This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Long-Term Factors in American Economic Growth Volume Author/Editor: Stanley L. Engerman and Robert E. Gallman, eds. Volume Publisher: University of Chicago Press Volume ISBN: 0-226-20928-8 Volume URL: http://www.nber.org/books/enge86-1 Publication Date: 1986 Chapter Title: New Estimates of Gross National Product, Canada, 1870-1926: Some Implications for Canadian Development Chapter Author: M C. Urquhart Chapter URL: http://www.nber.org/chapters/c9678 Chapter pages in book: (p. 9 - 94)
Transcript
This PDF is a selection from an out-of-print volume from the National Bureauof Economic Research
Volume Title: Long-Term Factors in American Economic Growth
Volume Author/Editor: Stanley L. Engerman and Robert E. Gallman, eds.
Volume Publisher: University of Chicago Press
Volume ISBN: 0-226-20928-8
Volume URL: http://www.nber.org/books/enge86-1
Publication Date: 1986
Chapter Title: New Estimates of Gross National Product, Canada, 1870-1926:Some Implications for Canadian Development
Chapter Author: M C. Urquhart
Chapter URL: http://www.nber.org/chapters/c9678
Chapter pages in book: (p. 9 - 94)
2 New Estimates of GrossNational Product, Canada,1870-1926: SomeImplications for CanadianDevelopmentM. C. Urquhart
This paper has its genesis in a project devoted to the preparation ofnational income· estimates for Canada for the years 1870-1926: thedelimitation of the period is explained by the twin facts that the firstCanadian census after confederation was taken in 1871 and that theofficial estimates of the national income of Canada begin in 1926. Theestimates are now complete-just barely. In this paper, I examine someof the consequences of the availability of the new data for the interpretation of Canadian economic development in the period covered bythe estimates. In my discussion I barely scratch the surface, largelybecause the preparation of the estimates themselves absorbed nearlyall of my time until very recently.
Before getting on with the main task I should say just a word aboutthe new estimates. I shall be brief at this juncture, even though it isperhaps fair to say that they are the main contribution of this paper.
The estimates comprise: annual estimates of gross domestic product,at factor cost by industrial sector, and of gross national product atmarket prices, all in current prices; annual estimates of gross nationalproduct at market prices in constant dollars; annual estimates of government expenditure on goods and services, by level of government;annual estimates of the main components of the balance of internationalpayments, a large part of which has been newly estimated; annualestimates of capital formation in residential construction throughoutthe period and of producers' durables from 1870 to 1895, which, together with new capital formation estimates for nonresidential investment prepared by Statistics Canada, provide a new series for gross
M. C. Urquhart is the Sir John A. Macdonald Professor of Political and EconomicScience in the Economics Department of Queen's University, Ontario, Canada.
9
10 M. C. Urquhart
domestic capital formation for the entire period. They are the productof a collaborative work by seven of us in academia, assisted by at leasta score of research assistants, over a decade, mostly on a spare-timebasis. I had hoped myself to be pretty much chairman of the board,but it did not work out that way, with the result that I must takeresponsibility for large parts of the new estimates as well as for thedelays in their production. The division of responsibility for the variou~
parts of the estimates is given in appendix 1.As for the quality of the new estimates, I have considerable confi
dence in them, comparatively speaking, which is not to say that theydo not have limitations. But then, which country's estimates do not?The estimates have been prepared from a mass ofdata. The basic sourceinformation, frequently hitherto untapped, proved to be substantiallybetter than we had expected it to be. And we have put a good deal ofeffort into developing processes that make the greatest feasible use ofthat information. Having said this much, I hasten to add, as I am sureeveryone knows, that the basic information was considerably less inquantity and quality than that on which the official estimates for Canada, beginning in 1926, are based. Ultimate judgment of the quality ofthe estimates must come, of course, from others than those of us whowere engaged in the project. A general statement of the sources of thedata is given in appendix 2; a detailed statement would be of suchvolume as to be unmanageable on this occasion.
I do not intend to proceed with a detailed discussion of the basis ofthe estimates but rather to see what inferences, if any, can be easilymade from them about the nature of Canadian economic development.However, given that the estimates are the most important part of thepaper, I present them immediately. They are given on an annual basisbecause the annual data contain much information, useful to my latermusings, that would be submerged in annual averages.
Table 2.1 presents gross domestic product (GDP) at factor cost, byindustry, and gross national product (GNP) at market prices. For allindustries but two the data are given on an annual basis; the industrygroups, "wholesale and retail trade" and "community, business andpersonal services," have been given only for census dates and for 1926,the first year of the official accounts, these being the years for whichprimary data are available and there being no satisfactory specific annual interpolaters. The aggregate GDP at factor cost was interpolatedbetween census years and to 1926 on the basis of the sum of thoseseries for which annual estimates are available-the latter make up byfar the larger part of GDP.
Table 2.2 presents data on gross capital formation broken down bya number of categories. As has been stated already, our project's contribution to this material is limited to the estimates for residential con-
Tab
le2.
1G
ross
Nat
iona
lP
rod
uct
,C
anad
a(T
hous
ands
of
Dol
lars
)
1870
1871
1872
1873
1874
1875
1876
1877
1878
1879
1880
1881
Agr
icul
ture
1437
9714
5281
1473
8114
4490
1545
1614
6516
1391
7214
4466
1341
9315
8421
1593
3919
7021
Fo
rest
ry(e
xclu
ding
agri
cult
ure)
5790
6960
7669
9175
9257
8184
7101
7244
6565
5911
5908
7923
Hun
ting
,tr
appi
ng21
130
651
686
799
810
4710
4789
485
075
210
1911
01F
ishe
ries
2921
3362
4249
4775
5186
4596
4936
5330
5868
6007
6540
6978
Min
ing
4431
5354
5507
5436
4762
6109
5906
5237
4736
5385
5289
5404
Man
ufac
turi
ng76
983
8940
698
954
1239
9710
7930
9747
984
232
9317
383
725
8699
610
3615
1229
23M
anuf
actu
red
gas
399
505
641
744
778
813
848
562
534
825
719
847
Con
stru
ctio
n20
000
2100
026
300
2870
032
000
2900
022
700
1950
017
300
1740
020
400
2240
0T
ran
spo
rtat
ion
2000
022
609
2201
423
372
2377
719
690
1984
919
323
2145
421
249
2500
127
929
Ele
ctri
cli
ght
&p
ow
erC
orrl
mun
icat
ions
Ban
king
&fi
nanc
e70
0080
0010
000
1000
010
000
8000
9000
9000
8000
9000
1000
012
000
Res
iden
tial
ren
ts20
756
2195
926
609
2820
928
769
2772
527
123
2677
926
515
2629
027
275
2865
4F
eder
alg
ov
ern
men
t45
9552
6860
8679
8979
1486
8987
8284
7483
8577
2379
8084
04P
rovi
ncia
lg
ov
ern
men
t15
8917
5622
3025
4830
7630
5829
3328
9026
0426
0725
4127
04M
unic
ipal
serv
ices
3441
3587
3908
4202
4476
4748
4986
5340
5395
5482
5586
5711
Ed
uca
tio
n,
publ
ic34
8034
3839
7844
2848
0051
2053
5559
3559
0061
0561
9862
21U
nive
rsit
ies
200
203
223
243
263
283
303
323
343
363
383
420
Who
lesa
le&
reta
iltr
ade
2117
631
976
Com
mun
ity,
busi
ness
,an
dpe
rson
alse
rvic
e26
454
3689
5G
DP
(old
offi
cial
basi
s)36
3223
3910
6042
3498
4626
1246
2896
4320
0740
1742
4145
8838
9621
4235
8145
6664
5390
10P
ubli
cre
ven
ues
from
reso
urc
ero
yalt
ies
1027
1120
1718
1451
1230
864
1040
999
807
862
1340
1871
GD
P(n
ewba
sis)
3642
5039
2180
4252
1646
4063
4641
2643
2871
4027
8241
5587
3904
2842
4443
4580
0454
0881
Les
s:n
etin
tere
st&
divi
dend
spa
idab
road
5412
4034
4991
5409
7039
8192
9079
9804
1004
711
993
1428
614
727
GN
Pat
fact
orco
st35
8838
3881
4642
0225
4586
5445
7087
4246
2939
3703
4057
8338
0381
4124
5044
3718
5261
54In
dire
ctta
xes
less
subs
idie
s23
715
2455
027
029
2911
428
456
2777
327
967
2891
329
268
3267
738
236
4253
5G
NP
atm
ark
etpr
ices
3825
5341
2696
4472
5448
7768
4855
4345
2452
4216
7043
4696
4096
4944
5127
4819
5456
8689
(con
tinu
ed)
'Iab
le2.
1(c
onti
nued
)
1882
1883
1884
1885
1886
1887
1888
1889
1890
1891
1892
1893
Agr
icul
ture
2048
9218
5086
1733
9616
5035
1580
6317
5819
1706
3817
7122
1846
5618
9108
1894
9918
1588
For
estr
y(e
xclu
ding
agri
cult
ure)
8940
9297
8685
8136
9343
9458
1017
010
697
1093
311
105
1142
211
575
Hun
ting
,tr
appi
ng79
874
592
411
0111
3012
4612
8011
3499
298
510
1310
84F
ishe
ries
7459
7640
8044
8090
8385
8347
8143
8031
8279
8682
8668
9623
Min
ing
5740
5498
6065
6250
7500
8083
9155
1034
812
350
1472
912
285
1450
5M
anuf
actu
ring
1424
9314
8958
1329
1012
7817
1332
4114
1622
1489
1515
6984
1716
9117
2454
1653
1715
8575
Man
ufac
ture
dga
s76
990
695
011
6612
8114
6713
6115
0617
0516
4217
1517
15C
onst
ruct
ion
3()()
()()
3400
038
000
2570
025
500
3020
031
600
3420
030
100
3120
028
600
2620
0T
rans
port
atio
n29
051
3130
131
015
2867
232
168
3360
436
177
3632
040
460
3984
042
429
4223
4E
lect
ric
ligh
t&
pow
er93
610
1210
8911
66C
omm
unic
atio
ns52
654
863
674
585
592
111
62B
anki
ng&
fina
nce
1300
014
000
1400
014
000
1500
017
000
1800
019
000
1800
02(
)()()(
)22
000
2100
0R
esid
enti
alre
nts
3108
030
687
3011
229
689
2898
633
892
3549
636
580
3749
338
724
4126
742
442
Fed
eral
gove
rnm
ent
9240
1025
911
091
1243
611
249
1129
711
250
1111
711
416
1156
511
818
1227
5P
rovi
ncia
lgo
vern
men
t28
8230
1429
8430
1331
8634
2334
5139
5739
0443
8841
1940
91M
unic
ipal
serv
ices
5904
6067
6205
6554
6788
6954
7766
8447
8635
9505
9202
9437
Edu
cati
on,
publ
ic63
3965
8067
3370
4572
6871
5275
0176
6379
8782
8585
5284
79U
Div
ersi
ties
456
493
530
566
603
640
676
713
749
786
804
821
Who
lesa
le&
reta
iltr
ade
5305
2C
omm
unit
y,bu
sine
ss,
and
pers
onal
serv
ice
6014
3G
DP
(old
offi
cial
basi
s)59
0448
5864
8956
0657
5305
4453
7061
5874
3860
2482
6307
3166
4226
6810
0167
6116
6609
09P
ubli
cre
venu
esfr
omre
sour
cero
yalt
ies
1982
1663
1379
1483
1675
2021
2739
2388
2080
2564
3649
3193
GD
P(n
ewba
sis)
5924
3058
8152
5620
3653
2027
5387
6658
9459
6052
2163
3119
6663
0668
3565
6797
6566
4102
Les
s:ne
tin
tere
st&
divi
dend
spa
idab
road
1574
516
846
1729
117
961
2219
924
817
2468
726
920
2990
430
313
3115
631
951
GN
Pat
fact
orco
st57
6685
5713
0654
4745
5140
6651
6537
5646
4258
0534
6061
9963
6402
6532
5264
8609
6321
51In
dire
ctta
xes
less
subs
idie
s42
200
4022
140
432
4046
344
196
4643
449
770
4956
149
017
5025
351
676
5025
7G
NP
atm
arke
tpr
ices
6188
8561
1527
5851
7755
4529
5607
3361
1076
6303
0465
5760
6854
1970
3505
7002
8568
2408
1894
1895
1896
1897
1898
1899
1900
1901
1902
1903
1904
1905
Agr
icul
ture
1725
5516
7159
1571
5018
6915
1888
6720
0280
2078
2824
3414
2801
1626
7048
2787
8230
3838
For
estr
y(e
xclu
ding
agri
cult
ure)
1073
210
973
1216
212
697
1231
813
020
1313
714
439
1474
915
109
1559
417
263
Hun
ting
,tr
appi
ng11
1311
1911
3210
4610
0810
8411
2711
4313
9915
0815
0416
11F
ishe
ries
9790
9517
9809
1065
696
2510
504
1064
912
155
1064
011
291
1145
414
089
Min
ing
1429
615
010
1650
021
126
2860
736
481
4771
347
922
4454
842
201
4068
24
46
86
Man
ufac
turi
ng14
5114
1379
9813
8751
1560
8216
9539
1791
8820
0146
2039
4124
3475
2597
7125
4645
3084
39M
anuf
actu
red
ga
s17
2815
3213
6612
8512
5511
9513
0912
1912
3814
6917
5518
99C
onst
ruct
ion
2130
021
100
2()()
()()
2330
03(
)()()(
)30
400
3250
040
900
4680
059
100
6750
078
500
Tra
nspo
rtat
ion
4204
438
658
4348
845
107
5207
755
589
6208
363
794
7357
484
534
8634
592
760
Ele
ctri
cli
ght
&po
wer
1241
1320
1395
1471
1546
1625
1700
2124
2652
3234
4985
6023
Com
mun
icat
ions
1162
1162
1162
1162
1512
1600
1818
2192
2548
2981
3429
4164
Ban
king
&fi
nanc
e22
000
2200
024
000
2500
028
000
3200
039
000
4100
048
000
5700
045
000
5600
0R
esid
enti
alre
nts
4401
244
544
4653
746
138
4925
253
288
6045
365
529
6885
772
380
7776
987
312
Fed
eral
gove
rnm
ent
1208
511
397
1198
712
631
1416
614
107
1567
217
259
1757
519
456
2338
023
934
Pro
vinc
ial
gove
rnm
ent
4334
4142
4523
4573
4687
4726
5240
5462
5872
6012
6146
6565
Mun
icip
alse
rvic
es95
7294
4397
6310
295
1054
010
725
1133
012
419
1350
814
825
1650
417
458
Edu
cati
on,
publ
ic92
3492
8096
9497
3797
4199
3910
158
1068
711
043
1166
212
715
1343
5U
nive
rsit
ies
839
857
874
892
910
928
945
963
1126
1289
1452
1615
Who
lesa
le&
reta
iltr
ade
6555
3C
omm
unit
y,bu
sine
ss,
and
pers
onal
serv
ice
8446
9G
DP
(old
offi
cial
basi
s)63
1077
6119
5061
5771
6880
6974
0798
7928
7487
2830
9508
7510
7440
811
2784
211
5191
513
1093
5P
ubli
cre
venu
esfr
omre
sour
cero
yalt
ies
2353
2481
2341
3833
3849
4150
4740
4634
4878
5886
6300
5702
GD
P(n
ewba
sis)
6334
3061
4431
6181
1269
1902
7446
4779
7024
8775
7095
5509
1079
286
1133
728
1158
215
1316
637
Les
s:ne
tin
tere
st&
divi
dend
spa
idab
road
3138
029
998
3049
931
195
3445
035
673
3712
039
540
4149
342
485
4576
549
639
GN
Pat
fact
orco
st60
2050
5844
3358
7613
6607
0771
0197
7613
5184
0450
9159
6910
3779
310
9124
311
1245
012
6699
8In
dire
ctta
xes
less
subs
idie
s49
361
4898
553
204
5631
559
175
6463
166
907
7469
481
806
8690
793
366
9454
5G
NP
atm
arke
tpr
ices
6514
1163
3418
6408
1771
7022
7693
7282
5982
9073
5799
0663
1119
599
1178
150
1205
816
1361
543
(con
tinu
ed)
18bl
e2.
1(c
onti
nued
)
1906
1907
1908
1909
1910
1911
1912
1913
1914
1915
1916
1917
Agr
icul
ture
3187
9635
4676
3356
8940
2554
4023
2746
9654
4779
5851
7812
4909
0068
6638
7716
7993
5133
For
estr
y(e
xclu
ding
agri
cult
ure)
1946
619
795
1804
921
187
2299
525
066
2532
924
341
2404
823
453
2620
837
850
Hun
ting
,tr
appi
ng19
4718
1216
5222
7627
7426
4132
4936
8323
1828
2336
6650
21F
ishe
ries
1296
112
651
1235
614
177
1435
916
119
1605
916
039
1540
917
252
1926
925
593
Min
ing
4930
653
077
5238
852
979
6197
557
026
7507
281
903
7486
081
724
1072
5211
7201
Man
ufac
turi
ng36
3617
4018
2834
9336
4062
8445
2122
4695
6651
6339
5177
9144
7723
4751
7866
4054
9600
72M
anuf
actu
red
gas
1679
2146
2141
1921
2078
2203
3181
3535
3042
1953
3067
3653
Con
stru
ctio
n91
000
1131
0011
3800
1241
0015
8500
1782
0021
5600
2196
0017
2800
1265
0011
6300
1220
00T
rans
port
atio
n10
8661
1327
9913
1485
1328
6915
3591
1748
5520
7943
2466
7022
2008
1900
2522
9617
2605
07E
lect
ric
ligh
t&
pow
er67
9076
6085
5395
1295
0313
786
1610
317
995
2061
122
080
2386
127
551
Com
mun
icat
ions
4860
8223
8807
9306
1040
111
387
1346
715
795
1750
717
549
2012
722
503
Ban
king
&fi
nanc
e71
000
7700
076
000
7500
073
000
9200
010
4000
1250
0011
4000
9300
010
4000
1310
00R
esid
enti
alre
nts
9656
410
5533
1152
6412
0417
1327
6414
2948
1627
5318
1142
1829
8018
1795
1863
7120
3125
Fed
eral
gove
rnm
ent
1826
527
448
3078
227
759
3255
637
194
4213
750
515
7983
015
1371
2392
2326
4918
Pro
vinc
ial
gove
rnm
ent
8288
1016
511
628
1345
015
465
1779
220
904
2284
921
050
2058
819
589
2313
5M
unic
ipal
serv
ices
1943
921
078
2303
024
722
2788
829
838
3471
536
692
4052
546
275
4872
550
274
Edu
cati
on,
publ
ic14
333
1538
717
399
1897
620
776
2222
925
235
2727
430
464
3442
834
491
3659
5U
nive
rsit
ies
1779
1942
2105
2268
2431
2594
3088
3582
4075
4569
5062
5556
Who
lesa
le&
reta
iltr
ade
2044
44C
omm
unit
y,bu
sine
ss,
and
pers
onal
serv
ice
1483
59G
DP
(old
offi
cial
basi
s)14
6902
216
6256
915
9673
317
8038
919
4830
821
4937
623
8346
325
5752
623
6698
426
0158
531
1097
438
2691
4P
ubli
cre
venu
esfr
omre
sour
cero
yalt
ies
5677
7082
7267
6816
8653
9218
9202
9877
9874
7776
7415
8048
GD
P(n
ewba
sis)
1474
699
1669
651
1604
000
1787
205
1956
961
2158
594
2392
665
2567
403
2376
558
2609
361
3118
389
3834
962
Les
s:ne
tin
tere
st&
divi
dend
spa
idab
road
5603
060
586
6862
877
439
8623
910
5303
1187
5914
1168
1532
7117
3251
1722
9417
3505
GN
Pat
fact
orco
st14
1866
916
0906
515
3537
217
0976
618
7072
220
5329
122
7390
624
2623
522
2358
724
3611
029
4609
536
6145
7In
dire
ctta
xes
less
subs
idie
s10
7216
1193
4111
8421
1285
7715
2088
1798
7421
9970
2252
3722
4992
2524
6929
6627
3304
15G
NP
atm
arke
tpr
ices
1525
885
1728
406
1653
793
1838
343
2022
810
2233
165
2493
876
2651
472
2448
579
2688
579
3242
722
3991
872
1918
1919
1920
1921
1922
1923
1924
1925
1926
Agr
icul
ture
9061
7694
3779
1042
279
6778
4572
0736
7785
2778
3897
9911
4492
7356
For
estr
y(e
xclu
ding
agri
cult
ure)
4228
549
270
6374
037
689
4822
946
876
5858
866
000
6600
0H
unti
ng,
trap
ping
8188
1271
611
536
9876
1237
611
507
1115
910
855
1180
7F
ishe
ries
2923
928
042
2513
419
118
2148
921
480
2219
823
919
2754
7M
inin
g13
9388
1139
9614
7166
1151
7812
7971
1364
6513
7769
1325
1415
4000
Man
ufac
turi
ng10
8402
610
4224
812
7106
987
3027
8653
1195
4824
8997
7795
3898
1067
402
Man
ufac
ture
dga
s31
2946
6062
0275
5886
4088
1167
9387
5991
74C
onst
ruct
ion
1097
0014
8500
1846
0017
5400
1824
0021
5900
1939
0019
8200
2032
00T
rans
port
atio
n25
6400
3345
5538
1516
3479
8735
5327
3639
9334
5071
3689
8240
5179
Ele
ctri
cli
ght
&po
wer
3085
832
963
3735
339
495
4371
846
733
5163
559
354
6987
7C
omm
unic
atio
ns25
344
3203
131
035
3415
634
380
3541
837
216
3981
546
688
Ban
king
&fi
nanc
e13
2000
1630
0022
1000
1930
0016
9000
1570
0016
8000
1830
0020
9000
Res
iden
tial
rent
s21
8207
2424
2628
3216
3143
5133
1245
3445
6335
2049
3574
8435
9551
Fed
eral
gove
rnm
ent
3243
9617
2761
1032
2198
038
8976
987
800
8763
291
128
9195
4P
rovi
ncia
lgo
vern
men
t25
409
3131
639
681
4375
849
251
5066
649
026
5156
450
964
Mun
icip
alse
rvic
es54
540
5851
866
621
7608
175
599
7563
175
941
7513
478
671
Edu
cati
on,
publ
ic41
168
4707
357
043
6845
874
549
7760
677
443
7903
281
111
Uni
vers
itie
s60
5065
4370
3773
3576
3279
3082
2885
2688
25W
hole
sale
&re
tail
trad
e43
9432
5340
00C
omm
unit
y,bu
sine
ss,
and
pers
onal
serv
ice
3032
4550
6000
GD
P(o
ldof
fici
alba
sis)
4053
209
4106
737
4722
126
3767
062
3906
309
4200
995
4179
100
4643
179
4908
306
Pub
lic
reve
nues
from
reso
urce
roya
ltie
s89
6911
612
1408
114
978
1379
013
175
1582
916
974
1800
9G
DP
(new
basi
s)40
6217
841
1834
947
3620
737
8204
039
2009
942
1417
041
9492
946
6015
349
2631
5L
ess:
net
inte
rest
&di
vide
nds
paid
abro
ad17
6060
1784
6718
6029
2109
2822
5335
2312
7924
1200
2433
9420
8000
GN
Pat
fact
orco
st38
8611
839
3988
245
5017
835
7111
236
9476
439
8289
139
5372
944
1675
947
1831
5In
dire
ctta
xes
less
subs
idie
s37
5364
4274
9951
0708
5027
1353
9181
5723
7554
7796
5789
8962
7000
GN
Pat
mar
ket
pric
es42
6148
243
6738
150
6088
640
7382
542
3394
545
5526
645
0152
549
9574
853
4531
5
16 M. C. Urquhart
'Dable 2.2 Gross Fixed Capital Formation, Current DoUan (Millionsof DoUan)
Total Housing Total Govem-Manufac- Railway & Other Construc- Private Public ment Grand
Year turing Telegraph Business tion Business Schools Total Total
struction and the estimates of investment in machinery and equipmentbefore 1896 which are necessary to obtain estimates oftotal fixed capitalformation, 1870-95. The other estimates are those of Statistics Canada.They have been prepared as a part ofStatcan's program to obtain capitalstock estimates for 1926 and later years by the perpetual inventorymethod (Statcan 1981).
