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Manitoba History: Imports and Exports in the Manitoba Economy 1870-1890 [1]

by Gerald Friesen
Department of History, University of Manitoba

Manitoba History, Number 16, Autumn 1988

This article was published originally in Manitoba History by the Manitoba Historical Society on the above date. We make it available here as a free, public service.

Please direct all inquiries to webmaster@mhs.mb.ca.

The establishment of a world-wide competitive trade in numerous agricultural products occurred in the half-century between the 1860s and 1914. The emergence of a global market had an especially important impact on temperate-zone areas where meat and wheat and other raw materials such as wool could be produced in huge volumes for export to a rapidly-industrializing and urbanizing Europe. These agricultural goods crossed thousands of kilometres of land and ocean, benefiting from and at the same time supporting advances in transportation technology. The migration of 52 million Europeans to the so-called “New World” between 1846 and 1932 was another facet of the new order. Australia, Argentina, New Zealand, India, Russia, the United States, South Africa and Canada came to occupy important places in the new trade patterns. The consequences were considerable for each country but they were not identical. Certain classes and regions in each nation grew prosperous whereas others bore the brunt of the changes. Only by establishing the precise details of the changes—especially the timing and direction and causes of the events—can we understand how the winners and losers were selected and identify the consequences of this selection.

The story of the great transformation on the Canadian prairies is due for revision. The inherited version, written between the 1930s and the 1960s, placed a sharp dividing line between the age of fur and the age of wheat, between the hunt and the plough as it was sometimes expressed, and usually implied that this quick, relatively peaceful transition coincided with the extension of Canadian sovereignty over the region in 1870. This picture is not wrong but it may conceal some of the many variations on the themes of resistance, collaboration and dispossession that inevitably coloured the experience of long-established residents in such a dramatic era, and it may obscure the themes of conquest, adaptation and defeat in the stories of new settlers. Today, as the globe is shaken by new economic arrangements, it is appropriate to return to the history of a previous economic revolution with the expectation that it might provide us with a sense of perspective. This paper is one building block to be used in the larger project of reinterpreting the great transformation. This subject has occupied a number of scholars for some years and has required the kind of accurate data that follows. Therefore, the following pages offer a new statistical tabulation of imports into and exports from the prairie region between the early 1870s and the late 1880s. The data are drawn from official Canadian government reports and, more important, from the dispatches of the United States Consul in Winnipeg to the American State Department in Washington. This paper also proposes some conclusions about the direction of trade flows, the timing of important changes in trade patterns, and the policy decisions that influenced both. [2]

The export staple of the region in the 1870s was fur. The dominant exporter, accounting for well over eighty percent of the fur shipments, was the Hudson’s Bay Company. The market, at least in the first instance, was in Great Britain. The annual value of this trade was consistently between about half and three-quarters of a million dollars. The Hudson’s Bay Company could reasonably expect a tidy annual net revenue, according to American consul, J. W. Taylor, of about $250,000 but this sum varied with the fur harvest and with changes in European prices. Consul Taylor’s generalizations, made in 1877, assumed an average invoice value of $500,000 in fur exports. The consequent sale revenue in London and Leipzig would be about $1,000,000. He estimated that trade goods expended to obtain the furs would cost about $300,000 and that “transportation and all other charges” would be $450,000. Taylor noted, in making these estimates, that Edward Ellice, doyen of the trade in London, had reported slightly higher HBC net revenue of $327,865 in 1859. Taylor also noted the drop in European fur prices in 1875 and 1876 that forced the HBC to suspend payment of dividends for two years. [3] (See Table A).

James Wickes Taylor, U.S. Consul, 1870-1893.
Source: Archives of Manitoba

Table A.
The economic reports of J. W. Taylor; exports from prairie Canada (or Winnipeg district) 1871-1887* (in $ Canadian)


To 30 June

To E. Cda.

To U.S.A.

To Gr. Br.

To Br. Col.

Total


1872

108,359

55,738

130,355

295,452 + 400,000

1873

119,758

30,327

106,238

256,323 + 400,000

1874

124,404

390,542

21,413

565,322

1875

180,757

419,324

16,307

587,547

1876

116,241

555,329

1,095

672,666

1877

554,233

35,980

695,970

1878

123,827

55,395

670,503

849,725

1879

20,709

137,929

374,434

537,574

1880

55,458

91,283

368,924

518,665

1881

6,342

127,436

502,419

636,197

1882

163,410

214,671

493,533

871,615

1883

935,718

402,828

504,935

1,843,481

1884

1,077,173

451,564

459,541

1,988,278

1885

1886

3,000,000

545,451

620,966

50,000

4,297,533

1887

6,000,000

590,798

650,043

250,000

7,492,371

1888

1889

549,710



* In 1872 and 1873, estimated exports of $400,000 from York Factory were not
included in the Consular reports.

The fur trade continued to be an important and consistent aspect of the prairie export economy throughout the 1880s and well beyond. The only significant declines in the volume of fur exports (as opposed to the market value) occurred in 1870-71, when a smallpox epidemic and political uncertainties in the aftermath of the Red River resistance combined to reduce the figures, and in 1878-81, when the extinction of the buffalo herds caused another drop in robe and fur exports. (See Table B).

Table B.
The economic reports of J. W. Taylor: prairie fur exports 1872, 1877-87 ($,000)


1872

1876

1877

1878

1879

1880

1881

1882

1883

1884

1885

1886

1887


To Britain

(400)

--

36

456

367

360

494

505

460

--

615

624

To U.S.

