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PREFERENTIAL TRADE. imports custom duties exceeding those to which they were previously subject, nor because she had treated Germany differently from other foreign countries with whom she had commercial relations, but because Canada had refused to extend to Germany a special concession made by her to the mother country, in pursuance of a policy deliberately adopted for the purpose of promoting the national trade of the British Empire.'

Canada replied to Germany's action by imposing a special penalty on German goods. The German Government, in their dispatch of June 29th, announced: 'That if other British self-governing Colonies should follow the example of Canada, and accord national treatment to British imports, the German Government might find themselves compelled to refuse not only to those Colonies, but to Great Britain herself, the treatment which, in view of the liberal terms upon which German imports are admitted to this country, we are entitled to expect upon the most ordinary grounds of reciprocity.' I think, gentlemen, you will agree with what I understand to be the general opinion of the country, that the threatened action of Germany with reference to Canada, and the threatened action of Germany with respect to ourselves, constitute amply sufficient grounds to justify a departure from our existing fiscal policy.

The next ground on which the reform in our fiscal policy deserves attention is the development of the American trusts and the German trade combinations. These trusts and trade combinations, owing to the high protective duties, are enabled to make a large profit on the goods they sell in the home market, and then, in order to spread the general charges on their business, 151