Table 2.3 presents estimates of government expenditure on goodsand services by federal, provincial, and municipal government and bypublic schools. The last is included because, in Canada, public education has been, in the main, organized under local school boards and,in our period, financed mainly by property taxes.
Table 2.4 presents data on the main components of the balance ofinternational payments, both current and capital account. A great dealof work has been done on these data for this project. Some parts ofearlier estimates have been used, but much is new. And everything hasbeen rechecked and reexamined.
Now to return to the main task, my scheme, in broad terms, is toaddress conflicting interpretations of Canadian development from 1870to the mid-1920s that have been a subject of controversy. One interpretation of Canadian development, the traditionalist view, is that, atleast until the Second World War, the pace of Canadian economicgrowth was determined by the presence or absence of export staples.The best-known expositer of this view is perhaps H. A. Innis in hisworks on the fur trade and the codfisheries. And Arthur Lower hasemphasized the exploitation of the forest. It was W. A. Mackintosh,however, who dealt most specifically and in greatest detail with the
18 M. C. Urquhart
Table 2.3 Govemment Expenditure on Goods and Services (Millionsof DoUan)
PublicYear Federal Provincial Municipal Education Total
period from Confederation (1867) to the 1930s, and many others elaborated on his work.
The traditionalist view was that the period from 1870 to 1900 was aperiod of laggard growth because Canada had lost external markets forwheat and forest products with the evolution of free trade in Britainand the end of reciprocity with the United States (in 1866) and withthe substantial replacement of activities based on wood, wind, andwater, such as wooden ship building and other construction, by thosebased on steam and iron (or steel). The loss of markets for forestproducts stemmed directly from the decline in use oflumber and timber;the loss of the grain market stemmed indirectly from the competitionwith grain from the Middle West of the United States made more thancompetitive by the presence of the new railways. Then, from the midor late 1890s onward, when some cost and price changes occurred intowhich we need not go, the development of new export staples and mostespecially of wheat as the country's great export staple, supplementedlater by the development of base and precious metals and by pulp andpaper, led to a period ofunprecedented growth. In fact, so the argumentgoes, the emergence of Canada as a developed economy stems fromthe emergence of wheat and to a lesser degree pulp and paper and baseand precious metals: the agricultural expansion provided a market forindustrial products for the two big central provinces, Ontario and Quebec, and this led to the economic integration of the various politiesthat had joined together at Confederation and afterwards. l
Following the Second World War a twofold questioning of this viewtook place. On the one hand, it was argued that there was a considerablegrowth in manufacturing output and in productivity in manufacturingeven from 1870 to 1900 and that the process ofgrowth in manufacturingfrom 1900 onward was merely a continuation of what went before. On
'DIb
le2.
4C
anad
a's
Bal
ance
of
Inte
mat
iona
lP
aym
ents
(Tho
usan
dso
fD
oUar
s)
1870
1871
1872
1873
1874
1875
1876
1877
1878
1879
1880
Cre
dits
Exp
orts
(adj
uste
d)66
385
7298
181
777
8560
980
789
7678
176
137
7608
074
020
7747
090
841
Exp
orts
of
gold
coin
&bu
llio
n70
016
0030
0012
0019
0031
0021
0016
0021
0060
018
00F
reig
ht13
2814
5916
3617
1216
1615
3615
2315
2214
8015
4918
17T
ouri
stre
ceip
ts21
0024
0026
0033
0033
0033
0033
0033
0033
0041
0041
00M
igra
nts'
capi
tal
(net
)80
411
9514
6624
0913
0368
841
971
179
021
0917
23N
onco
mm
erci
alre
mit
tanc
eIn
sura
nce
4328
Inte
rest
&di
vide
nds
850
1151
710
856
838
1173
975
973
858
1010
1116
Tot
alcu
rren
t72
167
8078
791
189
9508
689
746
8657
884
453
8851
382
548
8683
810
1397
Cap
ital
(lon
gte
rm)
3394
1329
080
1922
742
3850
914
709
1630
310
900
1141
414
262
1235
8C
apit
al(s
hort
term
)73
5028
933
0336
1913
Net
erro
rs&
omis
sion
s25
470
1351
935
699
2244
317
454
1826
710
341
1220
014
401
3719
6546
Tot
alcu
rren
t&
capi
tal
1010
3111
4944
1349
0714
0559
1457
0912
2858
1111
3311
3526
1083
6310
4819
1203
00
Deb
its
Impo
rts
(adj
uste
d)81
220
1002
6711
5557
1231
6912
1044
1046
7993
064
9378
585
484
8169
893
565
Impo
rts
of
gold
coin
&bu
llio
nF
reig
ht54
6359
5774
9869
8573
9955
7946
6061
4154
9247
7246
07T
ouri
stpa
ymen
ts24
0025
0026
0025
0024
0022
0022
0022
0024
0025
0027
00M
igra
nts'
capi
tal
Non
com
mer
cial
rem
itta
nce
553
658
785
835
755
696
666
624
583
541
550
Insu
ranc
e12
937
833
580
565
533
948
996
754
310
67In
tere
st&
divi
dend
s62
6251
8557
0162
6578
7793
6410
054
1077
710
905
1300
315
402
Tot
alcu
rren
t96
026
1149
4413
2476
1405
5914
0129
1228
5811
1133
1135
2710
5831
1030
5711
7891
Cap
ital
(sho
rtte
rm)
5005
2431
5580
2532
1762
2409
Tot
alcu
rren
t&
capi
tal
1010
3111
4944
1349
0714
0559
1457
0912
2858
1111
3311
3527
1083
6310
4819
1203
00
1881
1882
1883
1884
1885
1886
1887
1888
1889
1890
1891
Cre
dits
Exp
orts
(adj
uste
d)98
782
9880
792
548
8740
285
252
8637
689
085
8816
489
868
9447
710
3388
Exp
orts
of
gold
coin
&bu
llio
n16
0015
0010
0012
0040
020
0080
048
0014
00F
reig
ht19
7619
7618
5117
4817
0517
2817
8217
6317
9718
9020
68T
ouri
stre
ceip
ts41
0041
0041
0047
0047
0047
0047
0047
0049
0049
0049
00M
igra
nts'
capi
tal
(net
)61
239
3544
2521
3049
410
4622
1917
0412
7033
629
07N
onco
mm
erci
alre
mit
tanc
eIn
sura
nce
Inte
rest
&di
vide
nds
1050
1146
1175
1463
1211
1237
1358
1845
2440
2412
2023
Tot
alcu
rren
t10
8119
1114
6410
5099
9864
393
762
9708
699
944
9817
710
5076
1040
1411
6686
Cap
ital
(lon
gte
rm)
2577
510
310
1870
423
927
4687
035
200
1563
266
519
2133
422
478
1504
8C
apit
al(s
hort
term
)50
5256
9N
eter
rors
&om
issi
ons
31.1
029
450
3240
910
754
1065
441
087
3240
739
975
4193
8T
otal
curr
ent
&ca
pita
l13
7104
1512
2415
6212
1383
7514
0632
1429
4015
6663
1646
9515
9386
1664
6117
3671
Deb
its
Impo
rts
(adj
uste
d)10
9819
1227
7712
0823
1083
8710
1871
1050
9010
8786
1096
8411
5652
1174
3511
9736
Impo
rts
of
gold
coin
&bu
llio
n19
0080
0F
reig
ht56
9956
7661
9851
3045
4956
9354
1255
6161
4557
0158
65T
ouri
stpa
ymen
ts29
0033
0032
0032
0032
0038
0038
0038
0041
0041
0041
00M
igra
nts'
capi
tal
Non
com
mer
cial
rem
itta
nce
688
1179
1444
1946
1946
1869
1861
1987
2105
2028
1899
Insu
ranc
e30
381
776
395
811
8464
388
414
5120
2417
3598
4In
tere
st&
divi
dend
s15
777
1689
118
021
1875
419
172
2343
626
175
2653
229
360
3231
632
336
Tot
alcu
rren
t13
5186
1506
4015
0449
1383
7513
1922
1405
3114
6918
1509
1515
9386
1641
1616
4918
Cap
ital
(sho
rtte
rm)
1918
584
5763
533
2409
9745
1190
023
4587
53E
rror
s&
omm
issi
ons
8177
1880
Tot
alcu
rren
t&
capi
tal
1371
0415
1224
1562
1213
8375
1406
3214
2940
1566
6316
4695
1593
8616
6461
1736
71
(co
nti
nu
ed
)
18
ble
2.4
(con
tinu
ed)
1892
1893
1894
1895
1896
1897
1898
1899
1900
1901
1902
Cre
dits
Exp
orts
(adj
uste
d)11
1896
1138
0611
1220
1110
0412
2498
1429
5815
2908
1533
9916
8695
1792
1619
8499
Exp
orts
of
gold
coin
&bu
llio
n29
0012
900
2210
024
800
2150
013
700
Fre
ight
2238
2276
2224
2220
2450
2859
3058
3068
3374
3584
3970
Tou
rist
rece
ipts
4900
4900
4700
4700
4700
4700
4500
9600
7000
8000
1100
0M
igra
nts'
capi
tal
(net
)85
977
7II
3920
3723
8555
3769
1513
412
Non
com
mer
cial
rem
itta
nce
Insu
ranc
e11
9621
4In
tere
st&
divi
dend
s23
7327
7131
5633
5135
7640
2442
9445
0649
4548
3159
79T
otal
curr
ent
1222
6612
4530
1213
1112
1275
1332
2415
7480
1796
9719
5058
2155
4722
4260
2465
60C
apit
al(l
ong
term
)28
625
1592
131
101
6568
1055
928
036
1672
225
350
3316
120
367
Cap
ital
(sho
rtte
rm)
2860
Net
erro
rs&
omis
sion
s30
207
3585
310
071
316i
729
446
9388
4214
427
737
2280
0T
otal
curr
ent
&ca
pita
l18
1098
1763
0416
2483
1594
7017
3229
1855
1620
5808
2372
0224
3757
2851
5828
9727
Deb
its
Impo
rts
(adj
uste
d)12
1689
1179
7510
9672
1069
2111
1248
1225
3814
4055
1666
3218
0572
1921
3621
3450
Impo
rts
of
gold
coin
&bu
llio
n33
0016
0060
030
029
00F
reig
ht60
7260
2460
9563
9763
6176
4910
148
1098
311
142
1106
811
981
Tou
rist
paym
ents
4100
4300
4400
4500
5000
5300
5500
5300
4900
5400
6100
Mig
rant
s'ca
pita
l18
717
4N
onco
mm
erci
alre
mit
tanc
e16
6216
9517
6815
1413
1113
5214
8418
0024
8734
8443
35In
sura
nce
793
363
556
666
952
404
565
4631
23In
tere
st&
divi
dend
s33
529
3472
234
536
3334
934
075
3521
938
744
4017
942
065
4437
147
472
Tot
alcu
rren
t17
1145
1666
8015
7628
1538
3416
2021
1724
6220
0496
2249
4024
1166
2564
5928
6461
Cap
ital
(lon
gte
rm)
1285
Cap
ital
(sho
rtte
rm)
9953
9624
4855
5636
1120
867
4153
1210
977
2869
932
66E
rror
s&
omis
sion
s63
1325
92T
otal
curr
ent
&ca
pita
l18
1098
1763
0416
2483
1594
7017
3229
1855
1620
5808
2372
0224
3757
2851
5828
9727
1903
1904
1905
1906
1907
1908
1909
1910
1911
1912
1913
Cre
dits
Exp
orts
(adj
uste
d)19
9704
1885
8020
9015
2395
1225
0527
2517
5628
1116
2853
6129
5366
3482
6542
1392
Exp
orts
of
gold
coin
&bu
llio
n68
0065
0012
500
3900
1400
2700
1130
0F
reig
ht39
9437
7241
8047
9050
1150
3556
2257
0859
0769
6584
28T
ouri
stre
ceip
ts10
500
1280
013
300
1680
016
200
1920
019
600
2470
026
200
2940
030
500
Mig
rant
s'ca
pita
l(n
et)
1526
412
326
1719
118
292
1825
893
9719
825
2663
928
023
2409
221
366
Non
com
mer
cial
rem
itta
nce
Insu
ranc
e47
99In
tere
st&
divi
dend
s61
1054
4162
8769
1864
1855
4592
4310
587
9552
9690
9682
Tot
alcu
rren
t24
2372
2342
1726
2474
2902
1229
7814
2909
3333
8106
3529
9436
5049
4297
1249
1368
Cap
ital
(lon
gte
rm)
3029
079
091
1084
3881
306
6984
717
7045
1851
7622
2072
1725
3527
7868
3264
13C
apit
al(s
hort
term
)16
723
1251
421
824
2588
618
2N
eter
rors
&om
issi
ons
1991
432
422
2125
215
7184
271
577
5288
1893
4816
4151
1133
84T
otal
curr
ent
&ca
pita
l30
9299
3457
3037
0933
4092
4646
1327
5395
5552
8570
6009
5272
6932
8719
1393
1165
Deb
its
Impo
rts
(adj
uste
d)23
5037
2468
4826
3513
3039
1934
6256
3071
4835
4317
4294
1150
0023
6317
2063
2593
Impo
rts
of
gold
coin
&bu
llio
n19
100
4100
2180
074
00F
reig
ht12
410
1234
714
521
1519
416
080
1399
216
131
1878
323
882
3255
030
160
Tou
rist
paym
ents
6000
6900
9400
1290
013
400
1510
016
600
2160
025
200
2900
033
200
Mig
rant
s'ca
pita
lN
onco
mm
erci
alre
mit
tanc
e56
4072
8090
5411
624
1769
017
029
1982
927
014
3605
647
483
5579
7In
sura
nce
1616
2734
2661
897
555
1409
874
1666
2711
2403
Inte
rest
&di
vide
nds
4859
551
206
5592
662
948
6700
474
173
8668
296
827
1148
5512
8449
1508
50
Tot
alcu
rren
t30
9299
3245
8035
5148
4092
4646
1327
4470
9649
4968
5986
0972
3482
8719
1391
2403
Cap
ital
(sho
rtte
rm)
2115
015
785
9245
933
602
3450
1876
2E
rror
s&
omis
sion
s23
44T
otal
curr
ent
&ca
pita
l30
9299
3457
3037
0933
4092
4646
1327
5395
5552
8570
6009
5272
6932
8719
1393
1165
(con
tinu
ed)
1llb
le2.
4(c
onti
nued
)
1914
1915
1916
1917
1918
1919
1920
Cre
dits
Exp
orts
(adj
uste
d)44
2587
6782
0510
3929
614
6257
013
3693
813
0037
212
6596
5E
xpor
tso
fgo
ldco
in&
bull
ion
2260
014
000
1630
015
700
3420
0F
reig
ht41
100
7070
091
700
8410
083
800
8690
011
4400
Tou
rist
rece
ipts
2960
036
600
5320
06
44
00
6610
073
000
6420
0M
igra
nts'
capi
tal
}28
200
1830
019
200
2000
021
600
3220
040
700
Non
com
mer
cial
rem
itta
nce
Insu
ranc
e39
0020
0036
0066
0032
002
90
048
00In
tere
st&
divi
dend
s10
400
9600
1410
019
300
1890
020
000
2090
0T
otal
curr
ent
5783
8781
5405
1235
096
1656
970
1546
839
1531
072
1545
165
Cap
ital
(lon
gte
rm)
3818
3628
633
9582
355
720
5357
057
811
1327
45C
apit
al(s
hort
term
)21
200
1080
042
400
War
fina
nce,
exte
rnal
2430
06
04
00
3100
0N
eter
rors
&om
issi
ons
9058
311
3097
6962
444
50T
otal
curr
ent
&ca
pita
l10
0572
399
5021
1444
015
1723
489
1670
031
1593
332
1751
310
Deb
its
Impo
rts
(adj
uste
d)52
1572
5163
7078
3825
9584
2895
3372
1053
065
1225
783
Impo
rts
of
gold
coin
&bu
llio
n94
0017
00F
reig
ht80
200
1010
0014
5500
1390
0014
4100
1256
0017
0100
Tou
rist
paym
ents
3500
025
000
2900
027
000
3000
047
000
4840
0M
igra
nts'
capi
tal
}20
100
1130
012
300
1800
021
200
1210
010
000
Non
com
mer
cial
rem
itta
nce
Can
adia
nex
pend
free
5000
3000
010
0000
1750
0017
0000
9500
020
000
Insu
ranc
e61
0057
0050
0083
008
60
014
800
1940
0In
tere
st&
divi
dend
s16
3671
1828
5118
6394
1928
0519
4960
1984
6720
6929
Tot
alcu
rren
t83
1643
8816
2112
6201
515
2023
315
2223
115
4603
217
0061
1W
arfi
nanc
e,ex
tern
al52
600
1131
0011
9300
2560
0C
apit
al(s
hort
term
)11
3400
1294
0028
500
2170
0N
eter
rors
&om
issi
ons
1740
8090
156
5069
9T
otal
curr
ent
&ca
pita
l10
0572
399
5021
1444
015
1723
489
1670
031
1593
332
1751
310
1921
1922
1923
1924
1925
1926
Cre
dits
Exp
orts
(adj
uste
d)89
4290
9182
7210
4250
710
7553
812
7058
912
7200
0E
xpor
tso
fgo
ldco
in&
bull
ion
4220
082
200
4600
1510
030
000
Fre
ight
8430
078
500
8920
083
000
8670
096
000
Tou
rist
rece
ipts
6830
078
900
1033
0011
7000
1285
0015
2000
Mig
rant
s'ca
pita
l}
3630
031
900
3800
037
800
3780
0}
Non
com
mer
cial
rem
itta
nce
8300
0In
sura
nce
4100
6500
8100
1050
015
700
Inte
rest
&di
vide
nds
1920
013
400
1230
012
800
1350
032
000
Tot
alcu
rren
t11
4869
011
2747
213
7560
713
4123
815
6788
916
6500
0C
apit
al(l
ong
term
)50
516
1314
5311
7150
1525
6355
438
5230
0C
apit
al(s
hort
term
)14
4400
2700
0W
arfi
nanc
e,ex
tern
al27
900
4680
063
800
2070
019
0023
00N
eter
rors
&om
issi
ons
Tot
alcu
rren
t&
capi
tal
1371
507
1332
725
1556
557
1514
501
1625
227
1719
600
Deb
its
Impo
rts
(adj
uste
d)89
0409
8074
1789
1996
8402
6791
5483
9730
00Im
port
so
fgo
ldco
in&
bull
ion
4530
0F
reig
ht11
6500
9430
012
1400
9910
010
6400
1050
00T
ouri
stpa
ymen
ts43
300
40
90
043
900
4910
055
900
99
00
0
Mig
rant
s'ca
pita
l}
Non
com
mer
cial
rem
itta
nce
2310
016
900
8400
9400
2080
0}
Can
adia
nex
pend
free
1210
00In
sura
nce
1060
099
0099
0014
100
1860
0In
tere
st&
divi
dend
s23
0128
2387
3624
3579
2540
0025
6894
2400
00T
otal
curr
ent
1314
037
1253
453
1319
175
1265
967
1374
077
1538
000
War
fina
nce,
exte
rnal
Cap
ital
(sho
rtte
rm)
1270
015
700
9280
051
800
Net
erro
rs&
omis
sion
s57
470
7927
322
4682
2328
3415
8350
1298
00T
otal
curr
ent
&ca
pita
l13
7150
713
3272
515
5655
715
1450
016
2522
717
1960
0
26 M. C. Urquhart
the other hand, there was an attempt to show that the rents from wheatproduction produced by the populating of the prairies by 1910 were sosmall that settlement of the latter could have had little effect in thegrowth of per capita income that took place from 1900 to 1910. Bothapproaches downplayed the role of the staple. 2
It is not the aim of this paper to try to reconcile the contending viewsof Canadian growth or to try to pick a winner, if indeed there is O:le.But our data do provide a considerable amount of new information thathas a bearing on the contending interpretations, and it is to these thatwe turn.
