dependence upon foreign bottoms? Here is where we shall pay the price
for neglecting our merchant marine.

Still another menace to our trade lies in preferential alliances between
Mother Countries and their colonies, which is part of the projected
programme. Our next-door neighbour, Canada, has just given an
illuminating instance of what may be in store for us. A Co-operative
Export Association has been formed in the Dominion to get business
throughout the British Empire and the other allied nations. In the
circular announcing its organisation it declares that "the products of
Canada will be preferred against the products of her great neutral
competitor, the United States, who has stayed outside of the war and has
borne no sacrifice of life and money made by the allied countries."

Return to the economic pact again and you find that it continues to
bristle with dangerous possibilities for us. You will recall that one of
the clauses forbids the resumption of a favoured-nation arrangement with
enemy countries for a period "to be fixed by mutual agreement." This may
be for an indefinite time.

Now the danger here lies in the European interpretation of the
favoured-nation idea. To quote an authority: "Most of these countries
have treaties under which each must grant most-favoured-nation treatment
to the other; and this means that a reduction in duties granted to one
country is automatically extended to all other countries with whom such
treaties exist. The result is that the lowest rate in any treaty
becomes, with exception, the rate extended to all countries."

We have the favoured-nation relation with many European countries, and
herein lies the possible danger: The war automatically annulled all