, f o r already arrangements for a B r i t i s h Columbia delegation to meet the Ottawa Government early i n (2) January were p r a c t i c a l l y completed. Two t r i p s east, or a very long stay there i n order to attend both meetings were a l i k e impossible. As a res u l t , Premier P r i o r necessarily expressed his concurrence from a great distance. When the conference met at Quebec on December 18, 1902, delegates were present from a l l the p r o v i n c i a l govern-ments, except B r i t i s h Columbia and Ontario. Premier G. W. Rosa of Ontario, however, transmitted to the meeting a memorandum c o n t a i n i n g h i s v i e w s on t h e q u e s t i o n s to he discussed. In his opening remarks, Mr. Parent pointed to | the increasing cost of government, exhibited by his. pro-vince's expenditure of $4,707,932.24 i n 1900-01, as against (1) See Pri o r to Parent, Dec. 12, 1902; Premier's l e t t e r Book, 1900-1903. (2) See P r i o r to Parent, Jan. 3, 1903; B.C. Sessional . - . Papers, 1903, P» K 39. 103. §1 ,183 ,238 .44 i n 1867^68, i n contrast to the Dominion's Revenues which had. developed, from §13,687,928 i n the year a f t e r Confederation to §31,029,994 in 1900. Shis was proof, he declared, "that i n demanding from the Federal authorities an increase in the subsidy per capita we are asking for a simple act of just ice Shis i a a v i t a l l y d i f f e r e n t basis of attack upon the Union Serms than was B r i t i s h Columbia's. Mr. Parent had no objection to r e l a t i v e treatment of his Province as compared with the others at or after Confederar-l t i o n . His contention was simply that increased population t i o n ^ ' a n d t h i s too was the basis on which the entire findings of the conference r e l i e d . Hot so simple, as we s h a l l see, was B r i t i s h Columbia's attack upon the Union Serms. She result of the Quebec Conference was a resolution, (1) B.C. Sessional Papers, 1903, p. K 33• (2) For proceedings at the conference, see i b i d . , pp. K 2 9-. , - K 39. She following paragraph from Premier C. W. Ross's statement i s enlightening: "She present basis ignores the f a c t that, while the increase of population lightens the burden of the Dominion inasmuch as i t m u l t i p l i e s the contributors to the revenue from customs and excise, the increase of population adds to the burdens of the Provinces without any corresponding contribution towards t h e i r maintenance." (p. K 3°») 104 passed unanimously, whioh suggested a new basis for Dominion grants i n l i e u of the allowance of eighty cents per head. She meeting declared that at the time of the B.N.A. Act, " i t was impossible to foresee the development of the Dominion, and to f i x i n a d e f i n i t e and unalterable way the d i s t r i b u t i o n of the revenue". She confer^nce_therefore sug^ested_the following basis: "A. Instead of the amounts now paid the sums here-a f t e r yearly by Canada to the several Provinces for the support of t h e i r Governments and Legislatures to be as follows: (a) Where the population i s under 150,000 §100,000 (b) Where the population i s 150,000 but - does not exceed 200,000 1.50,000 (c) Where the population i s 200,000 but . - does not exceed 400,000 180,000 (d) Where the population i s 400,000 but does not exceed 800,000 190,000 (e) Where the population i s 800,000 but . does not exceed 1,500,000 220,000 ( f ) Where the population exceeds 1,500,000 240,000 UB. Instead of an annual grant per head of the population now allowed, the annual payment hereafter -to be at the same rate of 80 cents per head, but on the population of each Province as ascertained from time to time by the l a s t decennial census, u n t i l such population exceed 2,500,000; and at the rate of 60 cents per head for soi much of said population as may exceed 2,500,000. "C. She population as ascertained by the l a s t decennial census to-govern, except as to Manitoba and B r i t i s h Columbia; and, to these two Provinces, the population to be taken to be that upon which, under the respective statutes i n that behalf, the annual payments now made to them respectively by 105. "the Dominion Government, are f i x e d u n t i l the actual population i s by the census ascertained to be greater; and thereafter the actual population so ascertained to govern. "D. The amounts so to be paid and granted by the Dominion t o the Provinces h a l f - y e a r l y and i n ad-vance, " ( l ) This resolution i s of the greatest importance because i t contains i n compact form the views of s i x of the then seven provinces of Canada on the subject of better t'erms, and must therefore be of profound significance i n case of a general r e v i s i o n of the Union Terms. It i s , however, open to serious c r i t i c i s m on two points. At the outset, the delegates had asserted that i t was impossible f o r the Fathers of Confederation to foresee the actual e f f e c t of fcheir f i n a n c i a l arrangements i n operation, and that t h i r t y - f i v e . years of union had shown that i n e q u a l i t i e s existed i n o r i g i n a l agreement. Yet the delegates at Quebec i n 1902 thereupon proceeded to do f o r following generations the very j< same thi n g which they alleged the delegates at Quebec i n 1864 were incompetent to do. Why should they suppose they were any more able to make a f i n a l settlement than the Fathers of Confederation; and conscious of the f a l l a c y i n \ . •. ( l ) The Conference of 1887, held at Quebec, at which B r i t i s h - . Columbia was not represented, passed a s i m i l a r resolu-t i o n to t h i s . Paragraph 5 of the 1887 resolution said that the new basis suggested was for "a f i n a l and un-alterable settlement of the amounts to be yearly paid by the Dominion to the several Provinces". See B.C. Sessional Papers, 1903, p. K33. For above resolution see p. 39. These terms were l a t e r incorporated i n B.N.A. Act, 1907, (see Appendix). 106, l a t t e r " a p o s i t i o n , why did they not provide i n t h e i r resolu-t i o n f o r an easy means of p e r i o d i c a l adjustment and revision? Secondly, the chief reason for the proposed change was that # the increase i n population aince 1897 brought a r e l a t i v e l y greater increase i n the cost of p r o v i n c i a l government than allowed for under the f i n a n c i a l clausea of the Union Act. Under that Act, the two paramount sources of revenue open to a province were taxation allocated hy i t to the provinces and the federal subsidies. The former varies naturally-with the population, and by making the l a t t e r depend d i r e c t l y on the nearest census returns instead'of a f i x e d or t h e o r e t i c a l population, the p r o v i n c i a l premiers declared f i n a n c i a l equilibrium alone could be achieved. Yet, that being the case there could hardly be a l i m i t set to the p r i n c i p l e . In other words, i t may have been expedient not to ask for more than §240,000 as a dir e c t grant, but i t v/as c e r t a i n l y not l o g i c a l i n view of the grounds on which any increase was being demanded. There 'could be no reason for assuming that administration expenses would remain stationary a f t e r the population had reached 1,500,000, or that they could be met , s o l e l y out of the variations of p r o v i n c i a l taxes, and the fi x e d grant of eighty cents a head, which at the 2,500,000 population mark became s i x t y cents. Mr. P r i o r amplified h i s Province's p o s i t i o n i n respect 107. to the conference's proposals i n a l e t t e r to Mr. Parent, JLated January 3, 1903.^) While endorsing the general ob-jecti v e s of i t s findings, Mr. P r i o r made i t quite clear that he f e l t the resolution did not go f a r enough to •meet"") _the special req.ui rements of his Province. Physical charac-\ t e r i s t i o s placed B r i t i s h Columbia on an e n t i r e l y d i f f e r e n t basis to any other i n the Union, and of thi s the Conference \ \had taken no cognizance. On January 16th, C o l . P r i o r received a telegram from S i r W i l f r i d Laurier advising him of the meeting arranged for January 27th with the other Premiers f o r the purpose of discussing t h e i r resolution, and i n v i t i n g B r i t i s h Columbia representatives to be present.^ 2) The next day, the Premier *• and Attorney-General B. M. Eberts l e f t for the national c a p i t a l . They arrived i n Ottawa on the afternoon of Friday, January 23rd, having arranged by wire with S i r W i l f r i d , on the way, for a meeting with the federal cabinet on the following Monday. (3) At that conference C o l . P r i o r outlined the subjects which he proposed to discuss; which were, besides: the - . r . - . ,. (1) P r i o r to Parent, Jan. 3, 1903; B.C. Sessional Papers, 1903, P. K 39.. (2) See P r i o r to Laurier, Jan. 16, 1903; Premier's Letter' . . . Book, 1900^1903. Also see "Colonist", Jan. 17, 1903, p. 1. (3) See B.C. Sessional Papers, 1903, p. K 3* 108. freadjustment of f i n a n c i a l relations between the two govern-ments, the f i s h e r i e s question, the regulation of Mongolian ) immigration into B r i t i s h Columbia and the d i v i s i o n of the-/ ^ taxes c o l l e c t e d under the Chinese Immigration Act, and the /^readjustment of some of the Indian reserves. In view of the meeting of the p r o v i n c i a l Premiers and the federal cabinet, scheduled f o r the next day, B r i t i s h Columbia's claims f o r increased f i n a n c i a l assistance were not discussed. This meeting was primarily occupied with consideration of the * f i s h e r i e s question, of which branch of the negotiations Hon. D. M. Bberts had special charge.^ 1) ( l ) Subsequently, on February 3, i n a l e t t e r to S i r W i l f r i d L aurier, the delegates r e c a l l e d that following the Province's announcement of i t s intention i n 1901 to a v a i l i t s e l f of the r i g h t s under the decision of the Privy Council (see p. 83 ) an agreement was reached between the Province and the Department of Marine and Fis h e r i e s , whereby i t was agreed that the Dominion should remain i n control and account to the Province for such proportion of licence fees as might be agreed upon, i n case of diagreement the proportion being adjusted by a referee. The Dominion wished t h i s system to continue u n t i l t h e . f u l l rights of the Pro-vinces were determined. The l e t t e r of February 3rd asked for a d e f i n i t e understanding as to what that proportion was to be, adding, "on our part we think there should be returned to the P r o v i n c i a l Government for fishery purposes that amount of revenue collected which i s i n excess of the operating expenses, or a fi x e d sum as may be_agreed upon". (See P r i o r and Eberts to Laurier, Feb. 3, 1903; B.C. Sessional Papers p. K 181.)-Further conferences were held on the 4th and 5th at the l a t t e r a proposed settlement was handed to the Minister of F i s h e r i e s . This showed that during 1900-1901, 1901-1902, the years of the above agreement, the Province had paid i n licences §44,984.28 more than was spent for s a l a r i e s of o f f i c e r s , and cost of opera-t i n g f i s h hatcheries (not including §25,490.35 spent i n the erection of hatcheries at Skeena and Granite Creek. This was taken 7 as being cleared by the 21 109. In preparation for the all-important meeting of that afternoon, a conference waa held i n Russell House on the morning of Tuesday, January 27th, at which the Premiers of a l l the provinces were present, together with many of t h e i r ministers. Printed.documents containing the resolutions of the Quebec Conference and Col. P r i o r ' s l e t t e r respecting B r i t i s h Columbia's s p e c i a l claims were signed. The resolu-tions were formally presented a t the afternoon conference by Hon. G. W. Ross, Premier of Ontario, S i r W i l f r i d pro-mising i n reply that they would receive his consideration. (1) The next day the question of Oriental immigration occupied the attention of the B r i t i s h Columbia delegates. S i r W i l f r i d pointed out that l e g i s l a t i o n with respect to Japanese immigration would be unnecessary since the govern-ment of that country had of i t s own v o l i t i o n enacted res-t r i c t i v e measures. An act similar to the Natal Act would be unnecessary and unwise. With respect to the Chinese, the Dominion Government, the Prime Minister announced, would not i n future, disallow anti-Chinese l e g i s l a t i o n which i t was Footnote ( l ) continued from p. 108: years previous of revenue exceeding expenae (also aee pp. K 45-52, K 54 of Sessional Papers). This sum, 144,984.28, the Province claimed as i t s r i g h t f u l share for the year 1902-03, a f i x e d sum of 50 per cent of the receipts was suggested. (See P r i o r and Eberts to Prefontaine, Feb. 5, 1905; i b i d . , p. K 45.) (1) See i b i d . , p. K 4. competent f o r the P r o v i n c i a l Legislature to pass. In r e s -pect to the refund, of the Chinese head, tax to the Province, S i r Wilfrid, pointed, out that an Act had. been passed, at the 'last session of the Dominion Parliament providing for an Order-in-Gounoil for a refund of f i f t y per cent a f t e r July 1, 1902. The delegation urged that the Order-in-Council he passed immediately, and that the Act should he amended allowing the Province seventy-five per cent, and should apply to the whole period during whieh.the Chinese R e s t r i c -t i o n Act had heen i n force On February 4th a conference was held at v/hich the whole question of the f i n a n c i a l relations of Province and Dominion were discussed with the Prime Minister. Maps were produced, showing the s e t t l e d and inhabitable sections of _ the Province, and a detailed analysis of the problem was l e f t with the Dominion Government i n the form of a memoran-dum. At the outset i t i s perhaps well to note Premier P r i o r ' s opening statement of the Province's claim: /-"""The p o s i t i o n we take i s not that the Dominion / Government has v i o l a t e d the terms of union, or ( that we are e n t i t l e d to compensation f o r lack of i f u l f i l m e n t i n any substantial respect, as the \ performance of a l e g a l contract could be construed; but we do contend that i n the development of the \ constitution, i n i t s actual operation, from the date of Confederation i n 1871, that a state of a f f a i r s has grown up i n B r i t i s h Columbia and i n the Dominion, as the r e s u l t of the union between ( l ) B.C. Sessional Papers, p. K J5. 111. /"the two, that has established a moral right and f a sound c o n s t i t u t i o n a l claim on our part for i n -l creased r e c o g n i t i o n — a state of a f f a i r s that was \ not anticipated by either party to the Federal / compact."( l ) B r i t i s h Columbia's case rested on the f a c t that the \ Hova Scotia settlement i n 1868 had established a d e f i n i t e ^ precedent f o r the adjustment of f i n a n c i a l r e l a t i o n s without I a change i n the B.N.A. Act; that, subsequently, similar ac-tions i n respect to other provinces had established that " i t was not only competent but a matter of right and c o n s t i -t u t i o n a l necessity on the part of the Dominion to apply that p r i n c i p l e whenever and wherever the circumstances j u s t i f y i t . " ^ 2 ) B r i t i s h Columbia did not contend that i t had been \ forced into Confederation as i t was claimed NovatScotia was, j / but as an actual f a c t there was l i t t l e alternative l e f t to \ her i n the matter of terms. This, Col. P r i o r claimed, was because i t was believed that B r i t i s h Columbia ''would remain a drag on the Dominion" and that i n including i t i n Oonfedera-/ t i o n , Canada was " s a c r i f i c i n g material interests to a large ! extent i n the i n t e r e s t s of p a t r i o t i c sentiment—that of ) 'rounding out Confederation* ".^^ History had shown these fears to have been " e n t i r e l y and absolutely erroneous and (1) B.C. Sessional Papers, p. K 6. (2) Ibid., p. K 6. (3) I b i d . , p. K 7. 112. unfounded: And t h e i r reasons having proved unfounded the Government of to-day i s e n t i t l e d i n equity to recognize the consequence of those errors. These, the Premier declared, had resulted i n i n o r d i -nate benefits accruing to the Dominion, i n contrast to the Province's yearly d e f i c i t s . The 1871 settlement had com-p l e t e l y f a i l e d to consider the "special circumstances" with which the government of B r i t i s h Columbia had to contend. These the Premier outlined as follows: F i r s t : The cost of administration owing to the physical character of the country. Here Col. P r i o r sub-mitted a table showing the comparative cost of administering j u s t i c e , c i v i l government, l e g i s l a t i o n , public i n s t i t u t i o n s , public works and education i n the provinces. This table, "substantially correct, though subject to correction i n some d e t a i l s " , showed the t o t a l cost of administration per \ \ 1 1 person to be considerably higher for his Province than any - ( 2 ) other.. The Premier's t o t a l s were as follows: B r i t i s h Columbia §11.62 Manitoba 4.00 Prince Edward Island 3.00 Quebec 2.70 (1) B.C. Sessional Papers, p. K 7. (2) Ibid., 1903, p. K 8. 113. New Brunswick $2.40 Nova Scotia 2.04 ^ Ontario I.85 In p a r t i c u l a r C o l . P r i o r mentioned the cost of public works. Waggon roads cost as high as §4,544 per mile i n West Yale, and other roads were mentioned at costs varying from §1,000 to §3,350 per mile. From returns published by the Ontario Department of S t a t i s t i c s , the B r i t i s h Columbia Premier made the following comparison i n respect to the cost (1) per head of government: v ' Ontario B r i t i s h Columbia P r o v i n c i a l tl . 8 5 §12.60 Municipal .6.00 . 1.75 Customs (average f o r Dominion)5.28 16.00 Excise - - 2 ' 0 0 (Included i n .. Customs; §15.13 §30.35 Second: The distance from the commercial, i n d u s t r i a l ajndjato^^ The e v i l \ effects of B r i t i s h Columbia's i s o l a t i o n from the rest of Canada i n the p o l i t i c a l sphere were manifest, the Premier-claimed, but i t v/as the commercial aspect of the problem that was most keenly f e l t . The cost to the Eastern Canadian consumer of article^jsonyOYf.^ f r o m such points as Halifax, MontrejaJ^^ to 50 cents, i n most cases. Occasionally i t reached as high ( l ) B.C. Sessional Papers, 1903, p. K 9. 114 as 75 cents. For B r i t i s h Columbia consumers, who since the C.P.R.*s completion had purchased the great abundance of t h e i r materials from Eastern Canada, the cost per 100 pounds ranged from §2.00 to §3 .25 . . Third; The non-industrialjjharajt,ej^jtfJ^e_ J ? r 0 vinee, as compared with Eastern Canada, wherebyja, J.arger__percentage of goods, are imported and_ o£ns.BS§-^»--J^MrOa.ainS ^ e contribu-tions to the_^^^jaZJErea^sury, i n the way ojf_taxes,_ i n a (2) Fourth:. The disadvantage of the^Proyince Jja^relation to the markeJjj ^ p x^Jis.^^ While B r i t i s h (^-^ Columbia buys f o r the most part from the older Canadian pro-vinces, there were no markets i n the East f o r her products. Ever since Confederation, the Province has "had to f i n d a ( l ) B.C. Sessional Papers, 1903, p. K 10, What were known as..commodity rates, to meet the rates from Hew York to San Francisco and other coast points, were, however, lower. But i n addition to the through rate the people of the i n t e r i o r of B.C. had t o pay a l a r g e l o c a l rate, which i n some cases equalled the through rate. .