fresh-water fish or fish preserved in oil, could be admitted into either country from the other for a period of twelve years free of duty. The treaty was made, so far as Canada was concerned, subject to its ratification by the Canadian Parliament, and the Prime Minister was at first opposed to such ratification. He afterwards, however, changed his mind, and in July, 1873, induced the Dominion Parliament to agree to the treaty.

It being asserted by Great Britain, though not admitted Fisheries

Arbitration

by the United States, that the privileges obtained by American under citizens were greater than those obtained by British subjects, Treaty. it was provided by the 22nd article of the treaty that commissioners should be appointed to determine the amount of any compensation which, in their opinion, ought to be paid by the United States in return for the privileges accorded. Some difficulty occurred in forming this commission; but it met at Halifax in June, 1877. The Canadian representative was Sir Alexander Galt and the American Mr. Kellog, with the Belgian Minister at Washington as an independent third commissioner. The majority, to the surprise and disgust of their American colleague, awarded to Great Britain the sum of $5,500,000. The American Secretary of State, Mr. Evarts, endeavoured, in corresponding with Lord Salisbury, to impugn the award; but the latter took the simple ground of res judicata, and in November, 1878, the money was duly paid.

On another point, which was settled by the joint High Commission of 1871, the decision was less satisfactory to the Dominion. It has been previously noted that, while the main question at issue with regard to the Oregon boundary was settled in 1846, the exact water boundary remained far from clear. The question was, what was the middle of the San Juan Boundary Gulf of Georgia between the southern end of Vancouver Question.

Island and the North American coast ?-the main question at issue being the ownership of the island of San Juan. The British contention was that the boundary ran to the eastward

of the island, down what was known as the Rosario Straits. The argument maintained that there was but one navigable channel between the continent and Vancouver Island at the forty-ninth parallel of north latitude, viz. the Gulf of Georgia, and that the boundary must start in its waters. Carrying this line to the south to about 48° 45′ the waters were studded with islands, through which there were two navigable passages. According to the wording of the treaty, the channel forming the boundary must separate the continent from Vancouver Island, admit of the line being carried through it in a southerly direction, and lastly be a navigable channel. Rosario Strait answered these conditions, whereas the Canal de Haro, or Haro Channel, which the Americans contended formed the boundary, did not meet the first two requirements. The Americans, on the other hand, argued that the pre-eminence in depth, width, and volume of the Canal de Haro made it the natural boundary. No settlement was arrived at, and the outbreak of a dispute on San Juan Island between the agent of the Hudson's Bay Company and an American settler led to an agreement under which the islands were held by both Powers under a joint military occupation. Negotations were again set on foot; but with no results. The American Minister in England, Mr. Reverdy Johnson, and Lord Clarendon, the British Foreign Secretary, agreed in 1869 to refer the question to the arbitration of the President of the Swiss Republic; but the Senate of the United States shelved the treaty. At last, however, the question was settled through being referred, under the Washington Treaty of 1871, to the arbitration of the German Emperor, who was by the terms of the reference bound to decide in favour of one or the other party, and not to propose a compromise. The German Emperor held that the boundary line through the Haro Channel was 'most in accordance with the true interpretation of the treaty concluded in 1846'. The ground of the decision was probably that the 'radical principle' of

the boundary was the forty-ninth degree of latitude, and that, inasmuch as the only reason for departing from it was to assign the whole of Vancouver Island to the Power entitled under that condition to the greater share of it, the deflection from that line should be limited, as far as possible, to the fulfilment of that object. The award was made on October 21, 1872, and was promptly and fully accepted by the British Government, which at once put an end to the joint occupation of San Juan. In his message to Congress of December, 1872, President Grant rejoiced that at last all boundary questions between the United States and Great Britain had come to an end. He could not at the time foresee that the future had yet another boundary question in store arising out of the purchase by the United States of Alaska in 1867.

AUTHORITIES

Memoirs of the Life of Sir John Macdonald. By Joseph Pope. London, 1894. Chapters xvi, xvii, and xix deal with the first years of the Dominion.

The correspondence re the Treaty of Washington in chapters xx and xxi is of especial value. For the opposite point of view see Life, Letters and Diaries of Sir S. Northcote, by A. Lang. 2 vols. 1890.

An account of the articles relating to the Fisheries in the Treaty of Washington will be found in History and Digest of the International Arbitrations to which the United States has been a party (in 6 vols. Washington, 1898), vol. i, pp. 702-53. For the history of San Juan water boundary question, see the same volume, pp. 212-36.

CHAPTER II

THE CANADIAN PACIFIC RAILWAY

Negotiations with regard to railway.

WE have seen that the construction of a transcontinental railway was a material part of the agreement under which British Columbia entered the Dominion. At first it was intended to build the railway as a public work, but the fear of the cost was such that the Government was induced to hand it over to a company of capitalists, aided by subsidies in land and money. It was, however, by no means easy to find the necessary enterprise and capital. American capitalists might have been willing to undertake the task, but the Government was rightly determined that, if it was necessary that there should be a company, it should at least be Canadian. At the time millionaires were not common in Canada, but Sir Hugh Allan, the chairman of the shipping line of that name, and Mr. D. L. Macpherson, a railway magnate, were approached by members of the Government. These two represented rival interests, the inhabitants of Quebec championing the one, those of Ontario the other. The latter province was afraid lest the construction of a railway direct from Montreal to Manitoba should divert the western trade of Toronto. Both rivals came to Parliament with railway bills, being incorporated under the titles of 'The Canada Pacific Railway Company' and 'The Interoceanic Company'. The Government remained neutral between the rival companies, it being provided that the construction of the railway might be entrusted to either of them, or to an amalgamated company composed of the two, or, if it seemed

advisable, to another and distinct company. In any case, a subsidy was to be provided of $30,000,000 and a grant of 50,000,000 acres to the company which should obtain the contract. Although the intention was that American influence should be excluded, it became known that Sir Hugh Allan was largely depending upon American capital, on which ground Mr. Macpherson refused amalgamation when proposed to him. Sir Hugh Allan had pledged himself both to the Government and to Parliament that he had severed all connexion with the Americans; but Mr. Macpherson did not believe him, and subsequent revelations proved that his suspicions were justified. On the Grand Trunk Railway threatening to interfere with Allan's control of the shipping trade to Europe, he embarked vigorously in schemes of railway development which, while aimed at the Grand Trunk, had the further effect of benefiting the province of Quebec. The position, then, was in this unsatisfactory state when the general election of 1872 took place.

elections

Amalgamation having hitherto proved impossible, Sir John The Macdonald, in the thick of the election, telegraphed to Sir general George Cartier that he should assure Allan that the influence and the of the Government would be exercised to secure for him the railway. position of president of the new company, 'the whole matter to be kept quiet till after the election.' Sir George Cartier went much further, and promised Allan that, if the attempts at amalgamation failed, the construction of the railway should be given to his company; but this promise was promptly repudiated by Sir John when he heard of it.

Still it was clear that a Government, which was accepting (as was admitted by Macdonald) large grants of money to their election funds from a capitalist, who was known as not too open-handed, and whose motto might well have been the do ut des of Bismarck, at the very time when delicate negotiations were on foot in which he was closely interested, was ignoring the ordinary rules of public morality. Macdonald's