I present the remaining material of this paper in three parts. First,some background facts, not new to this paper but of relevance to ourmaterial, are presented. Second, the relationships among the aggregatesare examined. Third, the nature of changes in the structure of GNPare examined.
2.1 Background Facts
A most important set of facts relates to the underlying populationbase and its growth. On one hand, Canada failed to retain the naturalincrease in its population in each decade from 1870 to 1900, despitehaving a substantial number of immigrants; on the other hand, it gainedlarge numbers from net immigration in 1900-1921 (and to 1926). Therelevant data are shown in table 2.5: it relates to the population 10years of age and over, since only for them could estimates of survivalfrom the last census be made-the natural increase, the immigrationand emigration all apply to the 10 and over age groups.
The loss from net out-migration in the 10-year and older age groupin each decade from 1871 to 1901 averages 4.9% of the beginning population. Other data show that Quebec's net loss by migration of pop-
18ble 2.5 Population and Changes in Population 10 Years of Age and Over,by Decades, 1861-1931 (Thousands of Persons)
Source: Historical Statistics ofCanada, 1st ed., p. 22.
27 New Estimates of Gross National Product, Canada, 1870-1926
ulation was very high in both 1881-1891 and 1891-1901 and that insofaras they were nativeborn most of the migrants left the country; Ontarioalso lost large numbers, especially in 1891-1901, but a quite large partof the loss comprised migration of the nativeborn to Western Canada.
By contrast, in 1901-11 the countrywide net inflow of migrants aged10 years and over was of the same order as the natural increase in thesame age group, and the net inflow remained substantial although smallerin the succeeding two decades. Supplementary data show that Quebecand the Maritime Provinces continued to lose population by migration-in this regard Quebec's relatively high rate of natural increaseshould be kept in mind-that the Prairie Provinces were big gainers in1901-11 and 1911-21, that British Columbia was a big gainer in allthree decades, and that Ontario also gained substantial numbers fromnet in-migration in all three decades, a point of which we shall see therelevance later. The figures for total population in Canada and thesignificant provincial groupings are given in table 2.6.
While there are differing estimates of the labor force and its industrialdistribution before 1901, the general lines of the division between agricultural and other pursuits are sufficiently accurate to be useful. Theso-called gainfully occupied and the numbers engaged in agricultureare given in table 2.7. It should be noted at once that in 1900 the numbersin agriculture and total gainfully occupied are too low owing to theomission of a considerable number of unpaid farmers' sons from thecount.
A next "fact" concerns the railways in Canada. Of 1870, it can besaid, with only slight exaggeration of fact, that the Canadian railwayssystem was limited to a main line from north of Quebec City, throughMontreal and Toronto to Sarnia (near Detroit) with a connection fromMontreal to Portland, Maine, lines from the Niagara Peninsula andfrom Hamilton to Detroit, and a few short spurs from these lines; theMaritime Provinces had only 379 miles in 1867 at Confederation. Rail-
Table 2.6 Population of Canada and Five Provincial Groups, Census Dates1871-1931 (Thousands of Persons)
Maritime Prairie BritishYear Canada Provinces Quebec Ontario Provinces Columbia
Source: Historical Statistics o/Canada, 1st ed., p. 59; and R. M. McInnis, "Output andProductivity in Canadian Agriculture," in this volume; Firestone 1958, p. 184, for gainfully occupied in 1871.
18ble 2.8 Railway Track and Equipment, Selected Years, 1870-1925
Miles ofFirst NumberMain of NumberTrack in Number of Passenger of Freight
Source: Historical Statistics o/Canada, 1st ed., pp. 528, 532, 533.
way building played a major role in Canadian development from 1870to the First World War both in the direct impact of the railway buildingon the economy and through its contribution to freight and passengermovement once it was built. Some measure of its impact is given bythe miles of line in operation and the equipment in use which is givenin table 2.8. We will return to the railways later.
Finally, there is a question about the course of prices through thisperiod and how movements in real GNP differ from those measuredin current prices. Estimates of GNP measured in 1900 dollars along
29 New Estimates of Gross National Product, Canada, 1870-1926
with an implicit price index and real GNP per capita are given in table2.9. The deflation of GNP in current prices was essentially done bytwo components. Gross domestic fixed capital formation in currentprices broken into residential and nonresidential items was deflated byindexes of costs of capital goods appropriate to each of the items. Allof the remaining part of the GNP was deflated by an index of consumerprices, part of which was constructed within this project.5
The deflation procedure can probably be improved, but I have sufficient confidence in our findings that I do not expect further refinementsin the deflation process to result in changes that would lead to anysignificant reinterpretation of the meaning of the data.
In order to aid the interpretation of the data in table 2.9, certaingrowth ratios calculable from it are given in table 2.10 and for comparative purposes comparable growth rates are given for the UnitedStates. The entries are usually for decadal periods; however, the firstentry in each panel is for 9 years and the final entry in panel C, realGNP per capita, is for 19 years. For both countries, the rates of growthof population are between the single years at the beginning and end ofeach period; for both countries, the rates of growth of real GNP arethose between the averages of 3 years centered on the beginning andon the ending year of each period. I am most indebted to Robert Gallman for providing me with the estimates of the growth of real GNPand real GNP per capita in the United States from 1871 to 1900.
We should note at once that there is a considerable arbitrariness inthe growth rates that are obtained for each period determined by thechoice of beginning and ending years of the period. Thus, if the firstdecade were made to end in 1882 and the second in 1892, the calculatedgrowth rate for income in Canada for the first period would be raisedand that for the second period lowered; or if we divide the decade from1890 to 1900 into two parts, we can see from table 2.9 that all of thegrowth in per capita income took place between 1896 and 1900. It isimportant that we keep these properties of the data of table 2.10 inmind when we come to draw inferences from them.
The main series of relationships among aggregates which utilize ournew data and that appear to be relevant to the issues about the natureof Canadian development are given in table 2.11. The figures are givenon an annual basis because the year-to-year movements themselvescontain valuable information. The ratios are between values in currentdollars.
A few comments about the data of table 2.11 are in order. First, allof the absolute values from which the ratios are calculated appear inother tables and hence are not given here. Second, the gross fixedcapital formation ratio includes public as well as private capital formation; the public component-budgetary capital formation-is ordi-
30 M. C. Urquhart
table 2.9 Gross National Product in Current and Constant DoUan and RealGross National Product per Capita, 1870-1926
GNP in GNP in RealCurrent Constant GNP perMarket (1900) Implicit Population in Capita inPrices Prices Price Index Thousands 1900
narily less than 10% of the total, as may be seen from table 2.2. Third,the net capital inflow has been measured, for all years, by the currentaccount balance on international account. Fourth, the implied domesticsaving is simply the difference between the gross fixed capital formationratio and the capital inflow ratio. Fifth, the export ratio and the government expenditure ratio are, respectively, for merchandise exportsand for government expenditures on goods and services. Finally, theratio of export prices to import prices, the terms of trade, are given toshow the qualitative nature of the impact of international prices on realincome in Canada.
We are now in a position to examine the bearing of the data that wehave considered on the matter at issue. I shall not go into the detailsof the way in which the traditionalists saw the staples as contributingto growth nor the arguments of the critics about the inadequacies ofthe traditionalists' explanations: such would take too much space. Awell-rounded analytical statement and evaluation of the issues andcontentions is given in Richard E. Caves's "Export-Led Growth andthe New Economic History" in the Kindleberger festschrift (Caves1971). Rather, I shall just examine the extent to which our data at leastseem consistent with what the traditonalists or their critics would expect us to observe. Suffice it to say that in a period of expansion thetraditionalists saw a growth of the export sector of the economy (the
32 M. C. Urquhart
18ble 2.10 Compantive Growth Rates of Canada and the United States (AUGrowth Rates in Compound Rates Percent per Annum)
Source: For Canada, calculated from the data of table 2.9. For the United States, for1871-1900, real GNP and per capita growth rates provided by Robert Gallman fromdata underlying his paper in vol. 30 of the Conference series; for 1900-1925, Kendrick1961, pp. 298-99, and Historical Statistics of U.S., Colonial Times to 1970, p. 8.
high-productivity sector) lead to a more general expansion that permeated from the export sector to most other parts of the economy. Forexample, for the period 1895-1920, W. A. Mackintosh, in describingthe main measured dimensions of growth-in which, incidentally, thehigh population growth was mentioned first-wrote:
The most fundamental single characteristic of the period was ahigh rate of investment induced by improved expectations of profitfrom the exploitation of natural resources, which had been newlydiscovered, newly tapped by the extending railways, subjected tonew productive techniques, or converted into profit possibilities byfavourable shifts in costs and prices. Overwhelmingly most importantwere the wheat lands of the Prairie Provinces. Prospective profitableness in the exploiting industries created markets for other industriesand for a time investment fed on itself. (Mackintosh 1939, p. 41)
There remains one matter of contention that requires comment. Thetraditionalists did not elaborate on whether economic growth meant
33 New Estimates of Gross National Product, Canada, 1870-1926
Table 2.11 Ratios of Selected Aggregate Expenditure Items to GNP andTerms of Trade
Capital Capital Implied Government Export!Formation! Inflow/ Savings Exports/ Spending! Import
aRatio, gross fixed capital formation to current GNP (both in current prices).bRatio, inflow of capital to GNP (current account balance to GNP).cImplied domestic savings ratio.dRatio, exports of goods to GNP.eRatio of government expenditure on goods and services to GNP.t'Ratio of export prices to import prices 1899 = 1.
rapid extensive growth (growth in population) or intensive growth(growth in income per capita) or some combination of the two. Theyusually argued that the emergence of staples led to periods of rapidpopulation growth which would, of course, cause growth of aggregateoutput. In fact, Mackintosh judged the relative growth in the Provinceof Canada in the 1850s and 1860s by the relative rates of populationgrowth in the two decades and, indeed, noted that a central objectiveof national policy after confederation was the settlement of the west,and that objective, on a grand scale, presumably meant substantialaggregate population growth. It was perhaps implied that a rise in percapita income was necessary to acquire the additional people, but thatpoint was not made explicit.
The revisionists have tended to base their arguments on the growthof income per capita, which has been described as intensive growth.They have argued that growth of per capita output was not greatlyaffected by the presence or absence of exports in the period to whichour data apply. Such per capita growth as there is comes from othersources. They presumably would not deny that sufficiently high growthin per capita productivity m~ght lead to immigration and hence extensive as well as intensive growth; but they do not ordinarily go into that.
The ratios of table 2.11 are not as enlightening as one would likesince the process of drawing inferences from them is complicated by
3S New Estimates of Gross National Product, Canada, 1870-1926
the interactions between the development of exports, population growth,and capital formation. In accordance with the staple hypothesis, onemight expect to take the ratio of exports to GNP as an indicator of therole of the export sector, the high productivity sector, in driving theeconomy. Yet the way in which growth in the export sector works incausing economic growth in the early phases of expansion may be onlyin small part in its direct effect on GNP but more largely through itseffect on population growth and capital formation, both of which intum affect directly the size of GNP. If an initial growth of exportsstimulates both rapid population growth and capital formation in anticipation of further export growth, the consequent rise in GNP maycause the ratio actually to decline. The process of growth is a dynamicone with leads and lags, and the growth of the export sector to maturitymay take many years. I propose then to leave examination of the exportsector ratios until we have looked at the way in which related variablesand particularly investment have moved.
As for fixed capital formation, and especially its relationship to GNPas shown in table 2.11, there are three periods when it was especiallyimportant. It was relatively robust, for its time, in the first half of the1870s, again through the mid- to late 1880s, and, above all, in the periodfrom 1900 to 1914. Capital formation in the railways was important inall three of these periods. It involved the building of the intercolonialrailway (a government undertaking) in the early 1870s. And it wasespecially the major factor in the 1880s with the building of the CanadianPacific Railway line to the west coast, 1881-85, a private undertakingthat was greatly aided by very generous treatment from the federalgovernment and that was supplemented by a building boom in the late1880s in Montreal, a boom most likely consequent on the building ofthe railway. Had it not been for this building of the CPR in the 1880s,the period from the late 1870s to the mid-1890s would have been oneof continuously low investment and bleak prospects. As it was, therailway building of the 1880s ameliorated the sad export performanceof the decade. However, its main impact as a going concern only came10 years later when the volume of freight began to increase rapidly.Railway building was important also in 1900-1914, but the investmentwas also very broadly based in that period, as may be seen in table2.2.
The period from 1900 to 1914 epitomizes a classic investment boom,a major part of it related directly or indirectly to the settlement of thewest. In the latter regard, much of the railway building was directedtoward the west-two new transcontinental lines and many branch linesin the prairies were built. And as can be seen from tables 2.5, 2.6, and2.10, there was an extraordinarily high rate of population growth ofwhich a most disproportionate part took place on the prairies. That thesettlement of the west was based on the expectation, in the minds of
36 M. C. Urquhart
the settlers, of there being a viable market for wheat is beyond doubt.But the great engine of growth of the period was the enormous investment expenditure associated with that settlement.
During the 1914-18 war, investment expenditure languished and,although recovering somewhat from wartime levels in the 1920s, it didnot retain anything like the relative eminence of the lusty levels of1900-1914.
We shall return to the roles and interrelationships of investment andexports, but first we should look at some other relevant items.
Caves (1971) has made the point that export-led growth might affectthe levels of saving, hence presumably the level of domestically financed capital formation, and hence growth rates. Our measure of thelevel of saving (table 2.11) leaves much to be desired since it is calculated as the residual of fixed capital formation less capital inflow andthere are considerable errors of measurement in the latter. However,it seems most improbable that such revision as might be made wouldalter the general tenor of the inference we draw about saving. Thisinference is that the level of saving was of a quite different order after1900 than it had been before. As a ratio of GNP, overall gross savingsaveraged 8.8% in 1870-79, 10.0% in 1880-89, and 8.3% in 1890-99.In contrast, it averaged 15.7% for 1900-1909,16.3% for 1910-14, and16.9% for 1921-26-the wartime years have been omitted. That therewas a substantial increase in the saving rate appears to be quite clear.
Next there are the growth rates of production and of productivitywhich have been matters of issue and for which there are the data intable 2.10. It is clear that growth rates of population and of total realGNP in Canada were much higher after 1900 than before. The contrastwould have been considerably stronger had the dividing point beentaken at 1896, the date generally taken as the turning point in Canada'sfortunes: in that event, the annual rate of increase of real GNP from1871 to 1895 (3 years centered in each case) is 2.5% and from 1895 to1913 (3 years centered) is 5.8%. The per capita real income growthrates are interesting. They do support the view that there was considerable growth in output per capita before 1900 with some increase inthis growth of real output per capita in peacetime years after 1900.Again if one takes 3-year averages at the beginning and ending of thetwo periods from 1871 to 1895 and 1895 to 1913, the respective annualcompound rates of growth of per capita real income are 1.2% and 3.4%.(If one wishes to take alternate periods of comparison, that can bedone by use of the data of table 2.9.)
Account should be taken of the fact that the proportion of the population of working age that belongs to the gainfully occupied categorychanged from decade to decade. Unfortunately, until 1921, figures forthe gainfully occupied are available only for census years (see table
37 New Estimates of Gross National Product, Canada, 1870-1926
2.7). Further, it is generally accepted that there was an undercount ofthe agricultural labor force in 1901 and hence that the figure for thegainfully occupied persons for 1901 is too low. In light of the 1901undercount and the fact that the expansion of exports began in the1890s and was especially significant from 1896 onward (table 2.11), wecompare growth of the output per worker for three periods.6 The average annual rate of growth was 1.1% from 1871 to 1891, 2.3% from1891 to 1911, and 4.3% from 1921 to 1926 (end years centered on 3year averages in each case). The high rate of growth from 1921 to 1926may in part be a matter of recovery from a small decline in productivityper worker in the decade covering the wartime years.
Comparison with the United States shows the following. Populationgrowth rates were clearly higher in the United States from 1871 to 1900and in Canada from 1900 to 1920. Growth rates of aggregate real GNPin the United States were substantially higher than those in Canada inthe 1870s and substantially lower than those in Canada in the decade1900-1910; for other periods (the wartime decade excluded) the realGNP growth rates were about equal. Growth rates of real income percapita, which may be somewhat arbitrarily allocated among periods bychoice of beginning and ending years, give a mixed picture. If the 1870sand the 1880s are taken together, United States per capita growth ratesclearly exceeded those of Canada in 1871-90 but fall short of theCanadian rates in 1890-99. Following 1900, Canadian per capita growthrates substantially exceeded those of the United States in the decade1900-1910 but lost such ground in the wartime years that over thewhole period from 1900 to 1926 the per capita growth rates were aboutequal.
Now what inferences can be drawn from the export ratios of table2.11? In order to try to abstract from influences on the data of lagsbetween the initial and final impact of export (staple) growth on theperformance of the economy, I compare first the export ratios of 18701900, which preceded the period of the wheat economy, with thoseafter 1920 when the wheat economy was in full flourish. The relativelylarge increase in the export ratio was much more than accounted forby the increase in the value ofwheat exports, which were supplementedin an important way from 1918 onward by those other resource-based(though more highly processed) exports of newsprint and wood pulpand of nonferrous metals: it was a product of the increase in exportsof staple-based products. In order to give some indication of the significance of these ratios, I just mention for comparative purposes thatthe similar United States export rates were for the 3 years centered on1890 just over .07 and for the 3 years centered on 1925 just under .07.
An examination of the export ratios within the period 1870-1900should be supplemented by a look at the movement of total exports
38 M. C. Urquhart
and of wheat exports given in table 2.12. Export ratios held up mod-erately well in the 1870s, but that was only because neither exports intotal nor income grew through that decade; the complete absence ofwheat exports and a decline in forest product export values were maskedby a modest growth in some agricultural products exports-most no-tably barley to the United States, an item that disappeared in the early1890s. Exports languished badly in the 1880s in the sense that they didnot grow with the overall growth of the economy. They appear to havebeen an increasingly expansionary force in the 1890s, lead by a recoveryin the export of wheat (from the pre-Confederation period), by growingexports of cheese and meats, and by some growth of exports of baseand precious metals. The potentialities for wheat production 'on theprairies were clearly evident by 1900, when wheat production in theprairie region had reached 23 million bushels in a year (decennial censusdata) when yields were considerably below average. As a probably
Table 2.12 Total Exports, Declared Values and at 1900 Prices and Net Exportsof Wheat in Bushels, 1870-1915 (Values in Millions of DoHan,Wheat in Millons of Bushels)
Value Wheat Value WheatDeclared 1900 Exports Declared 1900 Exports
Source: Historical Statistics of Canada, 1st ed., pp. 175, 363-64.
39 New Estimates of Gross National Product, Canada, 1870-1926
fairly minor point we should note that the building of the intercolonialrailway, especially in 1874-75, and the building of the Canadian PacificRailway in 1881-84 were isolated exogenous events, undertaken respectively by government and by a private corporation with very heavygovernment subsidization, that undoubtedly tended to increase GNPin those years in cyclical fashion: they increased the denominator ofthe export ratio accordingly.
We come now to the 1900-1914 period. As can be seen from table2.12, the value of exports increased two and one-half-fold between theyear ending June 30, 1900 and that ending March 31, 1915 (fourfoldfrom 1896 to 1915) and the great expansion of wheat exports was yetto come. Yet from 1900 to 1913 the ratio of exports to GNP in thisgreat period of growth was at about the levels of the 1870s and 1880s.The explanation of the apparent conundrum has been given already.The settlement and growing cultivation of new lands based initially onexpectations of future production and sale of wheat led to an enormousincrease in capital formation that, along with a very rapid expansionof the population and labor force (see tables 2.5,2.6,2.7, and 2.9), ledto a great increase in GNP even before the major increase in productionof the wheat staple. The matter cannot be better put than in the wordsof Mackintosh that have been already quoted. At this stage of development the great source of expansion was the prospective productionof great quantities of wheat even though the actual production in largequantity did not come until later.
One other matter deserves attention. As already noted, in 1900 thehigh-productivity export sector was relatively no larger than in the pre1896 period. Yet it was a period of very high growth of aggregate GNPas well as GNP per capita. Clearly the capital formation sector, whichis the major direct stimulus to growth, must have been a sector ofreasonably high productivity. The expectations of purchasers of capitalgoods were sufficiently sanguine that they were prepared to pay goodprices for structures and equipment.