(2) This r a t i o was ar r i v e d at by comparing the per capita . - customs and excise c o l l e c t i o n s f o r the whole of Canada with the per capita contributions of B.C. e.g. i n 1899 these taxes f o r the whole of Canada amounted to 134,958,000 of which §2,657,500 was attributable to B.C. alone. On a basis of population, the per capita contributions here are f o r a l l of Canada §6 .65 , f o r B.C. |21.02. S i m i l a r figures could be quoted f o r other.years. (See account of Dunsmuir Delegation, B.C. Sessional-Papers, 1901, pp. 564-65; on which occasion t h i s p a r t i c u l a r aspect of B.C.'s case was given more consideration.) market i n Great^Britain and„fpreign lands f o r our lumber, f i s h , , and minerals, and s e l l i n competition with other nations, where there was cheaplabourj*., i n otherjvords, to "buy i n thsjtearest market and_sjeJLl^ in_the cjieapest n ( ^ p ) Considerable space has been devoted to Premier P r i o r ' s memorandum, but with good reason, f o r i t i s at once a valuable l i n k with the past.and an i n d i c a t i o n of the future trend of the better terms movement i n B r i t i s h Columbia. In pondering the claims which he outlined, one cannot but f e e l how well the ground had been prepared f o r i / the Premier by his predecessors and how his own federal parliamentary experience must have aided him at t h i s time* ' The issues r a i s e d i n his memorandum were not i n any sense • i new. U n t i l the completion of the Canadian P a c i f i c Railway, I | Federal-Provincial r e l a t i o n s centred about the construction i S of that road. The Province experienced f i n a n c i a l d i f f i - \, c u l t i e s from the outset and n a t u r a l l y there were occasional outbursts against Confederation and i t s terms* But these cases of bad f e e l i n g were i s o l a t e d and i n no way connected with l a t e r better terms demands or any other movement of the kind. The f i r s t concerted a c t i o n that i n any way anticipates the r e a l better terms negotiations of t h i s i -i century i s the campaign of the B r i t i s h Columbia members i n See B.C. Sessional Papers, 1903, p. K 13 116. fthe f e d e r a l hou.se for cabinet representation f o r t h e i r Pro-\vince. Beginning i n 1893, that movement achieved i t s objecr t i v e three years l a t e r with the appointment of Col. E. G. P r i o r to the post of "Collector of Inland Revenue". I ts r e l a t i o n to the Province's hetter terms demands i s si m p l y \ that the argument of B r i t i s h Columbia's proportionately large per capita contribution to the Federal Treasury, which was the basis of those members* demand f o r cabinet representation i n spite of the small actual population of the Province, i s the same one which we f i n d here i n Premier P r i o r ' s memoran-dum. It has been expanded and enlarged, of course, but e s s e n t i a l l y i t rests on the same ground. By comparing th i s large contribution with the actual federal expenditures i n the Province, the Turner Government concluded that something more tangible than membership i n the federal cabinet could l e g i t i m a t e l y be demanded from Ottawa. Thus, B r i t i s h Columbia's "large per capita c o n t r i -bution" became her "Excessive Contribution", and was made the basis of a request for s p e c i a l f e d e r a l railway subsidies to a i d the l o c a l government i n developing the Province. Premier Dunsmuir c a r r i e d the Turner programme to Ottawa, using the same arguments, without success. One year l a t e r Mr. Dunsmuir despatched his communica-t i o n c a l l i n g for a convention to consider a general r e v i s i o n 117 of Union Terms. This was a l l that was l e f t to he done to - j o f f i c i a l l y inaugerate a hetter terms movement. The ground $ had already heen prepared—the same claim s t a t e d — i n the j ! 1 preceding negotiations f o r railway subsidies. But to the f i r s t claim, as w i l l be remembered, Mr. Dunsmuir summoned others. Chief among these i s what he referred to as the "unique physical conditions of the Province". This we \ - I f i n d r e f l e c t e d i n the P r i o r memorandum as the "greater cost\^ i of administration owing to the physical character of the j country" and i t s i s o l a t i o n , p o l i t i c a l and economic. Thus Premier P r i o r was i n no way stating new claims •^- i n J i i s memorandum. He had, as a federal member, taken a (^IsadJ-ngjax^in fashioning the f i r s t point, and he does (materially develop the commercial importance of the Province's i s o l a t i o n from Eastern Canada i n his memorandum. In the l a s t " s p e c i a l circumstance" which he mentions, that of "the disadvantage of the Province i n r e l a t i o n to markets for special products", C o l . P r i o r i s most nearly o r i g i n a l . Yet even t h i s i s not e n t i r e l y new. It w i l l be remembered that \ Senator Templeman, as a candidate against C o l . P r i o r at the federal by-election i n V i c t o r i a i n 1896, had urged the large per capita contributions of the Province to the Federal - i T r e a s u r y — i n r e a l i t y , customs d u t i e s — a s proof of the e v i l j eff e c t s of the National P o l i c y t a r i f f . B r i t i s h Columbia, he '' 118. \ claimed, was being "bled white'1 by the t a r i f f and. the vjeastern monopolists which i t protected. Premier P r i o r ' s claim that the Province was under a disadvantage because i t had to "buy i n the dearest market and s e l l i n the cheapest" i s not e n t i r e l y unrelated to Senator Templeman's claims upon analysis. Thus, strangely enough, Col. P r i o r found himself embracing a doctrine which i s e s s e n t i a l l y an expansion of the same one which was used against him and his party i n 189&, and which at that time, naturally, he steadfastly denied. Before dismissing the P r i o r correspondence, the f i n a l outspoken warning of the B r i t i s h Columbia Premier deserves attention, f o r i t exhibits a f a r l e s s c o n c i l i a t o r y attitude than had cJiaraeJ.e.riae.d,Hr.. Dunsmuir's l e t t e r s , - - a chance {indicative both of the government's growing uneasiness and (the natures of the two Premiers. C o l . Prior' s concluding remarks were: "It i s worthy of note that i n almost every matter we-have brought to the attention of the Dominion Government, such as the f i s h e r i e s , the Chinese head tax, the question of f i n a n c i a l r e l a t i o n s and our contributions to the Federal treasury, as compared with expenditures, the outcome of Confederation has been the same,—a disproportion of benefit to theX Dominion, and a set of circumstances i n B r i t i s h \ Columbia d i f f e r e n t to what pertains i n the East. "I want to say to you, S i r W i l f r i d , and to your colleagues, as a duty we owe to the Province of \ B r i t i s h Columbia, that i f we do not obtain a just recognition of those claims, founded on the re-presentations we have made, nothing can stop the 119 "agi t a t i o n f o r readjustment of rel a t i o n s that w i l l grow out of them, and that sooner or l a t e r . , the people, who are f u l l y alive to t h e i r d i s - \ cjfr a b i l i t i e s and t h e i r requirement, w i l l as a unit demand as a right what we pray f o r . " ( l ) Returning to the P r o v i n c i a l C a p i t a l , Premier P r i o r faced the f a t e f u l session of April-May, 1903, which wit-nessed the retirement of two of the ministers at/t.he_ J?remier *s request and the resignation of a third'; and culminated with his own_di.smis.sal_from, o f f i c e hy the Lieutenant-Covernor ^-ifL^L— In summation, i t must he admitted that the work of the delegates, however thoroughly and c a r e f u l l y presented, fdid not achieve any d e f i n i t e advance towards i t s revisionary objectives. I t s greatest success was the enactment at Ottawa of an amendment to the Chinese R e s t r i c t i o n Act, r a i s i n g the head-tax to 1500,of which the Province was to (1) B.C. Sessional Papers, 1903, p. K 13. The years from 1896 to 1902 each produced d e f i c i t s . (See Table Uo. 2, p. D 23, of Reports.) Revenue Expense 1897- 1898 |1,439,623.60 $2,001,031.85 1898- 1899 1,531,638.60 2,156,473.86 1899- 1900 1,544,108.66 1,831,205.66 1900- 1901 1,605,920.57 2,287,821.21 1901- 1902 1,807,925.24 2,537,373.71 (2) The E. G. P r i o r and Company, i n whioh the Premier had a f c o n t r o l l i n g i n t e r e s t , had obtained a contract from the Government to. supply cable for the Chimney Creek Bridge. It was eharged that an o f f i c i a l of the com-pany had obtained information regarding the figures submitted by other tenderers. A f t e r an inve s t i g a t i o n of the charges, the Lieutenant-Governor dismissed f C o l . P r i o r from o f f i c e . 120. receive one-half the revenue derived from B r i t i s h Columbia porta of entry.^ 1) But the appeal for increased subsidiea did not receive even t h i s measure of encouragement. There waa no guarantee forthcoming from the Government that the matter v/ould be even considered at an e a r l y date. The other^provinces, however, received no hetter treatment i n this jreapect. Mr. ( l a t e r the Hon.) Rodolph lemieux made an eloquent plea on March 30th f o r the enact-ment of such measures of assistance as were suggested by the Quebec Conference, but received no r e p l y . O n July 2nd he asked the d e f i n i t e question: ''Is i t the government's intention to grant the provinces such increase as may be just and equitable?" j and received the conventional reply from the Prime Minister: "This matter w i l l receive the c a r e f u l consideration of the government at the proper time."(3) (1) See Canadian Hansard, 1903, Vol..I, pp. 2398-2399 ( B i l l Ho* 82); also see Statutes of Canada, 1903, Vols. I and I I , Ch. VIII "The Chinese Immigration Act", 1903, p. 105. • • -(2) Canadian Hansard, 1903, V o l . I, p. 696. (3) I b i d . , V o l . I l l , p. 3?64. 121. CHAPTER V. The. E a r l y E f f o r t s of the MoBride Government. On June 3, 1903, the new Premier, Richard McBride, /made a formal announcement of the adoption of party l i n e s ^ - i n the Br i t i s h . Columbia L e g i s l a t u r e . This was f a r from being unexpected. Reference to the newspapers of the day A w i l l e s t a b l i s h that the question of the adoption o f the party system i n p r o v i n c i a l p o l i t i c s had been discussed, and i n f a c t expected, f o r some considerable time.^) I t was - currently rumoured that the L i b e r a l s were organizing with the object of entering the p r o v i n c i a l f i e l d as a party, and before his dismissal Premier P r i o r l e t i t be known that he * intended appealing to the country, i f he could secure a dis s o l u t i o n , on party l i n e s . (2) Thus t h i s new departure i n B r i t i s h Columbia p o l i t i c s was p r a c t i c a l l y assured even before Premier McBride fs assumption of o f f i c e . I t s chief importance to the. better terms movement was the danger that i t would possibly carry those discussions into the realm of party p o l i t i c s . Up to this time, a l l negotiations had been (conducted, on the surface at l e a s t , on a s t r i c t l y non-(1) See Colonist, June 22, 1902, p. 4. (2) Ibid, May 29, 1903, p. 4. 122. ^ p a r t i s a n basis; t h i s was now more desirable than ever i f an amicable settlement were to be reached, for opposing p a r t i e s .were i n power at the two c a p i t a l s . As Premier of B r i t i s h Columbia, McBride addressed his f i r s t l e t t e r to S i r W i l f r i d Laurier on June 18, 1903. This, however, dealt e n t i r e l y with the question of Japanese immi-g r a t i o n . ^ ) It was not u n t i l the end of the month that he took up the question of the Ottawa negotiations, writing: "There are several matters of importance which have formed the subject of negotiations between the Governments of B r i t i s h Columbia and the Dominion of Ganada, and c e r t a i n other matters that have since arisen, which the Government p here has considered of such urgency as to j u s t i f y another Delegation being appointed to proceed to Ottawa i n connec-t i o n therewith."^ 2^ The federal houses were s t i l l i n session, but a conference was arranged. Premier McBride himself was unable to go; i n his place Hon. Charles Wilson, President of the Council, and Hon-. R. F. Green, Minister of Mines, l e f t f o r the national c a p i t a l on July 1 st. An interview was had with members of the fe d e r a l cabinet on July 14th. Two days l a t e r the delegates stated (1) McBride to Laurier, June 18, 1903; Premier's Le t t e r Book 1900-1903. . (2) McBride to Laurier, June 30, 1903; i b i d . 123. t h e i r arguments i n written form, out l i n i n g i n t h e i r memoran-dum the proceedings of the day b e f o r e . ^ ) The arguments with respeot to increased subsidies, ,Oriental,,immigrajy.ori^and Indian reserves were^^no^nej^ and ne_ed not be^repeated here. /With regard to the f i r s t , however, a new point was ra i s e d when the Prime Minister expressed a doubt of the competence of the Dominion or Province to vary the Terms of Union em-(2) bodied i n the B r i t i s h North America Act. ' This was the f i r s t occasion on which the Province's delegates had heen confronted with t h i s problem. To i t they gave their con«r sidered reply i n t h e i r l e t t e r of the 16th. .Here they said: "It i s submitted that the object of Parliament in-embodying the Terms of Union i n 'The B r i t i s h North America Act" was not f o r the purpose of /making,those terms unchangeable, save at the d i s -c r e t i o n of the Imperial Parliament, but f o r the purpose of guaranteeing the Treaty, as i t then stood, by Imperial l e g i s l a t i o n . "The whole l e g i s l a t i v e f i e l d i n the Dominion of Canada being, however, by the Imperial Act, appor-tioned between Federal and P r o v i n c i a l a u t h o r i t i e s , and the question involving simply the 'payment of money by either one to the other, i t i s submitted that the l e g i s l a t i o n i n respect of such a matter, i f passed by both, could not well be questioned. In our opinion, i t could only he questioned 'by the King i n Council disallowing the Act. ( l ) Wilson to Laurier, July 16, 1903; B.C. Sessional Papers, 1903-04,-p. G-15. Present at the meeting the day before, besides S i r W i l f r i d Laurier, were the fo l l o w -ing members of h i s cabinet—W. ;S. F i e l d i n g , Raymond Prefontaine, S. A. Fisher and Wm. Templeman. (2) I b i d . , p. G-16. 124. "Not having the advantage of any discussion on the subject, we can only anticipate the possible argument i n favour of the doubt.> It would perhaps be that each Province was a party to the Treaty with a l l the other Provinces and that without the consent of a l l or that of the paramount authority, the Imperial Parliament., no change could be made i n the Terms of Union i n any of the Provinces; and further, that t h e i r rights were affected by what might he termed favoured l e g i s l a t i o n , and the means at the command of the Dominion f o r Federal purposes, i n v/hich they would share, would he r e -duced hy any amount granted to the.' Province. I f th i s should he the argument, as to the f i r s t branch, i t would seem inaccurate as a matter of f a c t , and, as to the second, i t might b r i e f l y be answered that the Dominion Parliament, i n v/hich each Province was represented by i t s proper quota of members had assented to the .proposed readjustment."(l) It i s curious that the delegates did not i n t h i s con-nection make greater use of the precedents already set i n 9 the case of other provinces. Of these, only the Act of 1882, granting -Manitoba an increased subsidy f o r ten years, i s mentioned.^ 2) The delegates concluded stating that they had "been informed that i n 1869 the then Law O f f i c e r s of the Grown gave an opinion on t h i s subject, and that t h i s opinion was contained i n a despatch from Lord G r a n v i l l e , dated 23rd August, 186?, to the Hon. the Secretary of State".^3.) (1) Wilson to Laurier, July 16, 1903; B.C. Sessional Papers, . 1903-04, pp. G-16-17. (2) See "Statutes of Canada", 1882; Vols. I and I I , Ch. 5 (Public Acts.), p. 64. (3) Wilson to Laurier, July 16, 1903; B-.C. Sessional Papers, - . . 1903-04, p. G-17. Thorough search f a i l e d to produce a copy of t h i s most de-aired despatch.^) How f r u i t l e s s v/as "the search i s proven by the following l e t t e r written on September 29th, over two months l a t e r : "I have been unable here to confirm the date, 23rd August, 1869, aa being the date^of the des-patch which i s required, and I cannot f o r the. moment c a l l to mind where I discovered i t — p r o -bably at Ottawa. This opinion, as will-be seen, upheld the view, that the Parliament of Canada had been s t r i c t l y within i t s powers i n dealing with the matter v/ithout reference to the Imperial Government. A copy of the despatch conveying that opinion i s what i s wanted. D i l i -gent search was made at Ottawa for i t , but -without success and as i t i s the only l e g a l and c o n s t i t u t i o n a l pronouncement on a subject which has again come to the front, i t s importance i s obvious."(2) On July 18th, l e t t e r s were addressed d i r e c t l y to the several members of the cabinet under whose administration other matters discussed i n the interview, such as f i s h e r i e s and Indian reserves, pertained. In each case these f a i l e d to produce more than a general promise to consider matters thoroughly. (?) (1) See Wilson and Green to Scott, July 18, 1903; B.C. , . Sessional Papers, 1903-04, p. G-22. Had they so chosen, however, the delegates could have referred to debates on the subject i n the Commons, eapecially those connected with 1the granting of hetter terms to Hova Scotia. For example, see Dominion of Canada Parliamentary Debates; Third Session (1870); pub- • l i s h e d by Ottawa Times P r i n t i n g and Publishing Co.; V o l . I, pp. 768-792. ( 2 ) Gosnell to Powell, Sept. 29, 1903; Premier's Letter Book (1900-1903). - . (3) For copies of these l e t t e r s and the r e p l i e s see B.C. Sessional Papers, 1903-O4, pp. G-20-G-22. 126. The delegates returned, to t h e i r Province to face the / /arduous task of carrying an e l e c t i o n i n the f i r s t d e f i n i t e (party vote i n the history of i t s p o l i t i e s . The question of securing hetter terms f o r B r i t i s h Columbia was widely d i s - , joussed during the campaign, hut fortunately i t did not as-'surne an appearance of being a 'party 1 matter. Considerable credit i s due Premier McBride and his associates at this time for steadfastly refusing to adopt 'Better Terms fo r B r i t i s h Columbia' jas^apajrty e s p e c i a l l y since many Conservatives f u l l y r e a l i z e d the p o l i t i c a l value of such a step i n view of the f a i l u r e of the L i b e r a l ad-ministration at Ottawa to recognize the Province's claims. Unquest ionably, such actijojo_wo.uld-have^^ ment, adding as i t would have hut another d i f f i c u l t y i n the way of agreement between Ottawa and V i c t o r i a . s The McBride government, however, succeeded i n carrying /the e l e c t i o n , hy a narrow majority. When the House was summoned i n November of the same year i t was primarily i n order to discuss the Province's finances, which were by now exceedingly hazardous, and to arrange f o r the f l o a t i n g of a new loan i n L o n d o n . I n the urgency of securing more immediate ways of financing the government, the"question of hetter terms was given scant attention, the Speech from.the (1) See Colonist, November 27, 1?03, p. 1. 127. Throne merely promising that negotiations would he "earnestly and p e r s i s t e n t l y pressed to a settlement s a t i s f a c t o r y to the / p r o v in oe " • ( l ) And there, so f a r as the session i t s e l f i s t concerned, the matter was l e f t . That such a promise was intended, to he f u l f i l l e d , how-(2) ever, i s evident from Mr. McBride*s l e t t e r of December 24th.. His annoyance with the f e d e r a l government's f a i l u r e to act i s c l e a r l y d i s c e r n i b l e behind the outward politeness of the l e t t e r . The Premier remarked that the Province's claims / f o r increased recognition had been before the Dominion now I f o r nearly three years, that i t was p r a c t i c a l l y a year since j C o l . P r i o r and Hon. D. M. ilberts presented t h e i r claims, and N yet no i n d i c a t i o n , favourable or otherwise, had been f o r t h -X^coming from the federal government. Three portions of t h i s l e t t e r demand p a r t i c u l a r notice: t - F i r s t : Mr. McBride, while arguing that the terms granted to h i s Province were based on assumptions which events had shown to be u n j u s t i f i a b l e and altogether prejudi-c i a l to B r i t i s h Columbia, made the following proposal, v/hich i s i n dir e c t contradiction to the general idea of f i n a l i t y embodied i n the Quebec Resolutions of 1902: — (1) See Colonist, November 27, 1903, p. 8. (2) See McBride to Laurier, Dec. 24, 1903; B.C. Sessional Papers, 1903-04, p. G -23. 128. "To maintain i n v i o l a b l e i n s p i r i t the equity of a sacred compact, which i s c o n s t i t u t i o n a l l y involved i n the free, voluntary union of self-governing, responsible colonies, with a federal body represen-t i n g the whole group i n c e r t a i n governmental func-t i o n s , i t i s e s s e n t i a l that there should be from time to time, as shown to he necessary, an adjustment of f i n a n c i a l r e l a t i o n s conformable with new or al t e r e d conditions."(l) / This was the exact point on which Mr. McBride was I l a t e r to clash v/ith the federal a u t h o r i t i e s and the other \ provinces when a measure of reform was granted and stated \ to be "'final and unalterable". Second: While the excessive revenue contributed by ^ B r i t i s h Columbia to the Dominion warranted greater expendi-\ ture on public works i n the Province, the e f f e c t of greater \ assistance on the .part of the federal government i n railway j / development, as urged by the Dunsmuir Delegation, without } increased subsidies to the government would only be to make I \ matters worse, fo r "to the Province comes, with development, i i increased r e s p o n s i b i l i t i e s i n the way of roads, bridges, •j / educational f a c i l i t i e s , the administration of j u s t i c e , etc., which i n t h i s Province—-owing to physical configuration and long distances between settlements—involve expenditures quite out of proportion to the revenue reasonably to he ( l ) McBride to Laurier, Dec. 24, 1903; B.C. Sessional . . Papers, 1903-04, p. G--24. 