Chapter VIII: America (2)

On February 12 the Minister of Railways laid on the table of the House the report of a Commission to investigate the construction of the Transcontinental Railway, under the previous Government. The report was long and sensational in character. The conclusions of the Commissioners were substantially that the Transcontinental Railway Commission, the Grand Trunk Pacific Railway and those having charge of the construction did not consider it desirable or necessary to practise or encourage economy in construction, and that, without including the money unnecessarily expended in building the railway east of the St. Lawrence River, $40,000,000 at least was needlessly expended in the building of this road. The cost of the unnecessary Eastern Section was estimated at $35,000,000; and thus the sum total of undue expenditure was stated at $75,000,000. The Eastern Section of the road was held by many persons on both sides to be a needless duplication of the Intercolonial Railway. The road was taken from the control of the Special Commission which had thus over-expended on it, and was completed and finally handed over to the Minister of Railways by Major Leonard, C.E., whose successful labours were highly appreciated by the public.

The Opposition were not satisfied with the report of the Commission, and on March 25 the former Minister of Railways moved, declaring that the Report was "so wilfully partisan and misleading as to be wholly unreliable," that the manifest object of the Commissioners was "to misrepresent for party purposes rather than to investigate in the public interest, without regard to the serious consequences to the country or this great national undertaking; and that for the appointment of such Commissioners, and for accepting and endorsing their report, the Government deserved the severe censure of this House." This motion was vehemently debated till Thursday, April 2, when it was rejected by 105 to 67.

On April 7 the Budget speech was delivered by Hon. W. T. White, the Minister of Finance. Many minor tariff changes were announced, but in general, as indicated by the Minister in his speech on the Address (p. 470), the Protective policy was maintained. The demand made from various quarters for "Free Wheat" was refused. The Government asked for power to increase the existing surtax to 20 per cent, if needed. The duty on agricultural implements was reduced from 17-1/2 to 12-1/2 per cent. The large revenue and unusual surplus of 1912-13 was not maintained; and the revenue for the year ending March 31, 1914, would therefore be less and a large capital expenditure would have to be provided for. The sum of $56,404,231 had been borrowed on satisfactory terms. (The events of the next few months, of course, confounded all calculations. The revenue to the end of December, 1914, was only $99,635,943, as against $127,571,762 at the same date in 1913, a shortage of $27,935,819. The total net debt to the end of 1914 had increased by $73,182,060. The borrowings of the Government under the authority of the legislation of the War Session in August must have been large; but no full account would be given until the presentation of the Budget of 1915.)

The trade of the Dominion was, of course, subject to some fluctuations. The total aggregate trade of the year ending March 31, 1913, was $1,085,264,449. For the year ending at the same date 1914, the amount was $1,129,744,725. For the seven months of the fiscal year 1914-15 (_i.e._ from March 31 to Oct. 31) the total aggregate trade was $640,171,557. The effect of the war on the aggregate trade cannot be seen accurately till the Budget is delivered or the Customs statistics published in the spring of 1915.

The debate on the Budget was not concluded before the Easter recess. On the reassembling of the House on April 15 it was resumed, and continued till April 23, when the leader of the Opposition moved an amendment declaring that "in view of the prevailing economic conditions of the country, it is advisable to place wheat, wheat products, and agricultural implements on the free list, and, without doing injustice to any class, steps should be taken to alleviate the high cost of living by considerate removal of taxation." This amendment was defeated by a majority of 42.

The serious question of relief to the shareholders of the defunct Farmers' Bank was the subject of prolonged debate. On April 24 it was announced that the Government would satisfy all the depositors. The bank had been started on insufficient capital; and official recognition was given to it on what turned out to be false pretences. The results were disastrous, and the general manager was prosecuted and imprisoned. The new Government issued a Royal Commission to investigate the affairs of the bank, and, as a result, decided to pay the depositors. Resolutions and a Bill based on them were carried in the Commons by the usual Government majority. But on June 8 the Bill was thrown out in the Senate by a non-party vote of 32 to 25, several Government supporters voting against the measure.

One of the most serious questions of the session related to the affairs of the Canadian Northern Railway. Aid had become necessary to enable the company to carry on its great and varied industries. The Government of Canada had already assumed large responsibilities in guaranteeing the mortgage debenture stock of the company, and in payments for construction. On April 28 the Government brought down its proposals for relief (see _Journals of Commons_, 1914, p. 489; and _Hansard Debates_, May 13, _sqq._). The proposal of the Government was to guarantee the payment of principal and interest on securities of the company to the extent of not more than $45,000,000; taking security by means of a Trustee and Trust Deed over all the property and interests of the company and all its subsidiary companies. Some reluctance to agree to these terms was visible among the Government's supporters, and two prominent Conservatives refused to support them. Some time elapsed before the complicated series of statements made by the company, including railways, steamships, bonds, shares, terminals, etc., could be understood (see Votes and Proceedings, 1914, p. 859). The total liabilities of the company to the Government were calculated at about $197,000,000. The actual debate began on May 13. The Prime Minister's speech was marked by the quotation for public use of messages of approval from the Premiers of Alberta, Saskatchewan and Nova Scotia, all Liberals, but in whose Provinces the Canadian Northern had large interests. The "six months' hoist" (equivalent to rejection) was moved by Mr. E. M. McDonald for the Opposition. The debate was maintained till May 19, when the Opposition motion was rejected by 111 to 64. In Committee various other amendments were moved, all of them defeated by majorities of from 40 to 44. A Bill was introduced based on the Government resolutions; it was passed in the Commons on June 2 by 85 to 38; and in the Senate on June 9 by a non-party majority of 40 to 17.