The two remaining ratios of table 2.11 may be dealt with summarily.First, the ratio of government expenditure on goods and services toGNP shows that aside from the years of war and its immediate aftermath government purchases of goods and services for the ordinaryfunctions of government were relatively small. The smallness of thesefigures may not reflect the government role well since governments didguarantee railway bonds in large quantity as well as build some line inthe 1900-15 period in addition to the earlier participation which wehave noted already. Governments also ran some market-oriented operations, including the Canadian National Railway after the bankruptcyof its constituent lines during the war. But it remains true that thegovernment role was much less in 1900-1915 than in many other coun-
40 M. C. Urquhart
tries in their periods of rapid growth. Second, the terms of trade movedin Canada's favor in two significant periods. The improvement fromthe early 1870s to the mid-189Os was quite substantial and would playsome part in contributing to the favorable conjunctures ofthe late 1890s.The other period of improvement from 1900 to 1915 would play somerole in the expansion of that time, especially in its effects on the expectations that underlay the capital formation performance.
One final point about the aggregates must be made. In general, suchstimulus to the economy as there has been from the export trade hasnot come because exports of goods and services exceeded imports ofgoods and services. In general, until the First World War, not only didcurrent account receipts, on international account, fall quite substantially below current account expenditures, but in most years merchandise exports fell short of merchandise imports; only the years. 189498 showed merchandise trade surpluses (usually very small). In mostof these years net capital inflows were large. With the First World Warand in the 1920s the international current account came roughly intobalance and net capital inflows more or less disappeared. This lastchange was a significant development in the Canadian economy, but itnevertheless still remained true that Canada's international transactionsdid not directly increase the aggregate demand for Canadian goods andservices.
I turn briefly now to the inferences one may draw from these dataabout the differences between the traditionalists and the revisionists.At the outset I wish to make it clear that I am not working with a modelspecified in a way that makes possible the shaping and application ofspecific tests. Rather, I just try to see in more general fashion whetherthe developments of the economy appear to be consistent with whatthe traditionalists specify or imply would occur according to their hypothesis or whether they fit better with the view of the revisionists orboth. This procedure is not rigorous, but it is all that can be done now.I make just three points.
First, I would find it very difficult, in the light of our data, not toconclude that the staple, wheat, played the role assigned to it by thetraditionalists in the extensive growth (aggregate growth) of the Canadian economy from the late 1890s onward. It is true that in the years1870-1895 the relatively low growth of population and aggregate realGNP took place in a world setting that was not buoyant, and 1895 orthere abouts is regarded as a low point of world growth. Nevertheless,in these years the United States maintained population growth ratesmuch above those of Canada, and growth rates of aggregate real GNPconsiderably higher than Canada's (see table 2.11). This was the timewhen Canada's wheat exports, the major export of the 1850s, haddisappeared and exports of forest products were faltering. In the period
41 New Estimates of Gross National Product, Canada, 1870-1926
from the opening and growth of the wheat economy from the 1890sonward, Canadian population growth rates exceeded those of the UnitedStates from 1900 to 1920 and matched the United States rate from 1920to 1926; and extensive growth of GNP in Canada exceeded that in theUnited States from 1900 to 1910 and again from 1920 to 1926. That amajor part of the growth was associated with the settlement of theprairies, and definitely based on the objectives of growing wheat, isclear. The stimulus came first through the enormous induced investment of the 1900-1915 years and then in the 1920s with the export flowof wheat and the concomitant realization of the gains of internationalspecialization. (I omit mention of the development of newsprint andwoodpulp production and export rather late in our period, and of basemetal production and export somewhat earlier, which were importantbut played subordinate roles to wheat.) Even given the upturn in worldeconomic activity from 1895 onward, I find it very difficult to see howbalanced aggregate growth in the Canadian economy could have beeninduced at close to the rate of the unbalanced expansion of the post1900 period, especially when the role of the induced investment isconsidered.
Second, with regard to the growth of per capita product, the revisionists have a point. There was considerable growth in GNP per capitafrom 1870 to 1900 even with the relatively slow aggregate growth. Asto whether or not the rate of growth 'of product per capita increasedwith the expansion of the wheat boom, the picture is not entirely clear.That the intrusion of the war had adverse effects on productivity isclear, but what effect it had on cumulative productivity from 1900 to1926 is not evident. The fact that there seems to be an acceleration inper capita product from 1896 onward (table 2.9) after a flat performancefrom 1890 to 1896 leads one to believe that part of the 1896-1900 percapita growth may be cyclical recovery and part true long-term growth.That there were indeed the beginnings of the influence of westerngrowth at this time will be seen from the fact that there were alreadyabout 420,000 persons in the three prairie provinces at the 1901 census.In these circumstances it may be best to compare per capita growthfrom 1890 to 1910 with that from 1871 to 1890. Such a comparison(table 2.10) shows clearly that the per capita growth rate by the 18901910 period substantially exceeds that for 1871-90. The same comparison for productivity per worker also shows a much higher perworker productivity growth rate in the 1891-1911 period (2.3%) thanin the 1871-91 period (1.1%). This increase in the rate of growth ofproductivity in the staple period cannot necessarily be attributed to thedevelopment of the wheat staple, but, at the same time, it does notcontradict the view that such could be the case-in other words, thatthe wheat staple led to intensive as well as extensive growth.
42 M. C. Urquhart
Third, the higher saving rates after 1900 than before should makepossible higher rates of growth of GNP. Our data are not adequate toexplain why savings rates increased, but whatever the cause it mustbe associated with developments after 1900.
2.2 Changes in the Structure of GDP
I turn now to see what easy inferences, if any, emerge from thenature of changes in the relative contributions of various industrialgroups during the country's development. The industrial distributionof GDP at factor cost in percentage form is given in table 2.13. Butbefore examining its implications I should mention one or two of theidiosyncrasies of the industrial distribution.
Among these idiosyncrasies, the most important one relates to themanufacturing and the trade sectors. In the early part of the periodcovered here, many of the trading functions were carried out in the
Table 2.13 Percentage Distribution of Gross Domestic Product at Factor Cost,Average of 3 Years Centered on Census Years and of 1925, 1.926
and personal servicePublic resource 0.3 0.3 0.5 0.5 0.4 0.3 0.4
royalties
Source: Calculated from the data in table 2.1.Note: The percentages for wholesale and retail trade and for community, business, andpersonal service are taken from data for the single years given in the heading, andconsequently the sums of the percentages vary slightly from 100.
43 New Estimates of Gross National Product, Canada, 1870-1926
so-called manufacturing establishments. Tailors, dressmakers, hatters,shoemakers, blacksmiths, and gristmillers, to mention only a few cases,dealt directly with the consumers and hence performed, in part, afunction that was later performed by specialized merchants. Hence, ina sense, the income produced in the manufacturing function tends tobe overstated and income generated in trade function tends to be understated in the early period. There was the added feature that someactivities, such as blacksmithing, which had a large genuine manufacturing component in the earlier period, changed to producing mainly aservice function. An attempt was made to retain the manufacturingcomponent of these types of activity in the manufacturing sector.
Given these limitations-and ofcourse, there are many others-whatdoes the change in the industrial distribution show? The most dramaticpoint, in my view, is the fact that, in a time that is regarded as a greatperiod of industrialization in Canada, from 1900 to the 1920s, agriculture's share in GDP fell so little; and such a fall as there was appearsto have taken place largely between 1900 and 1910. There can be nodoubt about where the growth in agricultural income occurred. Table2.14 presents the components of agricultural gross revenue in this period. It was the emergence of wheat that explains the maintenance ofagriculture as a principal income earner: the share of wheat in grossfarm revenue (table 2.14) rose from less than 13% in the 3-year averagecentered on 1900 to more than 33% in the 3 years centered on 1925.To complete the agricultural income information, table 2.15 gives agricultural expenses and table 2.16 gives income of farmers.
The fact that the share of manufacturing did not increase more thanit did is hard to interpret. In fact, the rise was much greater thanapparent because much of the trading function did become separate,the evidence of the separation appearing in the growth of the share ofincome generated in trade. Further, just the maintenance of a constantshare of income produced would represent a high rate of growth. ButCanada did remain a substantial net importer ofmanufactured products,which explains, in part, why manufacturing's share of output did notgrow more.
Tables 2.17 and 2.18, showing the distribution of manufacturing domestic product among groups, reflect some of the changes that tookplace in the structure of manufacturing. Unfortunately at the level ofdetail in tables 2.17 and 2.18 the more significant changes that tookplace in manufacturing do not always show up. Some things are evident,however: the declines of the leather products industry and the woodproducts industry (lumber, furniture, etc.) are very clear; similarly, thegrowth of the paper products industry (newsprint and woodpulp), thenonferrous metals products industry, the chemical industry, and theprinting and publishing industry is equally evident. However, the changes
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9291
5456
3450
64S
eed,
gras
s&
clov
er69
37
-18
2-1
33
-21
9-2
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-21
9-5
10
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95W
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2137
2681
2361
2007
1563
1366
1374
1282
1631
1785
1709
For
est
prod
ucts
1984
021
439
2155
320
534
1962
719
937
1862
119
715
2058
321
046
2121
5G
rand
tota
l21
8911
2280
7720
1548
1947
8618
5749
1794
3119
9230
1946
7020
2411
2101
0221
4854
(co
nti
nu
ed
)
18bl
e2.
14(c
onti
nued
)
1892
1893
1894
1895
1896
1897
1898
1899
1900
1901
1902
Whe
at26
427
2072
518
746
2971
522
876
3575
426
269
3050
528
160
3712
745
252
Oat
s64
5050
8740
7637
7141
7055
1661
6857
1759
1275
3472
13B
arle
y14
9880
612
1888
410
0049
675
415
4416
5012
0612
27R
ye14
287
108
106
129
498
223
321
402
298
346
Hay
4771
5639
4617
6922
4941
3740
3122
4788
5820
7929
7552
Veg
etab
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1094
812
962
1086
883
6075
5913
058
1227
512
089
8428
1383
415
519
Pot
atoe
s88
4596
5692
7040
9560
4495
6299
8287
4850
5198
7913
284
Ho
ps
365
358
143
165
145
211
181
112
180
157
288
Fla
xse
ed95
8339
078
422
922
034
034
519
723
853
0T
obac
co27
028
828
136
238
260
654
271
975
480
985
2F
lax
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r12
426
815
112
830
438
7519
623
514
317
5E
ggs
7199
8294
7291
7408
7465
6912
8218
9819
9848
9337
1055
0M
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suga
r&
syru
p16
9216
0414
9713
5015
1110
1413
5224
3314
2717
4717
61H
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ey39
837
136
936
239
030
330
136
435
641
140
1A
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s56
7851
8348
8648
6843
7958
5465
7866
0650
5862
7175
05S
mal
lfr
uit
2114
1533
1542
1776
1357
1578
1367
1376
1408
1837
1627
Gra
pes
395
634
546
731
720
827
569
600
1166
1182
1249
Orc
hard
frui
t21
4812
6713
2069
792
511
8110
0510
5018
0511
0210
34C
attl
e&
calv
es30
504
3048
624
976
2404
723
279
2871
832
192
3457
836
732
4272
251
781
Hog
s14
582
1028
519
457
1357
713
754
1594
919
685
1783
517
993
2694
432
380
She
ep&
lam
bs80
9564
6863
7675
1644
3435
5949
8053
3157
1860
3758
52P
oult
ry18
9724
3821
8423
5726
9723
5423
9931
0333
7936
2236
15C
hees
e12
621
1444
413
346
1257
613
268
1569
914
976
1852
819
250
1799
422
812
Bu
tter
2717
727
778
2556
223
327
2351
123
613
2618
723
379
2958
631
209
3353
1F
luid
mil
k16
797
1706
117
326
1583
114
288
1450
516
580
1686
719
083
1745
017
899
Hor
ses
2746
316
-10
35
3012
4998
515
5244
6065
6364
6410
041
See
d,gr
ass
&cl
over
-23
314
532
5-2
54
-23
7-8
730
4-2
32
1478
535
9W
ool
1690
1719
1655
1375
1445
1490
1432
2057
1609
1382
1534
For
est
prod
ucts
2097
821
012
2014
720
350
2106
521
164
2070
020
952
2160
422
686
2412
8G
rand
tota
l21
6425
2070
0719
7652
1932
2918
3291
2153
3022
0320
2342
0123
9375
2783
5032
0310
1903
1904
1905
1906
1907
1908
1909
1910
1911
1912
1913
Whe
at39
026
4910
556
401
5354
770
128
7669
111
9799
8458
412
4116
1209
1313
7734
Oat
s64
2862
6868
1179
2513
131
8604
7626
8942
1027
296
4316
716
Bar
ley
1297
1423
1363
1420
2475
2523
2025
1939
3282
5564
6417
Rye
195
211
188
103
207
291
247
195
139
117
216
Hay
5958
5506
5754
6388
9276
7434
9709
8974
1757
312
712
1127
3V
eget
able
s19
796
1574
318
312
1713
420
931
1670
715
191
1991
821
107
1751
221
538
Pot
atoe
s19
882
1407
714
467
1513
819
278
1679
613
411
1804
122
108
1688
320
152
Hop
s27
130
415
722
713
211
231
129
051
937
434
8F
lax
seed
400
462
599
968
1867
1415
2941
8472
2578
824
846
1570
8T
obac
co97
595
310
5412
2113
5214
0615
9715
6912
4266
914
50F
lax
fibe
r27
141
024
473
163
120
8412
572
2446
Egg
s10
275
1375
312
720
1569
018
132
1780
721
702
2231
027
128
2698
432
387
Map
lesu
gar
&sy
rup
1922
1807
1864
2926
2374
2232
2211
2514
2594
2598
2471
Hon
ey37
036
138
356
765
269
976
971
372
979
076
0A
pple
s90
5770
0395
9972
8110
053
7677
9734
7840
1029
195
1511
200
Sm
all
frui
t17
0314
9820
2721
7926
3421
9619
7524
6728
4018
0921
08G
rape
s11
8288
713
4413
8412
1212
1511
5312
1782
385
710
56O
rcha
rdfr
uit
1418
1350
1248
1674
2739
1355
1984
1824
1786
709
1125
Cat
tle
&ca
lves
4681
647
304
4863
341
582
4168
636
809
4499
755
761
6353
068
968
7455
2H
ogs
3073
930
744
3043
937
426
3010
930
643
3880
347
606
4627
548
438
5989
9S
heep
&la
mbs
4971
3593
4623
4129
5686
5102
4953
5218
6122
7412
6524
Pou
ltry
3465
3621
3921
6979
4670
5633
6757
9016
9437
1097
811
189
Che
ese
2205
618
399
2288
026
525
2208
520
078
2086
019
997
2080
920
755
1924
0B
utte
r33
063
3327
440
906
4019
542
766
4818
646
825
5072
540
670
5056
546
763
Flu
idm
ilk
1846
119
089
2190
722
315
2588
129
256
2760
125
855
2400
530
073
2823
8H
orse
s-1
894
1487
810
353
1795
420
070
1257
023
560
2110
715
391
2276
429
316
See
d,gr
ass
&cl
over
971
5110
11-1
29
-20
8-6
74
-20
356
4-1
4-7
14
-39
2W
ool
1636
1730
1961
1727
1748
1413
1506
1615
1472
1548
1945
For
est
prod
ucts
2501
424
848
2561
230
275
3407
630
792
3176
533
437
3796
938
051
3754
9G
rand
tota
l30
5738
3186
6634
6796
3648
3640
5315
3851
0145
9897
4628
4653
8087
5513
6759
7540
(co
nti
nu
ed
)
'DIb
le1
.14
(con
tinu
ed)
1914
1915
1916
1917
1918
1919
1920
Whe
at12
7468
2987
8428
0766
3768
0227
5169
2915
3838
3267
Oat
s16
149
2551
548
549
3838
422
295
3132
523
152
Bar
ley
3635
5581
8195
9022
9993
1586
110
976
Rye
364
597
1491
1690
402
3360
4476
Hay
1340
615
144
1147
012
617
2046
519
709
2249
3V
eget
able
s18
463
2647
432
053
3744
441
046
3989
946
290
Pot
atoe
s19
648
2445
834
254
4418
742
556
4611
046
676
Hop
s21
417
021
680
8120
645
5F
lax
seed
6552
8472
1794
015
261
1647
820
175
1405
9T
obac
co10
2080
167
712
6524
7675
6412
599
Fla
xfi
ber
3486
277
370
827
1439
1298
Egg
s32
346
3128
546
955
5376
461
108
6955
772
514
Map
lesu
gar
&sy
rup
2678
3062
3263
46
08
7261
8828
9376
Hon
ey65
778
883
198
415
3514
9216
33A
pple
s77
0983
2890
7388
8313
476
1585
815
016
Sm
all
frui
t22
5521
2620
1025
2137
8261
0569
57G
rape
s95
895
910
5913
5910
2917
6123
28O
rcha
rdfr
uit
1045
701
1368
1461
2477
1890
4130
Cat
tle
&ca
lves
8611
093
108
1066
9112
4018
1348
0610
6956
1245
46H
ogs
5667
652
962
6523
473
320
1034
4611
1234
8335
7S
heep
&la
mbs
7230
7455
9960
1565
517
739
1661
389
57P
oult
ry10
879
1079
411
552
1441
521
309
1904
320
389
Che
ese
2001
026
296
3627
839
176
3777
445
267
3924
0B
utte
r45
154
5132
057
336
7105
782
494
9880
510
8841
Flu
idm
ilk
2915
232
482
3848
438
768
5426
561
501
7281
1H
orse
s22
823
1379
911
932
2241
016
859
-315
520
003
See
d,gr
ass
&cl
over
-189
8-2
121
-50
0-4
22
1649
740
-44
7W
ool
2136
2967
3363
4435
5316
6755
6213
For
est
prod
ucts
4114
740
888
3873
949
884
6345
261
666
6704
7G
rand
tota
l57
4030
7832
9387
9529
1063
431
1061
579
1108
113
1228
662
1921
1922
1923
1924
1925
1926
Whe
at22
7439
3074
9130
7525
2913
1941
3771
3860
02O
ats
1574
616
547
1865
326
143
2006
211
532
Bar
ley
6323
7163
7312
2150
719
085
2118
2R
ye24
4559
9434
6778
1243
2653
18H
ay16
783
9622
1094
296
7610
526
1142
8V
eget
able
s37
283
2947
432
067
3624
951
206
4170
8P
otat
oes
3680
325
648
2957
825
190
6662
349
421
Hop
s31
114
232
923
527
931
8F
lax
seed
4506
8461
1217
419
817
1054
288
45T
obac
co22
5241
7738
3332
5549
2442
65F
lax
fibe
r16
733
118
540
010
928
Egg
s61
342
5672
758
052
5756
650
484
6775
7M
aple
suga
r&
syru
p43
9741
8859
5759
9152
8748
96H
oney
1345
1068
1174
1510
1756
2164
App
les
3582
124
692
2448
919
747
2005
796
88S
mal
lfr
uit
3235
3114
3051
2566
2385
2581
Gra
pes
2812
3515
2742
1470
1750
720
Orc
hard
frui
t33
9425
7728
8617
1814
6322
34C
attl
e&
calv
es45
920
5219
861
843
5848
875
247
8037
5H
ogs
6305
782
013
7591
673
068
1094
7111
3929
She
ep&
lam
bs85
9662
7680
5911
315
9895
8592
Pou
ltry
2396
423
131
2631
228
848
3101
332
695
Che
ese
2818
622
682
2820
226
199
3755
328
851
Bu
tter
9134
279
029
8969
091
446
9336
898
144
Flu
idm
ilk
5715
847
961
5434
352
020
5492
159
116
Hor
ses
4879
-32
97
3738
-18
68
1623
-43
69
See
d,gr
ass
&cl
over
-31
1-2
23
772
1009
1862
2084
Woo
l28
5330
1733
0442
7440
4236
48F
ores
tpr
oduc
ts51
408
5096
557
421
6038
557
698
5488
2G
rand
tota
l83
9462
8746
9493
4029
9373
6711
6134
511
0804
6
18bl
e2.