129. anticipated, and possible to be e a s i l y obtained. ^aXr^i Any re-arrangement " i s a P r o v i n c i a l question /as between the Province and the Dominion; and i t s s e t t l e -{ . • [ ment should not be dependent upon the p o l i t i c a l character ^ o f e x i s t i n g administrations. Up to the present a l l the representations that have been made to you have been con-ceived and couched i n that s p i r i t . Hither they are worthy of consideration and a d e f i n i t e reply or they are not. I f /no reply be forthcoming, they must perforce become the "j" basis of an agi t a t i o n , and w i l l , i n that event, undoubtedly (2) Renter the arena of partisan debate very soon." It i s a_q.ue.sti on,.-..whe.ther McBride meant t h i s prophesy as a f r i e n d l y ^ a r n i a g - ^ £ n e impending ( l ) McBride to Laurier, Dec. 24, 1903; B.C. Sessional Papers, 1903-04, pp. 0-24-23. With respect to the Chinese head tax, B.C. received for the f i s c a l year 1902-03, f i f t y per cent, of the revenue a r i s i n g out of the amended Act of 1902. Mr. McBride observed that " i f the Province be properly e n t i t l e d to a refund of. f i f t y per cent, as a compensation for l o c a l e v i l s and disadvantages a r i s i n g out of Chinese immigration, i t i s e n t i t l e d to the whole sum remaining over a f t e r the expenses of administering the Act have been met", and also, " i f the Government.be now e n t i t l e d to f i f t y per cent, of the revenue a r i s i n g out of the Act for the reasons i n q_uestion, i t i s also e n t i t l e d to have that or any other percentage f i x e d upon f o r the whole period during v/hich the Act has been i n operation". See i b i d , p. G-23. (2) I b i d . , p. G-23. 130. f e d e r a l elections, which a c t u a l l y occurred i n October of that year, and McBride*s own a c t i v i t i e s i n that campaign, cer-t a i n l y lend colour to the l a t t e r i n t e r p r e t a t i o n . This too, was the meaning which the Prime Minister took, from the warning; an idea which the p r o v i n c i a l Premier nevertheless hastened to deny.^^ H i s t o r i c a l l y , however, the most s i g n i f i c a n t feature of t h i s exchange of l e t t e r s was the wide gap which they showed to separate the approach of these two statesmen to the question of c o n s t i t u t i o n a l r e v i s i o n . To McBride there would ever be a need for periodic reform of the constitution; to Laurier, " i f the subject should be taken up, i t should be so taken up with the view of l a y i n g down a uniform, systema-t i c and f i n a l basis''.^ 2) Thus, should a general r e v i s i o n be granted, involving the whole confederacy, and since the i n t e r - p r o v i n c i a l con-ference of 1902, any change, even a s p e c i a l grant to B r i t i s h Columbia, could be expected to come from such a reform measure, Ottawa and V i c t o r i a would almost c e r t a i n l y approach a settlement from opposite viewpoints. Unquestionably McBride had raised a new issue. Hereafter, not alone would (1) McBride to Laurier, Dec. 24, 1903; B.C. Sessional Papers 1903-04, p. G-23. Also see McBride to Laurier, Jan. 27, 1904; i b i d . , p. G-28. (2) Laurier to McBride, Jan. 4, 1904; i b i d , p. G-27. 131 he have to convince the Dominion and the other provinces of B r i t i s h Columbia's claim to special consideration i n the matter of federal subsidies, but he had set f o r himself the / a d d i t i o n a l task of converting the federal government to his "theory of periodic r e v i s i o n . And i n t h i s too, there was no doubt i n view of the Conferences of 1887 and 1902, the other provinces of the Union ?/ould also need to be con-vinced. The Laurier l e t t e r , however, gave no assurance of early settlement of the question. Consideration of the Quebec Conference's proposals, the Prime Minister announced, had heen impossible due to the urgency of business at Ottawa and the prolonged session. The B r i t i s h Columbia session, concluding on February 10, 1904, also passed without any new developments i n the sphere of better terms proposals. Returns of the Wilson-Green Mission which had v i s i t e d Ottawa without success i n July of the preceding year, were published, hut otherwise a general quiet pervaded. Ottawa had given no i n d i c a t i o n N^of i t s intentions and for the moment ^matters marked time. ^^.=^1904 was to prove, however, the t r u t h of Premier /McBride*s prophecy that the question of better terms might I e a s i l y become a party issue; and i n no small measure the ) I Premier was himself responsible for the partisan angle which i t assumed during the general Dominion elections of October j ^ f ^ h a j _ y e a r . Obviously, the f a i l u r e of the federal government to recognize B r i t i s h Columbia's claims opened an/easy avenue of attack upon the Laurier cabinet; and of t h i s the p r o v i n c i a l Conservatives proceeded to take u l l advantage. Unquestionably too, the Conservatives were n dire need for good platform material for that e l e c t i o n . The Vancouver Province, as events proved, surveyed the s i t u a t i o n with considerable accuracy, when i t said: / "Regarding the probable res u l t (of the e l e c t i o n ) , /freed from party passion and prejudice, we conclude ( that the Government of S i r W i l f r i d Laurier w i l l be 1 sustained by a substantial, working majority. ..... ! The population of Canada i s t h r i v i n g and contented. I The years have been years" of success, and they have •been under L i b e r a l r u l e . ...... "Then the leading issue of the campaign i s the /question of enlarging the transportation f a c i l i t i e s / of the country, and on t h i s issue the electorate / seems to he p r a c t i c a l l y united. It i s hardly denied, / except by extreme p o l i t i c i a n s , that there i s con-| siderable objection to the terms of the contract with | .the Grand Trunk P a c i f i c ; hut i f the people want the v / road b u i l t , and i t i s evident they do, the matter of j terms w i l l not be regarded as s u f f i c i e n t l y objection-V able to induce the electors to defeat the Govern-ment." ( l ) Under these circumstances, i t i s not surprising that the Conservatives made every use of such an available ( l ) Vancouver Daily Province, Oct. 27, 1904, p. 6. The "Province" f i r s t appeared i n V i c t o r i a as a weekly paper on March 3, 1894. I t became the Vancouv/er Daily Province, i t s p u b l i c a t i o n being transferred to that o i t y on March 26, 1898. The newspaper i s independent i n p o l i t i c s . 133. argument against the Ottawa government as i t s f a i l u r e to \ grant B r i t i s h Columbia better terms. McBride's speech at Duncans on October 14th i s a t y p i c a l example of the Conserva-t i v e ' s attempt to convince the electorate that .the Laurier administration was neglecting the interests of the Province. Here.he declared: "Since 1871 we havj^paid...into the Dominion treasury #15,000,000 more than we have taken out. Was i t intended that we should pay th i s enormous fine f o r the p r i v i l e g e of entering confederation?" To the Province's claims the Dominion government had turned a "deaf ear"; the /Dunsmuir, P r i o r , Wilson-G-reen delegations had a l i k e been 'given "scant consideration". "Are you," he asked, " w i l l i n g to support men who sustain a government that neglects the intere s t s of_ your- province?" Mr. McBride was followed on th i s occasion by S i r Charles Hibbert Tupper, at that time President of the B r i t i s h Columbia Liberal-Conservative Association, who declared that there was "no other province where there exist such serious grievances and such strong reasons for opposition to the government of the day".d) These or si m i l a r extracts might be taken from almost any of the Conservative campaign meetings of October, 1904. Pr i o r to the elec t i o n , Mr. George H. Cowan of Vancouver had ( l ) See Colonist, Oct. 14, 1904, p. 6. 134. prepared a brochure on B r i t i s h Columbia's claim f o r i n -creased consideration. This was submitted to Hon. R. 1. Borden, the federal Conservative leader,^hc__onjDctober 10, JL9_04, sent the following reply to S i r Charles Hibbert Tupper: "Let me also say that I have given much thought to.the conditions i n B r i t i s h Columbia which, i n your opinion, c a l l f o r special attention i n con-sidering the : f i n a n c i a l r e l a t i o n s between the Dominion and5 that Province. You claim not only that these conditions are exceptional and peculiar to the s i t u a t i o n and physical character of your Province, but also that they are permanent i n t h e i r nature. In my opinion they are such as to /"demand immediate inquiry and investigation, to the / end- that any i n j u s t i c e c l e a r l y established may be ^^immediately r e l i e v e d . " ( l ) The L i b e r a l s ' reply to a l l t h i s was simply that the Laurier government could hardly be held responsible for the terms granted B r i t i s h Columbia i n 1871,—by a Conservative government; that the question of r e v i s i n g the o r i g i n a l terms was not a party matter; and, most important of a l l , the present issue was one of continued expansion and development of the country under L i b e r a l l e a d e r s h i p . T h e answer was ( l ) See Colonist, Oct. 21, 1904, p. 24. Also given i n " B r i t i s h Columbia's claim upon the Dominion Govern-ment for Better Terms" by George H. - Cowan; printed by the Independent P r i n t i n g Co., Vancouver, i n 1904, at p. 24. Cowan's speech i n Vancouver on October 13, 1904, i s also found here, at p. 25. (2) See Times, Oct. 14, 1904, p. 4. 135. apparently s u f f i c i e n t to s a t i s f y the electorate, for the f government party elected a s o l i d phalanx of Laurier \ supporters i n B r i t i s h Columbia, and emerged triumphant from the p o l l s throughout Canada* Thus^jie_aitejQp_t^to_make a party issue of B r i t i s h Columbia's treatment f a i l e d miserably. In r e a l i t y , the Cowan brochure emerges as the most inter e s t i n g and altogether . the most in s t r u c t i v e product of the campaign i n that regard. That document i s , i n fact, such as to deserve serious con-side r a t i o n as one -of the ablest expositions of B r i t i s h Columbia's case f o r increased subsidies. Mr. Cowan did not develop any e s s e n t i a l l y new arguments with possibly one exception; hut he did lend strength to the Province's claims with an imposing array of tables and figures, pre-pared, i t i s worthy of note, by the Dominion s t a t i s t i c i a n , Mr. George Johnson. Mr.. Cowan opens with an explanation that B r i t i s h Columbia's habitable area i s about one-fortieth of i t s entire surface, or about 6,000,000 out of a t o t a l of 238,485,007 acres, and l i e s more or less evenly d i s t r i b u t e d over the whole Province, along narrow but widely.separated valleys and gulches, immured hy 360,000 square miles of snow-capped mountains. This i s a condition for which no analogue i n Canada'can be found, and, he emphasizes, i t i s 136. a permanent one.^ 1^ The ef f e c t of these unusual conditions upon the cost of government i n the Province Mr. 0:owan i l l u s t r a t e s hy a series of tables, showing the cost of road construction per (2) person and per mile, v y and the per capita cost of c i v i l government, administration of j u s t i c e , s o c i a l services, education, etc., i n B r i t i s h Columbia as compared with the other provinces. The t o t a l e f f e c t of th i s i s summarized i n the following table, showijig_jjhjj__aye^^ per head fo r f i v e years, J :8^8_to J.J_02: Province Roads, C i v i l Justice Hospital, T o t a l etc. Gov't, etc. y* B r i t i s h Columbia $2791 11.0b $ .83 I .38 §5.18 3r Hew Brunswick .61 .08 .06 .02 . .78 Prince Edward Island .58 .06 .16 .06 .68 Quebec .08 .16 .32 .02 .60 Manitoba .19 .15 .12 .07 -.54 Ontario .06 .12 .19 .09 .47 Hova Scotia .20 .04 .03 .13 .42 Average .80 (1) Cowan, Ceo. H., " B r i t i s h Columbia's Claim", 1904, p. 5. (2) Tables comparing the cost of road construction per person and per mile w i l l be seen at pp. 6-10. The following extract from these pages gives some idea of how com-parisons were arri v e d at: "An examination, then, of Return Ho. 24, printed i n the sessional papers of Ontario f o r I885, V o l . 17, Part V, reveals the fact that during 18 years, from 1867 to 1885, Ontario b u i l t 2,333 5/4 miles of new roads i n Algoma, Muskoka, and other northern parts of the province at a t o t a l cost to the province and the m u n i c i p a l i t i e s of §684,946.74, or an average cost of §294 per mile, as against an average i n Br. C o l . of §2,000 per mile." (See i b i d . , pi-. 9.J 137 "By t h i s t a b l e , " he proceeds, " i t appears that the ra t i o of B r i t i s h Columbia's per capita expenditure under these four heads of service to that cf New Brunswick, the next pro-vince i n order of amount, i s $518:78 or nearly 7:1, and to that of Manitoba, the next province i n order of age, i t i s 9:1; while the r a t i o of Few Brunswick to Nova Scotia, the lowest of the provinces, i s $78:42, or about 1 4/5:1. I t further appears that to place B r i t i s h Columbia on an even keel with New Brunswick, the province next highest i n expen-diture, she should have had each year an allowance of $4.40 per head of an average population of 171*480, equivalent to a yearly sum of $754,512. n^ For the same years, the t o j ^ l _ expenditure for a l l ser-vices i n a l l provinces, showed the following comparison: Province Average. .Popular Total Spent Average per t i o n for 5 yra« for 5 yes, head per y r . B r i t i s h Columbia 1 171,489 $10,013,905 (^[32763^ Manitoba 245,469 . 5,132,134 ~r~4TIo*~*--Prince Edward Island 103,687 1,526,494 2.94 Quebec 1,636,454 22,057,010 2.69 New Brunswick 330,377 4,027,154 2.44 Nova. Scotia 458,882 4,815,300 2.10 Ontario 2,177,751 19,969,942 1.37 Total 4,451,138 $68,341,939 $3.07 (2) (1) Cowan, Geo. E., " B r i t i s h Columbia's Claim", 1904, p. 12. (2) Ibid., p. 13. 138. A s i m i l a r table, covering a period of t h i r t y years/""" ^ attested to the permanency of B r i t i s h Columbia's d i s a b i l i t y y as follows: Province Average popula- Total Spent Average per t i o n f o r 3" yra» f o r 1 30 y r s . head per'yr. B r i t i s h Columbia 90,b34 §32,243,Obd • ^ l l . b l T ^ ' Manitoba 123,801 ,16,023,974 . 4^1" Prince Edward Island 104,062 9,179,906 2.94 Quebec 1,421,994 104,027,881 2.44 Few Brunswick 314,802 20,581,060 2.16 Ontario 1,961,260 105,798,513 1.79 Hova Scotia 434,585 21,525,865 I.65 T o t a l 4,451,138 1309,182,264 |2.32 (1) B r i t i s h Columbia, as had so often before been claimed, contributed to the federal treasury, Mr. Cowan declared, at J;he r a t i o of 3 to 1, compared with the other provinces. By comparing t h i s condition with the t o t a l debts assumed by the Dominion at or since Confederation, Mr. Cowan arrived at the conclusion that. " B r i t i s h Columbia pays f o r l o c a l services 4:1 of the other provinces, and, we s h a l l see, contributes \^  to the Dominion treasury 3:1 of the other provinces; but, X when we come to the p r o v i n c i a l debts assumed by the Dominion, we f i n d the inverse r a t i o of 1:2 of the other provinces." This statement he substantiated by the following table showing a l l p r o v i n c i a l debts assumed by the Dominion: ( l ) Cowan, George E., " B r i t i s h Columbia's Claim," 1904, p. 14. - -139. At Confederation: Canada (Province)* § 6.2,500,000 Nova Sco t i a . . . 8,000,000 New Brunswick... 7,000,000 Subsequently assumed or allowed: Nova Scotia (1869). . . § 1,186,756 Province of Canada (1875) . . . . . . . . . . 10,506,089 Ontario 2,848,289 Quebec....... ... 2,549,214 Nova Scotia.. 2,543,059 New Brunswick 1,807,720 Manitoba.....'... 3,775,600 B r i t i s h Columbia 2,029*,392 Prince Edward Island.... 4,884,023 T o t a l " P r o v i n c i a l Debts assumed §109,430,148--, Taking the population from the Dominion census of 1901, the p r o v i n c i a l debts assumed by the Dominion f o r B r i t i s h Columbia and the other provinces are: Provinces Population Debts Assumed Amount per he ad B r i t i s h Columbia 178,657 ' § 2,029,392 §11735 "\ The Other Provinces -4,881,009 107,400,756 22.50 1 ( l ) ( l ) Oowan, George H., " B r i t i s h Columbia's Claim", 1904, . - . p-. 15. 140. Proceeding, Mr. Cowan a n a l y z e d _ i n j i e t a i l trade condi-tions i n the Dominion, using figures supplied hy the Dominion s t a t i s t i c i a n . - These established the r a t i o of 3:1 before referred t o . ^ ^ In conclusion, B r i t i s h Columbia's share i n the i n t e r - p r o v i n c i a l trade of the Dominion was considered, leading the_author to the following,conclusions: "But what i s B r i t i s h Columbia's share i n a l l t h i s i n t e r - p r o v i n c i a l trade, f o r which she i s paying, as we have seen, a threefold price? /Under a compelling t a r i f f her imports from the Leastern provinces are considerable. But; imports / w i l l not make a market f o r her products or make ( a trade. What, then, -of B r i t i s h Columbia's /exports to the other provinces? These consist ( c h i e f l y of lumber, shingles, fish'and f r u i t to ! the T e r r i t o r i e s and the Eastern Provinces- and \wgoods to the Yukon. - From a comparison of the figu r e s to be found i n the reports of the various Boards of Trade, and after allowances of-every kind i n i t s favor, t h i s trade doas not exceed 13,000,000. / "Thus, B r i t i s h Columbia being 3 per cent, of /the whole, population pays 9 per cent, of "the : (price of Confederation and gets i n return 1 per cent, of i t s trade benefits. "Or, taking a l l the figures from the s t a t i s t i c s f o r . l a s t year, we f i n d that a l l the provinces con-tri b u t e d to the Dominion the sum of $36,197,340, of which British.Columbia contributed $2,945,55l» or upwards of 8 per cent., and that, a l l the provinces, enjoyed the p r o f i t s on an i n t e r -p r o v i n c i a l turn-over of $315,000,000, the p r o f i t s on $3,000,000 of t h i s only, or less than 1 per cent, going to B r i t i s h Columbia."(2) (1) Cowan, George H., " B r i t i s h Columbia's Claim", 1904, . - , Table p. 21. -(2) I b i d . , p. 22. Mr. Cowan's arguments a r e i m p r e s s i v e i n t h e i r d e t a i l e d and t h o r o u g h a n a l y s i s , e s p e c i a l l y s i n o e he has used f i g u r e s c o m p i l e d hy the Dominion s t a t i s t i c i a n and not those o f any p r o v i n c i a l i n v e s t i g a t o r . Nowhere, up t o t h i s t i m e , w i l l t h e r e he f o u n d so t h o r o u g h a t r e a t m e n t o f the f i n a n c i a l a s -p e c t s o f t h i s s u b j e c t . The work i s f u r t h e r commendable f o r •"having i n t r o d u c e d a new argument f o r B r i t i s h Columbia's 'case, by comparing the p r o v i n c i a l debts assumed by the Dominion a t and a f t e r C o n f e d e r a t i o n , a p o i n t , v/hich though o c c a s i o n a l l y h i n t e d a t , . h a d not been d e v e l o p e d up t o t h i s t i m e , and one w h i c h i n . l a t e r n e g o t i a t i o n s was to be g i v e n a p l a c e o f c o n s i d e r a b l e i m p o r t a n c e . ^ 1 ) F u r t h e r i t marks a ^ d e f i n i t e advance over a n y t h i n g h e r e t o f o r e a c h i e v e d i n t h e C o n s i d e r a t i o n of B r i t i s h Columbia's t r a d e p o s i t i o n . A l l i n a l l , i t was no i n c o n s i d e r a b l e achievement, and i t s v a l u e as a s t u d y s t i l l r e m a i n s u n i m p a i r e d . Tet i t i s u n f o r t u n a t e t h a t so e x c e l l e n t a work was put t o use f o r p u r e l y p a r t y p u r p o s e s , the more so i n t h a t i t v/as i d e n t i f i e d w i t h t h e l o s i n g p a r t y . The p o s t - e l e c t i o n p o l i t i c a l p s y c h o l o g y o f t h e v i c t o r i o u s L i b e r a l s was n a t u r a l l y to r e g a r d i t as o p p o s i -t i o n e l e c t i o n propaganda, and a-document t h e r e f o r e t o be c o n s i d e r e d o f l i t t l e consequence; t h u s t h i s o t h e r w i s e ( l ) See P a t t u l l o , T.D.; Sloan:G. McG; and H a r t , John; " B r i t i s h Columbia's C l a i m f o r Readjustment o f xerma)*-of U n i o n " , 1?34, pp..17-26. 