The Commission held prolonged sittings, first at Quebec and later at Washington, and reached tentative agreement on nearly all of the troublesome questions at issue. The bonding privileges on both sides the border were to be given an assured basis; the unneighborly alien labor laws were to be relaxed; the Rush-Bagot Convention regarding armament on the Great Lakes was to be revised; Canadian vessels were to abandon pelagic sealing in Bering Sea for a money compensation; and a reciprocity treaty covering natural products and some manufactures was sketched out. Yet no agreement followed. One issue, the Alaska boundary, proved insoluble, and as no agreement was acceptable which did not cover every difference, the Commission never again assembled after its adjournment in February, 1899.
The boundary between Alaska and the Dominion was the only bit of the border line not yet determined. As in former cases of boundary disputes, the inaccuracies of map makers, the ambiguities of diplomats, the clash of local interests, and stiff-necked national pride made a settlement difficult. In 1825 Russia and Great Britain had signed a treaty which granted Russia a long panhandle strip down the Pacific coast. With the purchase of Alaska in 1867 the United States succeeded to Russia's claim. With the growth of settlement in Canada this long barrier down half of her Pacific coast was found to be irksome. Attempt after attempt to have the line determined only added to the stock of memorials in official pigeonholes. Then came the discovery of gold in the Klondike in 1896, and the question of easy access by sea to the Canadian back country became an urgent one. Canada offered to compromise, admitting the American title to the chief ports on Lynn Canal, Dyea and Skagway, if Pyramid Harbor were held Canadian. She urged arbitration on the model the United States had dictated in the Venezuela dispute. But the United States was in possession of the most important points. Its people believed the Canadian claims had been trumped up when the Klondike fields were opened. The Puget Sound cities wanted no breach in their monopoly of the supply trade to the north. The only concession the United States would make was to refer the dispute to a commission of six, three from each country, with the proviso that no area settled by Americans should in any event pass into other bands. Canada felt that arbitration under these conditions would either end in deadlock, leaving the United States in possession, or in concession by one or more of the British representatives, and so declined to accept the proposed arrangement.
Finally, in 1903, agreement was reached between London and Washington to accept the tribunal proposed by the United States, which in turn withdrew its veto on the transfer of any settled area. Canada's reluctant consent was won by a provision that the members of the tribunal should be "impartial jurists of repute," sworn to render a judicial verdict. When Elihu Root, Senator Lodge, and Senator Turner were named as the American representatives, Ottawa protested that eminent and honorable as they were, their public attitude on this question made it impossible to consider them "impartial jurists." The Canadian Government in return nominated three judges, Lord Alverstone, Lord Chief Justice of England, Sir Louis Jette, of Quebec, and Mr. Justice Armour, succeeded on his death by A. B. Aylesworth, a leader of the Ontario bar. The tribunal met in London, where the case was thoroughly argued.
The Treaty of 1825 had provided that the southern boundary should follow the Portland Canal to the fifty-sixth parallel of latitude and thence the summits of the mountains parallel to the coast, with the stipulation that if the summit of the mountains anywhere proved to be more than ten marine leagues from the ocean, a line drawn parallel to the windings of the coast not more than ten leagues distant should form the boundary. Three questions arose: What was the Portland Canal? Did the treaty assure Russia an unbroken strip by making the boundary run round the ends of deep inlets? Did mountains exist parallel to the coast within ten leagues' distance? In October these questions received their answer. Lord Alverstone and the three American members decided in favor of the United States on the main issues. The two Canadian, representatives refused to sign the award and denounced it as unjudicial and unwarranted.
The decision set Canada aflame. Lord Alverstone was denounced in unmeasured terms. From Atlantic to Pacific the charge was echoed that once more the interests of Canada had been sacrificed by Britain on the altar of Anglo-American friendship. The outburst was not understood abroad. It was not, as United States opinion imagined, merely childish petulance or the whining of a poor loser. It was against Great Britain, not against the United States, that the criticism was directed. It was not the decision, but the way in which it was made, that roused deep anger. The decision on the main issue, that the line ran back of even the deepest inlets and barred Canada from a single harbor, though unwelcome, was accepted as a judicial verdict and has since been little questioned. The finding that the boundary should follow certain mountains behind those Canada urged, but short of the ten league line, was attacked by the Canadian representatives as a compromise, and its judicial character is certainly open to some doubt. But it was on the third finding that the thunders broke. The United States had contended that the Portland Channel of the treaty makers ran south of four islands which lay east of Prince of Wales Island, and Canada that it ran north of these islands. Lord Alverstone, after joining in a judgment with the Canadian commissioners that it ran north, suddenly, without any conference with them, and, as the wording of the award showed, by agreement with the United States representatives, announced that it ran where no one had ever suggested it could run, north of two and south of two, thus dividing the land in dispute. The islands were of little importance even strategically, but the incontrovertible evidence that instead of a judicial finding a political compromise had been effected was held of much importance. After a time the storm died down, but it revealed one unmistakable fact: Canadian nationalism was growing fully as fast as Canadian imperialism.