On June 1 notice was also given of a guarantee of interest on $16,000,000 bonds of the Grand Trunk Pacific Railway to aid in the completion of the road, the Government taking sufficient security. Owing to the outbreak of the war in August, these various guarantees are understood to have been of little value on a money market where all available funds were wanted for war purposes; but the actual results had not been made public at the close of 1914.

On May 8 it was announced from England that H.S.H. Prince Alexander of Teck was to succeed Field-Marshal H.R.H. the Duke of Connaught as Governor-General. The announcement was received with general approval. The speech which the Prince made at the Canada Club, in London, on May 28, was widely copied in the Canadian Press. Owing to the war, the Duke of Connaught consented to remain at the head of affairs, while Prince Alexander went on duty to the front.

An important Act passed during the session was the British Nationality, Naturalisation and Aliens Act (Chap. 44, 1914). This Act remedies a state of things which caused inconvenience throughout the Empire. After some years of discussion with the Home Authorities and the other Colonies, it is now provided that a colonial certificate of naturalisation shall be effective throughout the British Dominions. The applicant for a certificate must have a complete knowledge of English or French, The Canadian Act is based on the British Act (p. 209), 4 and 5 Geo. V. cap. 17.

On May 29 the announcement was made of the terrible disaster to the steamship _Empress of Ireland_, and the loss of over a thousand lives (Chron., May 29). The Government at once began a Canadian investigation; and a Royal Commission, including a British representative, was appointed to make a searching inquiry. There was the usual crop of reports, assertions, contradictions and explanations. The subject was however dealt with prudently in Parliament and there was no useless debate. The Royal Commission consisted of Lord Mersey, Sir Adolph Routhier and Chief Justice McLeod of New Brunswick. The sittings were held at Quebec; and many counsel, English, American and Canadian, were engaged. The Report of the Commission placed the blame for the collision on the officers of the _Storstad_ (see p. 599, Sess. Paper No. 21_b_, 1915). Extensive litigation has been going on since the Report was presented, and the amounts involved are large.

The session closed on June 12 with a degree of excitement and confusion which continued for some days after. There had been much discussion between the two parties regarding the Representation Bill, which was eventually passed in both Houses. But the increase in the number of Senators from the West had to be provided for by Resolution, praying the Imperial Parliament to alter the British North America Act, 1867, so as to enable the new Senators to be appointed. When the measure went to the Senate, the Act relating to the increase in the membership of the House of Commons was accepted. But the proposals regarding the increase of the Senate did not meet with the approval of the majority in that House, which was still opposed to the Administration. An amendment to the effect that the increase in the number of Senators should not take place till after the next general election, was refused by the Government. An accusation of bad faith was made by the Government against the Opposition in regard to an alleged agreement to pass this Bill and Resolution at the same time as the Representation Bill. This accusation was denied. Controversial statements as to this agreement were issued after the close of the session, by the Premier and the leader of the Opposition. And there the matter ended, to be taken up no doubt in the session of 1915.

On June 11, the day before the close of the session, both houses agreed unanimously on an address to H.R.H. the Duke of Connaught, Governor-General, on what was at the time thought to be his last official appearance in Parliament. This address was presented subsequently to the proceedings at the close of the session. The following paragraphs may be quoted:--

In visiting every portion of our Dominion, and in the earnest
endeavour to acquire by personal contact with all classes of the
community a full and accurate knowledge of the varied conditions
prevailing in this country, and of the purpose and aspirations
which animate our national life, Your Royal Highness has but given
another evidence of that high devotion to duty which has always
inspired your actions and has ever been associated with your career.

The Canadian people will not fail to cherish a happy remembrance
of the deep and practical interest which Your Royal Highness
has invariably manifested in literature, art and industrial
pursuits in the Dominion, as well as in all philanthropic and
charitable undertakings; and they recognise most fully that Your
Royal Highness has always been ready to associate yourself with
every movement designed to improve the conditions and add to the
happiness of those to whom has been entrusted the great task and
duty of possessing and developing this portion of the Empire.

His Royal Highness, in reply, after expressing his cordial thanks and his profound appreciation of the kindly sentiments of the representatives of the Canadian people, said:--

During my three years of office it has been my earnest endeavour to
become acquainted with the many problems affecting the welfare and
progress of this great Dominion. Nothing has struck me more than
the energy and tenacity shown in all circumstances by its people,
and I hope that a strong sense of duty will always pervade those to
whom its destinies are entrusted.

Of their loyalty and devotion to the King and to the Empire I have
had many proofs, and I hope that Canadians will always be true to
themselves and to that great Dominion with which it has been my
pride to be connected.

He concluded by a renewed assurance of heartfelt thanks for the generous expressions towards himself, the Duchess, and their daughter, and of their prayers for the continued happiness, peace and prosperity of Canada.

=The War Session.=--When the disturbances in Europe resulted on August 4 in open war, and Great Britain was precipitated into the conflict in defence of treaties, of her allies, of international morality and of national honour, Canada lost little time in contributing to the defence of the Empire.