142. valuable asset to the l i t e r a t u r e of B r i t i s h Columbia's better terms campaign did not receive the attention which i t might otherwise have and which, it. unquestionably deserved. ^ Likewise, as a resu l t of t h e i r a c t i v i t y i n the e l e c -on and i t s outcome, the Conservative government at V i c t o r i a was l e f t i n a d i f f i c u l t p o s i t i o n . In spite of t h e i r acknowledged b e l i e f i n the p r o v i n c i a l rather than party character of the question, the members of the McBride government had attempted to make p o l i t i c a l c a p i t a l of the Laurier government's f a i l u r e to grant the hetter terms desired. With the defeat of t h e i r party i n the fe d e r a l elections i n B r i t i s h Columbia they had to retr i e v e t h e i r former non-party p o s i t i o n on the question as best they could. This involved denying the-very- basis of the i r recent e l e c t i o n a c t i v i t i e s to some extent f o r to accept; the elec-t i o n result as the verdict of the Province on the question of better terms was tantamount to admitting that the people t h e m s e l v e s d i d not. want a revised s c a l e of federal sub-s i d i e s . Thus, i n asking f o r a resolution endorsing the P r o v i n c i a l cabinet's action i n reopening the negotiations with Ottawa on t h a t question i n 19Ojj, we f i n d Premier McBride explaining to the l o c a l house: "It could not be argued from the r e s u l t of the recent general e l e c t i o n that the importance of t h i s subject was not appreciated by the people of the country, as there were a confusion of 143. / • p o l i t i c a l issues which, prevented, an expression of \opinion i n that way."(l) Returned to power on a tide of expansionist enthusiasm, the Laurier government was, as we s h a l l soon see, once again faced with a r e v i v a l of the P a c i f i c Province's demands, l a r g e l y as a r e s u l t of the natural outcome of that s p i r i t . In the Speech from the Throne on January 12, 1905, with whieh Laurier met his Commons fresh from a triumphant en-dorsation at the p o l l s , the following paragraph was con-tained: "The rapid growth, i n the population of the North-west T e r r i t o r i e s during the past two years j u s t i -f i e s the wisdom of conferring on these t e r r i t o r i e s p r o v i n c i a l autonomy. A h i l l for that purpose w i l l he submitted for your consideration."(2) This was the sign a l for a r e v i v a l of a c t i v i t y among the advocates of hetter terms for the provinces. Obviously parliamentary consideration of terms and subsidies f o r these new members of Confederation would a f f o r d an excellent opportunity f o r the discussion of a general r e v i s i o n of the agreements with the other provinces. An instance of t h i s renewed interest i n p r o v i n c i a l subsidies, i s the speech of F. B. C a r ^ e l l of Garleton, New Brunswick, on March 6th, i n which he advocated a rearrangement of grants and asked f o r (1) Colonist, Feb. 25, 1905, p. 1. (2) Canadian Hansard, 1905, V o l . I, p. 6. 144. a return of a l l correspondence i n connection with the pro-vince s! demands. This drew from the Prime Minister an able summary of those demands, and one v/hich indicated a warmer f e e l i n g for the mo.vement than S i r W i l f r i d had heretofore exhibited. In part, the Prime Minister's remarks on t h i s occasion are hereafter quoted: "The correspondence on the subject i s now pretty voluminous. It commenced, i f I remember r i g h t l y , i n the year I887. . . . . . "Two years ago another conference of the premiers of a l l the provinces met in the c i t y of Ottav/a. lew resolutions were passed, much upon the same basis as those whioh had been adopted at the Quebec conference i n 1887. Apart from these, the province . of B r i t i s h Columbia, though i t joined with the other provinces i n a demand for a re-adjustment of the subsidies, put i n a separate demand of i t s own, |claiming that i t was e n t i t l e d to s p e c i a l treatment Ion account of s p e c i a l circumstances a f f e c t i n g that / province and not the others. The matter has rested there, and i t i s not free f r o m . d i f f i c u l t i e s . I have had occasion more than once to express the view that I thought the p r i n c i p l e adopted at the time of confederation of giving subsidies to the provinces, was not as wise as i t might have heen. But at a l l events, we f i n d t h i s p r i n c i p l e in the Confederation Act to-day, and even i f we do not agree with i t , we must accept i t and abide by i t . "While I agree mostly v/ith the views expressed i n a l l the provinces that the present system i s too d r a s t i c , that i t should he given more e l a s t i c i t y , s t i l l at the present moment I would not commit myself beyond saying that I view the matter with a considerable degree of i n t e r e s t . I f i t i s to be approached and dealt with at a l l , I see no other-method than to have the question discussed f u l l y between representatives of the Dominion and the 145. "various provinces i n a conference to be ealled f o r that purpose."(l) In B r i t i s h Columbia, Premier McBride wasted no time /in u t i l i z i n g t h i s revived interest to renew his request f o r / ( increased f e d e r a l assistance. Qn January 24th—only twelve days a f t e r the Throne Speech was read at Ottawa—he t e l e -graphed the Prime Minister that a memorial setting f o r t h the Province's case was. being prepared and would he f o r -(?) warded i n a few days. v ' On February 1st the memorial was (*) despatched. v-" In a l e t t e r of the same date Mr. McBride (1) Canadian Hansard, Vo l . I I , pp. 210J, 2104, 2105. With respect to the f i s h e r i e s , the Prime Minister had the following to say: "The question of the f i s h e r i e s which, up to 1889 or thereabouts, was i n a rather s a t i s f a c t o r y condition, has been much disturbed by a judgment of the J u d i c i a l Committee of the Pr i v y Council.... I think the public interest would be served i f the f i s h e r i e s were vested altogether i n one body or the other, but there should be no divided authority; and I believe that the f i s h e r i e s had hetter be vested i n the Dominion than i n the provinces." (See i b i d . , pp. -2104-2105.) In June 1904, a fi s h e r y delegation consisting of Hon. F. J. Fulton ( P r o v i n c i a l Secretary i n the McBride Cabinet) and J. B. Babcock (B.C. Fishery .Com-missioner), v i s i t e d Ottawa, but achieved no d e f i n i t e settlement. (See B.C. Sessional Papers, 1905, PP» F 59-F 48.) (2) McBride to Laurier, Jan. 24, 1905; Premier's Letter Book (1904-1906). ( 3 ) For the f u l l text of the Memorandum see B.C. Sessional . . . Papers 1905, pp. D 1-D 19. Copies of the Memorandum were also despatched to the other members of the fe d e r a l cabinet. (See McBride to S i r F. W. Borden, Feb. 9, 1905; Premier Le t t e r Book (1904-1906). 1 4 6 . remarked that i t was intended to "include the whole case of the Province as i t appears to the present Government", and renev/ed his request f o r a commission to investigate his demands. A n t i c i p a t i n g the p o s s i b i l i t y of a general uniform r e v i s i o n , the B r i t i s h Columbia Premier said: "I beg to point out that no uniform arrangement f o r readjustment based on population w i l l be * s a t i s f a c t o r y to B r i t i s h Columbia nor indeed would i t be j u s t . It must be evident that any such re-arrangement, while i t would increase the subsidies to B r i t i s h Columbia would leave the Province r e -l a t i v e l y no better o f f . In a sense i t would leave B r i t i s h Columbia worse of f than before, because she must.contribute, as she does at present, excessively to the increased subsidies given to a l l the Provinces. In other words a uniform readjust-ment, without reference to the sp e c i a l circumstances \which, aff e c t our case, would leave a net result to \our disadvantage. It would neither a l t e r nor com-pensate for the d i s p a r i t y i n contributions to the Federal Treasury or the cost of l o c a l administration as compared with the rest of Canada."(l) Meanwhile at V i c t o r i a the P r o v i n c i a l Legislature was unanimously adopting the following resolution amidst much enthusiasm, but not without Hon. J. A. Macdonald, the Opposition Leader, chiding the Premier upon his actions during the federal campaign: "In the opinion of t h i s House, the province i s e n t i t l e d to such d i s t i n c t and separate r e l i e f from the Dominion of Canada based upon an equitable consideration of conditions i n the province, and large contributions made by the province to the Dominion by way of customs duties and otherwise, and the exceptionally high cost of government i n (1) McBride to Laurier, Feb. 1, 1905; Premier's L e t t e r Book . , -(1904-1906). 147. "the province ana of the development of our natural resources."(l) The new provinces were created and admitted into Con-federation as Alberta and Saskatchewan, but Ottawa did not use this- occasion to open a discussion of the demands of (2) the older provinces for a r e v i s i o n of the, federal subsidies. (1) Colonist, Feb. 25, 1905, p. 8. It i s inte r e s t i n g to note ' - that the year .1.905 m a.gjjL, ^ n e beginning of the days of substantial provjtaci^al.,_s&r Se^i-oml^Fapera, T908, (Public Accounts) p. B 23, Table No. 3. The following table gives revenues and expenditures for years 1904 to 1907: -Net Revenue Net Expenditure D e f i c i t Surplus "v. 1904 §2,b38,2b0 §2,bb2,794 " §224,534 § \ 1905 .2,920,461 2,302,417 618,044 \ 1906 3,044,442 2,328,126 716,316 N 1907 4,444,595 2,849,479 1,595,114 (2) See: Statutes of Canada, 1905, Ch. 3, P» 77. "An Act to establ i s h and provide for the Government of' Alberta". Also see Ch. 42, p. 201, "An Act to e s t a b l i s h and pro-vide f o r the Government of Saskatchewan". By the terms of these acts, each province was given the following yearly grants; (a) a subsidy of §50,000; (b) 80 ^  per head on an estimated population of 250,000, to be i n -creased according to a census taken every f i v e years, u n t i l the population reached 800,000; (o) since the provinces had no debt, they were each to receive 5 per cent, on §8,107,500 (or §405,375 y e a r l y ) ; (d) i n l i e u of lands retained by the Dominion, valued at § 3 7 , 5 0 0 , -000 i n each case, 1 per cent, of the value (or §375,000) u n t i l the population reached 400,000; from then.until the population reaohed 800,000, 1 1/2 per cent, (or §562,500); from that time u n t i l the population reached 1,200,000, 2 per cent, (or §750,000); and thereafter, at the rate of 3 per cent, (or §1 ,125 ,000) ; (e) f o r f i v e years each province was to receive 1/4 per cent, or §93,750 of that amount to a i d i n the construction-of public buildings. These subsidies o f f e r an int e r e s t i n g comparison to those granted to B r i t i s h Columbia upon i t s entrance 148. As a r e s u l t Hon. lomer Gouin took up the question of r e -newing these demands. During September he despatched l e t t e r s to the various p r o v i n c i a l premiers seeking t h e i r co-operation. Mr. McBride i n his reply stated that he was glad to cooperate with the other provinces i n th i s move, but rather than sign the j o i n t l e t t e r which had been pre-pared by the Quebec Premier, he would concur by writing . ^ Y ^ * ^ • - • ' ' />r direct to S i r W i l f r i d Laurier, a course made advisable by ' " ' . (2) reason of the Province's demand for special consideration. -This renewed a c t i v i t y was i n time destined to bear Footnote (2) continued from p.. 14.7: into Confederation (see Chapter i ) . For an i n t e r e s t i n g discussion .of the f i s c a l terms provided f o r the new provinces, i n which the -older provinces. 1 treatment and the successive " f i n a l " settlements are discussed, see Canadian Hansard, 1905, Vol. I l l , pp. 5434-5471. (1) The new Premier of Quebec, Hon. Lomer Gouin assumed . . . o f f i c e on March 25, 1905• (2) See McBride to Gouin and McBride to Laurier, Oct. 4., 1905; Premier's Letter Book (1904-1906), The l a t t e r l e t t e r , together with the joint l e t t e r sent by the other premiers w i l l be found i n Federal Sessional Papers, 1906, V o l . XL, No. 14, p. 96-5. A copy of the B..C. Memorandum was also forwarded to the Quebec Premier f o r his consideration. Also .see McBride to Gouin, Oct. 11, 1905; Premier's Letter Book (1904-1906), i n which McBride explains-his delay i n answering. 149. f r u i t , — b u t not u n t i l a year had elapsed. On November 15, 1905, S i r W i l f r i d Laurier addressed the following l e t t e r to each p r o v i n c i a l premier: "Pear S i r : "I have had for some time the memorial whioh was. placed i n my hands, suggesting that new f i n a n c i a l arrangements be made between Canada and the provinces, on the basis of c e r t a i n resolutions passed by the p r o v i n c i a l governments i n 1902, and praying that I f i x as early a date as possible at which the d i f f e r e n t p r o v i n c i a l governments could meet the federal government, to confer on t h i s important subject. "I am sorry to say I have not yet had an opportunity of presenting t h i s memorial to a f u l l cabinet c o u n c i l . I cannot hope f o r such an oppor-tun i t y during the s i t t i n g of the T a r i f f Commission, but as soon as the T a r i f f Commission has concluded i t s labours, I. w i l l at once bring your request to the attention of the Cabinet. " W i l f r i d Laurier." ( l ) On March 14, 1906, i n the House of Commons, the Prime Minister d e f i n i t e l y announced his intention of c a l l i n g such , a conference as had been requested "during the recess be-t N;ween t h i s session and the next".^) i t was not u n t i l September 10th, however, that the i n v i t a t i o n to the Provin-c i a l Premiers to meet with the Dominion government went fo r t h , and th i s Premier McBride promptly accepted on behalf (1) Fed. Sessional Papers, 1906, V o l . XL, No. 14, p. 96-6. (2) Canadian Hansard, 1906, V o l . I, p. 195. 150. of B r i t i s h Columbia.(l) Thus, at l a s t , a sympathetic hearing of the Quebec Conferenoje^_^c^mmendations was assured, and _a,s.ubse%uent constitutional---revision seemed within pos,sib.le<reach. But to B r i t i s h Columbia the achievement of a successful denoue-ment to i t s campaign f o r s p e c i a l consideration was f a r l e s s imminent; f o r Premier McBride was s t i l l faced with the herculean problem of convincing the other provinces and the ^Dominion of the justness of his claims for special treatment, and i n addition he had set f o r himself the task of convert-ing the Ottawa delegates to his plan of making no f i n a l and ^permanent settlement, but rather "that there should be from ^time to time, as shown to be^necessary, an adjustment of ^financial r elations conformable with new or altered conditions."> ' (1) McBride to l a u r i e r , Sept. 19, 1906; Premier's Letter Book, 1906-1909. (2) See McBride to Laurier, Dec. 24, 1903; quoted herein at p. 128 • - •;, 151. CHAPTER VI The Int e r - P r o v i n c i a l Conference, 1906. On Monday, October 8, 1906, i n the Railway Committee Room of the Senate, S i r W i l f r i d Laurier met representatives of the provinces of the Canadian union, who had assembled there i n response to the Prime Minister's i n v i t a t l o n . ^ 1 ^ With S i r W i l f r i d Laurier were the Hon.W. S. F i e l d i n g , his Finance Minister, Hon. A. B. Aylsworth, Minister of Justice i n the federal cabinet, and Postmaster General the Hon. Rodolphe Lemieux. Each province had sent i t s premier, supported i n every case,with the single exception of B r i t i s h Columbia, by one or more members of the p r o v i n c i a l cabinets. I t was therefore an imposing body, one well b e f i t t i n g the importance of the task i n hand. From the p r o v i n c i a l point of view there was, excepting B r i t i s h Columbia, a p r a c t i c a l ^ unanimity of f e e l i n g , f o r which the conference of 1902 had < provided a working basis. Two d i f f i c u l t i e s i n p a r t i c u l a r presented themselves: f i r s t , the problem of convincing the federal government; and, second, that of appeasing B r i t i s h Columbia i n i t s demand f o r special consideration, the decidedly more d i f f i c u l t of the two, as we s h a l l see. ( l ) The Hova Scotia delegates did not ar r i v e u n t i l the . - . following day. A f t e r a week of negotiations, the d i s t i n c t success of the ( delegates i n the former task was matched by t h e i r f a i l u r e ^ i n the l a t t e r . The f i r s t act of the Conference a f t e r i t had assem-bled was the e l e c t i o n of Hon. Lomer Gouin, Premier of Quebec, as chairman. The Prime Minister thereupon extended a welcome to the delegates, s t a t i n g that his government would be ready to discuss whatever proposals the provinces agreed i n submitting a f t e r a conference among themselves. To t h i s end, the delegates met that afternoon, and chose a committee, of which the B r i t i s h Columbia premier was a member, to prepare a resolution embodying the views of the Conference on the subject matter of the Quebec Conference's resolutions of 1 9 0 2 . ^ This committee's report was presented the following day and occasioned a debate of considerable duration, ex-tending on into the afternoon. The f i n a l result was the unanimous adoption of the Quebec resolutions, except f o r ^ alt e r a t i o n s necessary to include Alberta and Saskatchewan; -but i t was expressly reserved that any province could ( l ) Members of t h i s committee were: Messrs. Foy (Ont.);. Murray (H.S.); Pugsley (H.B.); McBride-(?>.C.); Campbell (Man.); Weir (Que.). See B.C. Sessional Papers, 1?07, p. B j>» Minutes of Meeting, Oct. 8, 1906. submit memoranda to the federal government i n writing con-cerning any claims i t may have to larger sums than allowed under those resolutions, This, of course, v/as a q u a l i f i e d success for B r i t i s h Columbia, for while not admitting the P a c i f i c Province's claims to special treatment, the way was nevertheless d e f i n i t e l y opened f o r a f u l l discussion of i t s case* It was decided that the Hon. lomer Couin, and Hon. J. P. Whitney, Premier of Ontario, should be a committee to submit the wishes of the Oonference to the federal govern-ment at the joint meeting to be held the following day. On Wednesday, the p r o v i n c i a l delegates met an hour e a r l i e r than the scheduled j o i n t conference with the Dominion r e -presentatives, and gave approval to the extracts of t h e i r previous meeting's procedure which were to be presented to S i r W i l f r i d Laurier. These were as follows? "Whereas the members of t h i s Conference are of opinion that i t i s desirable i n the i n t e r e s t of the people of Canada and essential to the develop-ment of the Provinces that an immediate provision be made for an increase of the subsidies granted by the Dominion to the several Provinces and f o r the award to the P r o v i n c i a l Governments by Canada of an amount s u f f i c i e n t to meet the costs of the administration of criminal j u s t i c e , not exceeding twenty cents per head of the population; "Therefore i t i s unanimously-"Resolvedl,—That the subject matter of the Re-solutions adopted by the Conference of Representa-ti v e s of the several Provinces held at Quebec i n 154. "December, 1902, and which were shortly thereafter presented to the Government of the Dominion and whioh were r a t i f i e d by the Legislatures of the then exi s t i n g Provinces except that of B r i t i s h Columbia, be now pressed upon the Government of the Dominion for immediate and favourable action, under reserve of the r i g h t of any Province to now submit to such Government memoranda i n writing concerning any claims i t may have to larger sums than those set out i n the said Resolutions, or to additional consi-deration or recognition.' "Resolved 2,—That i n case the Government of Canada concurring i n the views of the Conference as ex-pressed i n the above resolution, . a measure should be submitted to the Parliament of Canada at the next session providing for payment of such increased sub-s i d i e s and allowances as may be determined upon, pending an amendment of the B r i t i s h Forth America Act, i f such amendment should be deemed necessary."(l) At eleven o'clock the joint conferences began. Im-mediately following the presentation of the provinces 1 resolutions, Hon. J. P. Whitney presented a special memo-randum on behalf of Ontario. The burden of t h i s was a suggestion that a permanent scheme of a l l o t t i n g p r o v i n c i a l subsidies should be adopted based on the actual customs and excise revenues of the Dominion and one therefore which would allow for change and e l a s t i c i t y . I t was a r u l e , jthe memorandum urged, that the greater the population the ( l ) B.C. Sessional Papers, 1907, p. D 7; Minutes of Meeting, Oct. 10, 1906. Other resolutions presented provided fo r the necessary amendments to the Quebec Resolutions to provide f o r Alberta and Saskatchewan, and the appointment of Hon. Mr. Gouin and Premier Whitney as a committee. l a r g e r would "be the revenue of the Dominion, and hy inverse r e l a t i o n , the larger would he the expenses of p r o v i n c i a l governments. Any f i x e d scale would f a i l to meet t h i s s i t u a t i o n . By using such a d i v i s i o n as provided f o r hy Sections 87 and 96 of the Australian Constitution, wherehy one quarter of the customs and excise revenues were re-tained hy the f e d e r a l government, and the remaining three-quarters passed on to the state governments, a scheme e l a s t i c enough to meet the increasing costs of p r o v i n c i a l administration with the growth of population could he devised.