The relations between Canada and the United States now came to show the effect of increasingly close business connections. The northward trek of tens of thousands of American farmers was under way. United States capitalists began to invest heavily in farm and timber lands. Factory after factory opened a Canadian branch. Ten years later these investments exceeded six hundred millions. In the West, James J. Hill was planning the expansion of the Great Northern system throughout the prairie provinces and was securing an interest in the great Crow's Nest Pass coal fields. Tourist travel multiplied. The two peoples came to know each other better than ever before, and with knowledge many prejudices and misunderstandings vanished. Canada's growing prosperity did not merely bring greater individual intercourse; it made the United States as a whole less patronizing in its dealings with its neighbor and Canada less querulous and thin-skinned.
In this more favorable temper many old issues were cleared off the slate. The northeastern fisheries question, revived by a conflict between Newfoundland and the United States as to treaty privileges, was referred to the Hague Court in 1909. The verdict of the arbitrators recognized a measure of right in the contentions of both sides. A detailed settlement was prescribed which was accepted without demur in the United States, Newfoundland, and Canada alike. Pelagic sealing in the North Pacific was barred in 1911 by an international agreement between the United States, Great Britain, Japan, and Russia. Less success attended the attempt to arrange joint action to regulate and conserve the fisheries of the Great Lakes and the salmon fisheries of the Pacific, for the treaty drawn up in 1911 by the experts from both countries failed to pass the United States Senate.
But the most striking development of the decade was the businesslike and neighborly solution found for the settlement of the boundary waters controversy. The growing demands for the use of streams such as the Niagara, the St. Lawrence, and the Sault for power purposes, and of western border rivers for irrigation schemes, made it essential to take joint action to reconcile not merely the conflicting claims from the opposite sides of the border but the conflicting claims of power and navigation and other interests in each country. In 1905 a temporary waterways commission was appointed, and four years later the Boundary Waters Treaty provided for the establishment of a permanent Joint High Commission, consisting of three representatives from each country, and with authority over all cases of use, obstruction, or diversion of border waters. Individual citizens of either country were allowed to present their case directly before the Commission, an innovation in international practice. Still more significant of the new spirit was the inclusion in this treaty of a clause providing for reference to the Commission, with the consent of the United States Senate and the Dominion Cabinet, of any matter whatever at issue between the two countries. With little discussion and as a matter of course, the two democracies, in the closing years of a full century of peace, thus made provision for the sane and friendly settlement of future line-fence disputes.
The chief barrier to good relations was the customs tariff. Protectionism, and the attitude of which it was born and which it bred in turn, was still firmly entrenched in both countries. Tariff bars, it is true, had not been able to prevent the rapid growth of trade; imports from the United States to Canada had grown especially fast and Canada now ranked third in the list of the Republic's customers. Yet in many ways the tariff hindered free intercourse. Though every dictate of self-interest and good sense demanded a reduction of duties, Canada would not and did not take the initiative. Time and again she had sought reciprocity, only to have her proposals rejected, often with contemptuous indifference. When Sir Wilfrid Laurier announced in 1900 that there would be no more pilgrimages to Washington, he voiced the almost unanimous opinion of a people whose pride had been hurt by repeated rebuffs.
Meanwhile protectionist sentiment had grown stronger in Canada. The opening of the West had given an expanding market for eastern factories and had seemingly justified the National Policy. The Liberals, the traditional upholders of freer trade, after some initial redemptions of their pledges, had compromised with the manufacturing interests. The Conservatives, still more protectionist in temper, voiced in Parliament little criticism of this policy, and the free trade elements among the farmers were as yet unorganized and inarticulate. Signs of this protectionist revival, which had in it, as in the seventies, an element of nationalism, were many. A four-story tariff was erected. The lowest rates were those granted the United Kingdom; then came the intermediate tariff, for the products of countries giving Canada special terms; next the general tariff; and, finally, the surtax for use against powers discriminating in any special degree against the Dominion. The provinces one by one forbade the export of pulp wood cut on Crown Lands, in order to assure its manufacture into wood pulp or paper in Canada. The Dominion in 1907 secured the abrogation of the postal convention made with the United States in 1875 providing for the reciprocal free distribution of second class mail matter originating in the other country. This step was taken at the instance of Canadian manufacturers, alarmed at the effect of the advertising pages of United States magazines in directing trade across the line. Yet even with such developments, the Canadian tariff remained lower than its neighbor's.