Parliament was summoned to meet on Tuesday, August 18. H.R.H. and his staff appeared in service uniform and with few of the forms of ceremonial display. The Speech from the Throne was brief and practical:--

Estimates will be laid before you to provide for expenditure which
has been or may be caused by the outbreak of hostilities.

The critical period into which we have just entered has aroused to
the full the patriotism and loyalty which have always actuated the
Canadian people.

From every province and indeed from every community the response
to the call of duty has been all that could be desired. The spirit
which thus animates Canada inspires also His Majesty's Dominions
throughout the world; and we may be assured that united action to
repel the common danger will not fail to strengthen the ties that
bind together those vast Dominions in the possession and enjoyment
of the blessings of British liberty.

As representative of His Majesty the King, I must add my expression
of thanks and admiration for the splendid spirit of patriotism
and generosity that has been displayed throughout the length and
breadth of the Dominion.

The Prime Minister laid on the table the correspondence of the Imperial Government with foreign Powers (Cd. 7467, No. 6, 1914)--which were ordered to be printed and to be publicly distributed. Sir Wilfrid Laurier, the Opposition leader, rose after the formal speeches in moving the address, and delivered a very eloquent and patriotic speech. He said:--

It is our duty, more pressing upon us than all other duties, at
once, on this first day of this extraordinary session of the
Canadian Parliament, to let Great Britain know, and to let the
friends and foes of Great Britain know, that there is in Canada
but one mind and one heart, and that all Canadians stand behind
the Mother Country, conscious and proud that she has engaged
in this war, not from any selfish motive, for any purpose of
aggrandisement, but to maintain untarnished the honour of her name,
to fulfil her obligations to her allies, to maintain her treaty
obligations, and to save civilisation from the unbridled lust of
conquest and power.

And in special reference to his French-Canadian fellow-citizens, he said:--

If my words can be heard beyond the walls of this House in the
province from which I come, among the men whose blood flows in my
own veins, I should like them to remember that in taking their
place to-day in the ranks of the Canadian Army, to fight for the
cause of the allied nations, a double honour rests upon them. The
very cause for which they are called upon to fight is to them
doubly sacred.

The Prime Minister then followed in a necessarily more elaborate address. He complimented Sir Wilfrid Laurier on his patriotic address. He spoke earnestly of the efforts made by Mr. Asquith and Sir Edward Grey to preserve the peace of Europe. He discussed all the treaties by which the peace of Europe had been guaranteed. And with regard to the action of Germany in Belgium, he said:--

I cannot resist the conclusion, and I do not think that any man
who reads these documents can resist the conclusion, that it was
the deliberate intention of the Government of Germany, formed many
years ago, to violate the neutrality and independence of Belgium in
case war should break out with France. I say that because every man
in this country, every man throughout the world, knows that plans
of campaign are not made after war breaks out. Plans of campaign
are made long in advance, and the German plan of campaign which
has been carried out in the present war is one which involved as a
first step in their warlike operations the absolute violation of
the independence of Belgium.

On the subject of the value of the British Navy to the Colonies and the world, he made the following statement, which is likely to become part of the future policy of Canada:--

It is barely two weeks since war broke out. Already nearly every
pathway across the ocean has been cleared. Our foreign commerce
has been but little interfered with, very little indeed. The
splendid organisation of the British Navy has enabled this to be
accomplished. Those who are familiar with the religious service
used at sea will remember that prayer goes up from the men of the
Navy, in peace as in war, that they may be a safeguard to their
Sovereign and his dominions and a security for such as pass upon
the seas upon their lawful occasions. The quaint words of that old
prayer express as perfectly as may be that which is most essential
for the security and integrity of this Empire, a safe pathway
across the seas. Surely that prayer has been fulfilled even in this
appalling war, for already the silent victory on the sea has been
won. The Atlantic now is, and we have every reason to believe that
the Pacific shortly will be, practically as safe and secure for
those under the protection of the flag as in times of peace.

The Prime Minister outlined the steps that had already been taken to make the action of Canada prompt and efficient. The sum of $50,000,000 was for the present voted for war purposes. Authority was taken to issue Dominion notes to a limited extent, and to enable the Government to act on the general interest of the country in regard to banks, etc. In the Senate, the proceedings were equally prompt, unanimous and patriotic. The session closed on August 22.

Meanwhile every form of public and private patriotism was stimulated. Volunteers came forward in larger numbers than could be handled. A camp for 30,000 men was formed at Valcartier in Quebec. The Province of Ontario gave $500,000 to the Imperial Government, the Province of Nova Scotia, 100,000 tons of coal for the Navy. A large sum was instantly raised for a hospital, or hospital ship, at the request of H.R.H. the Duchess of Connaught. The Patriotic Fund for the maintenance of those dependent on Volunteers was swollen to a very large amount. The province of Prince Edward Island gave 100,000 bushels of oats, Saskatchewan 1,500 horses. Manitoba sent a million bags of flour. A regiment was offered by Major Hamilton Gault of Montreal, who, with his wife, went to the front with his men. H.R.H. the Duke of Connaught went to live among the troops at the camp, where his presence was inspiring, and his experience valuable. The Volunteers embarked about the end of September, under convoy, and were in training under hard weather conditions till towards the close of the year, when at least a portion of the contingent was sent to the front; the results had not been officially stated at the close of the year.