^ 1) l o adjust the p r o v i n c i a l subsidies under such an arrangement on a basis of population would "be impossible, ( l ) Sections 87 and 96 of Australian Constitution, referred . , to, are as follows: "During a period of ten years from the e s t a b l i s h -ment of the Commonwealth and thereafter u n t i l P a r l i a -ment otherwise provides, of the net revenue of the Commonwealth from duties of customs and excise not more than one-fourth s h a l l be applied annually by the Commonwealth towards i t s own expenditure. "The balance s h a l l , i n accordance with t h i s con-s t i t u t i o n , be paid to the several States, or applied towards the payment of in t e r e s t on the debts of the several States taken over by the Commonwealth. "Parliament may grant f i n a n c i a l assistance to any state on such terms and conditions as the Parliament thinks f i t . " See text of Ontario b r i e f ; B.C. Sessional Papers, 1907, P. D 18. 156. having regard to the pos i t i o n of some of the smaller Pro-vinces", s t i l l the large contribution of^Xntari-o i n the fOEm of duties should receive due consideration. F i n a l l y the Ontario delegation concluded: "15te urge that i n the future no spe c i a l grant, " \ at.any rate, should be made to any one province, j? WTe repeat that, i n our opinion, an agreement ,\ which w i l l render impossible p e r i o d i c a l applica- \ tions f o r a rearrangement of the subsidies, i s \ feasib l e and should be determined upon. It i s \ possible that such an arrangement might be f i x e d and p o s i t i v e , and at the same time e l a s t i c , working automatically, so to speak, as the \ (2) Dominion census from time to time would determine.] 1 Here i s a p r a c t i c a l suggestion quite at variance to the__Jbasis..on which the. provinces had agreed at Quebec i n 1? 02 ...Federal income i s to be made. the_ basis of contribu-t i o n i n direct opposition to the Quebec resolutions' f i x e d rates,,per-head of population. While unhesitatingly opposing the McBride proposal-for periodic r e v i s i o n , the Ontario ( l ) See text of Ontario b r i e f ; B.O. Sessional Papers, 1907, p. D 18. (2) Ibid., p. D 19. Ontario's attitude i s 0 p l a i n l y demon-- - strated.by the following sentence of the b r i e f : "We are strongly i n favour of some d e f i n i t e and permanent arrangement regarding the subsidy ques-t i o n ; one which w i l l render unnecessary, and indeed impossible, p e r i o d i c a l applications f o r rearrangement of the subsidies." See p. D 17. 157. ^suggestion i a to provide an e n t i r e l y new scheme that would 1 endeavour to allow f o r change and therefore render periodic ^ a l t e r a t i o n s of the consti t u t i o n unnecessary. The Ontario delegates d i d not c a l l for a hard and f a s t population basis " f o r the d i v i s i o n of t h i s general subsidy among the pro-vinces. Though that should be the rule i n the main,, because, they urged, expense of government i s i n most eases proportionate to population, nevertheless the memorandum recognizes that such an arrangement would not be e n t i r e l y f a i r to the amaller provinces. The Ontario suggestion would not ignore the faot that the newer provinces with small populations and large areas would require more considerate treatment i n t h i s respect than the more developed provinces of the east; s i m i l a r l y , B r i t i s h Columbia too might es t a b l i s h a right to s p e c i a l treatment becauae of i t s mountainous sur-face. The Ontario plan of determining p r o v i n c i a l subsidies " } by an agreed percentage d i v i s i o n of federal revenues, i s a novel one to Canadian p o l i t i c s , and deserves as such both I commendation and sympathetic consideration. Beyond the proposal to make federal revenue the basis of prpvinciail grants, the Ontario delegates have very l i t t l e to add. They do not seem at a l l c l e a r as to how that sum i s to be apportioned between the provinces, except that Ontario 158. because i t contributes so l a r g e l y to federal customs and excise duties should receive a commensurate share; just how that most important problem was to be s e t t l e d was perhaps intended to be a matter f o r future discussion. I f i t was, the delegates from Ontario were fated to disappointment, j) f o r the federal a u t h o r i t i e s showed no d i s p o s i t i o n to s e r i o u s l y ^ consider t h e i r suggestion. As i t stands, however, the plan presents some formi-dable dangers. Two weaknesses i n p a r t i c u l a r present them-selves. F i r s t ; Even allowing the maximum e l a s t i c i t y , no scheme can be r e l i e d upon to meet a l l the unforeseen a l t e r a -tions of circumstance and condition of the future. To make r e v i s i o n impossible would be to b l i n d l y ignore the r i g h t s of future generations. The Ontario memorandum i s condemned i n t h i s respect by i t s own arguments, for when speaking of the right of succeeding governments to a l t e r the o r i g i n a l Confederation terms i t declares: "It would have been indeed strange had they attempted to l e g i s l a t e for p o s t e r i t y and, on be-half of the four Provinces then about to unite, assumed to bind f o r a l l time the nine Provinces now interested and the greater number undoubtedly to be interested i n the fu t u r e . " ( l ) Second: The plan as outlined contemplates the sub-s i d i z i n g of p r o v i n c i a l governments by means of revenues (1) B.C. Sessional Papers, 1907, p. B 17. 159. derived from customs and excise duties. Under such an arrangement the tendency would undoubtedly more than ever be to levy customs duties with the object of producing cash surpluses f o r such d i s t r i b u t i o n . But such duties do not bear evenly on a l l the provinces. B r i t i s h Columbia i n p a r t i -cular pays more than her share of import duties i n propor-t i o n to her population. Unless i n the d i s t r i b u t i o n some allowance was made i n order to compensate those provinces which pay an inordinate proportion of such taxation, the e f f e c t would be to noticeably increase an e v i l which already exists to the detriment of some sections of the country. In presenting t h i s plan, the Ontario government was i n a rather strange p o s i t i o n . Their predecessors i n o f f i c e had subscribed to the Quebec Resolutions i n 1902 and that a c t i o n had been r a t i f i e d by the Ontario l e g i s l a t u r e . In view of t h i s Mr. Whitney had endorsed those resolutions also when presented to the Ottawa Conference the.previous day; but he had a suggestion to o f f e r , and, taking advantage of the resolution allowing for the presentation of s p e c i a l oases, t h i s new plan, with which they are p l a i n l y more i n sympathy, i s presented. As matters stood, i t appears as a suggestion—a r i v a l suggestion—which i s merely l e f t with the federal a u t h o r i t i e s f o r consideration. Hon. Richard McBride followed Premier Whitney and presented 160. B r i t i s h Columbia's case for sp e c i a l treatment. I t was a re-statement of the case as l a i d down i n the memorandum of February, 1906, but i n shorter form. On Thursday morning the f e d e r a l and p r o v i n c i a l representatives met again i n ( j joint conference for the purpose of considering McBride*a .arguments. L i t t l e seems to have been accomplished, and the ^meeting was adjourned to the following day,--the day on %hi o h the Conference was to reach i t s most dramatic moment. I t ten o*clock Friday morning, an hour before the time set for the joint conference, the p r o v i n c i a l delegates met with the object of considering B r i t i s h Columbia's demands. Their labours i n that connection lasted throughout the day, except f o r the hour's meeting with the federal representatives. At that joint conference, S i r W i l f r i d Laurier informed the delegates of the federal government's attitude towards the P a c i f i c Province's memorandum. The Prime Minister's remarks, as recorded i n the minutes of the meeting, are here repeated: "I have given c a r e f u l consideration to the Mem-o r i a l of B r i t i s h Columbia's Government, and p a r t i -c u l a r l y to the request that a Commission be rf appointed for the purpose of inquiring into the f i n a n c i a l r e l a t i o n s between the Dominion and the Province. I have been unable to reach the conclu-^ sion that the appointment of such a Commission would be the best way of dealing with a question of t h i s kind. I fear that such a course'would not > lead to the harmonious settlement of the grants to Provinces, which a l l should desire to bring about. 161.-"However, I regard the matter at present -more as one for the opinion of the Conference than f o r the judgment of the Dominion Government. You have assembled f o r the purpose of considering the sums which should properly be paid by the Dominion to the Provinces i n the way of subsidy and allowance for the maintenance of Government. The B r i t i s h Columbia proposal comes e n t i r e l y within the chief purpose of t h i s Conference. I f this Conference, a f t e r hearing Mr. McBride's arguments i n support of his contention, reach the conclusion that an a r b i t r a t i o n should take place, through a Commission, f o r the purpose of dealing with the claim of * B r i t i s h Columbia, that would present the matter to the Dominion i n a new l i g h t , and, while I am not prepared to express any f i n a l opinion, I can say at once that such a recommendation from the Conference would have great weight with us, and we should f e e l bound to give i t further consideration. While I give you t h i s expression of my own views and the views of my colleagues who are here with me, I s h a l l , i f you w i l l permit me, off e r a suggestion. I think there i s a d i s p o s i t i o n on the part of the Conference /to recognize that the conditions i n B r i t i s h Columbia, / owing to the vastness of her t e r r i t o r y , to i t s / mountainous character, and the sparseness of her ( population, create exceptional d i f f i c u l t i e s which \ should be taken in t o consideration i n the adjustment \ o f the d i s t r i b u t i o n of the grants i n a i d of Provin-c i a l Governments. I am, myself, disposed to admit / t h a t such i s the case. I would strongly advise that / Mr. McBride a v a i l himself of the good d i s p o s i t i o n / which i s manifested i n the Conference, and at once I approach the question of what allowance, i n addition \ to that already contemplated, should be made to meet ^ B r i t i s h Columbia's d i f f i c u l t i e s . I t i s a question, which, afte r a l l , can better be s e t t l e d here than anywhere e l s e . I f e e l assured that the Conference w i l l be w i l l i n g to deal with the matter i n a s p i r i t of fairness to B r i t i s h Columbia. I propose, therefore, \ that we s h a l l leave you to discuss the question frankly with one another, and come to you again when probably you w i l l have reached some s a t i s f a c t o r y agreement."(l) (1) B.C. Sessional Papers, 1907, p. D 23; Minutes of Meeting, . - ,0ct. 12, 1?06. 162. This was a decision, of course, of no small impor-tance to B r i t i s h Columbia. Mr. McBride 'a suggestion of aji ^ independent a r b i t r a t i o n of his Province's case was rejected, at least temporarily. Instead the whole matter was turned over to the Inte r - P r o v i n c i a l Conference, which could hardly be termed either independent or dis i n t e r e s t e d . The Prime Minister had made a r u l i n g , or what p r a c t i c a l l y amounted to ^ t h a t , that the subsidy paid to any one province was the )> d e f i n i t e concern of a l l other p r o v i n c e s , — a direct reversal ( -of the policy o r i g i n a l l y employed i n the case of Nova Scotia, ) to which B r i t i s h Columbia delegates had so often related i N t h e i r own. Equally important, the Prime Minister indicated that he f e l t B r i t i s h Columbia deserved some special consi-deration, and advised the delegates to attempt an agreement on the amount. But, and t h i s too i s of no small importance, that award, i n the words of S i r W i l f r i d Laurier, was to be made i n view of the Province's geographic c o n d i t i o n s — " t h e vastness of her t e r r i t o r y , . to i t s mountainous character, ^and the sparseness of her population". Nothing was sa i d (Of the s t r i c t l y economic aspect of Mr. M&Bride's claims--jthe excessive contribution of B r i t i s h Columbia per capita [%o the federal treasury, and the unusually d i f f i c u l t p o s i -t i o n of the Province's primary in d u s t r i e s . These arguments were not set aside by the Prime Minister. They are neither 163. affirmed nor denied—a portion of B r i t i s h Columbia's claims l e f t quite unexplored at t h i s time. The whole ease was / l e f t to rest on the geographic oonditions of the Province., ( • CD -—This too was the attitude of the Conference generally.. Unusual though t h i s i s , i n view of the space assigned other arguments i n the Province's memorandum to the'Conference, - t h i s attitude i s not e n t i r e l y surprising i f McBride'a own statement i n his f i n a l l e t t e r of protest i s any measure of his verbal arguments at the meeting. (2) Following the departure of S i r W i l f r i d Laurier and his colleagues, the p r o v i n c i a l delegates reassembled i n order to discuss the Prime Minister's proposals with r er ference to B r i t i s h Columbia's claims. Considerable debate ensued , a f t e r which Hon. G. H. Murray, Premier of Nova Scotia, moved "that i n the opinion of the Conference i t i s /inadvisable that the claim, i n the way of subsidies, of any ^Province be referred to a r b i t r a t i o n " . This proposal (1) See Resolution of Conference, quoted p. 165. (2) See McBride to Gouin, Oct. 13, 1906- B.C. Sessional" Papers 1907, p. B 12. McBride writes: "The; under-l y i n g p r i n c i p l e I have kept i n mind i n respect to our p h y s i c a l d i s a b i l i t i e s , whioh i s our main claim for compensation, i s that the allowance should not be based on population alone, but also upon the cost of administration per head of the population. It i s obviously very much cheaper to administer a small, compact area with a large population, than to admini-ster a larger, broken area with a scattered popula-t i o n . " (3) B.C. Sessional Papers, 1907, p. i> 9; Minutes of Meeting, Oct. 12, 1906. 164. the Conference immediately endorsed, B r i t i s h Columbia alone dissenting. Premier McBride thereupon immediately l a i d the following declaration before the Conference: /"I protest that the question of B r i t i s h Columbia's /Claim upon the Dominion Government f o r a reference / should not be considered by t h i s Conference, but i t I i s a question between the Government of B r i t i s h -\ Columbia and the Dominion Government . " ( l ) Thus must any of B r i t i s h Columbia's former delegates almost c e r t a i n l y have spoken i n l i k e circumstances©^ 2^Never over-willing i n i t s desire to cooperate with the other pro-vinces, a c t u a l l y refusing to p a r t i c i p a t e i n the Quebec Conference of 1881, of which the present meeting-was a d i r e c t descendant, B r i t i s h Columbia had clung f a i r l y consistently 1 [to the b e l i e f that th4 question of her claims was a matter "iconcerning which the two governments d i r e c t l y concerned,~ /the Dominion and B r i t i s h Columbia—should ar r i v e at a s e t t l e -vment by a d i r e c t negotiation. H i s t o r i c a l precedent for such a procedure there undoubtedly v/as, but the task of Mr. McBride under the present circumstances was a hopeless one. Faced with the united opinion of eight other provinces and the recent advice of S i r W i l f r i d Laurier, there was l i t t l e to be gained from such a protest i n the way of d i r e c t r e -s u l t s . On the other hand, i t placed on record f o r future 11/-B.C. Sessional Papers, 1907, p. D Y; Minutes of Meeting, Oct. 12, 1906, • (2) Mr. Dunsmuir would not have made t h i s exact statement, - but he would very l i k e l y have protested at the Con-ference's method of making i t s award. He proposed dealing-primarily with the Dominion, the Provinces being consulted only i f necessary. The 1906 procedure was/reversal of t h i s (see p. 92). a . . . . . . 165. times British. Columbia's r e f u s a l to acquiesce i n such a method of settlement; and t h i s undoubtedly was Mr. McBride's reason for the protest. The Conference, however, proceeded to discuss B r i t i s h Columbia's p o s i t i o n and claim upon the Dominion f o r increased assistance. Matters were brought to a climax when Hon. J. P. Whitney mojred: "That i n view of the large area, geographical pos i t i o n and very exceptional physical features of the Province of B r i t i s h Columbia, i t i s the opinion of t h i s Conference that the said Province should receive a reasonable a d d i t i o n a l allowance * f o r the purposes of c i v i l government, i n excess x of the provisions made i n the Quebec Resolutions . of 1902, and that such addi t i o n a l allowance should, be to the extent of one hundred thousand d o l l a r s annually f o r ten years. t t(l) This, i t should be noted, was a restatement of the reasons which S i r W i l f r i d Laurier had offered f o r such an allowance. The s t r i c t l y economic aspect of the problem, the r e l a t i v e p o s i t i o n of B r i t i s h Columbia i n trade matters was not touched upon here e i t h e r . ^ ) The debate upon t h i s l a t e s t proposal was a prolongued one, necessitating an adjournment to the following morning. In his account of those hectic hours Premier McBride men-tions a counter proposal which he offered, and which i s not (1) B.C. Sessional Papers, 1907, p. B 10; Minutes of Meeting, Oct. 12, 1906. (2) Of a l l , i t was probably one of the le a s t understood of: B.C.'s problems i n Eastern Canada. recorded i n the minutes of the meeting. He says: "I endeavoured, to the best of my a b i l i t y , to show the t o t a l inadequacy of such a proposed settlement, and submitted an alternative proposal as follows:-- ~"—--. "That i n case the proposed readjustment of sub-s i d i e s , as set out i n the Resolutions of the Quebec Conference of the P r o v i n c i a l Premiers, be accepted by the Dominion Government, there s h a l l be paid to the Province of B r i t i s h Columbia each and every year, i n addition to the payments and subsidies otherwise provided, ah amount understood ' to be what the Dominion of Canada i s w i l l i n g to pay and the Province of British.Columbia to receive as a nominal recognition of the d i s a b i l i t i e s borne by the Province owing to peculiar physical conditions and from other causes set f o r t h i n the case of B r i t i s h Columbia for Better Terms and accompanying memorandum. « "That the said annual amount s h a l l be f i x e d i n the following manner— "One d o l l a r per head of the population u n t i l the * amount reaches §300,000, to remain f i x e d u n t i l the population i s 400,000. "Seventy-five cents per head of the population * thereafter u n t i l the amount reaches $500,000, to remain f i x e d u n t i l the population i s 1,500,000. "Thirty-three and one-third cents per head of the population thereafter u n t i l the amount reaches $600,000, to remain f i x e d u n t i l the population i s 2,500,000. "Twenty-five cents per head on population there-a f t e r , " ( l ) ( l ) See McBride 1s report of the Conference: B.C. Sessional Papers, 1907, pp. D 2- D 3; Minutes of Meeting, Oct. 12, 1906. In his l e t t e r of Oct. 13th to Hon. Lomer Gouin, McBride thus explains the object of his-pro^ posal. (See p. 170 where t h i s l e t t e r i s further quoted.). MOur d i s a b i l i t i e s are of a permanent character and 167. This proposal the Conference would not consider; /'instead, the delegates proceeded to discuss the suggestion v--of Premier Whitney. When an amendment was offered, suggest-^ i n g an allowance to the provinces of Manitoba, Saskatchewan and Alberta of ha l f the amount to be given B r i t i s h Columbia, Premier McBride withdrew from the Conference i n protest to the whole procedure. When he withdrew, B r i t i s h Columbia was assured of $100,000 for ten years. His continued attendance could not have a l t e r e d that allowance, and i t might have augured to the other premiers that Mr. McBride had acquiesced to the wishes of the other members of the Conference. H i s footnote ( l ) continued from p. 166. "can never be overcome. Therefore, the add i t i o n a l .allowance f o r t h i s condition must, i f admitted at a l l , remain as permanent as the d i s a b i l i t i e s are. "It i s true that with the increase of our popular tio n , the r e l a t i v e cost per head may, and probably w i l l , s l i g h t l y decrease i n time, but while the r a t i o of d i s p a r i t y may a l t e r , the general condition w i l l always remain. "Moreover, our requirements for developments i n the immediate future, and by reason of sparse population, are per head greater than they w i l l be a f t e r some time to come. "Consideration also must be had f o r the d i s a b i l i -t i e s and conditions of the past, as well as those of the future. "Therefore, the proposal I have submitted, as to amounts asked, has been framed on a s l i d i n g scale whioh conforms to the p r i n c i p l e s we have l a i d down. I t applies, so to speak, automatically, or as nearly as we conceive i t should apply." 