285

--

542

40

100

36

72

37

--

114

199

To E. Canada

10

33

--


Total

685

661

588

529

610

497

--

729

724

(Addenda)

73

301

21

56

(Dressed fur and buffalo robes)


Revised total

685

661

661

797

488

471

529

610

497

--

729

724


The anomalies in the table of exports can be readily explained. Until 1873, as is apparent in the columns reporting exports to the United States and Britain, most HBC furs were shipped through York Factory. The establishment of more regular rail and steamer service in the American Northwest in 1873 induced the HBC to make its shipments via Fort Garry and the Red River to Norman Kittson in St. Paul. Once the railway from St. Boniface to St. Paul opened in December 1878, furs were shipped in bond via New York direct to London. Thus, despite the apparent shifts in destination from Britain to the United States and back to Britain, the ultimate market of furs was always Great Britain and western Europe. [4]

One obvious problem with Taylor’s data is the omission of significant data on buffalo robes and hides. Taylor reported that his information on fur exports included both undressed furs and buffalo robes. The Canadian robes were subject to an American tariff of 20 percent, so usually they were shipped in bond to Montreal or London. “Canadian” buffalo robes, according to Taylor, were rarely shipped to the American market. Can this be believed? Surely there must be some better official tabulation of the obvious slaughter of buffalo on both sides of the border in the late 1870s. Taylor himself noted a remarkable drop in the export value of buffalo robes between 1877-78 and 1878-79 (from about $187,000 to $21,000) and attributed it to the “dispersion and diminution” of the Northwest herds. [5] The reports on the hide export trade, the other buffalo-based industry, are no more illuminating. Taylor’s reports on hide exports provide such low values ($2300 in 1877, $5400 in 1878, $5800 in 1879, $11,000 in 1880, $33,000 in 1882, $42,000 in 1883, $57,000 in 1884) that they must have included only cattle products. It is possible, too, that buffalo hides were never part of Canada’s exports to the United States. We are left with the assumption that the buffalo economy existed beyond the reach of Winnipeg’s officials and that, for statistical and trade purposes, many of the buffalo harvested in Canada were shipped directly south where they became “American” buffalo.

This may have been the case because traders wished to evade the tariff but also because Missouri steamboat freight rates were much lower than the prices levied by the cart brigades to Red River.

The pre-eminence of fur among prairie exports was obvious in the 1870s and early 1880s. If Taylor’s estimates are accurate, approximately 80 percent and sometimes even 95 percent of annual prairie exports in the 1870s were furs. This circumstance changed when Manitoba wheat entered the export market in quantity in the 1880s. The relative value of furs in Manitoba’s total exports dropped steadily from 91 percent in 1879 to 61 percent in 1882 to 33 percent in 1883 and 10 percent in 1887. The absolute value of fur exports had not declined, indeed it had risen slightly in the 1880s, but this aspect of the economy had simply been dwarfed by the productive capacity of the new farms. (See Table B and Table C).

Table C.
Fur exports as a proportion of total prairie exports 1872, 1877-87 ($,000)


1872

1877

1878

1879

1880

1881

1882

1883

1884

1885

1886

1887


Fur exports

685

661

797

488

471

529

610

497

--

729

724

Total exports

695

696

850

538

519

872

1843

1988

--

4298

7492

% fur / total

99

95

94

91

91

61

33

40

17

10


The impact of wheat production on Manitoba’s export economy is striking. When fur was the only export staple, Manitoba’s export trade never totaled one million dollars and was usually closer to $600-800,000. The first exports of wheat, between 1876-77 and 1881-82, were not large. Instead of entering the export market, the sharp annual increases in prairie grain production were purchased mainly on the prairies by newcomers and new customers including surveyors, the North West Mounted Police, and the Indian Commissioner. [6] In addition, the American twenty-cent per bushel tariff limited Manitoba shipments into the adjacent states. Nevertheless, Consul Taylor believed that wheat valued at $100,000 was shipped to Britain and Canada in 1877-78 [7] and he later reported small sales in Minnesota as well but grain exports were limited during the next four years. [8] There were huge wheat surpluses in Manitoba after the harvests of 1881 and 1882. Despite the imperfections of the reports on these crops, it does seem clear from Taylor’s dispatches that over 250,000 bushels of wheat were exported in 1881-82, chiefly to eastern Canadian intermediaries, and perhaps as much as one million bushels followed the same path in 1882-83. Firm calculations of the 1883 and 1884 crops have not survived but Taylor suggested that about 5 million bushels would be exported in 1885-86 and 10 million in 1886-87. Herein lies the explanation of the extraordinary jump in the value of Manitoba exports in 1882-83 and subsequent years. (See Table D).

First customs house, Emerson, Manitoba, circa 1890.
Source: Archives of Manitoba, Emerson 21 (N13991)

Table D.
The economic reports of J. W. Taylor; Manitoba wheat and flour exports ($ and bushels) 1878-1887


Year to 30 June

1878

1879

1880

1881

1882

1883

1884

1885

1886

1887


Bushels

30,000

272,500

4.7m

10.0m

$ Canadian

32,620

25,611

21,000

618,560

916,204

2.6m

5.2m


Estimated total

$32,620

25,611

21,000

250,000

618,560

916,204

2.6m

5.2m


A number of smaller items are listed as exports from the western interior. Next to fur and wheat, fish and fish oil were important products in this era. They first appeared in Taylor’s reports in 1877-78 and became substantial export commodities in 1882-83. The shipment of $25,000 worth of fish to the United States from Manitoba and northern Ontario in 1883-84 was a strong indication that another staple had been discovered. The sale of twice that volume in 1885-86 ($50,000), half as much again in 1886-87 ($84,000) and in 1887-88 (Taylor’s estimate was at least $100,000), a level that seems to have been maintained for several years, was evidence that these shipments found a ready market in the northern United States. It also raised Manitobans’ apprehensions about the depletion of fish-stocks. [9]

Smaller items in the prairie export trade were seneca root, flaxseed, hides, whale oil, barley, wool, cattle, buffalo bones and horses. One “manufactured” item, carriages, figured regularly in the official Canadian reports but not in Taylor’s dispatches. In the enumeration and evaluation of these smaller items of export, each of which might have an invoice value of $1-30,000, the official Canadian reports were much more precise and, it might be inferred, much more reliable than Taylor’s data. The sum of these exports was small in proportion to the total but nonetheless each was an indication of considerable prairie effort to discover economic “niches” that would provide a cash income for the growing population, as well as of American enterprise in the quest for new supplies of raw materials. [10]

The most important external source of income in the prairie west in the 1870s and early 1880s was, as the saying had it, “government appropriations.” Federal expenditures in the region were crucial to the functioning of business. Consul Taylor quickly recognized this fact and, from time to time, elaborated on Canadian government spending—”an extraordinary line of expenditure”—in his reports to the American State Department. [11] During the 1870s, these government funds sustained the high levels of prairie commodity purchases. In late 1877, Taylor estimated in a dispatch to Washington that federal transfers had been “at least a million dollars annually—Winnipeg being the great point of distribution. [12] In early 1876, he noted that federal appropriations for the entire west in the preceding year were about four million dollars. [13]

We can conclude that the prairie economy existed on a plateau from 1871 to 1877. It was sustained by fur exports and infusions of federal government money. During this period, the value of prairie imports ranged from $1.8 million to $2.5 million and exports—those that can be measured, since we must acknowledge the problem of buffalo robe shipments via the Missouri valley—ranged between $550,000 and $850,000. The smallpox epidemic of 1870-71, the grasshopper scourge of 1874-75, increases in federal government transfers and fluctuations in European fur prices were the chief causes of variations in these totals.