_The Provinces._--The Legislature of Ontario met on February 18. Two Bills only, of any consequence, were promised, a Redistribution Bill and a Workmen's Compensation Bill. An amendment to the Address, regretting the absence of any effort to remedy the conditions of labour in the Province, was defeated by 58 to 19. A surplus of $230,000 was announced by the Treasurer. New taxes were imposed on business corporations, to provide about $600,000 extra revenue. The total expenditure for the fiscal year ending October 31, 1914, was calculated at $17,437,738. A general election (June 29) resulted in the success of the Whitney (Conservative) Government by a majority of 55 members, a decrease of 9 from the majority at the close of the session. During the early autumn the Ontario Premier (Sir James Whitney) died; and he was succeeded by the Hon. W. H. Hearst, who was first elected in 1908. The new Premier reorganised his Ministry (Oct. 2); but no session had been held at the close of 1914.

The _Quebec_ Legislature, which was sitting at the close of 1913, resumed business on January 7, 1914. On January 23, charges having been made against certain members of corruption, a House Committee was appointed to investigate them. A somewhat sordid state of affairs was revealed. Acrimonious and prolonged debates took place. Finally the Committee reported on February 12 against one member of the Lower and two of the Upper House; these latter resigned their seats. The Legislature was prorogued on February 19.

The _Nova Scotia_ Legislature met on February 19. The Speech from the Throne was a review of the year very favourable in character. A Bill for redistribution of seats and for changing the character of the franchise was promised. Some disagreeable episodes regarding slanders on members, and some accusations of members trafficking in public lands, occurred; but nothing came of them in the end. The Prime Minister of Nova Scotia later in the year made active and successful efforts to provide help for the Belgians.

The _New Brunswick_ Legislature met on February 26. It was announced that the financial claims of the Province against the Dominion had been settled, and that the Province would receive a revenue of $66,382 in addition. On April 6 charges of corrupt dealing with revenues from public lands were made against the Hon. J. K. Flemming, the provincial Prime Minister. An investigation was ordered by the Government itself. The result was a report unfavourable to the Minister, who accordingly resigned.

The Legislature of _Prince Edward Island_ met on March 11. The Speech declared that the prosperity of the Province during the past year had been unequalled. The business of fur-farming had proved abnormally successful, and further enterprise in that business was expected. The Budget was encouraging. The public accounts showed a surplus of $15,500 for the first time in many years; and a surplus was estimated in the current year. The question of the representation of the Province in the Federal Parliament was discussed. This question has been settled by the Representation Act passed by the Federal Parliament.

The Legislature of _Manitoba_ met on December 11, 1913, but did not begin business till the close of the holidays in 1914. The Legislature asked the Dominion Government to transfer to Manitoba all the natural resources of the Province. A redistribution Bill was passed. An appropriation of $2,500,000 was made for the improvement of roads; and a Commission was appointed to conduct the expenditure. The Budget showed a surplus of $473,221. A general election on June 10 resulted in the support of the Roblin (Conservative) Government, but by a very largely reduced majority, owing to the prominence given to delicate questions like temperance and separate schools.

On September 15-18 a special session was held to express the loyalty of the Province, to encourage enlistment, and to provide for the continuance and safety of the public business.

The _Alberta_ Legislature met on October 7. The Prime Minister announced a surplus of $100,000, in spite of the general stringency. The response of the people of Alberta to the call for troops was pointed to with pride, in the speech of the Lieut. Governor. The surplus for the coming fiscal year was estimated at $1,176,967. The speeches on the Address were all of a loyal character, and no partisanship disturbed the short session.

The _Saskatchewan_ Legislature met in special session on September 15. The special business was of a practical character; to grant extension of time to railway companies engaged in construction work; to regulate transactions of foreign companies; to enforce the closing of places where liquor was sold; to take power to regulate executions and debts in real estate transactions; to grant aid to the Patriotic Fund.

The _British Columbia_ Legislature met on January 15. The principal item in the speech related to the long-discussed question of better financial terms for the Province. The public accounts, ending March 31, 1913, showed a deficit of $1,846,228, due to expenditure on public works. A measure for raising a loan of $10,000,000 was passed. Further aid, much discussed, was granted to the Canadian Northern Railway, and other railroads. The session closed on March 5. [For the attempted immigration from India in the _Komagata Maru_, see p. 407.]

III. NEWFOUNDLAND.

The general depression which prevailed throughout the world was severely felt in Newfoundland during the year. One of the large iron mines on Bell Island closed down early in the year, and since the war commenced the other company has also stopped operations. The ice conditions prevailing early in the year hindered trade and commerce, and the fishery operations were seriously impeded by the late ice blockade of the coasts.

The reduction of the tariff in 1912 and the trade and business depression affected the revenue of the Colony, which, for the first time for several years, was below the expenditure by $301,849.

At the outbreak of the war a feeling of uncertainty and distinct uneasiness was manifested among all sections of the community, especially as to the probable effect on trade, and more particularly with regard to the fish markets; but by the close of the year Newfoundland had--so far--not suffered to any great extent. At first the most serious problems were those of exchange and war risk insurance, and for a time these caused considerable anxiety. These difficulties, however, were overcome by the statesmanlike action of the Home Government, with the result that confidence was restored and the prices of the Colony's chief export, codfish, rose from the low figure of about $5.00 to its present unprecedented figure of 7.50 per quintal (112 lb.).

The increased cost of imports was heavy. This especially applies to food stuffs, such as flour, which was comparatively cheap early in the year, and the increased price of this commodity alone cost the people of the colony nearly $250,000.