15F
arm
Exp
ense
so
fP
rodu
ctio
n(T
hous
ands
of
Do
Dan
)
1870
1871
1872
1873
1874
1875
1876
1877
1878
1879
1880
1881
Rep
airs
tofa
rmbu
ildi
ngs
2965
3054
3047
3084
3258
3115
3006
3108
2880
3428
3401
3526
Rep
airs
tom
achi
nery
&14
0214
4414
4114
5815
4014
7314
2214
7013
6216
2116
0819
93eq
uipm
ent
Tra
cto
rex
pens
esF
erti
lize
rex
pen
se22
1422
2924
243
24
Tru
ck&
auto
expe
nse
Mil
lfe
eds
1720
5176
2264
7984
4302
2652
5651
4234
3856
2844
2971
2640
Bin
dei
twin
eB
lack
smit
hing
4313
4454
4596
4738
4879
5021
5163
5305
5446
5588
5730
5749
Mis
cell
aneo
us56
0957
7957
6758
3561
6358
9256
9158
8254
5164
8764
3579
74T
otal
oper
atin
g~xpense
1601
119
911
1711
723
125
2016
018
179
2096
620
026
1902
119
973
2015
121
890
1882
1883
1884
1885
1886
1887
1888
1889
1890
1891
1892
1893
Rep
airs
tofa
rmbu
ildi
ngs
3651
3862
4057
4153
4247
4372
4505
4598
4651
4731
4813
4886
Rep
airs
tom
achi
nery
&20
7618
5917
3416
5616
0018
0517
5018
2119
0119
5219
5918
55eq
uipm
ent
Tra
cto
rex
pens
esF
erti
lize
rex
pen
se5
46
58
1416
1337
4361
38T
ruck
&au
toex
pens
eM
ill
feed
s33
3135
8925
9919
7825
9831
4135
4438
5338
1328
7531
3728
97B
inde
rtw
ine
242
484
727
969
1212
1454
1697
1939
1779
2217
1195
Bla
cksm
ithi
ng58
1554
6655
7155
6555
4056
4657
5960
1960
9865
5068
9971
22M
isce
llan
eous
8305
7437
6936
6626
6402
7221
7000
7286
7604
7811
7837
7421
Tot
alop
erat
ing
expe
nse
2318
522
462
2139
020
714
2136
823
411
2403
225
289
2604
625
745
2692
625
419
1894
1895
1896
1897
1898
1899
1900
1901
1902
1903
1904
Rep
airs
tofa
rmbu
ildi
ngs
4912
4951
4986
5061
5128
5229
5343
5962
6570
7190
7693
Rep
airs
tom
achi
nery
&17
8817
2916
3919
1619
7021
2121
8725
7629
3927
7329
00eq
uipm
ent
Tra
cto
rex
pens
esF
erti
lize
rex
pens
e80
9412
412
614
017
524
430
231
835
533
4T
ruck
&au
toex
pens
e17
Mill
feed
s26
2238
4030
1043
5155
8052
1334
5327
4345
9746
2644
94B
inde
rtw
ine
1335
1213
2252
1413
2585
3971
2171
3486
4017
2856
2559
Bla
cksm
ithi
ng72
0173
2075
6778
4281
7687
2093
9495
6099
9497
9210
280
Mis
cell
aneo
us71
5569
1965
5976
6678
8184
8787
5110
304
1175
611
093
1160
3T
otal
oper
atin
gex
pens
e25
097
2607
026
141
2837
931
453
3392
131
547
3493
640
194
3869
039
884
1905
1906
1907
1908
1909
1910
1911
1912
1913
1914
1915
Rep
airs
tofa
rmbu
ildi
ngs
8266
8917
9314
9907
1047
111
123
1195
212
531
1281
313
209
1358
3R
epai
rsto
mac
hine
ry&
3151
3248
3651
3530
4224
4218
4918
5059
5593
5322
7393
equi
pmen
tT
ract
or
expe
nses
9626
643
567
814
5231
4737
0434
6239
22F
erti
lize
rex
pens
e39
848
562
170
576
677
310
2311
1210
9223
3621
97T
ruck
&au
toex
pens
e20
4840
7610
220
458
612
2415
0417
8524
99M
ill
feed
s52
9762
0888
8073
0287
6498
8411
442
1141
587
8012
653
1074
1B
inde
rtw
ine
2655
2979
1662
1487
3047
3660
3206
3233
6940
4896
7725
Bla
cksm
ithi
ng10
574
1116
611
763
1201
512
630
1310
314
175
1544
516
922
1817
319
016
Mis
cell
aneo
us12
604
1299
314
607
1412
016
899
1687
319
674
2023
922
373
2128
929
574
Tot
alop
erat
ing
expe
nse
4296
846
040
5063
949
412
5734
360
519
6843
373
409
7972
883
130
9665
5
(co
nti
nu
ed)
18bl
e2.
15(c
onti
nued
)
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
Rep
airs
tofa
rmbu
ildi
ngs
1413
114
551
1636
117
959
1865
518
302
1817
218
171
1820
618
093
1810
0R
epai
rsto
mac
hine
ry&
8347
9982
9825
1030
111
484
7760
8200
8738
8731
1086
610
404
equi
pmen
tT
ract
orex
pens
es41
4059
5688
3814
650
2130
920
510
2053
417
580
1874
219
154
2421
5F
erti
lize
rex
pens
e49
9055
7463
1620
8471
2061
1357
1058
5559
4559
6361
82T
ruck
&au
toex
pens
e34
1869
3810
407
1308
518
901
1839
118
340
1686
019
028
1989
625
508
Mill
feed
s91
5593
6427
349
3740
026
816
2064
819
242
2194
018
152
2063
824
671
Bin
der
twin
e10
508
1489
914
729
5236
1233
416
380
9892
1111
310
707
1409
513
353
Bla
cksm
ithi
ng19
769
2110
122
270
2240
823
822
2246
521
062
2028
919
030
1802
816
634
Mis
cell
aneo
us33
389
3993
039
303
4120
645
938
3104
332
802
3495
234
924
4346
441
619
Tot
alop
erat
ing
expe
nse
1078
5012
8298
1554
0316
4334
1863
8316
1617
1539
5815
5502
1534
7017
0201
1806
90
53 New Estimates of Gross National Product, Canada, 1870-1926
Table 2.16 Gross Farm Income and Farm Gross Domestic Product (lbousandsof DoHan)
that took place in the iron and steel products industry and the transportation equipment industry are not nearly as apparent. For the formerindustry the relative decline of blacksmithing and other such smallindustry and the growth of the modern iron and steel industry withblast furnaces and steel mills is masked. For the latter industry, therelative decline in production of horse-drawn vehicles and, to someextent, the production of railway equipment, on the one hand, and thegrowth of the automotive industry, on the other hand, are alsosubmerged.
Another feature is the growth of the mining industry proper. Theincome produced in 1900 is exaggerated by the production and sale ofgold from the Klondike. But the emergence of base metal mining inthe late nineteenth century and its growth in the twentieth, togetherwith a continuation of coal and gold mining from the earlier period,established the mining industry as a substantial one. We have notedalready the concomitant growth of the nonferrous metals industry inmanufacturing.
I mention forestry (wood operations) just briefly. It was the principalcomponent of the category "Forestry, ... fishing," in table 2.13. After1900, and especially from the 1914 war onward, the relative decline inlogging for lumber was progressively offset by the great growth ofpulpwood production. It is of interest, first, that during its period ofdevelopment the pulp and paper manufacturing industry was muchmore export oriented than had been the saw and planing mill industrywhich it was to some extent replacing and, second, that the paper andpulpwood exports had a much larger manufacturing component thanprimary industry component in contrast to the agricultural exports.
Finally, the banking and finance industry (table 2.13) provides a goodindication of growth of an increasingly specialized economy. By 1890there was a fairly good banking system, but the remainder of the financial system was ill developed. A great growth of this sector after
Tab
le2.
17G
ross
Dom
esti
cP
rodu
ctin
Man
ufac
turi
ngat
Fac
tor
Cos
t,by
Indu
stry
,18
70-1
926
(lb
ou
san
ds
of
Cu
rren
tD
oR
an)
1870
1871
1872
1873
1874
1875
1876
1877
1878
1879
1880
1881
1.Fo
od&
beve
rage
1126
312
522
1369
714
787
1317
912
162
1202
214
783
1196
712
677
1441
316
355
2.T
obac
co&
prod
ucts
1014
1077
1150
1403
1693
1699
1665
1374
1021
982
1207
1421
3.R
ubbe
rpr
oduc
ts11
214
116
819
922
214
612
317
114
115
324
339
04.
Lea
ther
prod
ucts
1171
713
811
1263
210
721
1113
788
1473
1491
0584
2894
2012
825
1445
05.
Tex
tiles
(exc
l.26
9137
5135
4727
1027
6130
4729
9932
4832
2843
1451
1660
21cl
othi
ng)
6.C
loth
ing
5386
7230
7664
7027
7052
6707
6270
6925
7120
8519
9373
1071
27.
Woo
dpr
oduc
ts16
173
1674
316
944
2549
924
051
1993
715
802
1896
015
601
1677
622
227
2848
88.
Pap
erpr
oduc
ts67
079
177
792
598
410
4410
0799
298
795
310
3511
669.
Prin
ting
and
2270
2739
2930
3525
3880
4000
3816
3865
3906
3743
3579
4793
publ
ishi
ng10
.Ir
onan
dst
eel
1280
316
834
2369
834
585
2163
321
382
1345
914
586
1181
310
940
1548
518
102
prod
ucts
11.
Tra
nspo
rtat
ion
5943
5952
7104
1313
412
883
9648
9978
9394
9844
7940
7105
9626
equi
pmen
t12
.N
onfe
rrou
sm
etal
770
882
992
1103
1212
1322
1429
1534
1640
1745
1849
1852
prod
ucts
13.
Ele
ctri
cap
para
tus
&su
ppli
es14
.N
onm
etal
lic
min
eral
s23
9825
2126
4227
6128
7629
9131
0232
1233
2034
2535
2833
8315
.P
etro
leum
and
coal
1119
1352
1642
1822
601
1074
1822
1156
1055
1563
1308
1334
16.
Che
mic
alpr
oduc
ts15
6017
5919
0819
9321
2819
7420
2422
3421
6622
2423
3225
0917
.M
isce
llan
eous
1094
1301
1459
1803
1638
1532
1400
1634
1488
1622
1990
2321
indu
stri
es
Tot
alG
DP
7698
389
406
9895
412
3997
1079
3097
479
8423
293
173
8372
586
996
1036
1512
2923
(co
nti
nu
ed
)
Tab
le2.
17(c
ontin
ued)
1882
1883
1884
1885
1886
1887
1888
1889
1890
1891
1892
1893
1.Fo
od&
beve
rage
1773
917
681
1807
716
785
1702
818
754
2276
824
207
2623
227
785
2617
023
685
2.T
obac
co&
prod
ucts
1556
1738
2118
1938
1586
1886
2102
2255
2713
2914
2881
2908
3.R
ubbe
rpr
oduc
ts39
432
835
234
234
643
554
550
850
555
658
063
54.
Lea
ther
prod
ucts
1435
713
347
1337
415
502
1648
614
468
1273
012
102
1481
015
073
1450
413
378
5.T
extil
es(e
xcl.
7836
7180
6293
6672
7150
7458
8159
9246
9380
9524
9840
9134
clot
hing
)6.
Clo
thin
g13
456
1258
311
653
1252
013
925
1409
915
099
1828
819
251
1873
919
028
1781
17.
Woo
dpr
oduc
ts35
098
3903
133
868
3006
730
925
3143
832
256
3267
935
035
3525
729
452
2965
88.
Pap
erpr
oduc
ts13
6616
2517
1817
6817
6219
3620
8622
3623
9325
8127
9430
179.
Prin
ting
and
5610
5244
4439
4496
4393
5309
6601
6391
5809
6199
7961
8222
publ
ishi
ng10
.Ir
onan
dst
eel
2227
728
292
2120
418
669
1931
923
810
2367
924
652
2707
024
780
2414
121
615
prod
ucts
11.
Tra
nspo
rtat
ion
1101
510
215
9079
8276
8885
9844
1014
010
305
1180
612
178
1241
311
868
equi
pmen
t12
.N
onfe
rrou
sm
etal
1942
1621
1164
1339
1943
1998
2458
3026
3337
4480
3394
3533
prod
ucts
13.
Ele
ctri
cap
para
tus
&41
643
546
152
0su
pplie
s14
.N
onm
etal
licm
iner
als
3236
3085
2928
2769
2605
3032
3211
3798
5209
4209
4062
5285
15.
Petr
oleu
man
dco
al10
6411
0810
3611
3811
2711
6798
298
910
2010
1110
9011
2216
.C
hem
ical
prod
ucts
2902
3160
3140
3177
3323
3417
3366
3433
3596
3577
3532
3318
17.
Mis
cella
neou
s26
4527
2024
6723
5924
3825
7127
3328
6931
0931
5630
1428
66in
dust
ries
Tot
alG
DP
1424
9314
8958
1329
1012
7817
1332
4114
1622
1489
1515
6984
1716
9117
2454
1653
1715
8575
1894
1895
1896
1897
1898
1899
1900
1901
1902
1903
1904
1.F
ood
&be
vera
ge22
891
2405
024
262
3020
330
991
2932
733
172
3465
337
761
4092
943
355
2.T
obac
co&
prod
ucts
2884
2857
3185
4070
3937
3535
4012
4055
4343
4905
5332
3.R
ubbe
rpr
oduc
ts58
866
381
810
3612
6914
7115
1613
8514
2118
9924
504.
Lea
ther
prod
ucts
9859
1212
211
361
1724
318
719
1717
515
863
1721
720
889
2083
617
535
5.T
extil
es(e
xcl.
8014
7690
7360
9167
1103
612
286
1282
513
020
1359
913
300
1245
4cl
othi
ng)
6.C
loth
ing
1645
116
405
1581
616
998
1875
120
760
2166
923
103
2622
328
129
2902
47.
Woo
dpr
oduc
ts27
959
2378
126
109
2710
626
126
2995
034
024
3347
739
258
4434
643
470
8.P
aper
prod
ucts
3287
3242
3254
3550
3831
4203
4752
4596
5471
5893
6299
9.Pr
intin
gan
d65
5965
7470
7472
9875
1080
3589
5289
5590
1595
2110
509
publ
ishi
ng10
.Ir
onan
dst
eel
1899
414
716
1780
114
902
1868
420
072
2907
723
682
3968
339
436
3171
8pr
oduc
ts11
.T
rans
port
atio
n11
741
8855
6730
7732
9214
1104
510
765
1183
315
062
1730
316
335
equi
pmen
t12
.N
onfe
rrou
sm
etal
3138
3162
3105
4113
5169
5682
6257
8316
8496
9489
1106
0pr
oduc
ts13
.E
lect
ric
appa
ratu
s&
587
634
714
792
1076
1269
1628
2190
2438
2607
3028
supp
lies
14.
Non
met
alli
cm
iner
als
5319
6533
4454
4608
5271
5981
6329
7233
8064
8343
8229
15.
Pet
role
uman
dco
al11
6810
6798
395
496
494
910
7510
5911
3514
2017
9116
.C
hem
ical
prod
ucts
3029
3090
3144
3338
3794
4123
4523
5404
6238
6769
7488
17.
Mis
cell
aneo
us26
4625
5725
8129
7231
9733
2537
0737
6343
7946
4645
68in
dust
ries
Tot
alG
DP
1451
1413
7998
1387
5115
6082
1695
3917
9188
2001
4620
3941
2434
7525
9771
2546
45(c
on
tin
ue
d)
18bl
e2.
17(c
ontin
ued)
1905
1906
1907
1908
1909
1910
1911
1912
1913
1914
1915
1.Fo
od&
beve
rage
4845
246
528
5045
355
998
6106
564
767
6426
769
030
6664
370
857
8256
82.
Tob
acco
&pr
oduc
ts57
0355
3359
1077
2084
3085
8594
3097
6797
3510
261
1032
73.
Rub
ber
prod
ucts
2735
2983
3247
2629
3878
4497
5369
6749
5850
5964
8355
4.L
eath
erpr
oduc
ts21
408
2728
219
818
1419
725
789
2674
630
113
3909
727
271
3144
826
747
5.T
extil
es(e
xcl.
1301
814
323
1353
112
156
1468
817
894
1484
614
984
1556
513
678
1766
8cl
othi
ng)
6.C
loth
ing
3254
737
089
3863
233
675
4323
950
605
4557
949
244
5095
843
019
4737
77.
Woo
dpr
oduc
ts49
604
6114
867
417
5961
466
468
7216
878
640
6784
362
903
5664
156
984
8.P
aper
prod
ucts
7178
8449
9787
9985
1138
712
388
1129
511
240
1270
116
320
1872
29.
Prin
ting
and
1108
611
944
1226
613
958
1566
715
765
1728
218
795
2055
920
997
2100
6pu
blis
hing
10.
Iron
and
stee
l50
976
6924
687
249
5733
868
102
7580
878
188
9578
010
3973
6035
272
491
prod
ucts
11.
Tra
nspo
rtat
ion
1856
523
677
3245
227
221
2941
531
302
3891
944
854
5329
943
301
3328
1eq
uipm
ent
12.
Non
ferr
ous
met
al17
401
2094
122
341
1832
420
240
2416
922
760
2828
726
281
2012
828
364
prod
ucts
13.
Ele
ctri
cap
para
tus
&37
8249
4957
8963
8467
7872
8084
7178
0676
3376
3571
81su
pplie
s14
.N
onm
etal
licm
iner
als
9706
1169
912
686
1119
911
058
1707
619
261
2238
423
458
1883
114
245
15.
Petr
oleu
man
dco
al20
4718
2723
5823
7921
5523
5527
7944
9456
4055
3140
8916
.C
hem
ical
prod
ucts
8828
9801
1109
710
460
1085
212
890
1467
017
918
1763
716
160
1892
617
.M
isce
llane
ous
5403
6198
6795
6099
7073
7827
7697
8067
7685
6600
6847
indu
stri
esT
otal
GD
P30
8439
3636
1740
1828
3493
3640
6284
4521
2246
9566
5163
3951
7791
4477
2347
5178
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1.F
ood
&be
vera
ge10
3300
1442
1915
6916
1698
4318
7062
1524
7114
1002
1437
1515
0220
1560
6516
9158
2.T
obac
co&
prod
ucts
1188
415
997
2006
013
957
1955
716
646
1835
816
960
1687
997
7912
918
3.R
ubbe
rpr
oduc
ts12
744
1793
519
665
2292
930
558
1809
722
236
2443
027
188
3240
528
366
4.L
eath
erpr
oduc
ts42
026
3918
036
692
4393
745
462
3671
640
818
3866
137
228
3570
038
795
5.T
extil
es(e
xcl.
2293
236
734
4761
854
141
5887
246
725
5414
154
099
4145
041
083
5004
7cl
othi
ng)
6.C
loth
ing
6887
480
108
9113
310
7804
1094
9383
249
8797
889
630
8336
484
810
9343
67.
Woo
dpr
oduc
ts56
703
8586
393
048
1073
8813
7470
8718
884
079
1013
9388
223
8721
593
509
8.P
aper
prod
ucts
3150
747
850
6069
174
242
1343
7871
203
7806
692
893
8601
094
258
1054
449.
Prin
ting
and
2647
733
403
3250
442
105
5432
352
162
5223
553
007
5332
754
537
5804
7pu
blis
hing
10.
Iron
and
stee
l12
4805
1855
2319
8134
1588
7620
7531
1254
5298
746
1328
5511
4033
1240
9314
7981
prod
ucts
11.
Tra
nspo
rtat
ion
3754
476
866
1069
8011
0800
1115
3461
432
5804
368
923
6119
179
775
9599
1eq
uipm
ent
12.
Non
ferr
ous
met
al41
393
4532
135
666
3335
236
970
1759
521
204
2678
426
380
3344
534
170
prod
ucts
13.
Ele
ctri
cap
para
tus
&10
178
1590
912
108
1470
722
213
2014
118
603
1974
426
292
2850
632
401
supp
lies
14.
Non
met
alli
cm
iner
als
1491
817
950
1779
219
664
3349
425
481
2885
629
060
2793
228
207
2936
515
.P
etro
leum
and
coal
7621
1053
113
169
1473
017
208
1094
211
553
4711
8254
8325
1512
916
.C
hem
ical
prod
ucts
4194
193
829
1247
9734
433
3968
828
061
2970
437
941
3591
138
497
4325
917
.M
isce
llan
eous
9207
1285
417
053
1934
025
256
1941
619
689
2001
815
895
1719
819
387
indu
stri
es
Tot
alG
DP
6640
5496
0072
1084
026
1042
248
1271
069
8729
7786
5311
9548
2489
9777
9538
9810
6740
3
60 M. C. Urquhart
Table 2.18 Percentage Distribution of Gross Domestic Product,Manufacturing, Census Years, 1870-1920 and 1926
1890 is evident from the data, a growth in which several Canadianinstitutions, especially the banks, became big players in the worldscene.
2.3 Conclusion
What does this add up to? In the interests of brevity and to focusour attention, I make just two points.
First, the Canadian economy developed in a fundamentally differentway after 1900 than it had before. The best evidence in support of thisstatement from our data is provided by the performance of capitalformation. Levels of sustained capital formation relative to GNP wereof a distinctly higher order after 1900 than before; equivalently, levelsof domestic saving appear to have been clearly of a much higher orderafter 1900 than before. Ofparticular significance, the level of investmentin manufacturing became permanently much higher than it had been(table 2.2): Canadian manufacturing underwent a fundamental changebetween 1890 and 1910. Accompanying the change in manufacturing,the specialized trade sector and the financial sector went a long waytoward assuming their modem form. And the electric power and communications system underwent like development (table 2.1).
61 New Estimates of Gross National Product, Canada, 1870-1926
Second, the evidence of our data supports most strongly the presumption that the growth and many of the changes in the Canadianeconomy were a consequence of the settlement of the prairies. Thecontinued high level of the contribution of agriculture to GDP was adirect result of this settlement. And one should add that the foundationof western settlement was the production or prospect of production ofwheat. The effects ofwestern settlement and of the incomes consequenton it were felt strongly in Central Canada, where the manufacturingfinancial, and commercial functions were performed predominantly.Ontario gained population by net in-migration from 1900 onward.
I have put the matter rather starkly. Of course, other factors enteredthe picture. I have mentioned already the growth of the mining industry,itself highly dependent on external markets. I have not mentioned theeffects of the war, which led to large growth of some sectors of themanufacturing industry. But these events were of the second order ofmagnitude.
I leave the matter there. I do not attempt to resolve the disputebetween the traditionalists and the revisionists. I would just say that Ido not see that their views are entirely antithetical. Ofmore importance,I hope that the new data provided herein stimulate further research.There are many things still to be explained.
Appendix 1The Background of the Project
This project began, on my initiative, about nine years ago as a collaborative undertaking among seven of us in academia. The final projectis attributed as follows with special reference to the industrial categoriesof table 2.1.