If Canada’s dominion over the Northwest caused only a small change in the prairie economy in the early 1870s, more dramatic changes were in the offing. One can observe the difference in mood in Consul Taylor’s dispatches to Washington in 1877 and 1878. In the late autumn of 1877, Taylor was convinced that an economic boom was about to begin. In his November dispatch, he reviewed the stirring visit of Canada’s Governor General, Lord Dufferin, to the region and the signing of the last big prairie Indian treaty at Blackfoot Crossing in the preceding months. With the establishment of steamboat service on Lake Winnipeg and the Saskatchewan River, he wrote, and the imminent completion of a rail line from St. Paul to St. Boniface, this vast area would soon be “open to colonization.” Taylor was correct in his assessment that the prairie region was entering a new economic era in 1878. [14]

The crucial economic changes were the volume and the direction of trade flows. The importance of these changes in the history of the region cannot be exaggerated. For the preceding century, the western interior had enjoyed a subsistence economy in which Great Britain was the single crucial market for exports and supplier of imported goods. As late as the 1860s and early 1870s, annual British shipments into the region were estimated to be about $400,000. By contrast, the total of Canadian and American-origin shipments was less than $100,000 per year. [15] This balance had shifted in favour of the United States in the mid-1870s. Would the Americans be able to retain their advantage after the wheat and railway boom began in 1879? Was the era of British ascendancy over? Could the newly-integrated Dominion of Canada influence the region’s economic growth?

To listen to Consul J.W. Taylor at this juncture was to hear a message about the benefits and the inevitability of continental economic integration and regional specialization. Taylor believed that American manufacturers could capture markets in Canada’s western interior because their shipping costs and their knowledge of the North American consumer gave them an advantage over their British competitors. [16] Moreover, Taylor wrote to his superiors, the Canadian prairie economy would fit neatly into the American: “grain and cattle, bread and meat will be the great staples of the Winnipeg basin,” an area that extended from Red River to the Rockies and the Arctic, he reported. The two prairie exports, he went on, could find a ready market in the United States: “With the development of civilized occupation a great natural commerce must follow—the exchanges between the cotton zone of the southern states, the corn zone verging upon the shores of the great lakes, and the wheat zone ranging as far northward as in Europe. These exchanges of dissimilar products will in all probability constitute the bulk of the domestic trade of the interior of North America.” [17] Taylor’s faith in the quality of Canadian grain was especially strong: “It is well known that cereals reach their greatest perfection near the northern limit of their successful growth besides acquiring great celerity in maturing ...” [18] Thus, in the view of American expansionists in 1876-77, the western interior might soon be integrated into the economy of the United States.

Canadian entrepreneurs had their own dreams of new trading empires, however. What is striking, in retrospect, is the speed and efficiency with which they entered the competition for control of prairie commerce. A few months after Taylor’s optimistic dispatch of November 1877, the Canadians were consolidating their position as the leading force in Northwest trade. During the next five years of extraordinary prairie growth, the eastern Canadian share of total prairie imports soared to two-thirds. The American share fluctuated between one-third and one-sixth. And the British lost even more heavily, securing less than one-tenth of prairie commodity purchases. (See Table E and Table F). This was a decisive watershed in the history of the prairies and of Canada.

Table E.
The economic reports of J. W. Taylor: imports into prairie Canada (or Winnipeg district) 1871-1887


To 30 June

From E. Cda.

From U.S.A.

From Gr. Br.

Other

From B.C.

Total

1872

412,104

323,059

652,016

26,406

1,413,585

1873

322,064

441,198

510,199

14,696

1,029,130

1874

605,997

781,277

1,024,620

12,096

1,853,659

1875

637,774

780,317

441,107

6,481

1,865,679

1876

582,964

940,187

776,570

18,669

2,318,390

1877

664,489

808,332

400,888

5,600

1,876,753

1878

1,374,311

769,792

389,499

11,727

2,545,421

1879

2,266,088

839,499

335,324

21,464

3,462,375

1880

3,599,980

833,983

393,698

10,007

4,837,668

1881

5,351,665

1,496,986

503,937

10,052

7,362,640

1882

11,034,830

4,506,920

618,805

39,219

16,199,772

1883

14,197,077

8,495,985

1,539,240

59,265

24,291,767

1884

7,098,538

4,439,819

1,174,707

71,735

12,784,719

1885

3,661,814

1886

4,724,566 est.

2,362,283

635,003

50,000

7,820,959

1887

5,450,280

2,735,140

841,751

28,925

50,000

9,157,843


(Japan)

Table F.
The economic reports of J. W. Taylor: prairie Canada imports by place of origin as % of total imports by $ value