The following comparative statement shows the falling off in the Colony's productiveness, due largely to the abnormal ice conditions in the early part of the year. Fortunately the enhanced prices helped to make up to some extent for the shortages.

1914. 1913.
Cod-fishery, quintals 1,265,565 1,408,582
Seal-fishery, seals 233,719 272,965
Lobster pack, cases 11,017 16,565
Canned Salmon, cases 1,492 2,995
Whale Fishery, whales 168 222
Herrings, salt and frozen, barrels 78,923 68,432
Iron Ore exports--tons 1,245,797 1,243,200
Pulp exports-- " 51,605 51,487
Paper " " 40,077 44,424

The values of the products exported were:--

Fishery $10,907,677
Agriculture 23,702
Forests 315,430
Mines 1,551,803
Manufactures 2,183,611
Miscellaneous 152,320
-----------
Total, 1913-14 $15,134,543
===========

The debt of the Colony was $30,450,765, as against
$29,470,060 at the close of 1913.
The public Revenue $3,618,329.
Expenditure $3,920,178.

The imports and exports were respectively as follows:--

Value of Value of
Countries. Imports. Exports.
$ $
United Kingdom 3,826,529 3,256,446
Dominion of Canada 4,861,047 1,971,809
Other British Possessions 331,415 549,418
United States 5,796,906 1,679,362
Portugal 19,970 888,930
Brazil 31 3,240,487
Spain 113,541 1,260,649
Other Countries 244,287 2,287,442
----------- -----------
Totals 1913-14 $15,193,726 $15,134,543
" 1912-13 16,012,365 14,672,889
=========== ===========

The shore fishery was about 150,000 quintals less than that of 1913 (which was also below the average). The Bank fishery showed a shortage of about 28.00 quintals, and it is estimated that the Labrador fishery was slightly in excess of the catch of 1913.

The demand for codfish has been brisk, and though the late shipments to Brazil did not realise well, yet the markets in Spain, Italy and Greece have been good, though the risks in shipping and marketing it have materially increased. The green fish trade to the United States and Canada was not so brisk as in 1913. The export of this commodity so far has not suffered much from the effects of the war. Most of the catch has been shipped and marketed in the Latin countries and in the Mediterranean without loss.

The Government has been able this year to get the Government of Portugal to remove the discriminating duty of 35 cents per quintal on Newfoundland codfish entering that country. This will be a great benefit to the trade, and will permit the colony to sell on equal terms with the Norwegians.

The lobster catch was the shortest in the history of that fishery. It was estimated at 11,000 cases as against 16,500 in the preceding year and no less than 43,500 in 1904, the year of the biggest catch. The German market, which has always consumed about 90 per cent. of the catch, was closed at the end of the season, and the price went down from $24.00 per case to $13.00, and when the year finished only about 3,000 cases had been exported, the rest being in the hands of the merchants and packers who do not wish to sell at such a low figure.

The Board of Trade has recommended, in view of the falling catch and to preserve the fishery, that 1915 be made a close season and the Legislature will be asked to provide for this at the next meeting.

At the outbreak of the war British colliery owners were faced with the problem of securing a suitable supply of pit-props, and a commission visited Newfoundland to ascertain the practicability of securing supplies. Several cargoes were exported and it is likely that twenty-five to thirty cargoes will be obtained in 1915.

The mining companies operating in Bell Island were forced to shut down early in the year and at the beginning of the war, and the loss of employment to so many men caused much suffering in the part of the country affected.

At the invitation of the Government, Professor Dunstan, of the Imperial Institute, visited the colony in the summer to report on the coal and shale areas in the interior. These were inspected and favourably reported on, and it was hoped that a beginning would be made in these new industries at an early date.

The copper mines in Notre Dame Bay will probably be opened up in the spring of 1915.

During the year the colony was visited by His Royal Highness the Duke of Connaught.

The Dominion Royal Commission held meetings in St. John's and took evidence upon such subjects as "The Newfoundland fisheries," "Steam communication," "Possibilities of increasing the Colony's imports from other parts of the Empire," "Oil shale areas" and "Lumber exports." The Commission also visited Bell Island and Grand Falls and took evidence in relation to the mining and paper industries respectively of these two places. The seal fishery showed a decrease of nearly 40,000 seals, but the value was greater than in 1913 because of the greater size of the seals and the higher value of the oil and the skins. This industry was attended with two great disasters; the first occurred to the crew of the _Newfoundland_, who were caught in a blizzard some miles from the vessel, and seventy-eight were frozen to death, while others were maimed for life. The other disaster occurred to the _Southern Cross_, which was on her way home with a full load of seals when she was caught in the blizzard of March 31 and foundered. There were 174 persons on board and all perished. No traces have been found of either vessel or crew. The disasters attracted the attention of the whole civilised world and subscriptions came freely in from Canada and England, while the people of the Colony gave well. There is now a fund of $300,000 which is being faithfully administered and which will be sufficient to meet all cases of want.

The Herring fishery was large and on account of the high price of fish was well marketed.

At the ordinary session of the Colonial Parliament twenty-six Acts were passed all affecting the internal economy of the Colony; they included one giving power to borrow 400,000_l._ for the completion of the new branch railways and a second to raise a loan of $360,000 for the extension of the telegraph system, the erection of lighthouses and fog alarms, and for the construction and improvement of public buildings.