Alan Green was responsible for the estimates in transportation, communications, and electric light and power. This included estimates forthe steam railways, the electric railways, the telegraph, the telephone,and the electric utilities.
Duncan McDougall prepared estimates of wage and salary paymentsand of outlays on goods and services of federal and provincial governments, in great detail for 1910 and in somewhat lesser detail for 1900,1890, 1880, and 1870. I was responsible for estimates for provinces for1920 and also for the interpolation of the yearly data between censusyears and between 1920 and 1926 when the official estimates begin.Duncan McDougall was also responsible for the preparation of themajor part of the fisheries estimates; I did some work in reconciling
62 M. C. Urquhart
the estimates at a point of junction of two series where the nature ofthe underlying data changed.
Marvin McInnis and I developed the methodology of estimation ofincome for the agricultural sector in preparing an estimate for 1910.Marvin McInnis then wrote up the estimates for that year. I did thedetailed direction of the preparation of the estimates for the full periodand must bear the responsibility for their quality. Marvin McInnis isdoing the detailed writeup of the preparation of the estimates.
Thomas Rymes, of Carleton University, prepared the estimates forthe finance, insurance, and real estate sector.
Alasdair Sinclair; of Dalhousie University, prepared the balance ofpayments estimates.
Marion Steele, of the University of Guelph, prepared the estimatesof residential rent and also the estimates of capital formation throughresidential construction.
I am responsible for the preparation of the remainder of the estimates.We were assisted in our work at various times by a score or so of
research assistants.The project was supported by a grant from Killan Fund of the Canada
Council.
Appendix 2Notes on Methods and Sources
This note contains two parts. First, the method of estimation of GDPfor the period 1870-1926 and the rationale for the use of this methodare presented. Second, the major sources of data and their strengthsand weaknesses are described.
The Method of Estimation of GDP
There are three possible methods of estimating GDP or the closelyrelated GNP which are not necessarily alternatives but which, in fact,often are just that, at least for the preparation of historical estimates.It is about the method appropriate for historical estimates that I shallspeak, although I shall also make reference, at times, to current practice.
The Expenditure Method
One such method comprises the estimation of expenditure (actualand imputed) on final goods and services, on consumer commodities,on capital goods, on goods and services purchased by government, andon net purchases of goods and services by residents of foreign coun-
63 New Estimates of Gross National Product, Canada, 1870-1926
tries, to obtain GNP. It is then adjusted for net international incomeflows to obtain GDP. Practically all countries make estimates of suchexpenditure in their current preparation of their national accounts and,more important, make such estimates from data that are, for the mostpart, independent of those used to estimate GNP or GDP by alternativemethods as well. However, most countries do not have the luxury ofbeing able to make good historical estimates, from independent data,by both the expenditure method and either one or a combination ofthe two other methods that can be followed and consequently relyprimarily on one method or another.
Many countries do not depend primarily on expenditure estimatesfor historical periods. However, the United States is one country thatdoes. The historical GNP estimates for early years for the United States(before 1919) are based primarily on Kuznets'swork; he obtained hisestimates by use of the expenditure method. This method was reasonably appropriate for the United States since its census of manufacturesobtained a large amount of commodity data from as early as 1869.These data made it possible to separate finished products from intermediate products and, in turn, along with such items as trade data,data on production ofagricultural products, information on freight costsand on trade margins, and reports ofgovernment bodies, made possiblethe derivation of reasonably decent estimates for large components ofgross national expenditure.
This method was much less appropriate for Canada because hercensus of manufactures did not report commodity data until 1917: onlythe value of output was reported. Hence it is much more difficult toseparate production of intermediate products from final products andto divide the latter among consumer goods, capital goods, and goodssold to governments in Canada than in the United States. And wedecided at an early stage not to use this method.
The Income Method
A second method of estimating GDP is to add together factor costsof production to obtain national income at factor cost, to further addon capital consumption allowances to obtain GDP at factor cost, andthen, finally, if desired, to add indirect taxes less subsidies to obtainGDP at market prices. One can then, if one wishes, obtain GNP atmarket prices by subtracting factor incomes paid abroad and addingfactor incomes received from abroad.
This factor income method is widely used currently to obtain mostof the items of the factor income and GNP statements of the nationalaccounts. Its use depends on the direct availability of data on, first,labor income and, second, property income. Such data are now available in Canada and many other countries from personal and corporate
64 M. C. Urquhart
income tax returns and from many surveys done by statistical agencies.However, in the historical period in which we are interested, beforethe widespread use of income taxes to obtain revenue, data on propertyincome are not directly available, and while reports of wage data aresomewhat better, even they may be incomplete. Hence many countriesfind the use of this method unsatisfactory for estimation of historicalGNP. The United Kingdom is an exception: its continuous use of theincome tax dates from 1842/43. There are few data for Canada to yielddirect estimates of property income before the First World War-reports for the banks, insurance companies, railways, and governmentsare exceptions-and so this method has for Canada only limited usefor historical estimates.
The Value-Added Method
The third method involves obtaining estimates of GDP at factor costby the value-added method and then deriving from them estimates ofGNP by adding factor incomes received from abroad and subtractingfactor incomes paid abroad. Basically, the value-added method of estimation involves subtracting nonfactor costs of production from grossvalue of production or gross sales on an industry basis in order toobtain gross value added by industry (that is, the sum of factor costsand depreciation). This is the method used even yet in the officialestimates of agriculture income in Canada: a synthetic account is setup in which estimated nonfactor costs of farming items such as costof feed, fertilizer, machinery operating costs, and farm taxes are subtracted from farm sales plus an imputation of income in kind for farmproducts consumed as final products on the farms on which they wereproduced.
This method is often the one most suited, at least for a first approach,to making historical estimates of GDP at factor cost for both the farmsector and the manufacturing sector, which are, by any measure andby a substantial margin, the two largest sectors in Canada throughoutthe period 1870-1926 and which are really dominant in the earlier partof this period. Other goods-producing industries such as mining, forestry, construction, and even the fisheries may be approached by thefactor income method.
The Method Adopted
The method adopted in our project may best be given by a briefdescription of the procedure followed for selected industries, tediousas that procedure may be. Accordingly, I give now such an industrydescription.
Agriculture. Estimates for agriculture were made by the value-addedmethod: the method is described more fully in the section of this paper
65 New Estimates of Gross National Product, Canada, 1870-1926
that gives the estimates of income generated in agriculture. Here I justnote that the main innovation is the direct estimation, in the first instance, of off-farm sales and farm consumption of farm products without its being necessary to deal with the presence of intermediate farmproducts that are used in further production in the farm sector itself.The only expenses that are relevant then are the costs of purchasesfrom outside the farm sector.
Manufacturing. The value-added method is used: a general outline ofthe method is given in the section of this paper that deals with themanufacturing data. Basically, the method involves subtracting cost ofmaterials, cost of fuel and electricity, and "miscellaneous" expenses(items like repair and maintenance expenditures, insurance, and officesupplies) from gross value of production to obtain GDP at factor cost.The labor income component of GDP can be estimated directly fromdata collected in censuses of manufactures, and the property incomeemerges as a residual.
Mining. The value-added method is used for 1921-26 by use of Dominion Bureau of Statistics census of industry data. For 1870-1920 theestimates were made separately for each of five groups into which totalmining was divided, namely, metallic mines; coal (further divided byprovince); asbestos; other nonmetallic minerals and fuels; and sand,gravel, and stone. For each of these, it was possible to get long annualseries of gross value of production (GYP) running right back to 1886for all minerals but coal and gold and for coal and gold themselvesback to 1870. For the first four groups noted above we also had wageand salary costs for 1900, 1910, 1921-26, and for coal alone for 191718. The ratio of these wage and salary costs to GYP was constant forall of these aforementioned years. Estimates of annual wages and salaries were obtained by assuming that the ratios of wages and salariesto GYP, by groups, were the same before 1900 as in 1900 and that theseratios could be interpolated linearly between 1900 and 1910 and between1910 and 1920 (with the exception of coal for which there were additional ratios for 1917 and 1918). Multiplication of gross values of products by these ratios then yielded estimates of wages and salaries.
In the absence of data before 1921, to permit a direct estimate ofproperty income an improvisation was necessary. Ratios of propertyincome to labor income were available by groups for 1921-26, and for1966 onward (Corporation Financial Statistics). Overall ratios for mining were also available from the National Accounts for 1926 onward.There was sufficient stability in these ratios through time to suggestthat we might assume that such stable ratios existed prior to 1921 atthe level of industry subdivision that we used.
66 M. C. Urquhart
A variation of the method was used for the sand, gravel, and stonesubdivision, but it is not worth detaining us for the details at this point,particularly since this item was very small in early years.
After the above calculations were made, a small percentage wasadded to the whole series to take account of income of the self-employed.This percentage was based on data for the national accounts from 1926onward.
Transportation: The railways. For as far back as 1907 both wage andsalary payments and property income are calculated from annual reports, submitted to the government, which are published. Prior to 1907other methods were necessary, since the necessary data were not available in published reports. However, wage and salary data were availablefor a quite large sample of companies, in material housed in the nationalarchives, for many years in the earlier period. By relating them tooperating data one could obtain ratios that formed a basis for estimationof wages and salaries for all companies, since operating data werereported for all companies from 1875 onward. Property income wascalculated from bond interest expenses-bonded indebtedness was fullyknown-and from reports of dividends paid in Poor's, an allowancebeing made for undistributed profits.
These estimates can be taken as being quite reliable.
Finance, insurance, and real estate, excluding house rents. The estimates for finance and insurance were prepared predominantly by theincome method. Insurance companies of all kinds have long had toreport to the Federal Superintendent of Insurance for federally incorporated companies or to provincial counterparts for provincially incorporated companies. These reports contained the material from whichestimates of both labor and property income could be made. Laborincome included a large component of "commissions." It requiredsumming of information for each company to obtain the aggregates.
The estimates for banks were also derived basically by the incomemethod but with an added wrinkle. First, annual estimates of bothwages and salaries and property income were obtained from recordsof two of the major banks made available by the banks themselves: forone of the banks both wage and salary income and property incomewere obtained directly from the bank statements; for the other bankwages and salaries were obtained directly but property income wasobtained from the statements by the value-added method. GDP for thewhole banking industry was-obtained by multiplying the GDP for thetwo banks by the ratio of assets of all banks to the assets of the twobanks.
67 New Estimates of Gross National Product, Canada, 1870-1926
Labor income of loan and mortgage companies and the real estateand brokerage sections of the "Finance, etc." industry was obtainedby extrapolating estimates prepared by Statistics Canada (previouslythe Dominion Bureau of Statistics) for the 1920s backward, on the basisof assets of building societies and mortgage loan companies and of trustcompanies. The real estate and brokerage section extrapolation wastied into estimates of wage and salary income of real estate dealers andbrokers for 1911 derived from wage and salary data obtained in thepopulation census of 1911. The labor income of all of the financialoperations described in this paragraph are a relatively small part ofsuch income for the whole finance, insurance, and real estate industry.
Government: Federal, provincial, municipal, public education. Themain income item for all of the government components is salary andwage expense. Estimates of labor income for all of the governmentcomponents are from annual reports that are reasonably complete forthe federal and provincial governments and for education, and sufficiently good to permit passable estimates of municipal wages andsalaries.
Miscellaneous service industries. These industries include wholesaleand retail trade, business service, health and welfare, religion, recreation, other community services, and personal and domestic service.Labor income makes up a very large part of GDP in all of these industries. The estimation of labor income in all of these groups dependsvery heavily on the use of data collected in the population census onoccupations of the gainfully occupied persons in all censuses from 1871onward and on wages and salaries of every employed person in thecensuses of 1901, 1911, 1921, and 1931. Labor income for the selfemployed is imputed at rates that are derived from wages and salariespaid to hired workers. For census years before 1901, one obtains estimates of labor income by projecting wages and salary rates in 1900by such items as average earnings in manufactures, reports of wagesand salaries in Royal Commission reports and records of hearings (e.g.,Royal Commission on the Relations of Labour and Capital in Canada;Report, 1889), reports of wage and salary rates in both agriculture andindustry by the Ontario Bureau of Industries in the 1880s (and laterfor agriculture only), reported wage and salary rates for public servantsand schoolteachers, and a considerable amount of other such information.
Residential rents. The new estimates of residential rents are much morefirmly based than those available hitherto. The preparation of the estimates are best summarized in the words of Marion Steele, the author.
68 M. C. Urquhart
Estimates of residential rent in Canada 1871-1925 currently donot exist, except for those of Firestone (1958) for decade-endingyears. In this note we present and describe new annual estimates for1871-1930. The fundamentals of our estimation procedure are simple. First we estimate mean paid and imputed rent in 1931, using theCensus data of that year. Next we estimate an index of mean rentsback to 1870; this index is a patchwork of separate indexes whichwe estimate from sources as diverse as surveys carried out by OntarioBureau of Industry in the 1880s and James Mavor's Toronto surveyin the 1900s. Third, we estimate the stock of dwelling units by urbanization level-urban, rural nonfarm, farm-and so derive grossrents by urbanization level. Finally we estimate deductions fromgross rents: expenditure on repairs and maintenance and on fireinsurance premiums.
Major Sources of Data
It would take far too much space to even list all sources of data.Hence oniy the most important ones will be covered. The sources ofdata are grouped into three classes: benchmark data sources, annualdata sources, and occasional data sources.
Benchmark Data Sources
The data for some years are sometimes much more complete thanthose for adjacent years. These are the benchmark years. The mainbenchmark years for 1870-1926 are the decennial census years. Thedecennial census was taken in the first half of the first year of eachdecade. The production data collected in the census were for the preceding year. For example, the production data collected in the censusof 1901 are for the year 1900. In the census years the following relevantspecial census data were obtained.
a) Census of manufactures for 1870,1880,1890,1900, and 1910. (Theannual census ofmanufactures began in 1917, and hence this census wasseparated from the decennial census.) Later I elaborate on these data.
b) Census of agriculture for each decennial census year from 1870to 1980. Special data continued to be collected for decennial censusyears, even after the annual censuses of production in agriculture began. Quantities of products only were obtained in the censuses of 1870,1880, and 1890. Quantities and values of products were collected in1900 and later censuses. There was not much collected in the way ofcost data until the census of 1920, and even then the information obtained was quite limited. Further information on these data is containedin the discussion of the agricultural data that are presented later.
c) A usable census of mineral products was taken with each ofthe decennial censuses of 1900 and 1910. Quantities and values of
69 New Estimates of Gross National Product, Canada, 1870-1926
minerals produced were obtained. The numbers of persons employedand their wages or salaries were also obtained. There were no othercost data, but there was a description of plant and equipment.
d) A census of forest production was taken from 1870 onward to1910, but it was of limited use until 1900, in which year it appears tohave been quite complete. It covered only production on farms in 1910.There were no cost data.
e) The decennial census of population contained two valuable sourcesof data. First, from 1870 onward, in every census, the occupations ofthe gainfully occupied were obtained: the occupational data of the1910 census were particularly valuable because they were classifiedon an industrial basis very much like the 1948 standard industrialclassification. In addition to obtaining occupational data, the population censuses from 1901 to 1931 (and beyond) obtained records ofremuneration in the form of wage or salary from every hired personin the population. Information on the number of weeks worked aswell as age and sex characteristics were also obtained (on the samecensus form, of course). These data were tabulated according to occupational classifications that corresponded with those used for thegainfully occupied population.
Special mention must be made of the wage and occupational datafor 1910. The tabulations by the census office for this year were muchmore elaborate than those for either 1900 or 1920. There was the additional fact that since the classification was like that of the 1948 standard industrial classification, it was possible to compare wages andsalaries reported in the population census with those reported in thecensus of manufactures, in the census of mines, in reports of government bodies on the wage bill of the public service, in reports of teachers'wage bills in departmental reports, in reports of the railways on wagesand salaries, and in other such reports. In general the correspondencewas quite good. Such satisfactory correspondence gives one confidencein the reliability of the labor income data for other workers for whomthere is ordinarily little information. Thus, it seemed appropriate to usethese wage and salary data for such industries as trade (wholesale andretail), business service, recreation, domestic service, and other suchgroups for 1910. The year 1910 became in effect a benchmark year parexcellence.
Annual Data Sources
The number of sources of relevant annual data is very large; only asmall selection is mentioned here.
a) External trade data provide continuous annual series from Confederation onward. They are most important for the balance of pay-
70 M. C. Urquhart
ments. They have many other uses, of which I shall give only twoexamples. First, exports of wheat (quantity and value) help in theearlier years in the estimation of wheat production. Second, importsof raw cotton (and cotton thread) can be used as an interpolaterbetween census years of value of production of the cotton textileindustry.
b) Mineral production statistics, collected or assembled by the Geological Survey of Canada and successor bodies, are available on anannual basis for all minerals from 1886 onward; output of coal and goldis available annually back to 1870 from both provincial and federalgovernment sources.
c) Agricultural field crop production data are available annually forOntario from 1882 onward (Ontario Bureau of Industries); stocks ofanimals are available also for Ontario from 1882 onward and sales andslaughter are available from 1892; cheese production is available from1882. Similar data are available from provincial sources for Manitobafrom 1883, for New Brunswick from 1898, and for the Northwest Territories (Alberta and Saskatchewan) from 1898. From 1908 onward thefederal Census and Statistics Office collected crop production data anddata on numbers ofanimals annually for all but British Columbia, whichwas added in 1911; with the establishment of the Dominion Bureau ofStatistics in 1918, annual production data on meat, dairy, and poultryproducts were added.
d) Government annual reports provide information on wages andsalaries in the public service at all levels of government; they alsoprovide expenditures on educational salaries for all provinces.
e) Government reports of excise and bounty data and on inspectionservices provide annual data on items such as pig iron production,tobacco products made, production of beer and spirits, production ofpetroleum products, and other items.
f) Forestry branches of the federal government collected annual output of sawmill products from 1908 onward.
g) Government bodies collected railway statistics annually from 1875onward and banking and insurance company data from Confederationonward.
h) Price data are available from many sources right from 1867. Chiefamong these are the work of H. Michell in Statistical Contributionsto Economic History, Volume 2, of R. H. Coats in Wholesale Prices1890-1909 and subsequent annual volumes, and of DBS once it wasestablished. The basis of much of this work was newspaper pricequotations.
i) And then there are all the Dominion Bureau of Statistics data from1917 onward in the census of industry, the census of agriculture, andso forth.
71 New Estimates of Gross National Product, Canada, 1870-1926
Occasional Data SourcesThere were several occasional data sources:'a) Ontario Bureau of Industry Reports in the 1880s give a wide range
of wage data for many occupations and also price data.b) Some data came from commissions or committees of inquiry. Per
haps chief of these was the Report of the Inquiry into the Cost of Living(1915) of the Federal Department of Labour which was mainly Coats'swork and which contains an enormous amount of data of many kinds.
c) Some data were collected on a nonrepetitive basis by governmentstatistical agencies, for example, municipal financial data in the Statistical Yearbook of 1894, the predecessor of the Canada Year Bookpublished by the Census and Statistics Office.
Appendix 3Notes on the Estimates of Income Produced inAgriculture, Canada, 1870-1926
Concept of National Income Produced in Agriculture
The ultimate objective is to make an estimate ofgross and net incomeoriginating in Canadian agriculture regardless of who receives this income. Thus it includes rent paid to nonresident owners of farms, interest paid to nonfarm holders of farm mortgages, and wages paid tohired farm labor, as well as all income from farm operations accruingfrom farm operations in Canada to the farmers themselves. Conversely,it does not include income accruing to Canadian farmers from sourcesoutside of the farm sector of Canada, such as property income fromnonfarm property or labor income received by farmers for work theyhave done outside of the farm sector. Gross income produced in Canadian agriculture is gross of capital consumed in agricultural production. Net income produced is obtained by deducting capital consumption allowances from gross income produced.
Coverage
The income estimates provide only a total for all Canada. Geographically, they cover the provinces of New Brunswick, Nova Scotia, Ontario, Quebec, and Prince Edward Island for all years from 1870 to1879, even though the latter province did not enter confederation until1873; they cover all of present-day Canada, excluding Newfoundland,from 1880 to 1926.
The income estimates cover all activity that results in an output ofagricultural products wherever it takes place. Thus, they include the
72 M. C. Urquhart
feeding of animals on commercial feedlots as well as on farms. Theycover production of all crops and especially fruits and vegetables onsmall lots. They cover the very considerable production of dairy andpoultry products in villages, towns, and cities by nonfarmers, and theycover output of farm products consumed by farmers or owners of smalllots themselves. Only the products of urban kitchen gardens areexcluded.
The income is measured for each year from 1870 to 1926. The estimates for census years are particularly important since they are basedon more complete data than those for other years. But, except for the1870s, there are many production data for intercensal years.
Methodology
Two alternative methods, basically, are available for estimatingagricultural income produced. The first method involves adding· thevalue of consumption of farm-produced products by farm families(income in kind) to the value of off-farm sales of farm products forthe whole agricultural sector and then subtracting the expenses ofthose nonfactor inputs that are purchased from off the farms to arriveat income produced on the farms themselves. The second methodinvolves making estimates of the values of all products that are produced on farms, regardless of whether they are consumed by farmfamilies themselves, used as intermediate commodities for use infurther farm production (mainly feed crops), or sold off farms, and~hen subtracting the values of the intermediate products used forfurther farm production and also the expenses of off-farm purchasesof nonfactor inputs, in order to arrive at income produced on thefarms.
If marketing data (or information that serves the same purpose) canbe obtained for the sale of farm products, the advantages lie with thefirst method. Its use eliminates the necessity to estimate the value ofthe intermediate farm products that are used for further farm production. The first method has been used by Statistics Canada for manyyears and is the basis on which the offical statistics have been preparedfor as far back as 1926.