1878

1879

1880

1881

1882

1883

1884

1885

1886

1887


Eastern Canada

54

65

74

73

68

56

56

--

60

60

United States

30

24

17

17

28

35

35

--

30

30

Great Britain

15

10

8

8

4

6

9

--

8

9


It is impossible to determine whether the specific schedules of Sir John A. Macdonald’s National Policy tariffs were entirely responsible for eastern Canada’s trade ascendancy but they did play an important role in the outcome. Consul Taylor could only offer estimates of the tariff’s impact but his evidence was striking. Noting the commercial gains of the eastern Canadians in 1877-78 and especially 1878-79, before Macdonald’s National Policy tariff went into effect, Consul Taylor seems to have had no doubt about the efficacy of tariffs of any sort, even the lower levies imposed by the Alexander Mackenzie administration of 1873-78. In 1877-78, when shipments from eastern Canada to the prairies were twice as high as in the previous year, Taylor claimed that the 20 percent ad valorem duty on British and American imports gave the Canadians a substantial advantage. After the National Policy tariff was imposed in March 1879, he knew that his nation faced an even tougher struggle: “There appears to be no sensible diminution of imports from the United States and Great Britain,” he concluded: “Still, the new tariff has greatly extended the trade with eastern Canada, which my last report exhibited to be largely increasing, having nearly doubled in 1878 ...” A year later, describing the phenomenal boom in eastern Canadian shipments to the prairies, Consul Taylor commented that, given the tariff and the arrangements for shipments in bond through the United States, “it is quite remarkable that the importations from England and the United States are not more diminished.” [19] In light of Taylor’s testimony, we may conclude that the National Policy tariff did encourage Manitobans to purchase eastern Canadian products in preference to those of American and British competitors. Though one might question whether the shift in Manitoba buying patterns had not occurred a year earlier, Consul Taylor’s evidence on the effect of the National Policy cannot be discounted.

A decade after the National Policy tariff was introduced, Taylor offered examples of its impact. Surveying the history of agricultural implement sales in Manitoba, he noted that the importation of farm equipment was free in 1870-74, was subject to a 17½ percent tariff in 1874-79, 25 percent in 1879-82, 35 percent in 1883-89, and then, apparently, was reduced to 20 and 25 percent, depending on the item. The duties during the decade after 1879 were “prohibitory,” Taylor said, and the result was that eastern Canadians sold five times as much farm equipment in the Northwest as did American manufacturers. [20] Some years earlier, he had studied the leather industry. Given that the average tariff on leather manufactures was 25 percent, Americans were fortunate, he suggested, to dominate such small corners of the market as buckskin gloves and the finer class of shoes. British leather sales in prairie Canada in 1884 were $6460; American sales were about $33,000; eastern Canadian sales of $233,000 represented 85 percent of the prairie market for manufactured leather. [21] Taylor’s reports provide convincing evidence that eastern Canadian producers and shippers enjoyed an enormous trade advantage on the prairies in the decade of the 1880s.

Dominion customs house and Dominion lands office, Winnipeg, 1879.
Source: Archives of Manitoba

Consul Taylor did not give up his dreams of American expansion after 1879 but he had to acknowledge the success of Canada’s National Policy. As a result, he emphasized to his Washington superiors that the United States was now in a competition with Britain for the role of second largest supplier to prairie consumers. In late 1883, as “uneasiness and dissatisfaction” pervaded Manitoba public life, Taylor wondered whether he should publish his trade reports in Winnipeg in order to reinforce the prairie protests against Ottawa’s tariff policy. The purpose of such a tactic, it was clear, was to explain to prairie citizens that their best future lay in a continental trade arrangement, not in the British Empire. As Taylor explained, the “ideal prevails here that the imports from Great Britain equal those from the United States, instead of being only one-sixth in quantities and values. [22]

Britain and the United States had traded places as suppliers of prairie imports between the 1860s and the 1880s. Britain retained its leadership in only a few specialized areas, notably textiles and in HBC trade goods. Thus, Taylor noted in 1877 that “more than half” of the imports from Britain during the preceding year had been cotton and wool fabrics, and, surprisingly, the same proportions were evident in the larger British shipments to the prairies in 1881 and 1883. The other noteworthy British sales in the prairie region included tea (transshipped from Asia), spirits, fishing tackle, guns and tobacco (of Brazilian origin)—the customary trade goods of the Hudson’s Bay Company. [23]

American commodity shipments to the region varied according to the year, prairie economic fortunes and the Canadian tariff. In the mid-1870s, American producers shipped a number of natural products, such as grain, wood, live animals, fruits and nuts to Manitoba. However, the sale of American manufactured items, including agricultural implements, iron products, lumber, preserved foods, wood products and the customary fur trade goods was at least twice as valuable as the trade in natural commodities. Though the data are not as clear during the railway boom of the early 1880s, it appears that lumber and wood manufactures, on the one hand, and iron and steel manufactures, on the other, constituted almost half of the prairie imports of American origin. The other big items were food provisions and railway equipment. By 1885-86, when according to Taylor “normal” conditions had replaced the frantic atmosphere of the railway boom, American shipments to Manitoba included a wide range of natural and manufactured goods. The largest items (over $25,000) were baking powder, bacon and hams, fruits, coal, cotton goods, iron manufactures and wood manufactures. From this list it can be concluded that continental trade in natural products was already well-advanced and that American leadership in such areas as metalworking and lumber products was also being established.

Shipments of goods to the prairies from other nations were the exception rather than the rule. Some material for the construction of iron bridges was shipped from Belgium and glass, too, sometimes crossed the ocean to adorn prairie churches. Wines and similar fancy goods came from France, Spain, Portugal, and Germany. Indian tea was probably trans-shipped in Britain but tea also came directly from China and Japan. But these items never constituted more than a total of one or two percent of prairie imports.

Given British sales of textiles and fur trade goods, and American preeminence in steel and wood manufacturing, what was left for eastern Canadian entrepreneurs? The short answer is that Canadians competed effectively in every area of the prairie market. During the railway boom, eastern Canadian merchants and manufacturers sold dry goods, groceries, hardware, leatherware, machinery, and liquor in quantities that outpaced by far their American and British counterparts. Explanations of Canadian success must emphasize the tariff but also, perhaps, should note the relevance of such factors as previous personal contacts, national loyalty and corporate purchasing policies. In the absence of case studies on consumer buying practices in this era, no more precise conclusions seem to be sustainable.