In September a special war session of the Legislature was called and twelve measures were passed. These measures provided for the raising of a volunteer force of 1,000 men, for increasing the number of the Naval Reserve from 600 to 1,000 men, and for raising a loan, which was afterwards provided by the Imperial Government, for fitting out and keeping up the contingents. To meet the extra cost of maintaining these men, some new duties were imposed, and Acts imposing stamp duties and death duties were passed.

In the same session a Wireless Telegraphy Act was passed, requiring steamers engaged in the seal fishing to be fitted with wireless telegraphs. It was felt that, had the _Newfoundland_ had wireless on board, no one would have been lost.

The call of the Empire was well answered in "the loyal and ancient colony"; 750 men were sent to the Army and 500 more would be sent early in 1915. The full number of the Naval Reserve was easily made up, and already forty-nine have given their lives in the _Viknor_ and the _Clan McNaughton_ (in 1915). There were fully 200 Newfoundlanders in the Canadian contingent.

Archbishop Howley, Roman Catholic Bishop of St. Johns, died in October, and Monsignor Roche, a native of the Colony, was appointed in his place.

IV. MEXICO AND CENTRAL AMERICA.

The new year in _Mexico_ opened with President Huerta as Dictator, a Bank Moratorium, and furious fighting at Ojinaga, the issue for several days being in doubt. On January 11 it was reported that the Federal Army, which numbered 4,000 but had sustained heavy loss, had abandoned the town, crossed the Rio Grande and been disarmed by the United States authorities. General Villa took possession of Ojinaga, and his star was in the ascendant. The Government defaulted in the payments of the National Debt, and the Moratorium was extended to March 31. A plot against the Government was discovered in the capital and there were many arrests of prominent citizens. On February 4 President Wilson issued a Proclamation raising the embargo on the exportation of arms and ammunition to Mexico. Keen resentment was exhibited by the Huerta party, and General Villa, who had been inactive after Ojinaga except for the execution of "bandits," resumed his campaign. British marines and machine guns were sent from Vera Cruz to guard the Legation. On February 20 news came that an Englishman, Mr. William A. Benton, an extensive ranch-owner in the North, had been shot at El Paso by order of General Villa. He had lived in Mexico for twenty-five years and knew Villa personally. It was stated that damage having been done by Villa's men to his property, he had gone to Villa and had remonstrated with him. There was an altercation between the two. By Villa's orders Benton was tried by court martial and shot out of hand. The United States, having undertaken the obligation of protecting British subjects in places where we had no Consular representative, pressed for an inquiry. The "official" record of the court martial alleged that Mr. Benton was condemned for attempting armed violence against General Villa, and for assisting General Huerta; but the friends of the murdered man alleged that he did not carry arms and had none when he entered Villa's quarters. Sir Edward Grey sent Mr. Perceval, the British Consul at Galveston, to El Paso to investigate the crime. Yielding to United States representations, Villa allowed the body to be exhumed. Sir Edward Grey had meanwhile made a statement (1) reserving the right to secure reparation "whenever there is an opportunity" should United States action fail or not be proceeded with further; (2) dismissing the idea of a British punitive expedition to Mexico, on the ground that it would be worse than futile, seeing that it would "positively help those from whom we demand reparation, simply for the sake of appearing to do something"; and, (3) the matter would not be allowed to rest, "and as soon as, by any change of circumstances, it is in our power to carry the matter further we shall take whatever steps may be practicable." Villa telegraphed that "Benton was tried by Council of War and found guilty and shot for having tried to assassinate me." Mr. Consul Percival arrived at El Paso and an Anglo-American Commission met to investigate the crime. General Carranza also appointed a Commission of his own. But by this time Benton had been buried three weeks. Mr. Percival and the Anglo-American Commission were refused facilities to cross the frontier, and Sir Edward Grey therefore found it necessary, on Mr. Percival's advice, to drop the question of an examination of the body. There the matter had to be left, nor had any reparation been obtained by the end of the year.

Meanwhile General Huerta protested against the cancellation of the embargo on arms, and relations with the United States became more strained. On April 21, in view of the outrage on the United States flag at Tampico (April 10, p. 456), the American Admiral at Vera Cruz, on instructions from Washington, seized the Customs House, and intervention on a great scale seemed inevitable. Steps were taken for the protection of foreign residents in Mexico city and British subjects elsewhere had been ordered to seek safety at once.