The advantage of the second method, ifmarket data are not available,is that agricultural statistics, once they are collected, have typicallyprovided gross production data-that is, data on the total quantities ofcrops and other commodities produced regardless of whether they aresold off the farm or used on the farm for further production. If, then,some information can be obtained about the parts of gross farm production that are used as intermediate inputs, the second method maybe better than the first. In the pre-World War II period the DominionBureau of Statistics had some such information, obtained from farmers,and used this second method.
73 New Estimates of Gross National Product, Canada, 1870-1926
A variant of the first method was used for two reasons. First, thereis scarcely any information on the amounts of feed crops and otherfarm products that are used on the farms themselves for further farmproduction in the period before World War I. It would be very riskyto assume that the ratio of intermediate products to the total grossoutput of all products was the same in the pre-World War I periodas in the post-World War I period. The bulk of the intermediateproducts is made up of field crops, and the proportion of field cropsthat are used on the farms varies greatly between types of farms,especially between grain farms and livestock farms. Grain farms output grew much more rapidly than livestock farms output after 1900.Second, we have been able to find data that we believe permit us tomake reasonably good estimates of the part of crops that is for offfarm disposal or for farm family consumption without getting involvedin estimating the production of intermediate products in any majorway.
The Estimation of Net Farm Output of Final Products
We give now the general method of arriving at off-farm disposaland farm family consumption of crops and other vegetable products,on the one hand, and livestock and dairy products on the other. Thegeneral practice, in almost every case, was to estimate the vGlumeof such movements, first, and then to obtain a unit money valuewhich permitted a valuation of total farm product, net of intermediateproducts.
The disposal of farm crop and vegetable products, net of intermediate products, is composed of human consumption (of both farmand nonfarm families), plus nonhuman off-farm uses in Canada, plusnet exports (exports minus imports), plus increases (or minus decreases) of inventories. If we can estimate each of these for eachproduct, we would have one way of estimating the volume of farmproducts produced, net of intermediate products. Let us deal withthese in turn.
First, total human consumption of each product was calculated fromestimates of per capita consumption and the numbers in the Canadianpopulation. The numbers in the Canadian population are readily available on an annual basis throughout the whole period. Estimates of percapita consumption were arrived at in various ways, depending on theproduct. The way in which the per capita consumption estimates wereobtained was specific to each product. It is sufficient at this point tonote that it has been possible to obtain estimates in which one mayhave a considerable degree of confidence.
Second, nonhuman off-farm uses of field crops were calculated bya variety of methods, the chosen method being suited to the crop. Theamounts of hay and oats sold to feed nonfarm horses were calculated
74 M. C. Urquhart
by making estimates of consumption of each product per horse and ofthe number of off-farm horses. Barley used for malting could be obtained from excise figures; the consumption of grains for distillationwas obtained in like manner. In some years the supply of flax fibercould be obtained from statements of raw materials used in scutchingmills, and so forth. Fortunately, our decision to include commercialfeedlots and nonfarm production of milk and poultry products in theagriculture sector eliminated the need to estimate the feeds that wentfrom farms to these particular nonfarm uses.
Third, external trade data, both exports and imports, were obtainablefrom the published trade returns for every fiscal year from 1870 onward.Usually the information was given in sufficient detail to provide information for individual commodities. However, in some cases, in theearlier years of our period, data were grouped in the source, and it wasnecessary to estimate individual commodities from the grouped data.The export figures used were those for Canadian products only, andthe import figures were "imports for consumption."
Fourth, except for wheat, there are practically no data on inventoriesthroughout the period. The lack ofavailability of inventories may affectthe assignment of income to particular years. However, at this stagein Canadian development, carryovers at the end of crop years fromone year to the next were probably rather small but, of course, insofaras minimum inventories, on the average, did increase, our estimatesomit that part of the disposition of products that was directed towardthe building up of inventories.
Of course, we also made use of whatever production data of fieldcrops and fruits and vegetables were available. These production data,along with the trade data, for decennial census years often providedthe basis of the estimates of human consumption in Canada, forcensus years, of those grains, fruits, or vegetables that were notintermediate products. Of course, a reconciliation of production anduse data, where such is possible, provides the best ultimate checkon reliability.
In some cases the production data alone provided the basis of theestimates. At the same time, the production data were of little help forthose products for which a large part of the output is intermediate.
There was such diversity in the way that the farm prices, for valuingthe farm products, were obtained that a general description of ourmethod in short compass is not possible. The way in which individualprices were obtained was specific to each product.
Estimates of the net value of products of livestock and poultry wereobtained in a fashion similar to that for crops, with one difference. Forall but the earliest decades of our period we had annual direct estimatesof the production of crops and fruits and vegetables, for Ontario from
75 New Estimates of Gross National Product, Canada, 1870-1926
1882 onward, for Manitoba from 1885 onward, for Alberta and Saskatchewan from 1898 onward, for New Brunswick from 1898 onward,for all provinces except British Columbia from 1908 onward, and forBritish Columbia from 1911 onward. In the case of the provincial dataon livestock we had estimates of the stocks of animals on farms forthose periods described in the preceding sentence but, with one exception, not for off-farm disposition and farm family consumption. Theexception was Ontario, for which many livestock sales and slaughterdata were available from 1892 onward. Of course, the decennial censusfrom 1870 provided production data as well as stocks for most livestockproducts. The nature of the data available meant that, for provincesother than Ontario and even for some of Ontario's products, in makingour estimates for intercensal years, we had to infer production of livestock products from data on stocks of livestock and poultry. The availability of data on stocks of animals meant that we could take accountof changes in inventories from year to year, a procedure that we couldnot follow in the case of crops.
The Estimation of Expenses of Off-Farm Purchases of Inputs
The expenses of off-farm purchases of inputs must be subtractedfrom the net value of products to obtain farm income produced. Thesepurchases cover the acquisition of such items as tractor oil and grease,binder twine, blacksmithing, commercial fertilizers, fencing materials,harness and saddlery, and many other such items. Fortunately, manyitems that are expenses for an individual farm are only intermediateproducts for the agricultural sector as a whole, and our method ofestimation is such that we do not have to estimate the quantities andvalues of these intermediate products. In addition, since we are interested in income originating in agriculture, we do not have to estimatethe cost of hired labor, the interest paid on farm indebtedness, and therents of farmland.
These circumstances still leave a formidable list of expenses to becalculated. The data for their estimation are best at the end of ourperiod and become increasingly less satisfactory as we go back in time.Luckily, expenses for off-farm purchases become relatively less important the further back we go. For example, there were no purchasesof oil for farm tractors when there were no farm tractors or only steamtractors; these expenses increased more than in proportion to outputas the use of farm tractors became increasingly widespread. Similarly,as the use of increasingly elaborate machinery grew with the passingof time, outlays on machinery parts and machine service grew. Theintroduction and spread of the use of binder twine, from about 1890onward, added an element to off-farm costs that grew through the years.And one can add to the list readily. There were some elements of
76 M. C. Urquhart
substitution, of course. For example, the interchangeable part probablyreplaced one element of the blacksmith's services. But these appearnot to have been of great importance.
The quality of the estimates of farm expenses is best for the lateyears and less good the further back in time we go. They are sufficientlysmall in the earliest part of the period that even if the margin of errorof their estimation is quite large it does not have an important effecton the estimates of income produced in agriculture.
Sources of Data
The details of the sources of data are too voluminous to be givenhere; it is possible to give only the general sources of information.These include: the decennial census reports for the Dominion togetherwith the quinquennial reports for the Prairie Provinces; the reports offirst the Census and Statistics Office (based in the Federal Departmentof Agriculture) and later the Dominion Bureau of Statistics (DBS) onan annual basis from 1908 onward; provincial reports on agriculturalproduction; the external trade reports; and finally, certain publicationsthat give us prices.
From the agricultural censuses for 1870 onward, the data collectedin the decennial census included the quantity of output of the mainfield crops and the larger types of livestock. In addition the numberson farms, at a specific date, of the main types of livestock were obtained. No valuations of products were obtained until the census of1900; from 1900 onward values as well as quantities produced andnumbers and values of the inventory of livestock were obtained. Thecollection of data for some minor products was added in 1900.
The Census and Statistics Office collected annual data from 1908onward on production and values of field crops, vegetables and fruit,and of numbers and values of the inventory of livestock (but not annualslaughter). For 1920 onward DBS made estimates of off-farm disappearance. Many of these data appear in a series, Handbook of Agricultural Statistics, in a number ofvolumes prepared by DBS after WorldWar II.
Several provinces collected provincial data on an annual basis beforethe Dominion reporting system was set up in 1908. The Province ofOntario began the annual collection of data on the production of mostfield crops, of the numbers of livestock on farms, of capital investedin farms, and of prices of farm products in 1882; data collection on thesale or slaughter of farm animals was begun in 1892. The Province ofManitoba began the collection of considerable amounts of agriculturaldata in 1883, Alberta and Saskatchewan (initially the Western Territories) in 1898, and New Brunswick in 1898.
77 New Estimates of Gross National Product, Canada, 1870-1926
External trade data, both quantities and values, are available forevery year from 1870 (and before) onward. Unit values of exports andimports may be calculated from these data.
In addition to the price or unit value data available from these justenumerated sources, there are two other general sources that giveconsiderable agricultural price data. They are H. Michell in Taylor andMichell, Statistical Contributions to Canadian Economic History, volume 2, and Department of Labour, Wholesale Prices, Canada 18901909, along with its successor annual publication, Wholesale Prices,which begins with 1911.
There were, in addition to these general sources of data, many othersources that apply to more limited periods or to specific agriculturalproducts.
Appendix 4Notes on the Estimates of Income Produced inManufacturing, Canada, 1870-1926
The estimates for the manufacturing industry, like those of most othersectors, were prepared by the income-produced method.
The source data for manufactures estimates were of three main sorts.First, the most basic data were obtained from censuses of manufactures, which themselves were of three types: a census of manufactureswas taken with each decennial census, from 1871 to 1911, the dataapplying to the calendar year preceding the census date-these censuses of manufactures were taken by enumerators; two postal censuseswere taken for the years 1905 and 1915, both of which suffered fromincomplete coverage; an annual census ofmanufactures was taken from1917 onward. Second, a large quantity of data of many kinds and frommany miscellaneous sources, nearly all of them official documents,were used to obtain estimates for the intercensal years. Third, quiteextensive use was made of data on occupations and wages collectedin the censuses of population. The 1911 census was the most valuablefor this purpose. In that year the equivalent of an industrial classification of the labor force, very similar to the standard industrial classification of 1948, was used to classify the labor force. The part of thelabor force classified to manufacturing matched very closely that ofthe numbers recorded in the census of manufactures. In addition, in1911 the wages and salaries of every employed person collected in thecensus were useful for comparative purposes as well as for filling gaps
78 M. C. Urquhart
for those industries employing fewer than five persons that were omitted from the 1911 census. Similar data from the 1901 and the 1921censuses were likewise useful, though in a more limited fashion sincethere was not as satisfactory an industrial classification of the laborforce for these years.
The· information obtained in the censuses before 1917 was limited.The basic data obtained were gross value of products, costs of materials, payments of wages and salaries, cost of fuels beginning in 1900,and in one year, 1900, outlays on other miscellaneous expenses. In allof these early censuses there was a quite fine breakdown of industries,the number of individual industries varying from slightly less than 200upward to 250, but there was no commodity detail.
For the years from 1917 onward the censuses contained considerablymore information than hitherto. The largest change was the additionof the collection of commodity data. In addition, for the years 191723 data on "miscellaneous" expenses were obtained.
Three features of the set of data should be noted immediately. First,from 1870 to 1915 the census included what has variously been calledcustom and repair work or the hand trades, and, indeed, data werecollected for these trades, although tabulated separately, in the annualcensus from 1917 to 1921. It was not feasible to separate the data forcustom and repair from manufacturing proper before 1917, and consequently the estimates for 1870-1916 include these trades. In orderto maintain comparability from 1917 onward, custom and repair, thoughtabulated separately, were also included with the various manufacturingindustries to which they were related. This procedure is in contrast tothe official estimates, which begin in 1926 and do not include customand repair with manufactures.
Second, the censuses of 1900, 1905, 1910, and 1915 all fell somewhatshort of complete coverage of the manufacturing industry. The censusof 1900 did not cover businesses employing fewer than five persons,except in the cases of cheese factories and of brick and tile yards,which were covered completely. The census of 1910, in general, alsodid not include businesses employing fewer than five persons, but theexceptions for which full coverage was taken were extended to coversuch industries as sawmills and flour and grist mills, with the resultthat the undercoverage was much less than in 1900. The censuses of1905 and 1915, the first postal censuses, also had their shortcomings:the number of establishments covered in the census of 1905 appearssmall in comparison with the numbers in 1900 and 1910, and in anyevent, information on cost of materials was not obtained; the censusof 1915 omitted collection of data from businesses producing productsvalued at less than $2,500, irrespective of the number of persons employed, except for flour and grist mills, butter and cheese factories,
79 New Estimates of Gross National Product, Canada, 1870-1926
fish-preserving factories, sawmills, brick and tile yards, lime kilns, andelectric light plants, which were covered whatever their size. The greatest shortfall in coverage in 1915 would be bakeries, tailoring, and blacksmithing; sawmills were also considerably underreported. The shortfalls in the coverage of 1900 and 1910 required the construction ofspecial estimates to fill in the gaps of the census data for those years.
Third, for the first volume of Historical Statistics of Canada, themanufacturing data for all censuses from 1870 to 1959 were classified,on as nearly a uniform basis as possible, into 17 industry groups inaccordance with the Canadian standard industrial classification of 1948;this work was done in the DBS. This classification was most usefulsince the entire industrial distribution of GDP by industry in the officialaccounts for the years 1926-46 is based on the Standard IndustrialClassification of 1948.
The Basic Estimates
The most basic estimates are those for the decennial census yearsof 1870, 1880, 1890, 1900, 1910, for 1915, and for each year from1917 to 1926, all years in which a census of manufactures was taken.As has been noted, some supplemental estimation for the omittedestablishments employing fewer than five persons in 1900, 1910, 1915,and 1917 was necesssary, but a description of the method of calculating income generated in manufacturing in the decennial censusbenchmark years and in the later annual census of manufactures yearsis given.
The method is very simple. In the census of manufactures all businessestablishments reported the gross value of their products, the costs ofmaterials, and wage and salary and piecework costs. In addition, inthe 1900 census an estimate (provided by the establishments themselves) of the numbers engaged and of the value of labor services ofowners and firm members was obtained. Also, in 1900 and in 1917-23the costs of miscellaneous expenses, which included such items as rentof works and offices, insurance, travel, taxes, repairs, advertising, interest, royalties, and ostensibly all other expenses, were collected. Ifthese expenses were complete, GDP at factor cost in manufacturingshould be derivable by a process of subtracting the cost of materials,of fuel and power, and of such part of the miscellaneous expenses ascontains items that are true costs and not themselves a part of factorreturns from gross value of production. In fact, the method followedwas actually to subtract relevant costs from gross value of production,the estimation process being done at the level of each of the 17 industrygroups of the 1948 standard industrial classification.
The question then becomes one of trying to obtain estimates of grossvalue of product, of cost of materials, of cost of fuel and power, and
80 M. C. Urquhart
of miscellaneous expenses that are as correct as possible. These itemsare dealt with in order.
Gross Value of Product
As for estimates of gross value of product (GVP), the amounts reported in the census returns themselves were accepted without amendment for the part of manufacturing that was covered in the censuses. Itwas accepted that the coverage was complete in 1870, 1880, 1890, andvirtually complete in 1917-26; in 1900 and 1910, it was necessary to addestimates of output of those businesses employing fewer than five persons that were omitted in these censuses; in 1915 it was necessary toadd estimates for those businesses producing less than $2,500 output;and for 1917-26 it was necessary to estimate custom and repair work.A rather extensive examination of some individual establishment returns for 1870, the only year for which individual establishment data areavailable, suggests that sometimes minor products and their values werenot reported in that year. Hence the reported total ofproduct values forthat year is probably understated by an unknown amount. But there isno basis for making any revision of the reported figures. Further, it seemsprobable that in 1870 the cost of raw materials was also understatedthe inspection noted above suggested that minor raw materials mighthave been omitted. If both GVP and costs of raw materials were understated, the biases would be offsetting for calculating GDP.
A scrutiny of the questionnaires used in the censuses shows the following. For 1870, 1890, and 1900, the questionnaires under the heading"Products" (1870 and 1890) or "Goods Manufactured" (1900) simplyasked for "kind" or "classes" of products, "quantities," and "values"(1870 and 1890) or "value or price at work" (1900), with a single linebeing left for each of these stubs; in 1880 the request was limited to "aggregate value in $ of products"; in 1910 the headings were like those for1890 but there were several blank lines to allow the listing of products.A request "Received for custom work and repairing" was added in 1900.It was not until 1915 that the instruction on the questionnaire specificallyrequested the inclusion of by-products and the value of containers soldwith goods, and that a request for the item "all other products (valueonly)" was specifically printed on the questionnaire. The censuses from1917 onward specified the commodity detail desired on forms that werespecific to each industry and probably elicited full reporting.
Three other points are relevant. First, there is little or no informationon instructions given to the enumerators about the taking of the censuses of manufactures. Second, there is no indication of whether ornot construction work (of a capital account nature) done by establishments for their own use was included in value of product-it mostlikely was not. (Some information on establishments' construction with
81 New Estimates of Gross National Product, Canada, 1870-1926
their own workforce was sought in 1919, but there is no evidence thatthe resulting information was used.) Third, it is probably safe to saythat goods were valued at the works from 1900 onward although thespecific instruction to so value them was not contained in the 1910schedule; the instructions for 1870, 1880, and 1890 do not specify theplace of valuation.
Cost of Materials
The figures reported in the censuses for cost of materials were alsoaccepted as reported (except for such adjustment as was necessaryowing to the undercoverage of small businesses in 1900, 1910, and 1915and custom work, 1919-26).
There are some uncertainties about the reliability of the recordedraw material costs on which some light is cast by the questions in thequestionnaires. The exact wording of the relevant parts of the censusquestionnaire for censuses from 1870 to 1915 follows.
WORDING ON CENSUS OF MANUFACTURES
re information on raw materials and entire exact wording on form1870 Raw material
12. Kind13. Quantities14. Aggregate value, in dollars
1880 17. Aggregate value in $ of raw material1890 Materials used
18. Kind19. Quantities20. Cost at the factory using them including freight charges
1900 Materials usedIn crude state
42. Kinds43. Cost delivered, $
In partly manufactured state44. Kinds45. Cost delivered, $
1905 No information on raw materials1910 39. Kind or class of raw or partly finished materials used at
the works in year.
__ (several lines left)
40. Cost value of raw or partly finished materials used atworks in year.
(several lines left)
82 M. C. Urquhart
1915 4. Materials used:Give cost values including freight, duty, etc., of all materials actually used in the manufacture ofgoods, whetherraw or partly manufactured or whether entering into theproduct, used as containers (boxes, barrels, cans, etc.),or consumed in the process or manufacturing. Do notconsider stock used as identical with stock purchased.Materials produced by the establishment itself and usedby it for further manufacture are not to be included.
Total cost value of all materials used-$ .
Itemize principal materials used in the following schedule:Articles Quantities Cost Values
1.2.3.4.5.6.7.8. Fuel for power purposes9. All other (value only)
1917 (onward)
From 1917 onward itemized forms for material costs specialized toindustries were used. I have several of these. It would appear that insome industries in 1917 the listing of material inputs was not complete,since there was no heading for "all other materials" and containerswere not included; in other industries the specifications were fairlycomplete even in 1917. In all industries the specifications were quitecomplete by 1920-22. From then on containers, etc., and other packagematerials were always included with costs where relevant. The consequence is that for some industries the 1917-19 figures for materialsused are too low.
Cost of Fuel and Power
The data reported for cost of fuel and light and rent of power andheat are less well covered than those for GVP and for cost of material.Such data were not collected at all before 1900, although some part(probably small) of fuel costs may have been included in the cost ofmaterials. In 1900, the money cost of "rent of power and heat" andexpenses of "fuel and light" were collected explicitly; in 1910, theweight of coal used and the value of all fuels consumed were collectedbut not the cost of purchased power which, although requested on theform, was not tabulated; in 1915, although cost of fuel used for powerpurposes was collected, it was not tabulated separately and is most
83 New Estimates of Gross National Product, Canada, 1870-1926
likely included in cost of materials for that year-fuel-for-power costswere collected in the same section as material costs; from 1917 onward,costs of fuel of all kinds and of rent of power were collected. It becamenecessary, then, to make estimates for the census years not covered.Only the simplest methods could be used. Purchased power for 1910was estimated by first interpolating linearly the percentage of costs ofpurchased power to GYP for each of the 17 industry groups, between1900 and 1917, and then applying the relevant percentage figure foreach group in 1910 to the GVP in 1910. The purchased power costswere then added to fuel costs, which were collected in the census of1910, to obtain fuel and power costs. Fuel and power costs for eachindustry in 1915 were estimated by linear interpolation between 1910and 1917 of the ratio of such costs to GYP and then applying the 1915ratios to GYP in 1915. For 1870, 1880, and 1890, the ratios of fuel andpower costs to GYP for each of the 17 industries were taken as beingthe same as in 1900, and the estimates were made on that basis. Thechanges between 1900 and 1917 were sufficiently moderate that onehas a reasonably comfortable feeling in following this procedure.
