250 REPORT OF THE No. 3 



An Act abolisliing the Export Duty on stave bolts and oak logs was 

 passed in 1875. 



Export Duty Increased. 



In 1886 the remaining export duties were altered, that on shingle bolts 

 being fixed at $1.50 per cord, spruce logs |1 per thousand feet, and pine 

 logs |2 per thousand feet. Tbe Govemor^in-Council was autborized to 

 increase the export duty on pine logs to |3 per thousand feet. By an Act 

 passed in 1888 tbe Governor-General was empowered either to reduce or 

 remove these duties whenever it should appear desirable in the public inter- 

 est to do so. By an Order-in-Council of the 13th November in the same 

 year the export duty on saw logs was increased from |2 to $3 per thousand 

 feet; but on July 5th, 1889, the former rate was restored, in view of a pro- 

 bable understanding being reached with the United States for more favor- 

 able duties upon our manufactured lumber. Tbe negotiations progressed 

 satisfactorily, and in 1890 Sir John Macdonald promised the removal of 

 the export duty on pine and spruce logs in the event of the United States 

 Congress reducing the import duty on sawn lumber to |1 per thousand 



Abolished in 1890. 



feet. This reduction took place, and on October 11th, 1890, the Canadian 

 Government by Order-in-Council abolished the export duty. 



With the accession to power in the United States of the Democratic 

 Party the duty of |1 per M. on sawn lumber was removed, and free trade 

 in lumber and logs followed between Canada and the States. General busi- 

 ness was good on both sides of the line, and in 1892 the timber trade was 

 very prosperous. 



Trade Depression. 



The prosperous condition of the market which obtained in 1892 did 

 not long continue. The prolonged period of financial stringency and busi- 

 ness depression which set in during the following year in the United States, 

 followed by the imposition of a duty of |2 per thousand upon sawn lumber, 

 largely destroyed the market for the coarser grades of lumber. Meanwhile 

 large quantities of saw logs were being cut for exportation into the United 

 States in order to furnish American mill owners with the raw material to 

 enable them to meet the demand formerly supplied by Canadian shipments 

 of the manufactured article. 



Defensive measures were demanded by the lumber trade, and the 

 Dominion Government was urged to reimpose the export duty of |2.00 

 per M. on saw logs, abolished in 1890. As the United States tariff legisla- 

 tion imposing the import duty of |2.00 per M. on sawn lumber also pro- 

 vided that this duty should be increased by the amount of export duty on 

 logs that might be imposed by any other country, the Dominion Govern- 

 ment was naturally reluctant to act. Western Ontario lumbermen who 

 were mainly affected by the competition of their own logs sawn in Michi- 

 gan, applied for relief to the Provincial Government, and in the session of 

 1898, at the instance of the Government, regulations requiring that all logs 

 cut on Crown Lands should be manufactured in the Province, were approved 

 by the Legislature. Michigan holders of Ontario timber limits, whose mills 

 had been supplied with logs from them, claimed that this legislation con- 

 stituted a breach of contract on the part of the Crown, that by the payment 