There was, however, a lull and diplomacy was active with the object of inducing the various parties in Mexico to arrange an armistice between the Federalist and Constitutional or "rebel" forces as a step to agreement on a Provisional Government, the assumption being that Huerta would be eliminated, by consent or otherwise. General Carranza, for the Constitutionalists, accepted this idea, or was reported to have done so at first. After confusing negotiations the facts emerged that Huerta had no intention of resigning, and that Generals Carranza and Villa would not agree to an armistice. A Conference was arranged to meet at Niagara Falls, on the Canadian side, in May, and Huerta despatched his Commissioners. The Constitutionalists resumed operations and drove the Federalists out of Tampico with ease, the Federalists taking to flight when cannon and machine guns were brought into position, commanding the town and harbour. There were other rebel successes. Simultaneously the Mediation Conference, consisting of representatives of Argentina, Brazil, Chile, the United States, and the Mexican Commissioners, began their work at Niagara and after eloquent opening speeches sat in private. The Constitutionalists then decided to send a representative to Niagara, but General Carranza stoutly refused an armistice. In the early part of June it became evident that his military position was such that General Huerta's dictatorship had almost disappeared. In this situation General Huerta let it be known at Niagara that he was willing to resign if at the time of withdrawal the country was "politically pacified." A scheme was mooted by a provisional Government nominated and agreed upon by both parties in Mexico, and it was in principle accepted by General Huerta. But General Carranza still declined the terms on which the Conference would admit his delegate, and he acted with rigour towards Federalists in his power. Many executions were reported. General Villa quarrelled with him and the Constitutionalists thus broke into two military parties. The cause of the rupture was obscure, but it was alleged that General Villa had demanded full control of the Army in return for his recognition of Carranza as dictator. The feud still further diminished the already slender chances of success at the "A.B.C," Conference at Niagara. Affairs in the Republic fell into worse chaos, and thus they continued until mid-July when the name of Francisco Carbajal, Foreign Minister in the Huerta regime in succession to Señor Rojas, was discussed as that of a suitable Provisional President. At this time the Constitutionalists under General Carranza were threatening to descend on Mexico city and the situation seemed desperate. On July 16 it was announced that General Huerta, with other officials, had left Mexico city for Puerto Mexico, and that Señor Carbajal had taken the oath before Congress as Provisional President. General Huerta's resignation was presented to Congress and accepted by a vote of 121 to 17. In his message of resignation, he reviewed his assumption of office at the call of Congress. He recalled his efforts to bring about peace, noting that in seventeen months he had formed an army to carry out his promise of peace. He reviewed the difficulties of the Government in doing this, "owing to scarcity of funds as well as to the manifest and decided protection which a Great Power in this continent has afforded to the rebels," and which culminated "in the outrage committed at Vera Cruz by the American Fleet" at the moment "when the revolution had been broken up" by the division among its leaders. He also recounted the success of the mediation negotiations, adjusting the Tampico incident, but noted that "the revolution continued, with the support of whom we all know." Rebutting the allegations that his personal interest was predominant, he offered his resignation as a proof that interest in the Republic was his chief thought. The message aroused prolonged applause, and General Huerta had a hearty popular farewell. He left for Europe, _via_ Havana, landing at Avonmouth and proceeding to Spain.

The new President had been a Judge of the Supreme Court under Diaz, Minister in London under Huerta, and then Foreign Minister. He had the reputation of being a man of peace and distinction of mind,--qualities that made him unacceptable to General Carranza. Negotiations between the two chiefs broke down over the question of the punishment of the Huertist leaders, and ultimately Señor Carbajal fled to Vera Cruz, and the Carranzists entered Mexico city on August 20. The United States Government in September began to contemplate withdrawing its troops from Vera Cruz, but it demanded (1) that the Customs duties and taxes collected by it on Mexican account during the occupation should not be required a second time from the payers; (2) that Mexicans employed by it should not suffer in consequence; (3) that United States citizens and priests and members of religious orders should be protected from harm by the Mexican Government. General Carranza would not give definite assurances to this effect. Villa, whose allegiance to Carranza had long been doubtful, broke with him early in October, ostensibly because Carranza was supposed to be delaying agrarian reform, and a Peace Conference was summoned at Aguas Calientes (364 miles north of the capital on the line to El Paso), which was intended to eliminate both Villa and Carranza and to substitute a Provisional President. Carranza, backed by some of his subordinate Generals in Southern Mexico, refused to attend the Conference, but offered to resign if a Provisional Government were set up and Villa and Zapata would retire also. Villa had come to terms with Zapata, and controlled the Conference; and on October 31 it deposed both Carranza and Villa from their commands--Villa's deposition, however, being only nominal--and elected General Carlos Gutierrez Provisional President (Nov. 2) for twenty days, subject to renewal. It then declared Carranza to be a rebel. President Wilson now decided to withdraw the United States troops in order to leave Mexico free to settle her own affairs, and they left Vera Cruz on November 23, taking with them the Customs duties they had collected, to hold till a stable Government was established, and also some clerical refugees. It was occupied by a Carranzist force under General Aguilar. Villa, however, suspected Gutierrez, and the capital was occupied early in December by a Zapatist force. Carranza had offered to confer with Villa at Havana, but the year ended amid a fresh civil war. A tramway strike in the capital and a dearth of food in Northern Mexico also marked the end of the year.

An agreement was arrived at in June between Great Britain, the United States and Holland to withhold support from any of their respective nationals claiming, directly or indirectly, "any right or title or interest in oil properties acquired since April 24 by reason of the cancellation of contracts or leases, or by reason of the confiscation by _de facto_ authorities of properties on the ground of default of contractual obligations or non-compliance with legal requirements, provided that such default or non-compliance is unavoidable because of military operations or political disturbances."

In _Panama_ the Canal was unofficially opened for general traffic on August 15, the United States War Department steamer _Ancon_, of 6,000 tons net, going through the locks at the head of a procession of vessels. Barge traffic had passed through earlier, and a number of ocean steamers did so later, but a landslide in October blocked the waterway for a few days and other interruptions occurred in November and December. A report on the work of the Sanitation Department showed a steady improvement in the sickness and death rates among the employees on the Canal and the Panama Railway. Yellow fever and plague had disappeared, malaria had diminished greatly. The death rate of the whole population of the zone, including the towns of Colon and Panama, was 49.94 per 1,000 in 1905, and was reduced to 20.49 in 1912 and 23.57 in 1913. The expenditure on the Canal by the end of 1913 stood at 65,000,000_l._ In November rules were promulgated on the use of the Canal by belligerents.