A second important purpose of the so-called National Policy was to secure the “carrying trade”—that is, the transportation of goods by Canadian transportation companies. Here, of course, the Canadian Pacific Railway was to play a crucial role and here, again, Consul Taylor offered striking evidence on the operation of the policy. Imports into the western interior had been carried by Hudson’s Bay Company ships and York boats and Canadian canoes in the eighteenth and early nineteenth century and, from the 1840s, a small proportion was hauled by cart brigades from St. Paul and later, Fort Benton. The technology of all these modes of conveyance was relatively simple and relied to a considerable degree on human effort. Since prairie residents enjoyed considerable competitive advantages in skill, price and availability, the carrying trade was an important employer of local labour throughout the century after 1760. Red River steamboats and flatboats supplemented these modes after 1859 but it was not until 1873, when an American railway reached the Red River at Moorhead in Minnesota, that the southern route became sufficiently attractive for the Hudson’s Bay Company to abandon its historic Hudson Bay route to Britain. Even in the mid-1870s, however, the steamers and flatboats were supplemented by cart trains because river transport was unpredictable, reliant on high water levels, and of course, limited by the relatively short, ice-free season between May and November. [24]

A measure of the continued importance of land transport was a minor dispute between Canada and the United States over customs policy in 1875. In June of that year, the American government required that Canadian teamsters pay a customs duty upon entering the United States, to which Canada responded in the autumn with a reciprocal levy on American teams. The result was that Canadians were unable to engage in lumbering, freighting or railway construction in the United States except when their teams belonged to a regular freight or stage line. Similarly, only Americans employed by the Minnesota Stage Line could drive their teams into Canada. Manitobans welcomed this interruption of free trade in the freight business because it ended a local grievance: too often, they believed, American teams monopolised the Canadian Pacific Railway contracts and took their earnings back to the United States in winter. Moreover, Canadian teamsters would henceforth enjoy a monopoly on the Pembina-Winnipeg run. This was an advantage, as the Manitoba Free Press noted, because in past winters, notwithstanding that hundreds of teams had been engaged in freighting from Moorhead, the engagement of a Canadian team was exceptional. [25] Though a minor incident in Canadian-American relations, the issue of a duty on freight transportation was a reminder that, in the economy of the western interior, transportation was a valuable sector of the local economy. To the extent that goods were not carried by the capital-intensive medium of the steamboat, they were transported in carts owned by local entrepreneurs who were crucial employers of part-time labour.

The advent of the railway in the American Midwest quickly changed the nature of the carriage trade. In December 1878, the St. Paul, Minneapolis, and Manitoba Railway completed its first run from the Minnesota capital to St. Boniface, across the Red River from Winnipeg. Though “quite imperfect”—Taylor’s phrase—in the early months of operation, the new rail company soon had a near-monopoly on shipments of freight into Manitoba. Ironically, probably because its capacity was limited, it continued to utilize steamboats during the summer of 1879 for the St. Vincent-Winnipeg leg. [26] The St. P. M. and M. was absorbed into the new Canadian Pacific Railway syndicate, for all practical purposes, when that colossus was created in 1880-81. Then, the battle for the western Canadian carrying trade began in earnest.

The new Canadian Pacific Railway soon fulfilled the hopes of its supporters. The first train from Winnipeg to Thunder Bay completed its run in August 1882. [27] Because this route was finished so late in the Great Lakes season, it is unlikely that the all-Canadian outlet was utilized in the 1882-83 fiscal year. Certainly, Consul Taylor implied that all imports of Canadian origin entered Manitoba via Emerson in bond from the United States. [28] However, in the following year, 1883-84, Taylor estimated that Canadian freight valued at $2.3 million travelled into the west via the Lake Superior route and that $4.8 million in freight travelled from eastern Canada through the United States via Emerson. This ratio of 2:1 in favour of the American route in 1883-84 was not mirrored by the export traffic, which involved furs, wheat, fish and the return of excess merchandise from prairie stores. One-half of the prairie grain exports, for example, travelled the Lake Superior route. [29] Taylor did not report on the direction of the other exports, but one can assume that some of these goods followed the same path. Certainly, with the completion of the Canadian Pacific line north of Lake Superior in 1885, the all-Canadian route immediately won the patronage of the Canadian forwarding industry. Transit of eastern Canada goods in bond through the United States to prairie destinations declined sharply in 1885-86. In that year, over two-thirds of the freight into and out of the prairie region, as measured by value, travelled on the CPR. In 1886-87, the proportion was well over 70 percent. [30] Indeed, in early 1887 Taylor reported that the CPR controlled the prairie trade with the east and that transportation in bond via the United States had virtually ceased. This was in “remarkable contrast,” he told the State Department, to the situation just three years earlier when $5 million in goods travelled in bond from eastern Canada through St. Paul to Manitoba. [31] It was a remarkable victory for Macdonald’s transportation policy and vindication, according to defenders of the CPR, of the Canadian transcontinental railway.

Table G.
Manitoba imports as reported by Canadian Department of Trade and Navigation annual reports 1873-89


12 months to 30 June

From Great Britain

From United States

Total


1873

509,838

441,559

1,029,130

1874

1,797,033

1875

1,243,309

1876

777,434

940,011

1,735,427

1877

1,208,877

1878

1,122,744

1879

1,140,871

1880

1,227,105

1881

445,860

1,485,699

1,941,463

1882

779,678

4,396,478

5,223,856

1883

1,376,369

7,866,486

9,312,053

1884

556,562

3,140,685

3,768,851

1885

692,656

1,991,270

2,759,870

1886

635,934

1,275,708

1,959,337

1887

827,327

1,133,394

2,012,183

1888

672,398

972,213

1,750,048

1889

673,012

1,434,749

2,207,314


In defense of Taylor's reports on Manitoba's imports, we should note that his data on the total values of imports for each year are very close to those contained in the annual reports of Canada's Department of Trade and Navigation between 1873 and 1883. They diverge, however, for the years from 1884 to 1887, especially concerning the value of imports from the United States. Indeed, Taylor's reports are double the official Canadian values for Manitoba imports from the United States. There is no obvious explanation for the differences. It is possible, however, that the commencement of regular freight service on the Canadian Pacific Railway meant that Canadian officials, (if they counted the American imports where the goods crossed the border into Canada rather than at their ultimate destination) exaggerated the value of central Canadian imports of American goods and underestimated the amounts in transit to manitoba.

