deserve close attention, and which are, we believe, entitled to full confidence. The United States at the end of the year 1865 will either have effected the subjugation of the South by the destruction of all her armies in the field, or she will see an increase to her debt of at least forty millions sterling, or she will have arranged a compromise with the South of which one feature will be the assumption of the Southern debt. In the first case, the North must prepare for a long and costly military occupation. In no case as yet have the trade and commerce of any Southern port or city subjugated and held by Union troops, paid the Federal Government for the cost of holding it. In the second case, increase of taxation must fall with such a crushing weight on the poorer classes, especially in the agricultural States, as to force many of the people to take refuge in Canada, unless deterred by unforeseen obstacles. In the third case, the immediate result will be to throw on the Northern States for some considerable period, a greater amount of debt, and of consequent derangement, than they would have been subjected to by either of the preceding conditions. There can be no just comparison between the United States and the projected Confederation, except in the ratio of taxation _per capita_. And, if we take income, expenditure, and possible debt at the end of 1865, and contrast the financial position of the British Confederate with that of the American Federalist, we will find that the advantage is decidedly on the side of the latter. According to the Hon. A. T. Galt, the following is a fair statement of the revenue and expenditure of the provinces, of the debts and liabilities, of the trade exports and imports, and of all the assets and demands by which the future Confederation would be influenced, excluding of course the cost of such undertakings as great intercolonial roads or enlargements of canals. Mr. Galt may not be a favourite with some theorists of the Colonial Office; he certainly is not popular at Washington, and he is not more honoured at home than most prophets, but he is an able, clear-headed, trustworthy man:-- THE FINANCIAL POSITION OF THE PROVINCES. Debt, 1863. Income, 1863. Outlay, 1863. Nova Scotia $4,858,547 $1,185,629 $1,072,274 New Brunswick 5,702,991 899,991 884,613 Newfoundland (1862) 946,000 480,000 479,420 Prince Edward Island 240,673 197,384 171,718 ----------- ----------- ----------- Maritime Provinces $11,748,211 $2,763,004 $2,608,025 Canada 67,263,994 9,760,316 10,742,807 ----------- ----------- ----------- Totals $79,012,205 $12,523,320 $13,350,832 INCREASED REVENUES IN 1864.