On the map the Dominion covers an enormous area, but climatic conditions render at least two-thirds of it unfit for cultivation. The territory capable of profitable settlement could be comprised in a strip between 80 and 90 miles wide strung along the northern frontier of the United States. The same climatic disabilities also impose severe limitations upon the range of the country's products. Mr. Lloyd George, in a moment of imperialist enthusiasm after his American tour in 1922, gave vent to the cheerful prediction that Canada was capable of sustaining a population of 600 million souls, and thereby demonstrated the value of the first-hand education on North American problems which had been the avowed object of his Odyssey. For some centuries the populations of Scotland and England, owing to the disparity in their natural resources, cultivable area, and in a lesser degree climatic conditions, have preserved almost a constant ratio to one another, and for similar reasons a parallel ratio has for several generations persisted between the populations of Canada and the United States and is likely to persist. When Canada attains a population of 600 millions the United States has every right to expect a population of 5,000 millions-thrice the present population of the whole world-and Mr. Lloyd George should pray not to be re-incarnated in the role of a statesman in the age which beholds this portent. Canada does possess great and varied resources and can in time give harbourage and a comfortable living to many times her present population, but for a variety of reasons her pace of expansion, apart from a burst in the opening decade of the present century, has been disappointingly slow, and a certain envious impatience has precluded a proper appreciation of the compensating advantages of slower progress than the United States has made.

The recent check in the development of Canada is very largely due to the Great War. In proportion to her resources Canada made a very heavy contribution both in men and money to the Allied cause; the debt which she incurred through her most creditable effort remains a heavy load upon a young country. But another indirect consequence of the war was much more serious. Prior to its outbreak there had been flowing to the shores of Canada, chiefly from Europe, a vast annual stream of immigrants-in some years exceeding 400,000 souls-and the confident expectation was cherished that by 1930 the Dominion's population would be

within measurable distance of 20 million people. Exuberant optimists who occupied positions of influence in the worlds of politics and finance visualised an even more rapid increment, and since capital was available in abundance, they were allowed and even encouraged to provide Canada with a system of railways and other physical equipment far beyond her immediate needs. But the bloodletting in Europe not only lessened the acute pressure of population, which had driven thousands of emigrants forth in the pre-war years from their original homes, but it also disastrously impaired the value of Canada's best market. The prices of farm produce the main buttress of her economic lifefell to levels which yielded at best a meagre profit and thereby diminished the attractions which had previously been available to prospective colonists. The result is that in the last six years the stream of immigration has been decidedly thin and the returns of 1924 shew an ominous decline from the figures of 1923.

Quite clearly the present rate of immigration does not begin to fill the gaps left by a southward exodus of alarming dimensions, which is to-day the most disturbing phenomenon in Canada's national life. The southward movement is not of course entirely new. Ever since Canada took form as a settled community, each year a contingent of her sons and daughters have sought their fortunes in the United States, impelled by exactly the same motives as bring southward an annual drove of ambitious Scots to the richer pastures of England. At intervals, when a bad economic depression prevailed in Canada, the volume of the exodus was substantial. But before the war the rapid development of the west, presenting as it did abundant opportunities for Canada's youth, had caused an almost complete abatement of the southward emigration and there was in progress a heavy counterflow of American immigrants to Canada. Since the war the disparity in the prosperity of the two countries has once more altered the situation and in the last five years Canada has lost very heavily on the interchange of population between the two countries. The exact figures of the emigration to the United States are difficult to obtain and are a subject of acute controversy, but certain data are available. The Bureau of Immigration at Washington reported that during the year ending June 30, 1924, no fewer than 200,690 residents of British North America-a figure which included a small contingent from Newfoundland

paid the head-tax of $8 to enter the United States. Notoriously a large number of immigrants contrive by various methods to evade the head-tax, not so much from motives of thrift as from a desire to avoid a rigid examination which might result in their rejection at the border. Mr. Davis, the U.S. Secretary of Labour, who is charged with the supervision of immigration, recently declared that in two years no less than 850,000 aliens had been surreptitiously" boot-legged " into the United States, and it is a reasonable inference that more than half of these would enter across the Canadian frontier. Moreover the American Commissioner of Immigration at Montreal stated that out of some 60,000 Canadians who during a five months' period had been allowed to enter the United States from his district under the status of "temporary visitors" more than two-thirds had failed

to return.