Given this sudden and significant loss of Canadian freight revenue, American shippers must have shared Consul Taylor’s concern about Macdonald’s railway policy. As Taylor recognized, “the concentration of this domestic traffic upon the Canadian transcontinental line enlists powerful corporate and provincial interests in favour of the existing policy of obstruction to communications with American lines at the frontier ...” [32] How could the Americans defeat this growing Canadian lobby? Their best hope, it soon appeared, was to fuel Manitoba anger at the federal government’s policies. Taylor first studied this theme during the winter of 1883-84 when prairie hostility to Ottawa had surfaced after an early frost reduced potential grain exports by perhaps sixty percent: “Public opinion is far from cheerful,” he told the State Department, and there was “great disappointment and irritation in many quarters,” as a result not just of the crop failure but of the real estate market collapse, the drop in grain prices, and the hikes in tariff duties and freight rates. [33] Not that Manitobans wished to secede, in Taylor’s opinion: “There is no serious purpose of forcible separation from eastern Canada: although the number who believe that the speediest and surest prosperity of Manitoba would be obtained by union with the United States is greatly increased by recent events. [34] The topic disappeared from public view in 1885 and 1886, no doubt because the Saskatchewan uprising focussed attention on the districts farther west, but it arose again in 1887-88 as a result of Manitoba’s battle with Ottawa over railway policy. In February, 1888, at the height of the railway crisis, Consul Taylor proposed a drastic measure to the State Department in the hope of satisfying the CPR and ending Ottawa’s disallowance policy. [35] His plan apparently envisaged an American guarantee of CPR finances if, in exchange, the CPR would relinquish its monopoly clause: “If an expenditure of thirty million dollars, under a guarantee of 3 percent upon a further issue of the stock of the CPR was possible, with an assurance by such additional expenditure that the road should be fortified at all points to defy the competition of the long established and thoroughly equipped American lines, the policy of disallowance might be relinquished. Such a measure, with cooperation by the Imperial Government similar in character, if not in degree, to the intervention of England in behalf of the Suez Canal, would be a fortunate solution of a serious domestic complication, and would remove an imminent hazard of conflict with the trade interests of the United States.” [36] American concern about the redirection of Canadian freight traffic, as reflected in Taylor’s careful analysis of the issue, was palpable in the mid-1880s. It was a measure of the success of Macdonald’s National Policy.

Another aspect of the National Policy also aroused public debate in Manitoba. This was the issue of federal tariff revenue and its reverse side—as some saw it—the level of federal spending in the west. Manitobans had been sustained by federal expenditures during the 1870s. In the1880s, however, especially after the economic reverses of 1882-83, the Manitoba government began to criticize Ottawa’s tariff policies. This aspect of the Manitoba critique was based on calculations of the customs revenue generated by each province and the estimated cost of this tax to each Canadian consumer.

Taylor’s summary of the customs revenue was undoubtedly inconsistent and should be used for discussion of contemporary perceptions rather than for detailed studies which require precision. His reports do suggest that the incidence of the tariff became a provincial concern in 1883. [37] In that year, Taylor calculated that each prairie citizen paid $14.54 in customs duties as compared to the $4.18 paid by each resident of the six eastern provinces. [38] It was no coincidence that Premier Norquay used similar calculations to establish his bargaining position when he campaigned for “better terms” in Ottawa in early 1884. Norquay claimed, for example, that Manitoba paid $1.1 million in customs duties in 1883 but received only $1.25 million in federal grants and, he said, this did not include federal revenue from Manitoba land sales. Nor was Ottawa nearly as generous to Manitoba, in Norquay’s analysis, as it was to British Columbia. Over the previous decade, Norquay told a St. Paul newspaper, the average per capita contribution of customs duty to the Ottawa treasury was:

Manitoba

B.C.

Quebec

N.B.

N.S.

Ontario

P.E.I.

$10.76

$10.28

$5.16

$4.21

$3.49

$3.15

$2.41

Here was proof, he concluded, that Manitoba was Canada’s “most profitable” province in customs revenue. Taylor’s dispatches and Norquay’s speeches suggest a coincidence of views. Manitobans were unhappy with their economic circumstances and blamed the federal tariff for some of their problems. Taylor’s reports of Manitoba interest in a “Customs Union” with the United States were undoubtedly accurate and reflect both the insight of the American Consul and the uncertainties in the Manitoba position in Confederation in the mid-1880s. [39]

Table H.
The economic reports of J. W. Taylor: Manitoba customs revenue 1872-83*


1872

1873

1874

1875

1876

1877

1878

1879

1880

1881

1882

1883


47,839

48,074

67,473

171,420
Cdn. tariff

253,045

192,480

223,530

265,827
including 3 months of N.P. tariff

298,205

437,590

1,074,558
including 12 months N.P. tariff

1,624,508


* These totals are not always identical to those reported by Canada's Department of Trade and Navigation but they are always very close. After 1883, however, Taylor's reports on Customs revenues were very inaccurate.

The detailed reports on Manitoba’s imports and exports open new avenues for historical analysis. It is clear from Taylor’s dispatches that the fur trade continued to sustain relatively-consistent economic activity throughout these two decades and produced a flow of about one million dollars in imports and exports. The key difference in the local economy between the 1860s, when fur was the only crucial generator of activity, and the 1870s was the injection of federal government funds. From 1872 to 1879 these transfers permitted local consumers to purchase annually about $1-2 million of imported goods. If the prairie economy reached a plateau in the 1870s, it was catapulted into a new status by the developments in railway construction and settlement that commenced in 1878-79. The volume of imports into the region doubled between 1878 and 1880, doubled again in the next year, and again in 1882. An economy that had counted $2 million in imports as a good trade flow in the late 1870s imported $24 million of goods in the peak year of 1883 before levelling off at $8 to $10 million in the late 1880s.

There can be no doubt, based on these figures, about the timing and scale and source of this extraordinary economic boom. Moreover, the success of eastern Canadian industry and commerce in capturing control of this new market was far greater than might have been anticipated. The combination of tariffs and rail construction had reinforced eastern Canadian assumptions about the “natural” evolution of trade patterns on the northern half of North America. It had secured control of the rapidly-expanding prairie economy for Canadian shippers, merchants and manufacturers. And the terms of the prairie debate with eastern and central Canadians about the cost of Confederation had already been foreshadowed in the discussion of tariff revenues launched by Premier John Norquay in 1883-84. These were the terms and conditions on which prairie Canadians, recent and long-time residents alike, entered the new global and national economy in the closing decades of the nineteenth century.

Notes

1. I would like to thank Irene Spry, Judy Wiesinger, Morris Mott and Allan McCullough for their assistance with this paper and Nancy Hall for aid in the preparation of the tables.