168. withdrawal had the value of a protest well timed to r e a l i z e i t s f u l l force, i f i t were to he of any e f f e c t , for i t occurred shortly before S i r W i l f r i d Laurier and the federal delegates entered to announce t h e i r conclusions upon the resolutions submitted the previous Wednesday, and to receive the Conference's proposal with reference to B r i t i s h Columbia's claim f o r special treatment. Actually, the withdrawal had l i t t l e ^ e f f e . o t , and from r e s u l t s i t seems as i f Mr. McBride \ played this l a s t card i n his losing game to l i t t l e advantage, fo r apart from announcing i n no uncertain terms that B r i t i s h Columbia was adamant upon accepting the r e s u l t of the I n t e r - P r o v i n c i a l Conference as a s a t i s f a c t o r y s e t t l e -ment or a j u d i c i a l decision of her claims, nothing was achieved by i t that would j u s t i f y i t s wisdom. Mr. McBride's dissention and retirement from the Con-ference was announced to the Prime Minister at this l a s t meeting of federal and p r o v i n c i a l representatives, following the presentation of the resolution passed with respect to B r i t i s h Columbia's s p e c i a l grant. A f t e r these preliminaries. Mr. McBride re-entered the Conference and remained u n t i l the close of the-meeting. S i r W i l f r i d announced that his government had decided to grant the increases requested, with the exception of the special B r i t i s h Columbia re s o l u -t i o n , which i n view of the disagreement, would necessitate further c o n s i d e r a t i o n . F i n a l l y the Prime Minister con-cluded that his government "desired to impress upon the Conference the f a c t that these resolutions of 1887 seemed to have heen drawn and considered with great care, and they are of opinion that the terms agreed to at that time ought not to he departed f r o m " — i n other words, the federal government i n s i s t e d the new basis be made " f i n a l and un-alterable",X 2 ) In the afternoon of the same day, the p r o v i n c i a l delegates met. The only other s i g n i f i c a n t event of t h i a ( l ) Two additional proposals of the Conference were rejected . - . by the Prime M i n i s t e r . They were: 1. That a b i l l should be introduced into the Parliament of Canada providing for the payment of the increased subsidies and allowances pending necessary amendment of the B.H.A. Act. 2. That the provinces be awarded by Canada an amount s u f f i c i e n t to meet the costs of the adminis-t r a t i o n of oriminal j u s t i c e , not exceeding 20 cents per head of the population. The resolutions accepted were su b s t a n t i a l l y the same as those of the Conferences of 1887 and 1902 (see p. 104). (2) B.C. Sessional Papers, 1907, p. D 24; Minutes of . . . Meeting, Oct. 13, 1906. Following t h i s j o i n t meeting, the p r o v i n c i a l delegates agreed, at the suggestion of the Prime Minister, to recommend to t h e i r respective l e g i s l a t u r e s , the a b o l i t i o n of any s p e c i a l taxes placed on companies incorporated by the Dominion (see p. D 13).. The Prime Minister also took .occasion at the j o i n t meeting to remark upon the unsatisfactory condition of a divided con-t r o l of the f i s h e r i e s . 170. f i n a l day of the Conference was a meeting of the p r o v i n c i a l delegates at which a l e t t e r addressed to Hon. Lomer Gouin fo r Premier McBride, was read and considered. In part, Mr. McBride's l e t t e r i s hereafter quoted, f o r i t i s a document of considerable h i s t o r i c a l importance, explaining as i t N does, h i s p o s i t i o n i n the matter - of his withdrawal from the Conference. It reads: "In view of the c r i t i c a l stage reached i n the negotiations i n respect to the add i t i o n a l allowance claimed hy B r i t i s h Columbia, I desire to place my p o s i t i o n c l e a r l y and e x p l i c i t l y on record. "There are three main phases of the case of the Province determining-the attitude of i t s government, to which I wish p a r t i c u l a r l y to direct the attention of the members of t h i s Conference: "1. - B r i t i s h Columbia did not secure as favourable terms upon entering Confederation as subsequent a events have shown i t was e n t i t l e d to have obtained. "2. The Province, by reason of i t s peculiar circumstances, has contributed, and s t i l l continues to contribute, per head, enormously i n excess of the- • average of the rest of the Dominion to the Federal Treasury. "3. Owing to the physical conditions of B r i t i s h Columbia, the average cost of administration per capita has, for a period covering t h i r t y years, heen shown to be f i v e times that.of the other Provinces. The physical conditions.to whioh I re f e r either do not exist at a l l i n the other Provinces or.not by any means i n the^same degree. "There has been no attempt to dispute the f a c t s N. of.our case, and I hold that our contentions are i n - ) convertible. I cannot, therefore, be expected to <^  forego the pressing of claims founded on such f a c t s , for the sole purpose of a r r i v i n g at unanimity and harmony i n t h i s Conference, however desirable i n / i t s e l f the l a t t e r may be. Even were I disposed to^/ 171. "make the s a c r i f i c e , the people of the Province^, would not exonerate me. "I take the p o s i t i o n that i f the members of t h i s Conference recognize the claims of B r i t i s h Columbia for special consideration they are morally bound to give them t h e i r support. I f , on the other hand, they do not admit their v a l i d i t y , i t i s , I admit, equally incumbent i n t h e i r case to a s s i s t . i n having our claims investigated before a competent and .independent t r i b u n a l . Our contentions are sound or they are not sound. With t h i s i n view, I have i n s i s t e d upon a formal declaration of the attitude „ of t h i s Conference being placed on record before proceeding with a discussion of the terms I have proposed. ...... "I wish to state here in a l l earnestness that I cannot depart from those p r i n c i p l e s i n any s e t t l e -ment we may make in..respect to our special claims. I am not bound to the exact l e t t e r of our demands, and am w i l l i n g to go as f a r as possible, consistent with our general p o s i t i o n , to meet the wishes of my confreres on thi s occasion; but, unless the members of t h i s Conference are prepared to go much farther i n my d i r e c t i o n than they have done, i t i s useless to discuss such an arrangement as i s con-tained i n the res o l u t i o n of to-day, and I had no other alternative other than to protest and to r e -t i r e , d e c lining to take further part i n the pror ceedings."(l)' The Conference's answer, contained i n a l e t t e r drafted a f t e r debate, was merely to announce that the r e s o l u t i o n with respect to B r i t i s h Columbia had been passed, adding, "This r e s o l u t i o n shows d i s t i n c t l y that the Conference recognized the claim of B r i t i s h Columbia f o r exceptional treatment. I am s p e c i f i c a l l y directed to add that i t was passed a f t e r a l l (1) McBride to Couin, Got. 13, 1906; B.C. Sessional Papers, 1907, p. B 11. . data presented by you had been f u l l y considered.*(l) Whatever the f i n a l judgment upon Mr. McBride*s pro-~~^ cedure at Ottawa may be, there can be l i t t l e doubt that the electorate of B r i t i s h Columbia approved h i s actions. In December, a f t e r his return to V i c t o r i a , the House was dissolved and the Premier faced the f i n a l test of a provin-c a i l e l e c t i o n . That there were other important issues at th i s e l e c t i o n cannot f o r a moment be denied, hut both par t i e s showed a d e f i n i t e desire to make a f i g h t of the whole better terms question, and i n p a r t i c u l a r McBride's conduct of the Ottawa negotiations. (2) In a written state-ment to the public on January 1st, the Premier set f o r t h the government's case:as follows: tEven i f there were no other reasons f o r an appeal to-the country, i t would be the duty of the govern-ment to give the electors an opportunity to at once pass judgment upon my course at the recent i n t e r -p r o v i n c i a l conference at Ottawa "It was not intended when union was effected that either of the parties to i t should p r o f i t to the injury of the other, but that the functions on the one hand, and the source of revenue on the other, of the respective governments should be so divided that each should have enough to meet i t s needs and no more "My p o s i t i o n i s that the province ought not to suffer for t h i s defect i n the Terms of Union f o r (1) Gouin to McBride, Oct. 13, 1906; B.C. Sessional Papers, - .. 1907, p. D 12. (2) Prominent i n the L i b e r a l platform also were charges of corruption, p a r t i c u l a r l y i n connection with the Kaien Island Land grant. 173. "which i t i s not responsible; that there should be added to i t s annual subsidy such a sum as w i l l f u l f i l l the intentions of the treaty; that t h i s sum should be ar r i v e d at by an investi g a t i o n of the fac t s of the case, and that the Dominion should agree to accept the findings of an impartial com- j mission appointed to make such an inv e s t i g a t i o n . I hold, further, that i f the Dominion government ahoTXia. r e f M g r t o i ad'opt~t-hrsT~,or'~s brae" "ot fce*"^Th*o1fc--of reacKing a f a i r set tTernent7 Tif• wlTl""b¥~thT^duty o t~1Rfi£§~^^ .» t i j l ^ j S E ^ ^ ^ i i X l ^ ^ ^ Q m ^ the.. D^ifejsj»J^j^^to-e i t - % r now suffers as^t'Key" may''l3i'"a1ble^t*o,"afford. ~Al|d^I apj^al^t.o^t b^ de c 1 are~~~ t hems elyj|.s, 4e f ijQlJ^ly^up.Qn ^  t hi s^al'l-imp oft aht g tu^gi !gn.^(-l) " * As the campaign proceeded, the Conservatives went farther i n th e i r assertions, w. W. B. Mclnnes, who had been Governor of the lukon, resigned that p o s i t i o n to r e -enter p r o v i n c i a l p o l i t i c s , as jo i n t leader of the L i b e r a l s *> with J. A. Macdonald. Shis, and other occurrences of the kind, l e d to charges from the Conservatives of federal interference. A l l over the Province, coupled with h i s better terms demands, went the companion charge that the federal government was now unjustly i n t e r f e r i n g i n B r i t i s h Columbia p o l i t i c s , the inference being that t h i s was an i n d i r e c t way of fo r c i n g the Province into l i n e with the / ( l ) Colonist, Jan. 1, 1902, p. 2. McBride»s request f o r a . . di s s o l u t i o n , however, was based on c r i t i c i s m of h i s f i n a n c i a l p o l i c y . His conduct at Ottawa was not mentioned i n his communication to the Lieutenant-Governor (see McBride to Lieut.-Governor, Hov. 2, 1906; Premier's L e t t e r Book, 1906-1909). 174 findings of the Ottawa Conference. The proof of this^^charge i s as impossible how as i t was when i t was o r i g i n a l l y made; but i t was exoellent^campaign_material, and Premier McBride and W. J. Bowser, who by now had become one of the Premier's ablest lieutenants, made the most of i t ; and c e r t a i n l y the actions of Mr. Mclnnes, and Judge Henderson, who resigned his p o s i t i o n also to enter the f i g h t for the L i b e r a l s i n Vancouver, lent colour to the McBride" charges y The L i b e r a l s ' r e p l y on t h i s score was an unqualified 'denial. They charged the Premier with i n s i n c e r i t y i n the whole question of better t e r m s . H i s actions at the Con-ference were the subject of the severest c r i t i c i s m , es-p e c i a l l y by Mr. Mclnnes who declared: " I f you are ever going to get better terms f o r B r i t i s h Columbia you w i l l have to stand behind a L i b e r a l Premier. McBride has put himself out of. court. W.e are a member of a partnership of provinces, and unless we get from them by t h e i r good w i l l and cooperation the better terms we l^are seeking, we s h a l l never get them at all."(3 ) When the b a l l o t s were counted on February 2, 1907, \^ there was no doubt of the electorate's opinion; the re s u l t (1) See the following numbers of the Vancouver Province, which report meetings at various points i n the Province: Jan. 8, 1907, p. 1; Jan. 12, 1907, p. 1; Jan. 24, 1907, p. 15; Feb. 1, 1907, p. 10. (2) V i c t o r i a Times, Jan. 29, 1907, p. 1. (3) Vancouver Province, Jan. 9, 1907, P» 4. 175. was a complete v i n d i c a t i o n of Premier McBride fs actions. Returned to power with an increased majority, the Premier (1) n a t u r a l l y f e l t he had received an unhesitating endorsation. The L i b e r a l s urged that the v i c t o r y came rather from the country's prosperity—which, they i n s i s t e d , was mostly due to the Laurier government's wise p o l i c i e s — a n d that the hetter terms question and the charges of federal interference had had l i t t l e i f any e f f e c t . In that b e l i e f they un-doubtedly found some consolation; but, while frankly admitt-ing the undoubted influence of good times and a p r o v i n c i a l surplus, i t i s doubtful i f the.question of better terms can be dismissed that e a s i l y . The L i b e r a l s during the campaign had done t h e i r best to shake the government's support in. that respect; and McBride.J?.o?-M^^art _had asked.for a d e f i n i t e e l e c t o r a l mandate to proceed with his demands. The L i b e r a l s , l i k e the p r o v i n c i a l Conservatives i n the preceding f e d e r a l e l e c t i o n , having made an open f i g h t of B r i t i s h x Columbia's better terms demands and l o s t , would f a i n have dismissed the whole question and once more have relegated i t to the realm of non-party matter. (l) McBride had a clear majority of twelve. The Conserva^ . . . t i v e s elected 27 supporters, the L i b e r a l s 12 and the S o c i a l i s t s 5* 176. But now e s p e c i a l l y that could not be done. Premier McBride took, the e l e c t i o n r e s u l t as a declaration of public w i l l on the question. Thus when S i r W i l f r i d Laurier i n t r o -duced into the House of Commons the amendments to the con-s t i t u t i o n suggested by the Ottawa Conference, including B r i t i s h Columbia's s p e c i a l §100,000 allowance and the pro-^ v i s i o n that these reforms were to be f i n a l and unalterable, ^Premier McBride immediately asked the l o c a l l e g i s l a t u r e to i pass a resolution s p e c i f i c a l l y endorsing his actions, pro-•1 t e s t i n g any f i n a l and unalterable settlement, and f i n a l l y y declaring the incompetence of the Ottawa Conference to € 1 } properly adjudge the merits of B r i t i s h Columbia's ease. The re s o l u t i o n concluded with the declaration: "That a proper i n v e s t i g a t i o n of such claims would e n t a i l those charged with i t v i s i t i n g B r i t i s h Columbia and examining conditions on the spot, and that an indepes^ni_jbTiJmnal such as suggested i n the memoranda, mentioned above would be the only just method of a r r i v i n g at a proper decision as to such claims; and that, p a r t i c u l a r l y , i n view of the fac t that other provinces of the Dominion are making similar claims of a f i n a n c i a l character there i s such a c o n f l i c t of interest as would mitigate very strongly against an equitable decision as to the claims of B r i t i s h Columbia being a r r i v e d at by a t r i b u n a l com-posed, i n i t s entirety, of representatives of other provinces, " ( l ) The resolution passed on March 25th, on a straight (1) See Colonist, March 19, 1907, p. 2. Also see Colonist, . - . March 21, 1907, p. 2. 177. party vote between Conservatives and L i b e r a l s ; the three S o c i a l i s t s , while agreeing i n part with the resolution, did not e n t i r e l y concur and therefore r e t i r e d , taking no part i n the voting Curiously enough, on the same day the House of Commons was debating the Address to the Throne which was moved by S i r W i l f r i d Laurier and embodied the changes pro-posed to be made i n the Confederation Act. Those changes expressed the w i l l of the In t e r - P r o v i n c i a l Conference of 1906. (20 The debate i s an important one and i t s subject matter covers p r a c t i c a l l y the entire f i e l d of the better terms negotiations i n Canada. S i r W i l f r i d Laurier, i n out-l i n i n g the history of the revisionary movement, and the purpose of the present changes, made h i s own pos i t i o n on the matter of the f i n a l i t y of the arrangement to be entered into quite c l e a r . The award to Hova Scotia i n 1869 had set a precedent upon v/hich a l l subsequent demands for r e v i s i o n were based, and he added: "The door which was then opened never had been closed to the present day."^2) His purpose (1) See Colonist, March 26, 1?07, pp. 1, 10, 12. Also see Colonist, March 27, 1902, pp. 5, 9, 12. (2) See p. 8. For the "Address to the Throne" as passed . - by the Canadian Parliament see Appendix i' •>> w. For L a u r i e r f s "Hotice of Motion" see Canadian Hansard, 1906-07, V o l . I l l , p. 5288. (3) Ibid., p. 5297. 178. waa e s s e n t i a l l y to grant the provinces what they were now asking and then close that door. Speaking of the various demands f o r increased grants, the Prime Minister said: "What i s remarkable i n t h i s portion of our h i s -tory i s , that a l l these grants have been made by parliament without any plan, without any guiding p r i n c i p l e , hut aimply as the expediency of the IM^c^-^&i moment suggested, or rather as the f i n a n c i a l diffi-j-c u l t i e s of one province or the other were more or J l e s s urgent."(l) The p o l i c y of the government had heen to "ascertain what was the most they (the provinces) deemed requisite i n order to prevent t h e i r coming again to Ottawa and knocking at the door of t h i s parliament".^ 2) To questions from S i r George Foster regarding the proposal to make the changes asked for " f i n a l and unalterable", the Prime Minister offered the reply that has so often heen c i t e d since i n subsequent discussions of the Act of 1907. "The hon. gentleman knows,tt S i r W i l f r i d answered, "that there i s no other f i n a l i t y i n a l l these matters but the w i l l of the people, the w i l l of parliament i t s e l f . The settlement of B r i t i s h Columbia's request f o r s p e c i a l assistance did not pass without comment. One ques-t i o n asked the Prime Minister waa the aame one whioh Mr. (1) Canadian Hansard, 1906-07, ¥ol. I l l , p. 5298. (2) Ibid . , p. 5304. . (3) I b i d . , p. 5308. 179. McBride and B r i t i s h Columbians generally were pondering: "Does the Prime Minister expect the physical conditions to change i n ten years?!'^ 1) S i r W i l f r i d ' s answer i s therefore not without decided inter e s t to B r i t i s h Columbians. He re p l i e d : .'•Ho. But, i n ten years B r i t i s h Columbia w i l l have another transcontinental railway, and many other railways also; she w i l l be brought into close contact with the markets of the east. I A believe, and I think my hon. f r i e n d (Mr. Sproule) w i l l agree with me that i n ten years-the condir . tions i n B r i t i s h Columbia should have materially changed.1*-Of the government's c r i t i c s , S i r George Foster un-questionably was the most i n s i s t e n t and one portion of his speech i s of decided interest f o r , approaching the problem \ \ from the opposite viewpoint, he arr i v e s at p r a c t i c a l l y the • i d e n t i c a l c r i t i c i s m of the procedure adopted i n deciding upon the proposed r e v i s i o n that characterized the B r i t i s h •-Columbia Premier's attacks. Considering the new arrangement from the Dominions standpoint, and the effect of the changes on the federal government, he says: "Instead of there being any expert examination, any.careful looking into the matter by the Dominion \" government through their f i n a n c i a l department, and with the a i d of t h e i r expert accountants and J f i n a n c i e r s , i t simply amounts to t h i s , that the y p r o v i n c i a l premiers claimed so much, and the Dominion government came to the conclusion that ( l ) See Canadian Hansard, 1906-07, ITol. I l l , p. 5307. For a , - _ complete account of the incident. B.C.'s f i n a n c i a l history during the next decade does not add to S i r W i l f r i d ' s reputation f o r prophecy. "the easiest way was, as they were i n practieaI~-\ agreement, to give them exactly what they asked. J) f o r , and. so get rid. of the business as quickly as possible. A. four days conference was quite s u f f i c i e n t to clear up t h i s whole matter and lay the burdens on t h i s Dominion f o r a l l succeeding years, and i t ended v i r t u a l l y giving to each pro-vince what the p r o v i n c i a l premiers demanded, and giving to B r i t i s h Columbia, against B r i t i s h Columbia's- protest, not what the Dominion govern- > ment decided should be given, but what the pro- ^ v i n c i a l premiers decided should be a f a i r allowance to B r i t i s h Columbia."