It ought not therefore to be an excessive estimate to put Canada's loss of population to her neighbour at 300,000 during the last fiscal year. At present there is some evidence of a return movement of Canadians from the United States, but its dimensions are so far small compared with the volume of the exodus. If a proportionate outflow of population were in progress from British shores, entailing a loss of a million and a-half people in a single year, the phenomenon might be viewed with equanimity, but it is a ruinous drain upon the too scanty population of nine million people which Canada to-day contains, and its stoppage is the primary concern of all public-spirited Canadians, for obviously a decline in population must seriously aggravate the difficulties of the debt and railway problems.

The first remedial step must be an equalisation as far as is possible of economic conditions on each side of the international boundary. As soon as Canada is able to offer her residents as good material terms of life as the United States can hold out, her other patent superiorities will enable her to hold her population. Some of the advantages now enjoyed by the United States are permanent, others temporary: her wage-scale is generally higher, her costs of living on the whole lower, and there is greater continuity and diversity of employment within her borders. But the crucial difference lies in the rates of taxation. Compared with their brethren in the United Kingdom the taxpayers of

Canada get off lightly, but in comparison with the fortunate Americans their load seems grievous to bear.

There is also widespread mortification that the imminent prospect of another reduction in income tax rates in the United States is accompanied by no hope of any parallel relief in Canada. In the budget of 1924 the King Government, by the transparent device of segregating the finances of the State-owned railways, produced a fictitious surplus, but economic purists were all agreed that during the fiscal year there had been an addition of more than 40 million dollars to the national obligations. Under such circumstances any reduction of taxation without the provision of substitute revenues was unjustifiable, but for purely political purposes the customs and sales taxes were pared to the estimated tune of 24 million dollars. Nevertheless the revenue calculations of the Finance Department are proving far wide of the mark and there are clear indications that Canada at the end of the fiscal year on March 31, 1925, will have experienced the greatest revenue decline in any single year of her history. On January 31st, at the end of ten months, the slump had been 48 million dollars, and since the short wheat crop in the West has made inevitable an increase in the now chronic deficit of the Canadian national railway system, sober authorities calculate that the total deficit of the Federal Government on its different activities during the present fiscal year will not be far short of a hundred million dollars. Instead of diminishing, the total sum of the national obligations has been steadily mounting year by year, and what Canadians pray for is, not repayment of their national debt, but a halt to its annual increase. Under such circumstances sound financial practices should dictate an increase of taxation to secure a balanced budget, but with an election imminent the political dangers of such an heroic course will rule it out of consideration, although the disclosures of the budget are certain to create a storm of indignation against the laxity of the Government's financial policy. Undeniably a large part of the revenues are absorbed by fixed charges which are beyond the immediate control of the Government, but a very grave indictment can be brought against them for their complete failure to practise the rigid economy which the situation has demanded. Their lack of a majority has left them at the mercy of the more venal elements among their own followers; they have been devoid of the

fortitude necessary to resist importunate demands for fresh public works by greedy constituencies; they have wasted public funds for the temporary appeasement of clamorous sections, and as a result the reduction in ordinary expenditure has been trivial.

The business community makes bitter complaint about the effects of the heavy incidence of taxation and the assertion was made in the House of Commons that important firms in Vancouver were moving their headquarters to Seattle in order to escape its burdens; but no immediate relief seems possible until a stronger and more courageous ministry is installed in office. And grave as are its derelictions in the financial field an even more serious indictment lies against the King ministry in connection with the revival of the malignant patronage system which was the curse of Canadian public life for generations, but was abolished during the war-years in a mood of national idealism. More intent upon the preservation of their party's fortunes than upon the national interest, Liberal ministers have publicly bewailed the disappearance of the spoils system, and although Parliament was able to frustrate their worst designs, they have contrived to bring back in an unwholesome degree the wretched patronage system and its manifold abuses. The Manitoba Free Press is the ablest exponent of Liberal doctrines in the press of Canada, and while it pursues an independent path it cannot be accused of unfriendliness to the King Government, but its issue of January 30th contained these caustic comments :

The patronage system and the motto that "to victors belong the spoils " are the very negation of the spirit of true Liberalism. Yet a particular weakness of the present Government has been its constant zeal in appointing active party supporters to office. From the way in which this practice has been followed in the past three years and from the character of some of the appointments, the public cannot avoid the conclusion that the Government thinks it of more importance to reward its friends than to maintain the principle of civil service reform upon whose progress in recent years the country has based such high hopes.

This strong censure coming from such a source will serve to explain why the Liberal party under its present leadership has ceased to be regarded as an effective instrument of reform by a multitude of Liberals in the English-speaking provinces, and why the Progressive party has come into existence. Canada is however, as Mr. Nevinson wrote of the United States, too large