2. The paper should be used in conjunction with Donald Kerr “Wholesale Trade on the Canadian Plains in the Late Nineteenth Century: Winnipeg and its Competition” in Howard Palmer, ed. The Settlement of the West (Calgary, 1977), 130-52, forthcoming works by Professors Spry and Wiesinger, and Henry C. Klassen, “I. G. Baker and Company in Calgary, 1875-1884,” Montana: The Magazine of Western History, 3513 (1985) pp. 40-55.

The annual reports of Canada’s Department of Trade and Navigation were published in the Sessional Papers of the House of Commons. They vary in format, to a degree, but generally employ 30 June as the end of the reporting year and the Canadian dollar as the reporting currency.

J. W. Taylor, the American Consul in Winnipeg from 1870 to 1893 utilized the Winnipeg Customs House in the preparation of his trade reports but he went beyond the official data to record the place of origin or destination of all goods, whether Canadian or forerun. Though his material on prairie trade with the rest of Canada seems to be based on estimates in the later years (from about 1883), it is of great value and can be used as rough guide. Not all of Taylor’s economic reports have survived and those after 1887 are neither consistent nor, it would seem, reliable.

On Taylor, the best source is Hartwell Bowsfield ed. The James Wickes Taylor Correspondence 1859-1870 (Vol. III Manitoba Record Society, Altona Manitoba 1968). His reports are in United States of America, State Department, Dispatches from the United States Consul in Winnipeg 1869-1906 (microfilm copy University of Manitoba).

In his dispatch of 1 November 1871, Taylor thanked G. B. Spencer, Collector at the Canadian Customs House, Winnipeg, for his help in the preparation of the trade report. He noted, too, that the Winnipeg calculations omitted the goods arriving and departing Moose and York Factory in the three ships of 1871. He offered estimates of the value of that trade.

In his 29 November 1882 dispatch, Taylor commented that he had personally made the calculations of imports and exports. He added that the figures on Manitoba imports from the rest of Canada were estimates.

In his dispatch of 22 December 1881, Taylor observed that he could provide data on shipments of British and American origin but that the Customs House had not yet tabulated the domestic imports from eastern Canada. This may be as close as we’ll ever come to deter-mining the origin of his statistical reports.

3. Taylor to State Department, 14 November 1877; Canada’s Department of Trade and Navigation annual reports declare that $11.6 mil-lion in furs were exported from the prairies between 1871 and 1891. For the period when Taylor’s and the Department’s reports can be compared, Taylor’s data on prairie fur exports for 1876-80, 1882-84, 1886-87 total $6,167,000, whereas the official Canadian total is $5,798,562, a negligible difference of 6%.

4. The HBC furs were shipped to an American broker between 1874 and 1878. Because there was no American tariff on the import of undressed furs, the HBC would have lost nothing by this route change.

5. Taylor to State, 20 December 1879.

6. Taylor to State, 20 December 1879.

7. Taylor to State, 14 November 1878, 27 October 1884.

8. Taylor said that 29,749 bushels of wheat were sent to Minnesota in 1880 and implied that this was due to the superior quality of Manitoba flour; Taylor to State, 24 December 1880. As late as 1884, Taylor was still campaigning for a reduction of the American tariff on Manitoba wheat; he suggested that 100-bushel parcels be exempted because the Canadian seed was “highly appreciated” in Minnesota; Taylor to State, 27 October 1884.

It should also be noted that the Taylor reports on wheat exports differ substantially from the data in the Department of Trade and Navigation annual reports. According to Dr. Irene Spry, the discrepancy is due in part to the Canadian Department’s decision to record prairie wheat exports to the United States but not prairie exports to eastern Canada and thence to foreign markets. Thus, the reports on prairie exports in the 1880s in Canada’s Sessional Papers inflate the relative importance of fur in the prairie economy and underestimate the volume of wheat shipments. This problem is also reflected in the huge discrepancies between the Taylor and official Canadian reports on prairie exports between 1883 and 1887. I have concluded that Taylor’s reports are far more accurate on this question. One source to verify Taylor’s report is the Henderson’s Directory, which declares prairie wheat exports of 4 million bushels in 1886, 10.5 million bushels in 1887 and 4 million bushels in 1888, totals close to those reported by Taylor; Henderson’s Northwest Gazetteer and Directory 1906, p. 41. I am indebted to Dr. Spry and Professor John Campbell for this reference. Another useful clue is Taylor’s explanation that the sharp increase in 1882-83 exports to eastern Canada ($935,718 as compared to $6,342 in 1881) was due mostly to the shipment of surplus Manitoba wheat. J. W. Taylor to State, 26 November 1883.

Finally, one should note Taylor’s report to the State Department on 28 February 1888, which contains a Manitoba Department of Agriculture report on the 1887 crop:

Acres

Bushels

Avg./Acre


Wheat

432,134

12,351,724

27.7

Oats

155,176

7,205,237

46.2

Barley

56,110

1,925,231

36.3

Peas

872

16,680

20.5

Flax

8,539

163,572

15.3

Potatoes

10,791

2,640,000

238.0

Taylor made the following comments on the Agriculture Department report: Wheat: Surplus of 10 m bushels above local needs = $5.2 m (52 cents/bus.). Barley, oats, potatoes: Surplus of 500,000 bushels each—(barley would be shipped to the U.S.) Eastern Canada will take $6m of agricultural products Eastern Canada will send imports to Manitoba and the Northwest Territories valued at $5,450,280, [est.] “assuming the domestic trade to be double the foreign importation.

9. Taylor’s reports for 1891-92 indicated a total value for fish exports from the prairies and northwestern Ontario of about $100,000. The export of $50,000 in fish in 1885-86 represented 1.4 million pounds which was sold in Buffalo, Minneapolis, St. Paul, and, to a lesser degree, Chicago and Detroit; (Taylor to State, 28 February 1887). One-third of the 1.5 million pounds exported in 1886-87 went through the Port Arthur customs office, and two-thirds through Winnipeg. Taylor reported that two-thirds of the total was whitefish. The remainder was pike, pickerel and perch. As a winter industry, Taylor said, fishing was advantageous to residents on the shores of Lakes Winnipeg and Manitoba; (Taylor to State, 28 February 1888).