(l) Mr. McBride would have gone farther than t h i s , of course, and declared that the only f a i r and equitable way of a r r i v i n g at a just allowance f o r B r i t i s h Columbia would be by the award of an independent commission. To the suggestion that the federal experts were competent to decide upon the amount he must n a t u r a l l y have taken excep-t i o n , but otherwise, so f a r as i t goes, Mr. McBride would agree with t h i s c r i t i c i s m , which i n turn offers some corroboration to his disagreement at the manner i n which the awards were arri v e d a t . (1) Canadian Hansard, 1906-07, .Vol. I l l , p. 5313* 181 CHAPTER VII. McBride Ts Mission to London. On March 30, 1907, the Executive Council of B r i t i s h Columbia passed a minute, r e c i t i n g the resolution passed i n the L e g i s l a t i v e Assembly on March 25, endorsing Premier McBride*s actions and recommending an appeal i n the i n t e r e s t s of the Province to the Imperial government. As a consequence, the Premier was appointed "Special Agent and Delegate, f o r the purpose of laying the appeal of B r i t i s h Columbia before the Imperial Government". Ottawa was ad- \ vised of t h i s action by the Lieutenant-Governor on A p r i l 2nd, who also requested that the Secretary of State f o r Colonies be n o t i f i e d of the a p p o i n t m e n t T h e following day Lieutenant-Governor Dunsmuir wired direct to the C o l o n i a l Secretary n o t i f y i n g him that a delegate was pro-(2) ceeding to London. ' The P e t i t i o n of B r i t i s h Columbia to the King was drawn up by the cabinet and presented to the Lieutenant-Governor on A p r i l 9, and the following day received his approval. This appeal r e c i t e s the course of the Ottawa ^ (1) Dunsmuir to Secretary of State, Ottawa, A p r i l 2, 1907; . . B.C. Sessional Papers, 1908, p. C 12. Also see Minute of Council, at p. C 12. (.2) Dunsmuir to Secretary of State f o r Colonies, A p r i l 3, . . - 1907; B.C. Sessional Papers, 1908, p. C 14. 182. deliberations,'the subsequent address passed by the Canadian House of Commons and to be presented to His Majesty, the B r i t i s h Columbia Resolution on March 25th, and then proeeeds:\ •JYour p e t i t i o n e r s submit that although the claims o f , B r i t i s h Columbia"to special treatment were re-cognized by both the Conference and the Dominion Government, as above indicated, due consideration was not given to the fact that the physical d i s - " X a b i l i t i e s of the Province are permanent and that A the a dditional allowance for t h i s condition must^y also remain permanent. Your p e t i t i o n e r s submit that only by the \ appointment of a Commission, as set f o r t h i n the ^ memorandum submitted to the Dominion Government by the Honourable Richard McBride, on October 10th, 1906, can a proper decision be arr i v e d at with regard to the claims of B r i t i s h Columbia. "That the proposed amendment to the ' B r i t i s h . • Horth America Act', allowing $100,000 a year f o r X ten years as a f i n a l and unalterable settlement f o r \ the recognized claims of B r i t i s h Columbia would 1 i n f l i c t an i n j u s t i c e , both because of the i n - / adequacy of such compensation and by reason of the / fac t that the Province would be deprived of the / right to have such claims further recognized or considered."(l) On A p r i l 11th_Pjcemier_McB£ide l e f t for London, reaching hia destination on the 27th of the same month. I t was not u n t i l May 3rd, however, that Mr. McBride waa able to interview Loi^d_Elgin, Secretary of State f o r the Colonies. At that interview he'presented the Province's claims, and i n p a r t i c u l a r he stressed the i n j u s t i c e of the attempt to make (1) See B.C. Sessional Papers, 1908,. pp. C 16-11"• 183. (1) the r e v i s i o n " f i n a l and unalterable". Thereafter several interviews were had with Mr. Winston C h u r c h i l l , who was <P then Parliamentary Under-Secretary of State for the Colonies, and other o f f i c i a l s of the Colo n i a l O f f i c e . On two occa-sions Premier McBride consulted S i r W i l f r i d Laurier, who was then i n London, with a view to arranging an amicable' s e t t l e ^ ° ment of the d i f f i c u l t y , but the Canadian Prime Minister was unwilling to accept any modification of the proposed b i l l . There was an undeniable d i s p o s i t i o n on the part of \ the Imperial a u t h o r i t i e s i n a l l these discussions to avoid anything that might be interpreted as an interference i n the domestic a f f a i r s of Canada. The Dominion and a l l the provinces, with the exception of B r i t i s h Columbia, were agreeable to the terms of the proposed settlements a f a c t against which Mr. McBride urged the justness of his claims and the theory that the Terms of Union formed a separate and d i s t i n c t treaty between Dominion and Province v/hich ( l ) In reporting t h i s interview, Mr. McBride says: "I made i t clear to His Lordship that while I r e a l i s e d that no Act of Parliament could be regarded as ' f i n a l and unalterable' i n i t s e f f e c t , yet the using of such words i n the text would seem to express an i n -tention on the part of the Dominion Parliament and a majority of the Governments of the Provinces of Canada, against which the Government, Legislature and people of B r i t i s h Columbia were re s o l u t e l y opposed, and that i f allowed to remain would be pre-j u d i c i a l i n the extreme to the hope of the question of our s p e c i a l claim ever being again opened up." . See B.C. Sessional Papers, 1908, p. C 2» 184. could alone be al t e r e d by di r e c t negotiation between the two governments concerned, to very l i t t l e a v a i l . On June 5th, the following o f f i c i a l communication was received from Lord E l g i n containing the Imp^eri^^govern-m^nt2^ f i s a l_r^E,ly. jb.o^remie.r_.McBri.de_ls^ rjauesit s: '•2. Lord E l g i n f u l l y appreciates the force of the opinion expressed that the B r i t i s h North America Act was a r e s u l t of terms of union agreed upon by the contracting Provinces and that i t s terms cannot be al t e r e d merely at the wish of the Dominion Government. " J . But, i n t h i s case, besides the unanimous r-^ approval of the Dominion Parliament i n which B r i t i s h Columbia i s of course represented to the proposed amendment of section 118 of the B r i t i s h Forth America Aot, his Lordship i s bound to take into account the fact, that at the Conference of 1906 the representatives of a l l the other Provinces of Canada have concurred i n f i x i n g at §100,000 annually for ten years the a d d i t i o n a l allowance payable to B r i t i s h Columbia, while r e j e c t i n g the / claim of Manitoba, Albe r t a and Saskatchewan f o r additional grants, and that they also rejected the proposal that the claim of any province should be_ referred to a r b i t r a t i o n . "4. His Lordship f e e l s , therefore, that i n view^X of.the unanimity of the Dominion Government and a l l the P r o v i n c i a l Governments, save that o f B r i t i s h Columbia, he would not i n the i n t e r e s t s I S^L*. of Canada be j u s t i f i e d i n any e f f o r t to override the.decision of the Dominion Parliament or to com-pel the reference of the question to a r b i t r a t i o n . •*5. I am to add that no mention w i l l be made i n the Imperial Act of the settlement being ' f i n a l and unalterable', such terms being obviously i n -appropriate i n a l e g i s l a t i v e enactment. "6. His Lordship a l s o desires i t to be under-stood that he expressed no opinion upon the su f f i c i e n c y or otherwise of the quantum of extra 185, "contribution awarded to B r i t i s h Columbia."(l) (1) Bertram Cox to McBride, June 5, 1907; B.C. Sessional Papers, 1908, p. C 2-C 3. The f i r s t part of paragraph 3 o f f e r s an int e r e s t i n g comparison to the theory ad-? vanced by the Hon. Charles Wilson i n 1903 when con-fronted with the problem of the competence of the Dominion Parliament to deal with the revisions then asked f o r . In e f f e c t , a s i m i l a r argument i s here used against the Province 1s request to the Imperial government to overrule the Dominion's amendment re-? commendation (see p. 125, Ch. 7; or see Vifilson to Laurier, July 16, 1903; B.C. Sessional Papers, 1903-1904, pp. G 16-17)-. Premier McBride's answer to the above l e t t e r w i l l be found at p. C 3 of the B.C. Sessional Papers, 1908. As to the nature of the B.H.A. Act Mr. McBride says: "In a general way I would venture to observe that your Lordship appreciates the force of the opinion expressed that the B r i t i s h Horth America Act was the result of terms agreed upon by the contracting Provinces, i n d i v i d u a l l y , and the Dominion, and i s not to be alte r e d s o l e l y at the wish of the Parliament of Canada. This l i e s at the basis of our contention. Although the p r i n c i p l e s which underlie the Act of Con-federation are common and uniform, the f i n a n c i a l arrangements under which the Provinces entered the Dominion are e s s e n t i a l l y separate and d i s t i n c t , based upon spe c i a l conditions i n each province. The Terms ' of Union between B r i t i s h Columbia and the Dominion of Canada are i n many respects unlike those of the other •^Provinces i n Canada; therefore, s p e c i a l requirements I cannot i n ju s t i c e be made subject t o the w i l l or I arbitrament of an i n t e r - P r o v i n c i a l Conference having ' only i n view the basis of a re-adjustment uniformly I applicable to a l l . " This attitude, i t should be noted, characterized /Mr. McBride's programme throughout, and i s i n d i r e c t ( contradiction to the stand o r i g i n a l l y taken by Premier \ Dunsmuir i n 1902. Mr. Dunsmuir, i t w i l l be remembered, / i n opening the better terms negotiations expressed his V willingness to deal with a convention at which a l l the \ o t h e r provinces should be represented (see p. 92); Premier McBride, on the other hand, though attending such a conference, i n s i s t e d that the question of s p e c i a l terms f o r B r i t i s h Columbia was e n t i r e l y outside the j u r i s d i c t i o n of the other provinces, and concerned only the two d i r e c t l y negotiating governments. 186. This_was.,-.of. course, an official-announcement ot the failure_^f_Premier McBridjia, =efforts.-say^e^on_one f r o n t . On the question of the f i n a l i t y of the proposed amendment he alone seemed to have scored^a v i c t o r y . Qn June 13th the b i l l to amend the B r i t i s h Forth America Act was introduced by Mr. C h u r c h i l l into the House of Commons. On the 27th i t was given i t s second reading, and his work apparently at an end, Mr. McBride took his departure the following day, a r r i v i n g at the p r o v i n c i a l c a p i t a l on July 14th. A l l was not completed, however. Ho sooner was he home than Premier McBride Ts attention was directed to a statement i n press despatches from London to the e f f e c t that the words " f i n a l and unalterable" were proposed to be inserted into the Act by the House of Lords. Mr. McBride immediately wired Lord E l g i n , and the f i r s t f a i l i n g to bring a reply, a second message was despatched two days (1) l a t e r . ' To t h i s the Coloni a l Secretary r e p l i e d , explaining that the Dominion Parliament's address to the Throne was referred to i n the preamble of the Act as passed and a f u l l text of the address inserted as a schedule, but that the words " f i n a l and unalterable" did not appear i n any portion of the enacting part of the b i l l . In t h i s form the " B r i t i s h Forth America Act, 1907" received the Hoyal Assent on ( l ) See McBride to E l g i n , July 15. 1907 and July 17, 1907; B.C. Sessional Papers, 1908, p. C 4. 187. August 9, 1907, and another chapter i n the r e l a t i o n s of Dominion andJBjrovince was c l o s e d — a chapter which culminated i n the successful r e a l i z a t i o n of the objective of the Quebec Conference of 1887 and the subsequent better terms \movement. Reference to the Imperial Act and a comparison with the resolutions of that Conference w i l l show how com-plete v/as the measure of that success,^) To B r i t i s h Columbia, however, which neither began nor f i n i s h e d with the other provinces i n t h e i r negotiations, the / Act of 1907 was f a r from a successful climax, but was at * once regarded both as unsatisfactory and at most a temporary v r e v e r s a l . Looking back over a period of approximately a quarter of a century, B r i t i s h Columbia's claims f o r a r e -ad just me nt^of_ the !Ferms_of Union present an imposing array of h i s t o r i c a l data, which may, however, by careful analysis, he s i m p l i f i e d and reduced to three d i s t i n c t arguments-* <Firs.t:> The i n j u s t i c e of_jthe_ q ^ g i n a l w t e r m s . This i s the claim that the actual operation of the Union Terms had established a decided inequality i n the bargain entered into i n 1871 i n favour of the Dominion, that, moreover, the subsequent h i s t o r y of Confederation had shown how unfounded were some of the o r i g i n a l assumptions upon which those terms (1) See Appendix, 188. were based, and that i n part at least these f a l s e assumptions accounted for the i n e q u a l i t y of the o r i g i n a l agreement and (^constituted a moral, i f not l e g a l , r i g h t to i t s r e v i s i o n . In 1907 this p a r t i c u l a r phase of B r i t i s h Columbia's case was not accorded great weight or s i g n i f i c a n c e ; and, perhaps, not without good p o l i t i c a l "sense,"Mr. McBride did not stress i t . Naturally i t involves the whole question of the Canadian P a c i f i c Railway, and by that very token, more quickly than any other argument he oould have raised, would have aroused that sectional s p i r i t of Eastern Canada which had so often before characterized its.attitude.towards the railway clauses of j^he Union~Act^and_wj5uld_npw_J5ave added_,another b a r r i e r to the suc^ejsful^prosecution of his s u i t . , Seconjpii Geographicjo^ditions. B r i t i s h Columbia has consistently claimed that because of the e x i s t i n g physical conditions i n the Province i t requires s p e c i a l con-si d e r a t i o n . I t was upon th i s that both S i r W i l f r i d Laurier (and Premier McBride placed most weight i n 1907. This, of course, at once, r a i s e s the question, i s a federal govern-ment bound to account for and attempt to equalize, by means of additional subsidies, the natural geography of the various provinces? I t i s a. question not without considerable d i f f i c u l t y and as an abstract problem of government i t s answer remains doubtful. But i n 1907, every government i n 189. Canada acknowledged that duty, and i n a sense the matter i s j )therefore s e t t l e d . The amount of such extra allowance i s another and t o t a l l y d i f f e r e n t problem. To B r i t i s h Columbia * the award of $100,000 was d e f i n i t e l y i n s u f f i c i e n t ; to the other provinces and to Canada i t was the l i m i t of indulgence. The question of the added cost to government which these . unusual geographic conditions involve i s surely one which would require thorough and expert i n v e s t i g a t i o n . One n a t u r a l l y wonders with Mr. Eoster, how a group of delegates ' meeting at Ottawa for a week, the B r i t i s h Columbia Memorandum containing t h e i r only apparent information on the subject, a r r i v e d at that f i g u r e . And more es p e c i a l l y , one wonders how they arrived at the theory that a decade would eliminate n those conditions. Upon what grounds did they decide that a grant for ten years should be " f i n a l and unalterable"? P o l i t i c a l expediency or a j u d i c i a l l y correct award, which was t h e i r objective? Apart from the s u f f i c i e n c y or other-wise of the actual amount, the method of a r r i v i n g at the award seems, i n retrospect, to have been a matter of good business rather than good statesmanship, and only the l a t t e r so f a r as the two are p a r a l l e l . Thirdj Economic conditions. This i s possibly the oldest argument i n point of actual h i s t o r i c a l appearance. Upon i t — B r i t i s h Columbia's per capita contribution to the 190. ^ f e d e r a l treasury—was based the Province's claim f o r cabinet representation and the demand f o r s p e c i a l railway subsidies, even before better terms had become a p o l i t i c a l force. Yet /in the present negotiations, i t did not assume an important / r o l e ; Premier McBride probably attached less importance to v i t than either Mr. Dunsmuir or C o l . P r i o r had done. It i s , however, a more deep rooted problem than any of these leaders r e a l i z e d , an inherent d i f f i c u l t y i n a iarge country / puch as Canada with a wide var i e t y of opposing and con-1 f l i e t i n g economic needs. The problem i s to attune one economic p o l i c y to the wide range of i n d u s t r i a l conditions e x i s t i n g from A t l a n t i c to P a c i f i c . I t is. a commonplaces^ t r u t h to observe that a programme suitable to one section can be almost s u i c i d a l to another. Obviously, B r i t i s h j'Columbia, for i t s part, produces commodities which i n the jmain are exported, and therefore s e l l on the basis of l world competition. Her home market i s small and i n e f f e c t i v e . Her purchases, on the other hand, are either made i n Eastern Canada, on which a t a r i f f bonus must be paid, or are dir e c t importations. Thus, as has many times been said, B r i t i s h Columbia i s "buying i n the dearest market, and s e l l i n g ^ i n j y i e ^ ^ e a p e ^ t " — a ^ o o n d i t i o n which i s ruinous and one which c e r t a i n l y cannot permanently endure. This, rather than her contributions to the federal treasury, i s B r i t i s h Columbia's r e a l economic complaint. A c t u a l l y i t a f f e c t s the productive powers and wage earning p o s s i b i l i t i e s of the inhabitants themselves, to a greater extent than do either of the other conditions to which reference has been made. And i t i s well to remember that the economic p o l i c i e s are man-made instruments for which the governments constructing them must assume f u l l r e s p o n s i b i l i t y . I t i s conceivable, as was said before, that the Dominion might deny i t s res-p o n s i b i l i t y i n the case of geographic conditions, but no such denial can be made with respect to the equally impor-tant "economic mountains" which are of i t s own creation. ''And the d i f f i c u l t y which any attempt to equalize the e f f e c t of economic p o l i c i e s presents cannot permanently stand as an answer to the problem i f Confederation i s to achieve that jharmony and unity of purpose, p o l i t i c a l and s o c i a l , as well as economic, f o r which i t should stand. The o f f i c e of the h i s t o r i a n i n this.case i s not to evolve a s o l u t i o n . That, rather, i s the problem of the economist. But, history i s emphatic i n the warning which i t repeatedly gives on t h i s point and a survey of the Better Terms Movement i n B r i t i s h Columbia, even p r i o r to 1907, would not be complete without a recojgjiition^ of the r e a l s i g n i f i c a n c e ^ t h i s e s s e n t i a l l y economic problem. F i n a l l y , i n considering the closing act of this 192. drama of the Better Terms Campaign, and the actors therein, one must award a measure of praise to the gentleman who appears i n the character of B r i t i s h Columbia's chief ad-vocate f o r a somewhat obscure suggestion which otherwise might be completely l o s t sight of i n the more s t i r r i n g events of the play i t s e l f . Mr. McBride's request f o r some d e f i n i t e means of periodic r e v i s i o n was one of the soundest ^ and most statesmanlike suggestions produced by the whole era of negotiations, and i f i t had been successfully c a r r i e d /out, possibly i t s most important g i f t to subsequent genera-/ / t i o n s . And what of Premier McBride rs mission to London? It f a i l e d to achieve any a l t e r a t i o n of the f i n a n c i a l terms of the settlement, or to establish B r i t i s h Columbia's right to have her case investigated by an independent commission. Such an achievement, i n view of the overwhelming odds against McBride, could not have been expected. One monument /alone remains to that mission—the elimination of the words i ' " f i n a l and unalterable". One wonders why so much stress was l a i d upon t h e i r i n c l u s i o n or elimination. Both Laurier and jMcBride, who here appear as adversaries, knew that such a ) condition was impossible under parliamentary, government. In introducing the 1907 B i l l into the House of Commons, Laurier declared: "There i s no other f i n a l i t y i n a l l these 193. matters but the w i l l of the people, the w i l l of parliament i t s e l f . " ^ 1 ) Yet over and over again we have seen him stress the need of a r r i v i n g at a f i n a l settlement with the express object of "closing the door" opened by the Hova Scotia Amendment of 1869. McBride too knew f u l l well the i n e f f e c -t u a l nature of the offensive words, for i n his own account of his mission he says, "I r e a l i z e d that no Act of Parliar-ment could be regarded as ' f i n a l and unalterable' i n i t s (2) e f f e c t . " * ' Yet knowing that he voyaged to the Imperial Ca p i t a l and succeeded only i n having those words removed \from the Act, and s t i l l he regarded his mission as eminently succes s f u l . The only explanation i s that both men were doing t h e i r utmost to e s t a b l i s h a precedent. Laurier, on his part, was attempting to set a precedent of " f i n a l i t y " , which, though ultimately impossible, yet endorsed by Pro-/ v i n c i a l , Dominion and Imperial governments v/ould have i \^sufficient weight to make any attempt to reopen the Terms of Union extremely d i f f i c u l t . His was the p o l i c y of the "closed d o o r " — a door which i f not permanently barred was at least to be well enough bolted to withstand easy assault. McBride's mission v/as the preservation of the right of (1) See account of t h i s incident, p. 178, Ch. VI. (2) See B.C. Sessional Papers, 1908, p. C 2. 