Miscellaneous Expenses
The most difficult problem to deal with was the estimation of "miscellaneous expenses." The purpose of obtaining these miscellaneousexpenses presumably was to collect all expenses of manufacture otherthan material and fuel costs and salary and wage cost, excepting onlycapital consumption allowances.
The history of the collection of these costs is of some interest. "Miscellaneous expenses" under the headings given here were first requested on the questionnaire in the census of manufactures for 1900.
Headings of Miscellaneous Expenditure, 1900Rent of works (if any), $ Rent of offices, interest, in-Rent of power and heat (if any), $ surance, internal revenueFuel and light, $ tax, etc. $Municipal taxes, $ Amount paid for contractProvincial taxes, $ work (if any), $
The largest item reported is the second from the last in the list("rent of offices," etc.): it was obviously a catchall item-it frequently amounted to one-half or more of the total-but just whatwas included is not clear. For example, it is not clear whether or notit includes costs of repairs and maintenance, office supplies, postage,travel, local transportation costs, and other such items.
It was not until 1917 that the same kind of information was collected again. From 1917 to 1921 "miscellaneous expenses" were col-
84 M. C. Urquhart
lected under headings like those for 1919 enumerated here, whichare typical of other years.
Miscellaneous Expenses during the Year 1919Rent of offices, works, and machineryCost of purchased powerInsurance (premium for year only)
ExciseTaxes § Excess Profits Tax
Provincial and MunicipalRoyalties, use of patents, etc.Advertising expensesTravelling expensesRepairs to buildings and MachineryAll other sundry expenses (do not include fuel costs, materialsused, salaries and wages).
Total:
In 1922 and 1923 only the totals for all miscellaneous expenses(without any details) were collected; thereafter, this information wasno longer obtained in the census of manufactures. In the enumerateddata for 1917-21 the item "all other sundry expenses" was the largest one, often amounting to one-half or more of the total.
There was one other important body of data on miscellaneous expenses. At the time of preparation of the national income estimatesfor.the Royal Commission on Dominion-Provincial Relations, in thelate 1930s, a questionnaire requesting a great deal of information onvalue of products, cost of materials, wage and salary costs, depreciation, and a very wide range of miscellaneous expenses for theyears 1929, 1933, and 1936 was sent to a very large number of manufacturing establishments, and a large response was obtained. Thelisting of expense items was quite exhaustive. By means of its use itwas possible to ascertain that the "miscellaneous expenses" obtained by 1921 in the census of manufactures were quite complete,except for depreciation.
There are some items in the "miscellaneous expenses," as recorded in the census of manufactures data, that should not betreated as an expense for the purposes of estimating GDP. Thus, excess profits tax, royalties, use of patents, etc., and interest paidshould not be deducted as expenses. A basis for calculating the interest payments (included in sundry expenses) was obtained fromthe royal Commission data alluded to above. These items were removed from the miscellaneous expense series used as a cost item inthe calculation of GDP.
Basic data on miscellaneous expenses, then, were available by industrial groups for the years 1900 and 1917- 23. Estimates for the
85 New Estimates of Gross National Product, Canada, 1870-1926
years 1924-26 were made by interpolation of the ratios of miscellaneous expenses to GYP between 1923 and 1929, the data for thelater year being the Royal Commission material. The data for 1900yielded estimates that appeared to be much too low in comparisonboth with years 1917-26 in Canada and especially with estimates forthe United States for 1889, 1899, 1904, and 1910. A considerableamount of supplementary material along with the material of thecensus was used to obtain individual industry benchmarks in 1900.Estimates for each year from 1901 to 1916 were made, for each of 17industry groups, by linear interpolation of the ratio of miscellaneousexpenses to GYP between 1900 and 1917. The expense ratios for theyears 1870-99 were assumed to be the same as in 1900.
I have some reservations about these estimates of miscellaneousexpenses for the earlier years. I believe that the supplementation ofthe data for 1900 with other information was justified: the figuresthat were used reflected my best judgment of reality. Yet it remainstrue that an element of estimation not based on complete information was involved. It is possible also that even if the 1900 figures arereasonably accurate, the ratios might have been somewhat lower inthe 1870s and 1880s; but the absence of data precludes taking a different course than that followed.
Such then were the procedures used to obtain estimates of GDP inmanufacturing.
Appendix 5The Cost of Living Index
The cost of living index that was used to deflate the component of GNP(expenditure) that excluded gross fixed capital formation was preparedfrom three temporally distinct segments that were linked together atoverlapping years.
The first segment, covering the years 1913-26, was a full-blownestimate prepared by the Dominion Bureau of Statistics. It appears asseries KI in Historical Statistics of Canada, 2d edition.
The second segment, covering the years 1900-1913, was based onan index prepared by Gordon W. Bertram and Michael B. Percy whichappeared in "Real Wage Trends in Canada, 1900-26: Some ProvisionalEstimates," Canadian Journal ofEconomics (May 1979). Bertram andPercy revised the federal Department of Labour's "Index Numbers ofa Family Budget," which covered the years 1900, 1905, and 1909-26(Urquhart and Buckley, p. 303) in two ways. First, they used an im-
86 M. C. Urquhart
proved weighting system for aggregating the basic data, which werefully available. Second, they added a clothing component, preparedfrom mail-order catalogs of the T. Eaton Company for the years 190013, to the existing Department of Labour components of food, fuel andlight, and rent.
The Bertram-Percy index was used as given for the years which theycovered from 1900 to 1913. It remained to fill in figures for the years1901-4 and 1906-8, which they, following the Department of Labour,had not covered. The latter years were interpolated between 1900 and1905 and 1905 and 1909, respectively, by use of the wholesale priceindex, excluding gold (Urquhart and Buckley, sera J 34).
The third segment, covering the years 1870-1900, was based on acost of living index for Kingston, Ontario, prepared by R. F. J. Barnettand appearing in his M. A. thesis at Queen's University, "A Study ofPrice Movements and the Cost of Living in Kingston, Ontario, for theYears 1865 to 1900" (1963). Barnett prepared his index by using newspaper material on prices supplemented by information obtained fromgood records of a food store that was in business throughout his period,similar types of records for a fuel company, and records of expendituresby the House of Industry (the poor house), which records were in thearchives of the City of Kingston.
Barnett's weighting system used all available Canadian and UnitedStates data relevant to the period and, in addition, information onconsumer expenditure patterns collected by the Ontario Bureau ofIndustry for the 1880s. It was quite good for what it covered. However,Barnett was able to cover only food and fuel and light, which made upa large part of the consumer budget of the time but omitted clothingand rent (as well as items like household furnishing, etc.).
Although it was not possible, at this time, to do anything about theomission of clothing, it was possible to make an improvisation for rent.In her work on estimating expenditure on residential housing, MarionSteele had prepared a construction cost index for housing. This indexwas used as a surrogate for an index of rents. Such a procedure is, ofcourse, a makeshift measure. However, a check with United Statesrent data (the Rees-Long-Hoover data noted below) and United Statesconstruction cost indexes (United States Historical Statistics, ColonialTimes to 1970, Series N138 and N139) showed a not unreasonablecorrespondence in the period from 1870 to 1900. And so a rental indexcomponent was added to Barnett's index, the weight given to rent beingbased on data for Kingston in the 1880s from the Ontario Bureau ofIndustry surveys of the time. (The actual weight was 0.2.)
I believe that the resulting index for Kingston, although admittedlybased on narrow regional data, reflects living cost movements considerably better than does a wholesale price index. It lacks a clothing
87 New Estimates of Gross National Product, Canada, 1870-1926
component, which perhaps biases the index downward in the 1870s.However, at the same time the use of a construction cost index as asurrogate for rental rates may constitute a slight upward bias in the1870s.
For readers to make their own judgments, I give table 2.A.l (see p.88) for comparing movements in our cost of living with a comparableone for the United States and with the DBS wholesale price index(Urquhart and Buckley, sere J34). The United States index is derivedby linking together Rees's index for 1890-1900 (Albert Rees, RealWages in Manufacturing 1890-1914, p. 74) with Clarence Long's indexfor 1880-90 and Ethyl Hoover's index for 1860-80 (Clarence Long,Wages and Earnings in the United States 1860-1890, pp. 156, 157). TheUnited States index for 1870-78 is adjusted downward by the amountof the premium on gold in United States currency for that time. Concerning the DBS wholesale price index, I just note that an alternativeindex by H. Michell (Urquhart and Buckley, sere Jl) shows considerablylower relative prices in the 1870s than does the DBS index.
Notes
1. In response to suggestions made at the Williamsburg Conference, I have made twosmall additions to the paper as it was originally presented. First, estimates of indirecttaxes less subsidies have been prepared, making possible the presentation of GNP atmarket prices. Second, an improved estimate of real GNP replaces the notional estimatesof the original paper, and real growth rates are presented.
2. The actual procedure used was to calculate the ratio of gross product at factor costin "trade" and in "community ... services" to gross product in all other industries incensus years and in 1926, to interpolate this ratio linearly between census years and to1926, and then, in effect, to get annual intercensal data for these two industries bymultiplying, year by year, the interpolated ratios by the sum of gross product at factorcost in all other industries. The actual figures for intercensal years for these two industriesare not reproduced in the table just because for these years they have not been estimatedfrom basic data in the style of all other industries.
3. The best single reference to what I have called the traditionalist view is in the RoyalCommission on Dominion-Provincial Relations Final Report (1940).
4. I give two references for the revisionists: Bertram 1963, and Chambers and Gordon1966.
5. See appendix 5 for a description of the construction of the consumer price index.6. Even ifa reasonable correction is made to the numbers ofgainfully occupied persons
reported in 1901 census, the actual output per gainfully occupied person increased at asomewhat more rapid compound annual rate for the decade 1891-1901 (3 years centeredin each case) than for the decade 1901-11 (3 years centered in each case). All of thisincrease in productivity in the 1891-1901 decade occurred after 1896. Part of the growthof output per gainfully occupied person from 1896 onward to 1901 must have reflectedcyclical upswing, but some considerable part must have reflected long-term growth.Unless the growth of these years 1896-1901 is an artifact of the statistics, and I do notbelieve that it is, an investigation of the rapid productivity increase in these years shouldbe well worth while.
Tab
lel.
A.l
Co
mp
aris
on
of
Bar
net
tan
dR
ees-
Lo
ng
-Ho
ov
erC
ost
of
Liv
ing
Ind
exes
and
Can
adia
nW
hole
sale
Pri
ceIn
dex
,18
71-1
900
(Bas
eo
fIn
dex
1900
=10
0)
Ree
s-L
ong-
DB
SR
ees-
Lo
ng
-D
BS
Bar
net
tH
oo
ver
Who
lesa
leB
arn
ett
Ho
ov
erW
ho
lesa
leY
ear
(Can
adia
n)(U
.S.)
Pri
ceIn
dex
Yea
r(C
anad
ian)
(U.S
.)P
rice
Ind
ex
1870
107
135
128
1886
103
111
100
1871
108
134
130
1887
109
112
102
1872
116
133
145
1888
105
112
106
1873
115
129
146
1889
107
109
106
1874
112
128
138
1890
105
108
108
1875
108
118
133
1891
105
108
108
1876
109
117
124
1892
105
108
100
1877
106
125
118
1893
104
107
101
1878
104
121
109
1894
9510
295
1879
103
120
105
1895
9110
093
1880
106
121
115
1896
9510
090
1881
III
121
116
1897
9699
9118
8211
812
111
618
9810
099
9518
8311
911
911
318
9997
9997
1884
104
117
107
1900
100
100
100
1885
104
114
101
89 New Estimates of Gross National Product, Canada, 1870-1926
Comment J. H. Dales
For the better part of a decade Professor Urquhart and a small bandof colleagues have doggedly pushed forward with the preparation of acompletely new set of historical National Accounts for Canada. Thispaper, along with those of McInnis and Green, gives us our first substantial view of a project that has increased the volume of numbersavailable to students of the Canadian economy by many orders ofmagnitude. The project was initiated by Urquhart, and has been animated and directed by him; and in the end he also became directlyresponsible for a large portion of the new figures.
The quantitative output of the project is, quite simply, stupefying.The core of the work is the set of detailed, annual estimates of GNPat factor cost for the whole period from 1870 (the first Canadian census)to 1926 (when official National Accounts figures became available). Inaddition, A. Sinclair of Dalhousie University has completed "annualestimates of the main components of the balance of international payments, a large part of which has been newly estimated"; and there arenew data on investment-an annual series on residential capital formation prepared by Marion Steel of the University of Guelph, and aseries on investment in producer's durables from 1870 to 1985 preparedby Urquhart. Despite all this new work there is still one obvious softspot in our national accounts history. As Urquhart notes, the GNPfigures have not yet been deflated,* implicit prices appear in the agricultural, but not in the manufacturing or total GNP estimates. It wouldindeed be a pity to deflate these high-quality estimates by the coarseprice indexes that are currently available, and the new estimates havegiven a new urgency to historical work on prices in Canada.
The new estimates constitute the second attempt to provide a comprehensive set of historical National Accounts for Canada; the firstsuch estimates were prepared by O. J. Firestone some 30 years agoand published in his 1958 volume, Canada's Economic Development,1867-1953. Since the two sets of numbers are bound to be compared,I hope Urquhart will prepare a short account of the major differencesbetween them and possible explanations for the differences. (McInnisprovides a good commentary on the agricultural figures, perhaps themain source of these major differences.) The point would only be tosatisfy our gross curiosity; the estimates differ in concept, construction,and especially in the amount of raw data that underlies them, and itwould be pointless to attempt to reconcile them in any detailed way.
J. H. Dales is professor emeritus in the Department of Economics at the Universityof Toronto.
*These remarks by Dales relate to the draft of Urquhart's paper delivered at Williamsburg. Urquhart subsequently computed deflators. (Ens.)
90 M. C. Urquhart
Here I comment on the estimates from the point of view of their probable effect on research in Canadian economic history. In retrospect Ifind it rather surprising that Firestone's estimates have stimulated solittle research. Two reasons may be suggested. First, the Firestonefigures were simply too skeletal, consisting essentially of estimates atcensus dates, with only a few annual series for large aggregates thatrepresented interpolations made on a more or less mechanical basisbetween census years. Second, the worksheets of the people involvedin the Firestone project were apparently never brought together in asafe repository, and over time they became lost. The result was thatthe scholarly community was faced with numbers that could be usedto calculate decadal growth rates for a few major aggregates, but notfor much else. More important, there was not much chance of fleshingout the skeleton by building on the raw data and attempting to improvethe estimates, which is why improved estimates necessitated a wholenew start.
If the Firestone estimates had a low research multiplier, I feel surethat the Urquhart estimates will greatly enrich the study of Canadianeconomic history. The main reason is their richness in detail. The GNPtotals, for example, are built up from estimates for twenty sectors:agriculture, manufacturing, and six lesser commodity sectors; construction; transportation; residential rents; three government sectors;public education; three minor service sectors, and two large onestrade, and personal and business services. Of these only the last two,constituting about 15% of the total, have had to be interpolated on amechanical basis between census years; enough ancillary data havebeen found to develop annual series that can be used as interpolatorsfor the other 18 sectors. Moreover, the sectors are themselves constructed from subsectors: some 28 separate commodity series for agriculture, and 17 separate series for manufacturing. There is more thanenough here to enrich scores of doctoral dissertations, and it is hardto think of any research in the field that will not benefit from this newmaterial. Constant use, in turn, will act as a continuous testing of thedata, and, when anomalies appear, will lead to attempts to improveindividual series. Our new numbers can confidently be expected toincrease our research metabolism. (To make sure I was saying what Iwanted to say, I checked "metabolism" in The Concise Oxford Dictionary, and was delighted to find that it is the process by which "nutritive material is built up into living matter.' ')
I now tum away from the numbers themselves, as Urquhart hasdone, in order to speculate about how they may affect current interpretations of Canadian development between Confederation and 1930.I begin with a telling quotation from an article on "The Political Economy of National Statistics" by William Alonso and Paul Starr in theSocial Science Research Council's Items of September 1982:
91 New Estimates of Gross National Product, Canada, 1870-1926
Statistics are lenses through which we form images of our society.Frederick Jackson Turner announced his famous views on the significance of the closing of the frontier on the basis of data from the1890 Census. Our [the American] self-image today is confirmed orchallenged by numbers which tell of drastic changes in the family,the reversal of rural-to-urban migration ... and many others. Whetherthe meanings read into the data are reasonable or fanciful, thesenumbers provide a common reference in popular and professionaldiscussion. Even when they misrepresent reality, they often standardize our perception of it.
The process is thus recursive. Winston Churchill observed that firstwe shape our buildings and then they shape us. The same may besaid of our statistics. (P. 30)
Of course there are lenses other than statistics. The time-honoredview of Canadian economic history is that the economy suffered fromsomething like secular stagnation from 1870 to 1900. This view wasbased primarily, it seems, on the fact that no new major staple exportindustry appeared in Canada between Confederation in 1867 and thewheat boom that got under way in western Canada at the turn of thecentury; but it may also have reflected the two most readily accessiblestatistics for the period, those that demonstrated falling prices and netemigration throughout at least the first 25 years of these 3 decades.
In the past quarter century a somewhat different interpretation hasbecome quite common. It may very well have developed from Firestone's numbers, and especially from the emphasis he put on the growthof manufacturing in Canada in the nineteenth century. The new interpretation rather diffidently suggests that the 30 years after Confederationmay not have been such a washout after all, and rather morestridently blames the "staple theory" for putting far too much emphasison the western wheat boom and giving far too little attention to centralCanadian manufacturing and agriculture, both before and after 1900.
Neither view is very carefully specified, and their proponents quiteoften talk past one another rather than disagreeing with one another.No one would dispute the view that the Canadian economy, or nationalGNP, grew much more slowly from 1870 to 1900 than it did in eitherof the 3 decades before and after this period, and very much moreslowly than the United States economy during the same 30-year period.On the question of growth in the well-being of Canadians, or nationalGNP per person, there is less discussion. In traditional accounts, thegreat contrast drawn between the years before and after 1900 no doubtleft the impression that per capita trends moved with the total trends,but Canadian historians have displayed a remarkable lack of interestin discussing trends in the Canadian standard of living. On the generalquestion of emphasis, I offer two comments that weigh in on the re-
92 M. C. Urquhart
visionist side of the debate, which in truth might more accurately bedescribed as a duel in the dark.
First, net emigration from Canada over the period can be viewedpositively, that is to say as a necessary means of supporting the standardof living during these years, rather than negatively as clear evidenceof a national catastrophe. If the various parts of Canada are viewed asregions in North America, the emigrations may appear less shocking,and indeed as a process that has on occasion occurred in different partsof the United States. It remains true that after 1870 all sections ofCanada had bad luck at the same time, and that the growth of Canadianmanufacturing, though not insignificant, could not begin to compensatefor the decline in the Maritimes' shipping and shipbuilding industriesand for the rapid growth of population in Quebec where agriculturalland was already fully occupied. Even in Ontario, where the economywas much more buoyant, the good land had all been taken up andfarmers' sons made the sensible decision to head for the AmericanWest, despite the lamentations ofjournalists , notably ofGeorge Brown,one of the fathers of Confederation.
Second, nearly all students would agree that the positive effect ofwestern development on the Canadian standard of living after 1900 wasflawed, to an unknown extent, by government support for a ridiculousamount of overinvestment in railways. The efficiency of the economymust also have been reduced, but again to a completely unknown extent, by government policies promoting uneconomically rapid settlement of the West (the Canadian homestead program was on a muchlarger scale, proportionally, than the American program), and perhapsalso by the effect of western development in expanding tariff-protectedmanufacturing in central Canada.
Urquhart makes no claim that his new estimates settle this debate.He thinks the new figures may give marginal support to the traditionalists, mainly on the ground that agriculture is shown to have grownmuch more slowly before 1900, and considerably more rapidly after1900, than Firestone's figures implied. The same pattern is repeated inthe total GNP figures in current dollar terms. Indeed, the new estimatesof GNP are some 150/0-20% below Firestone's estimates for the yearsbefore 1900, and only a favorable deflator can save our forebears fromthe prospect of an even lower standard of living than we had imaginedthey had attained. The Urquhart numbers for manufacturing are alsolower than Firestone's, but the revisionists will be able to take a littlebit of comfort from the fact that the ratio of manufacturing to agricultural output is marginally higher in the new series, and that manufacturing's growth rate is slightly higher both before and after 1900 thanin Firestone's figures. But deflators can be dynamite, and we are allof us, both traditionalists and revisionists, hoping for the best, but
93 New Estimates of Gross National Product, Canada, 1870-1926
fearing the worst, about what constant dollar figures will show. In themeantime we do have a more accurate picture of the western boomthan we have had in the past. Urquhart shows that it was at firstprimarily an investment boom, and that wheat exports did not explodeuntil after 1910.
Allow me, in closing, to make a strong plea for someone to provideus users of statistics with sectoral workforce statistics of a quality tomatch our new output statistics, so that reliable sectoral productivityestimates may be calculated. My reason is that I have become satedwith growth rates and am anxious to trade off a good deal of additionalknowledge about economic performance for a better understanding ofeconomic process. I have always delighted in the way that Gallman'ssectoral productivity figures meshed so neatly with Salter's theoreticalanalysis of how differential sectoral productivities worked their waythrough the price system to produce easily observable features of thegrowth process. One of the great virtues of Urquhart's new estimatesis that they bring us within a relatively short distance of several additional breakthroughs in our understanding of Canada's economic past.
Reference
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---.1933. Problems ofstaple production in Canada. Toronto: Ryerson Press.
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