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Canadian-American Reciprocity: A Comment

Published online by Cambridge University Press:  03 February 2011

Robert E. Ankli
Robert E. Ankli
Affiliation:
University of Guelph
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Extract

In the December 1968 issue of this Journal, Professors Officer and Smith question the “classical and generally accepted view of Reciprocity.” A careful reading of earlier writing on this subject casts doubt upon the novelty of their conclusions. D. C. Masters, one of their authorities, was aware of the limited effects of the Treaty. In Reciprocity, 1846-1911, he writes, “To a considerable extent the prosperity of the period, including the increase in American-colonial trade, was the result of factors other than the treaty itself.” My note raises questions about the authors' use of customs union theory (Part I) and their interpretation of the data (Part II).

Type
Notes
Information
The Journal of Economic History , Volume 30 , Issue 2 , June 1970 , pp. 427 - 431
Copyright
Copyright © The Economic History Association 1970

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References

I would like to thank Douglas Auld and Leon Sydor for helpful comments.

1 Lawrence Officer and Lawrence Smith, “The Canadian-American Reciprocity Treaty of 1855 to 1866,” The Journal of Economic History, XXVIII (Dec. 1968), 598–623Google Scholar.

2 Masters, D. C., Reciprocity, 1846–1911 (Ottawa: The Canadian Historical Association, 1961), p. 8Google Scholar. See also his The Reciprocity Treaty of 1854 (Library, Carleton ed.; Toronto: McClelland and Stewart, Ltd., 1969)Google Scholar. [Hereafter referred to as Masters, Reciprocity Treaty.]

3 Lipsey, Richard, “The Theory of Customs Unions: A General Survey,” in The Economic Journal, LXX (Sept. 1960)Google Scholar.

4 Officer and Smith, “Canadian-American Reciprocity,” p. 601

5 Ibid.

6 Meade, James, Theory of Customs Unions (Amsterdam: North-Holland Publishing Co., 1955), p. 107Google Scholar, has made this point even more general: “The formation of a customs union is more likely to lead to a net increase in economic welfare if the economies of the partner countries are actually very competitive or similar but potentially very complementary or dissimilar.” Since both countries were expanding production of primary products and both were exporters of many of these same enumerated articles, it is not likely that welfare gains could have been large. One might also ask if all trade is not of a convenience nature.

7 Officer and Smith, “Canadian-American Reciprocity,” p. 614.

8 Ibid., p. 622.

9 Ibid., Table 1, col. 6.

10 Abstract of British Historical Statistics (Cambridge: The University Press, 1962), pp. 100–1Google Scholar.

11 Officer and Smith, “Canadian-American Reciprocity,” p. 605. It should be noted that Officer and Smith confuse the Province of Canada (Quebec and Ontario) with the British North American colonies (the Province of Canada, Newfoundland, New Brunswick, Nova Scotia, and Prince Edward Island); thus Tables 1 and 6 are misleading and incomplete.

12 Ibid., Table 6, col. 6.

13 Ibid., p. 608: “Furthermore, at no time during the treaty do imports rise significantly above 1855, especially when allowance is made for improved accounting procedures and decreased smuggling.”

14 Masters, Reciprocity Treaty, p. 143.

15 Ibid., p. 113.

16 Ibid., pp. 113–14.

17 See Officer and Smith, “Canadian-American Reciprocity,” Table 9. Officer and Smith's Table 10 purports to show that “growing U.S. demand drove up lumber prices despite abrogation” (“Canadian-American Reciprocity,” p. 612). Prices are given only for 1865–1867. Stock boards or shipping boards increase from $9.50-$9.75 per 1000 feet in 1865 to $10.00 in 1866 and 1867. Sliding plans prices increase from $15-$16 to $17.50 per 1000 feet in 1866 and 1867. The treaty was abrogated March 17, 1866. The facts they have provided do not warrant their conclusion.

18 Ibid., p. 615.

19 Ibid., pp. 621–22.

20 Easterbrook and Aitken conclude that the Canadian transportation system could be profitable only if the trade of the American Midwest were captured. See Easterbrook, W. T. and Aitken, Hugh G. J., Canadian Economic History (Toronto: The Macmillan Co., 1958), p. 352Google Scholar.

21 See Officer and Smith, “Canadian-American Reciprocity,” Table 14.

22 Masters, Reciprocity Treaty, p. 3.

23 See Brebner, J. B., North Atlantic Triangle (Library, Carleton ed., Toronto: McClelland and Stewart, Ltd., 1968), pp. 169Google Scholar and 175. “‘I know,’ cried Secretary of State Seward to a Boston audience in the summer of 1867, ‘that nature designs that this whole continent, not merely these thirty-six states, shall be, sooner or later, within the magic circle of the American Union.’”