194. provinces to f r e e l y appeal f o r a r e v i s i o n of the Union Act, and his problem to prevent the establishment of any pre-cedent, i n a c o n s t i t u t i o n that allows precedents a f u l l measure of authority, that would endanger such a p r i v i l e g e . In s t r i k i n g out the words, which he journeyed to London to* erase, symbolically at l e a s t , the supremacy of Parliament to law i t s e l f was once more curiously asserted, a r e s u l t the which saves Mr. McBride's mission from/charge of complete f a i l u r e and one that perhaps w i l l induce his c r i t i c s to overlook any attack to which the B r i t i s h Columbia Premier, i n going over the head of Ottawa, may have exposed himself. The" whole incident i s vaguely reminiscent of a condi-t i o n not unlike the present, when Blake's attack upon Macdonald's p o l i c y of a l t e r i n g the Confederation agreements to grant Nova Scotia better terms was i n f u l l f l i g h t . In -place of a p e t i t i o n offered by Blake requesting the Imperial Parliament to pass a measure providing that the Dominion should not have power to disturb the f i n a n c i a l r e l a t i o n s of the B r i t i s h North America Act, the Prime Minister succeeded i n passing an amendment declaring "that i t i s the undeniable p r i v i l e g e of Parliament to f i x and determine the amount of a l l expenses chargeable to the public funds of the country," the canny S c o t t i s h father of the Canadian Confederacy dryly ( l ) See p. 1 9 % commenting that t h i s was the f i r s t case he had heard of "where a people said they had too much l i b e r t y and were not f i t to he trusted with t h e i r own money". i . APPENDIX (7 Edw. YII, C 11), An Act to make further provision with respect to the sums to he paid, hy Canada to the several Provinces of the Dominion (9th August, 1907) Whereas an address has heen presented to His Majesty hy the Senate and Commons of Canada i n the terms set f o r t h i n the schedule to t h i s Act: Be i t therefore enacted hy the King's Most Excellent Majesty, hy and with the advice and consent of the Lords S p i r i t u a l and Temporal, and Commons, i n t h i s present Parliament assembled, and hy the authority of the same, aa f o l l o w s : — I . — ( l ) The following grants s h a l l he made yearly hy Canada to every Province, which at the commencement of t h i s Act i s a Province of the Dominion, f o r i t s l o c a l purposes and the support of i t s Government and L e g i s l a -ture:-'-? (a) A f i x e d g r a n t — Where the population of the Province i s under one hundred and f i f t y thousand, of one hundred thousand d o l l a r s ; where the population of the Province i s one hundred and f i f t y thousand, hut does not exceed two hundred thousand, of one hundred and f i f t y thousand d o l l a r s ; where the population of the Province i s two hundred thousand, hut does not exceed four hundred thousand, of one hundred and eighty thousand d o l l a r s ; where the population of the Province i s four hundred thousand, hut does not exceed eight hundred thousand, of one hundred and ninety thousand d o l l a r s ; i i . where the population of the Province i s eight hundred thousand, hut does not ex-ceed one m i l l i o n f i v e hundred thousand d o l l a r s ; . where the population of the Province ex-ceeds one m i l l i o n f i v e hundred thousand, of two hundred and f o r t y thousand d o l l a r s ; and (b) Subject to the s p e c i a l provisions of t h i s Act as to the Provinces of B r i t i s h Columbia and Prince Edward Island, a grant at the rate of eighty cents per head of the popu-l a t i o n of the Province up to the number of two m i l l i o n f i v e hundred thousand, and at the rate of s i x t y cents per head of so much of the population as exceeds that number. (2) An a d d i t i o n a l grant of one hundred thousand d o l l a r s shall-be made yearly to the province of B r i t i s h Columbia for a period of ten years from the commencement of t h i s Act. (3) The population of a province s h a l l be ascertained from time to time i n the case of the provinces of Manitoba, Saskatchewan, and Alberta respectively by the l a s t quin-quennial census or statutory estimate of population made under the Acts e s t a b l i s h i n g those Provinces or any other Act of the Parliament of Canada making provision f o r the purpose, and i n the case of any other Province by the l a s t decennial census for the time being. ( 4 ) The grants payable under t h i s Act s h a l l be paid ha l f - y e a r l y i n advance to each Province. (5) The grants payable under t h i s Act s h a l l be substir-tuted f o r the grants or subsidies ( i n t h i s Act r e f e r r e d to as e x i s t i n g grants) payable f o r the l i k e purposes at the commencement of t h i s Act to the several Provinces of the Dominion under the provisions of section one hundred and eighteen of the B r i t i s h Forth America Act, 1867, or of any Order i n Council esta b l i s h i n g a Province, or of any Act of Parliament of Canada containing directions f o r the payment of any such grant or subsidy, and those provisions s h a l l cease to have e f f e c t . (6) The Government of Canada s h a l l have the same power of deducting sums charged against a Province on account of the inte r e s t on public debt i n the case of the grant i i i . payable under t h i s Aot to the Province as they have i n the case of the e x i s t i n g grant. (7) Nothing i n t h i s Act s h a l l a f f e c t the o b l i g a t i o n of the Government of Canada to pay any Province any grant which i s payable to that Province, other than the e x i s t i n g grant f o r whioh the grant under t h i s Act i s substituted. (8) In the case of the Provinces of B r i t i s h Columbia and Prince Edward Island, the amount paid on account of the amount payable per head of the population to the Pro-vinces under t h i s Act s h a l l not at any time be le s s than the amount of the corresponding grant payable at the commencement of t h i s Act; and i f i t i s found on any decennial census that the population of the Province has decreased since the l a s t decennial census, the amount pai d on account of the grant s h a l l not be decreased below the amount then payable, notwithstanding the decrease of the population. 2 . — T h i s Act may be c i t e d as the B r i t i s h North America Act, 1907, and s h a l l take e f f e c t as from the f i r s t day of July, nineteen hundred and seven. i v * Schedule To The King's Most Excellent Majesty Most Gracious Sovereign, We, Your Majesty's most d u t i f u l and l o y a l subjects, the Senate and Commons of Canada, i n Parliament assembled, humbly approach your Majesty f o r the purpose of represent-ing that i t i s expedient to amend the scale of payments authorized under section 118 of the Acts of the Parliament of the United Kingdom of Great B r i t a i n and Ireland, commonly c a l l e d the B r i t i s h North America Act, 1867, or by or under any terms or conditions upon which any other Provinces were admitted to the Union, to be made by Canada to the several Provinces of the Dominion f o r the support of t h e i r Governments and Legislatures by providing t h a t — A* Instead of the amounts now payable, the sums hereafter payable yearly by Canada to the several Pro-vinces f o r the support of t h e i r Governments and L e g i s l a - ; tures be according to population and as f o l l o w s : — (a) Where the population of the Province i s under 150,000—§100,000; (b) Where the population of the Province i s •150,000 but does not exceed 200,000—§150,000; ( 0 ) Where the population of the Province i s 200,000 but does not exceed 400 ,000—§180,000; (d) Where the population of the Province i s 400,000 but does not exceed 800,000—§190,000; (e) Where the population of the Province i s 800,000 but does not exceed 1 ,500,000—§220,000; ( f ) Where the population of the Province exceeds 1,500,000—§240,000. B. Instead of an annual grant per head of popula-t i o n now- allowed, the annual payment hereafter be a t the same rate as eighty cents per head, but on the population of each Province, as ascertained from time to time by the l a s t decennial census, or i n the case of the Provinces of; Manitoba, Saskatchewan, and Alberta, respectively, by the l a s t quinquennial census or statutory estimate, u n t i l such population exceeds 2,500,000, and at the rate of s i x t y V cents per head f o r so much of said population as may ex-ceed 2,500,000. C. An ad d i t i o n a l allowance to the extent of one hundred thousand d o l l a r s annually he paid f o r t e n years to the Province of B r i t i s h Columbia. B. Nothing herein contained s h a l l i n any way supersede or affe c t the terms spe c i a l to any p a r t i c u l a r Province upon which.such Province became part of the Dominion of Canada, or the right of any Province to the payment of any s p e c i a l grant heretofore made by the Parliament of Canada to any Province for any special pur-pose i n such grant expressed. We pray that Your Majesty may be graciously pleased to cause a measure to be l a i d before the Imperial Parliament at i t s present Session repealing the provisions of section 118 of the B r i t i s h North America Act, 1867, aforesaid, and substituting therefor the scale of payments above set fo r t h , which o h a l l be a f i n a l and unalterable settlement to be paid yearly to the several Provinces of the Dominion f o r t h e i r l o c a l purposes and the support of th e i r Governments and Leg i s l a t u r e s . Such grants s h a l l be paid h a l f - y e a r l y i n advance to each Province, but the Government of Canada s h a l l deduct from such grants as against any Province a l l sums chargeable as in t e r e s t on the public debt of that Pro-vince i n excess of the several amounts stipulated i n the said Act. A l l of which we humbly pray Your Majesty to take into your favourable and gracious consideration. (Signed) R. Dandurand, Speaker of the Senate, (Signed) R. F. Sutherland, Speaker of the House of Commons. Senate and House of Commons, Ottawa, Canada, 26th A p r i l , 1907. 1. BIBLIOGRAPHY. Unpublished. Documents Premiers' Le t t e r Books- (on f i l e i n the Premier's O f f i c e , ~ V i c t o r i a , B.C.) 1. 1900-1903. 2. 1904-1906. 3. 1906-1909. O f f i c i a l Publications B r i t i s h Columbia, Executive Council: Memoranda with _ Respect to Claims of B r i t i s h Columbia for Better i'erms. King's P r i n t e r , V i c t o r i a . 1914. (King's P r i n t e r , V i c t o r i a ) 192 7; Presented by Hon. J. u, Maclean. (King's P r i n t e r , V i c t o r i a ) 1933. (King's P r i n t e r , V i c t o r i a ) 1934; Presented by Hon. D. P a t t u l l o , Hon. G. MoG. Sloan, and Hon. John Hart. L e g i s l a t i v e Assembly: Journals. King's P r i n t e r , V i c t o r i a , 1871-1907 i n c l u s i v e . L e g i s l a t i v e Assembly: Sessional Papers. King»s P r i n t e r , V i c t o r i a , 1871-1908 i n c l u s i v e , and i n p a r t i c u l a r the f o l l o w i n g , — 1872; pp. 77-78 (Canadian T a r i f f ~ Correspondence between the govern-ment of B r i t i s h Columbia and the government of Canada.) 1875; pp. 6O3-638 (Mr. Walkem's Mission.) 1876; pp. 373-375 (Papers r e l a t i n g to applications to the Dominion Government for advances under Act Ho. 4 of the Statutes of 1875.) 2. B r i t i s h Columbia, L e g i s l a t i v e Assembly: Sessional Papers (cont'd.) 1888; pp. 327-330 (Report of Hon. Mr. , Robson's Mission to Ottawa.) 1901; pp. 345-587 (Report of Dunsmuir-Eberts Mission.) pp. 617-619 (Salmon Canners 1 Association Memorial.) 1903; PP. K 1- K 60 (Report of P r i o r -juberts Mission.) 1903-.04; pp. G 15-G 29 (Report of Wilson-Green Mission.) 1905; PP. D 1-D 19 (Memorandum of the B.C• Government.) p. F 59 (Return of t o t a l ex-penditure to date since Confedera-tion.) 1907; PP. D 1-D 41 (Report of the I n t e r - p r b v i n c i a l Conference, 1906.) I908; pp. C 1-G 25 (Report of Premier McBride rs Mission t o London.) pp. H 1-H 29 (Correspondence re f i s h e r i e s dispute.covering period 1901-1908.) L e g i s l a t i v e Assembly: Standing Orders. King's Printer-, V i c t o r i a , 1930 (con-tains xerms of Union and B.F.A. Acts of 1867, 1907). L e g i s l a t i v e Council: "Debate on the Sub-Ject of Confederation with Canada" reprinted from the Government Gazette Extraordinary of March, 1870). King's P r i n t e r , V i c t o r i a , 1912. Treasury Department: P u b l i c Accounts f o r s i x months ending June 30, 1872. King's P r i n t e r , V i c t o r i a . Treasury Department: Pub l i c Accounts f o r nine months ending September 30, 1873. King's P r i n t e r , V i c t o r i a . B r i t i s h Columbia, Treasury Department: Public Accounts f o r ~ the years ending Sept. 30, 1 8 7 4 , 1 8 7 5 , 1 8 7 6 , 1877. King's P r i n t e r , V i c t o r i a . Treasury Department: Public Accounts f o r July 1 to Dec. 30, I878. King's P r i n t e r , V i c t o r i a . Treasury Department: Public Accounts f o r ' s i x months ending June 30, 1879. King's P r i n t e r , V i c t o r i a . Treasury Department: Public Accounts for " years ending June 30, 1880-1907 i n c l u s i v e . King's P r i n t e r , V i c t o r i a . Fate: Two gaps occur i n Public Accounts f o r B.C. for s i x months i n 1872 ( J u l y - D e c ) , and for nine months i n 1877-78 (Oct.-June) no report i s given. SOT explanation of l a t t e r see P u b l i c Accounts, 1878, p. 97. Canada, Parliament,(Governor-General-in-Council): "Message : ••• Relative to the Terms of Union with the Province of B r i t i s h Columbia". MacLean, Roger and Co.,. Ottawa, 1873. Canada, Parliament, House of Commons: "Parliamentary De-bates, Dominion.of Canada". Vols. I and II published by the-Times P r i n t i n g and Publishing Co., Ottawa, 1870, 1 8 7 1 . V o l . I l l published by Robertson, Roger and Go., Ottawa, 1872. Though not o r i g i n a l l y published under authority of Parliament, these records are now treated as o f f i c i a l reports of the House of Commons debates f o r the years l8?0, 1871, and 1872. House of Commons: O f f i c i a l Report of De-bates. King's P r i n t e r , Ottawa, 1875-1907 i n c l u s i v e . Senate: "Debates and Proceedings of the Senate of Canada". Vols. I and I I published by Times P r i n t i n g and Publishing Co., Ottawa, 1871, 1872. 4. Canada, Parliament, Senate (cont'd.) V o l . I l l published by Robertson, Roger and Co., Ottawa, 1873. V o l . IV published by Maclean, Roger and Co., Ottawa, 1874. These reports are now treated as o f f i c i a l records of the Senate de-bates for the above years. Senate: "Debates of the Senate of the Dominion of Canada". King's P r i n t e r , Ottawa, I875-1907 i n c l u s i v e . Sessional Papers: King's P r i n t e r , Ottawa, 1871, V o l . I¥, Ho, 18, pp. 1-29. "Papers Relative to the Proposed Union of B r i t i s h Columbia with the Dominion of Canada." Sessional Papers: King's P r i n t e r , Ottawa, 1872, V o l . Y, Fo. 10, pp. 1-246. Report of the Hon. H. L. Langevin. Sessional Papers: •King's P r i n t e r , Ottawa, 1906, V o l . XL, l o . 14, p 96, 1-6. Correspondence between P r o v i n c i a l governments and Dominion re readjustment of P r o v i n c i a l subsidies. Statutes of Canada: £>k King's P r i n t e r , Ottawa, 1876-1907 in c l u s i v e , and i n p a r t i c u l a r the following: 1869; p. 18, Ch. I I , 32-33 V i o t . — "An Act Respecting Hova S c o t i a " . 1873; PP. 94-95, Ch. 30,36 V i c t . — |JAn Act to re-adjust the amounts payable to and chargeable against the several Provinces of Canada by the Dominion Government, so f a r as they depend on the debt with which they re s p e c t i v e l y entered the Union." 5. Canada, Parliament, Statutes: of Canada cont'd. 1884; pp. 53-54, Ch. 4, 47 V i c t . - -"An Act to re-adjust the yearly subsidies to be allowed by Canada to the several provinces now included i n the Dominion." 1884; pp. 55-70, Ch. 6, 47 V i c t . — "An Act respecting the Vancouver Island Railway, the Esquimalt Graving Dock, and cer t a i n Railway Lands of the Province of B r i t i s h Columbia, granted to the Dominion." 1905; PP. 77-93, Ch. 3, 4-5 Edw. Y I I ~ ^An Act to e s t a b l i s h and provide f o r the Government of the Province of Alberta." 1905; PP. 201-216, Ch. 42, 4-5 Edw. VII "An Act to es t a b l i s h and provide f o r the Government of the Province of Alb e r t a . " Canada, Royal Commission re reconveyance of land to B r i t i s h Columbia: "Report of the Royal Com-mission Reconveyance of land to B r i t i s h Columbia. Pursuant to Order-in-Council of March 8, 1927 (Justice W.. M. Martin, Commissioner). King's P r i n t e r , Ottawa, 192:3. Great B r i t a i n , Laws, Statutes, etc. The Public General Acts. ; " King's P r i n t e r , London, 1907, Ch. 11, 7 Edw. 7»—"An Act to make further provision with respect to the sums to be paid by Canada to the several Provinces of the Dominion." Great B r i t a i n , Parliament, House of Commons. "Papers on the Union of B r i t i s h Columbia with the Dominion of Canada." London, 1869. 6. Books Howay, ff.W. and Sc h o l e f i e l d , E.O.S.: " B r i t i s h Columbia"; V o l . I I . S77. Clarke Publishing Co., Vancouver, B.C., 1914. Sch o l e f i e l d , E.O.S. and Gosnell, R.B.; "A History of ' B r i t i s h Columbia" (Sixty Years of Progress); B r i t i s h Columbia H i s t o r i -c a l Association, Vancouver and V i c t o r i a , B.C., 1915. Pamphlets, and P e r i o d i c a l s Cowan, George H.: " B r i t i s h Columbia's Claim upon the Dominion Government f o r Better Terms". Independent P r i n t i n g Co., Vancouver, B.C., 1904. Gosnell, R.E.: "Memorandum fo r the Hon. Mr. Justice Martin, Commissioner i n re railway lands. H. pub., (Ottawa, 192 7). I n t e r - P r o v i n c i a l Conferences: "Minutes of the Proceedings ~ ' i n Conference of the Representatives of the Provinces i n the Years 1887, 1992, 1906, 1910, 1913." IT. pub., n.p., 1915* McBride, Richard.: Review of Better Terms and P o l i c y of the P r o v i n c i a l Government. Reprinted from Hews-Advertiser, Feb. 15, 1912. Hews-Advertiser, Vancouver, B.C., 1912. W i l l i s o n , S i r John: "Reminiscences—Hon. Edward Blake" i n • ... Canadian Magazine, July 1918, p. 256. Ontario Publishing Co., Toronto. newspapers Hew Westminster " B r i t i s h Columbian", published by The Columbian Co., Ltd., since i860. Conservative. Vancouver "Province", published by Vancouver Daily Province Ltd., since 1898. Independent. 7. V i c t o r i a "Colonist", published, by Colonist P r i n t i n g and. .-; Publishing Co., Ltd.,, established 1858o Conservative. Victor i a "Times", published by Times P r i n t i n g and Publishing "~ " Col, Ltd., since l88l . L i b e r a l . 

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