In his Message to the Assembly of _Guatemala_, in March, President Estrada Cabrera announced that the Government had replied to the representations of the British Foreign Office, requesting the restoration of the revenue given as a guarantee for the service of the 4 per cent. external debt, by an agreement made direct with the representatives of the bond-holders.

A treaty between _Nicaragua_ and the United States was before the U.S. Senate at the close of the year (p. 461). The other Central American Republics had little history except that of financial distress consequent upon the war.

V. WEST INDIES AND THE GUIANAS.

The West India Islands and British Guiana had an uneventful and fairly prosperous year until the outbreak of war, nor do their commercial interests seem since then to have been materially affected. The war stimulated the loyalty of the people and caused less apprehension than might have been expected, having regard to the concentration of the Fleet in home waters and the defenceless condition of the archipelago, in which there were German cruisers late in July, which are believed to have cut the cable on August 3. It was at first thought that the cable had broken owing to an earthquake at Jamaica on that day, but the view of the repairers was that it had undoubtedly been cut. On the defect being remedied the West Indies learned that war had been declared. On October 20 the Governor of Jamaica was able to report that matters had proceeded normally. That had been the case elsewhere. There had been no excitement and no unrest; the bank returns showed an increase of deposits since the opening of hostilities,--one of many signs that the island was recovering from the depression of 1913. The people had displayed a spirit of the greatest loyalty and he had received a large number of offers of personal service. His language is applicable to other islands and the mainland colony. Many West Indians came to England and enlisted in the new army. Though the tide of war did not reach our possessions in the Caribbean and the Guianas, the fact that Germany was at war with France and Great Britain opened up new possibilities in the Western world south of the United States, in the event of German success. So far as can be judged the normal life of the colonies was pursued, but the war checked development projects. Thus no progress has been made with the scheme for opening up the hinterland of British Guiana by a railway. The proposal of the Governor, Sir Walter Egerton, awaits the decision of the Colonial Office. A loan would be required and the chances of such legislation in the Imperial Parliament at an early date may have diminished to vanishing point since August. The need of railway enterprise in this long-neglected colony--the El Dorado of Raleigh--was illustrated during the year by the authenticated discovery of a new gold area between the head waters of the Takutu River and the Tucurutu Mountains. The British route to the field would be partly by existing steamboat and railway services and thence by canoe, with many portages past rapids, then across the Savannah and again by canoe. The journey is commercially impracticable unless the deposits are exceptionally rich. The new gold area is sparsely inhabited by Macusi Indians, who speak the Carib language but are not pure Caribs, and there is no food in the region other than what the aborigines grow for themselves. On this account and because of the long and difficult journey the Government issued a warning notice to those fitting out expeditions. The discovery greatly strengthens Sir Walter Egerton's case for a hinterland railway, without which "the largest undeveloped auriferous area in the world"--to quote the Government expert--cannot be developed.

_Hayti_ and _Santo Domingo_ had another revolutionary year, tempered by the occasional intervention of United States warships for the protection of foreign property.

VI. SOUTH AMERICA.

A commercial crisis occurred in _Brazil_ early in the year, owing to the fall in the prices of rubber and coffee, and it culminated on the outbreak of war in a general default. It was complicated in February by a rebellion in the State of Ceara, which started among rubber collectors who could no longer get employment. It was led by an ex-priest, Padre Cicero, and quickly reached proportions beyond the resisting power of the State authorities, the political opponents of the President of Ceara, Colonel Rabello, apparently using the movement to get rid of him. In this they succeeded, the Federal authorities failing to respond to his requests for support. The rising, however, being economic rather than political in origin, became so extensive and so menacing to the Republic that the Federal Government had to proclaim martial law and reinforce the Federal troops at Fortaleza, the State capital. The administration of the State was taken over by the Federal Government and a military officer, Colonel Setembrino, put in charge. This meant the elimination of Colonel Rabello and an easement of the political tension. The disarmament of rioters was proceeded with and the State thus quieted. Meanwhile there had been ominous signs of trouble in Rio Janeiro, but these were promptly suppressed by the Government, by the usual methods of arrest and control of the Press. A leading paper at Rio gave an indication of the acuteness of this crisis by publishing in the place of its leading articles the story of Ali Baba and the Forty Thieves. But the trouble in the Federal capital--a week's journey from Ceara by sea--passed off. As fears of a revolution diminished the financial situation became more acute. The Budget law for 1914 put the expenditure at 435,773 contos of reis paper and 95,469 contos gold and the estimated revenue at 130,219 contos gold and 367,571 paper, leaving a deficit of 9,621 contos paper. In June Congress authorised the Government to contract a loan to enable Treasury obligations to be met, and passed resolutions prohibiting expenditure not yet entered upon though lawfully authorised. Whatever effects this belated zeal for economy may have had, a heavy deficit on the Budget proposals put before Congress in July was not avoided, and when war broke out in Europe the Republic defaulted. In October the Brazilian Government promulgated a Funding Scheme by which interest on all the foreign loans, except the Funding Bonds of the 1903 loan, became payable in scrip for three years, while the redemption of nearly all securities was postponed for thirteen years. The Budget estimates for 1915 were dislocated by the effects of the war.