Canada’s Department of Trade and Navigation reported prairie fish exports of $529,000 from 1881-91 and an average annual export of $65,000 in the highest years between 1884 and 1891.

10. Exports were increased in 1883-84 by the return of railway construction outfits to the United States (chiefly horses and locomotives valued at $176,000) and by the return of $127,000 in goods from overstocked prairie stores after the economic downturn in 1882-83; Taylor to State, 4 February 1885. Canada’s Department of Trade and Navigation also noted the steady export of horses in this era (valued at $210,000 during the 20 years between 1871 and 1891) and of horns, hides and hoofs (valued at $260,000 in the same two decades).

11. Taylor to State, 15 February 1876.

12. Taylor to State, 6 November 1877, 1 December 1872.

13. Taylor to State, 15 February 1876. Taylor’s 1872 calculations included federal payments of the provincial subsidy ($67,000), the costs of the judiciary ($20,000), the construction of the wagon road to Lake Superior ($165,000), public buildings in Winnipeg ($36,000), Indian payments ($37,000), the Boundary Commission ($65,000), the Dominion survey ($250,000), the troops at Fort Garry ($150,000), the Post Office ($18,000), and miscellaneous expenditures of $20,000—a grand total of $828,680. This sum was the equivalent of well over half the value of all commodities imported by the region in 1872; Taylor to State, 1 December 1872.

The American Consul’s analysis of federal spending in the west in 1874-75 was similarly precise. He suggested that the prairies received at least three million dollars in federal “gold” in that one year, including appropriations for the provincial subsidy ($67,000), the land office and survey ($115,000), the judiciary ($30,000), public buildings ($205,000), Indian treaties ($84,000), Northwest Territories administration ($10,000), customs service ($10,000), postal service ($26,000), the Fort Garry garrison ($175,000), the Northwest Mounted Police in Saskatchewan ($185,000), the Dawson Road to Lake Superior ($318,000), Red River navigation ($2500), the Receiver General ($4000), the CPR survey and telegraph ($2,150,000—but spent in Ontario and British Columbia as well), and the Pembina Branch Railway ($650,000); Taylor to State, 15 February 1876.

14. Taylor to State, 6 November 1877.

15. Taylor to State, 14 November 1877.

16. Taylor to State, 14 November 1877.

17. Taylor to State, 20 December 1879.

18. Taylor to State, 14 November 1877; his views on the eventual future of Canadian prairie grain in American markets were unusual because just a few years earlier, as a result of the 1873 “commercial crisis” and the 1874-75 grasshopper invasion, Manitoba had imported large quantities of American grain; Taylor to State, 15 February 1876, 6 November 1877.

19. Taylor to State, 15 February 1876; (the Canadian tariff of 20 per-cent came into effect in Manitoba on 1 July 1874); 14 November 1878, 20 December 1879, 24 December 1880. For a comparison of Taylor’s reports with those of the Canadian government, juxtapose Table E and Table G.

20. Taylor to State, 1 May 1889.

21. Taylor to State, 28 May 1885. The national implications of the tariff policy were not necessarily positive; see Glen Williams, “The National Policy Tariffs: Industrial Underdevelopment Through Import Substitution,” Canadian Journal of Political Science, XII:2 (June 1979), pp. 333-68.

22. Taylor to State, 26 November 1883.

23. Taylor to State, 6 November 1877, 14 November 1877, 26 November 1883, 28 February 1887.

24. Not only did the boats run only six months of the year but they travelled a much greater distance than did carts because of the meandering river course; Taylor estimated the one hundred mile journey from Lake Winnipeg to the American border actually was three hundred miles on the river.

In 1874, Taylor reported that 3 steamers made 31 round trips from Moorhead, the Northern Pacific terminus, and carried into Manitoba an average of 150 tons each trip. Also, 100 flatboats carried 30 tons each trip, chiefly “lumber and provisions.” Two years later, he noted that 7 steamers made 86 trips to Winnipeg carrying an aver-age of 200 tons, and 129 flatboats arrived with an average of 20 tons.

Taylor calculated that, in the 1873 shipping season, 11,800 tons were sent from the United States to Manitoba, in 1874 about 18,800 tons, and in 1875 about 20,400 tons; (Taylor to State, 15 February 1876). In 1876, the shipments were 25,297 tons and in 1877, 21,974 tons. The difference in 1876 was steel rails for the CPR and the Pembina branch; (Taylor to State, 6 November 1877).

In 1877, the Red River Transportation Company (described by Taylor as an American company), dominated the freight business. Its first arrival in Winnipeg was 23 April, its last departure 2 November. The 94 trips carried 17,892 tons in, and 418 tons out. The 197 flatboats, which carried an average of 18 tons plus the lumber of which they were constructed, imported 3582 tons. The wagon and express companies accounted for the import of 500 tons. In 1878, there were 76 round trips by steamboat (13,000 tons), and flatboats carried 1300 tons.

25. Manitoba Free Press, 6 November 1875, clipping in Taylor to State, 15 November 1875.

26. Taylor to State, 20 December 1879.

27. Taylor to State, 29 November 1882.

28. Taylor to State, 4 February 1885.

29. Taylor to State, 4 February 1885.

30. Taylor to State, 28 February 1887.

31. Taylor to State, 28 February 1887; in 1885-86, the minimum on the Canadian route was $7.7 of $12 million; in 1886-87, the Canadian route carried $11.45 of $16.23 million.

32. Taylor to State, 28 February 1887.

33. Taylor to State, 26 November 1883.

34. Taylor to State, 28 February 1884 and 4 February 1885.

35. Taylor to State, 28 February 1888.

36. Taylor to State, 28 February 1888; this may be a case where Taylor was predicting Canadian government intervention rather than proposing American involvement.

37. Taylor to State, 26 November 1883; he also estimated expenditure on railway construction in the prairie region to be $4.5 million in 1882-83. See Table H.

38. Taylor to State, 26 November 1883.

39. Taylor to State, 4 February 1885, 28 February 1887, 26 November 1883, 28 February 1884, 29 November 1882. Of course, customs duty per capita depends partly on the proportion of the provincial real income that is imported.

Page revised: 18 January 2010

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