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The relations between Canada and the United States now came to show the effect of increasingly close business connections. The northward trek of tens of thousands of American farmers was under way. United States capitalists began to invest heavily in farm and timber lands. Factory after factory opened a Canadian branch. Ten years later these investments exceeded six hundred millions. In the West, James J. Hill was planning the expansion of the Great Northern system throughout the prairie provinces and was securing an interest in the great Crow's Nest Pass coal fields. Tourist travel multiplied. The two peoples came to know each other better than ever before, and with knowledge many prejudices and misunderstandings vanished. Canada's growing prosperity did not merely bring greater individual intercourse; it made the United States as a whole less patronizing in its dealings with its neighbor and Canada less querulous and thin-skinned.
In this more favorable temper many old issues were cleared off the slate. The northeastern fisheries question, revived by a conflict between Newfoundland and the United States as to treaty privileges, was referred to the Hague Court in 1909. The verdict of the arbitrators recognized a measure of right in the contentions of both sides. A detailed settlement was prescribed which was accepted without demur in the United States, Newfoundland, and Canada alike. Pelagic sealing in the North Pacific was barred in 1911 by an international agreement between the United States, Great Britain, Japan, and Russia. Less success attended the attempt to arrange joint action to regulate and conserve the fisheries of the Great Lakes and the salmon fisheries of the Pacific, for the treaty drawn up in 1911 by the experts from both countries failed to pass the United States Senate.
But the most striking development of the decade was the businesslike and neighborly solution found for the settlement of the boundary waters controversy. The growing demands for the use of streams such as the Niagara, the St. Lawrence, and the Sault for power purposes, and of western border rivers for irrigation schemes, made it essential to take joint action to reconcile not merely the conflicting claims from the opposite sides of the border but the conflicting claims of power and navigation and other interests in each country. In 1905 a temporary waterways commission was appointed, and four years later the Boundary Waters Treaty provided for the establishment of a permanent Joint High Commission, consisting of three representatives from each country, and with authority over all cases of use, obstruction, or diversion of border waters. Individual citizens of either country were allowed to present their case directly before the Commission, an innovation in international practice. Still more significant of the new spirit was the inclusion in this treaty of a clause providing for reference to the Commission, with the consent of the United States Senate and the Dominion Cabinet, of any matter whatever at issue between the two countries. With little discussion and as a matter of course, the two democracies, in the closing years of a full century of peace, thus made provision for the sane and friendly settlement of future line-fence disputes.
The chief barrier to good relations was the customs tariff. Protectionism, and the attitude of which it was born and which it bred in turn, was still firmly entrenched in both countries. Tariff bars, it is true, had not been able to prevent the rapid growth of trade; imports from the United States to Canada had grown especially fast and Canada now ranked third in the list of the Republic's customers. Yet in many ways the tariff hindered free intercourse. Though every dictate of self-interest and good sense demanded a reduction of duties, Canada would not and did not take the initiative. Time and again she had sought reciprocity, only to have her proposals rejected, often with contemptuous indifference. When Sir Wilfrid Laurier announced in 1900 that there would be no more pilgrimages to Washington, he voiced the almost unanimous opinion of a people whose pride had been hurt by repeated rebuffs.
Meanwhile protectionist sentiment had grown stronger in Canada. The opening of the West had given an expanding market for eastern factories and had seemingly justified the National Policy. The Liberals, the traditional upholders of freer trade, after some initial redemptions of their pledges, had compromised with the manufacturing interests. The Conservatives, still more protectionist in temper, voiced in Parliament little criticism of this policy, and the free trade elements among the farmers were as yet unorganized and inarticulate. Signs of this protectionist revival, which had in it, as in the seventies, an element of nationalism, were many. A four-story tariff was erected. The lowest rates were those granted the United Kingdom; then came the intermediate tariff, for the products of countries giving Canada special terms; next the general tariff; and, finally, the surtax for use against powers discriminating in any special degree against the Dominion. The provinces one by one forbade the export of pulp wood cut on Crown Lands, in order to assure its manufacture into wood pulp or paper in Canada. The Dominion in 1907 secured the abrogation of the postal convention made with the United States in 1875 providing for the reciprocal free distribution of second class mail matter originating in the other country. This step was taken at the instance of Canadian manufacturers, alarmed at the effect of the advertising pages of United States magazines in directing trade across the line. Yet even with such developments, the Canadian tariff remained lower than its neighbor's.
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The Canadian Dominion -by- Oscar D. Skelton