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Presented to 
LIBRARY 

OF THE 
UNIVERSITY OF TORONTO 

by 

J.G. WORTS, ESQ. 



Archives Edition 



CANADA AND ITS PROVINCES 

IN TWENTY-TWO VOLUMES AND INDEX 



(Vols. i and 2) 

SECTION I 

NEW FRANCE, 1534-1760 
(Vols. 3 and 4) 

SECTION II 

BRITISH DOMINION, 1760-1840 
(VoL 5) 

SECTION III 

UNITED CANADA, 1840-1867 
(Vols. 6, 7, and 8) 

SECTION IV 

THE DOMINION: 
POLITICAL EVOLUTION 

(Vols. 9 and 10) 

SECTION v 

THE DOMINION: 

INDUSTRIAL EXPANSION 

(Vols. ii and 12) 

SECTION VI 

THE DOMINION: 

MISSIONS; ARTS AND 

LETTERS 



(Vols. 13 and 14) 

SECTION VII 

THE ATLANTIC PROVINCES 
(Vols. 15 and 16) 

SECTION VIII 

THE PROVINCE OF QUEBEC 

(Vols. 17 and 18) 
SECTION IX 

THE PROVINCE OF ONTARIO 

(Vols. 19 and 20) 

SECTION x 
THE PRAIRIE PROVINCES 

(Vols. 21 and 22) 

SECTION XI 

THE PACIFIC PROVINCE 
(VoL 23) 

SECTION XII 

DOCUMENTARY NOTES 
GENERAL INDEX 



GENERAL EDITORS 

ADAM SHORTT 
ARTHUR G. DOUGHTY 



ASSOCIATE EDITORS 

THOMAS CHAPAIS ALFRED D. DECELLES 

F. P. WALTON GEORGE M. WRONG 

WILLIAM L, GRANT ANDREW MACPHAIL 

JAMES BONAR A. H. U. COLQUHOUN 

D. M. DUNCAN ROBERT KILPATRICK 
THOMAS GUTHRIE MARQUIS 



VOL. 5 
SECTION III 

UNITED CANADA 



CANADA 

AND ITS PROVINCES 

A HISTORY OF THE CANADIAN 

PEOPLE AND THEIR INSTITUTIONS 

BY ONE HUNDRED ASSOCIATES 

ADAM SHORTT 
ARTHUR G. DOUGHTY 



GENERAL EDITORS 
VOLUME V 



EX'UNO 
D1SCE .OAVNESV 




PRINTED BY T. & A. CONSTABLE 

AT THE EDINBURGH UNIVERSITY PRESS 

FOR THE PUBLISHERS' ASSOCIATION 

OF CANADA LIMITED 

TORONTO 

GLASGOW, BROOK & COMPANY 
1914 



F 
5ou 



Copyright in all countries subscribing to 
tht Serne Convention 



CONTENTS 



THE UNION: GENERAL OUTLINES, 1840-1867. By W. L. 

GRANT ... -3 

PARTIES AND POLITICS, 1840-1867. By J. L. MORISON 

i. LORD SYDENHAM'S ADMINISTRATION . .13 

Social and Political Conditions Character and Training 
of Poulett Thomson The Political Stage Sydenham's 
Services to Canada 

II. BAGOT, MKTCALFE, AND THE POLITICAL CRISIS . 28 

A Troubled Period Sir Charles Bagel's Administration An 
Experienced Colonial Ruler Political Storms A Period of 
Deadlock Attitude of the Colonial Office 

IIL LORD ELGIN'S ADMINISTRATION . . .48 

An Eminent Peelite Problems to be faced A Turning-point 
in Canadian History The Rebellion Losses Bill A Con- 
structive Statesman The Clergy Reserves "Political Com- 
binations and Permutations The Fall of the Reform Party 
Reciprocity with the United States The Close of Elgin's 
Rule 

IV. LIBERAL-CONSERVATISM AND CONFEDERATION . . .77 

A New Political Day Dawns Great National Issues 
Liberal-Conservatism The French-Canadian Question 
Political Expedients The Confederation Movement A 
Union of Parties A Retrospect . 

CONSTITUTIONAL DEVELOPMENT, 1840-1867. By EDWARD 

KYLIE 

I. RESPONSIBLE GOVERNMENT ..... 105 
Lord Durham's Report Lord Sydenham Sir Charles Bagot 
Sir Charles Metcalfe Lord Elgin The Full Measure of 
Responsible Government 

II. THE EXTENSION OF CANADA'S POWERS . . . '3 1 

III. THE LEGISLATURE ....... '3* 

The Assembly The Legislative Council 

Til 



viii UNITED CANADA 

MM 

IV. CONFEDERATION .... '47 

The Failure of the Union The British North America Act 

V. THE JUDICIARY ..... 1 57 

Judges independent of the Crown Growth of the Judicial 
System 

HISTORY OF . PUBLIC FINANCE, 1840-1867. By DUNCAN 

M C ARTHUR 

A CONFLICT OF INTERESTS . . . ._.. 165 

SYDENHAM'S BANKING SCHEME . . . ".'167 

THE TARIFF UNDER THE UNION . . 169 

THE CIVIL LIST ..... .170 

THE REBELLION LOSSES CLAIMS . 17 

REVENUE AND THE PUBLIC DEBT . . . . 171 

THE RAILWAY POLICY ... . 173 

THE MUNICIPAL LOAN FUND . . . . -175 

THE PUBLIC ACCOUNTS . . . . . .176 

FINANCIAL DEPRESSION ...... 177 

FINANCIAL EXPEDIENTS . . . . . .178 

CONFEDERATION AND FINANCE . . . . l8o 

ECONOMIC HISTORY, 1840-1867. By ADAM SHORTT 

L GENERAL VIEW OF ECONOMIC CONDITIONS . . . 185 

II. CANADIAN INDUSTRY AND FOREIGN TRADE . . l88 
IIL THE TEA TRADE ....... 197 

IV. THE TIMBER TRADE . . . . . -199 

V. IMMIGRATION ....... 204 

VL CANADIAN AND AMERICAN TRADE RIVALRY . . . 2IO 

VIL BRITISH TARIFF REFORM AND CANADA . . . .214 

VIII. THE NAVIGATION ACTS . . . . . .224 

IX. THE AGITATION FOR RECIPROCITY .... 227 

X. THE RECIPROCITY TREATY ..... 242 

CURRENCY AND BANKING, 1840-1867. By ADAM SHORTT 

L LORD SYDENHAM AND CANADIAN BANKING . . .261 

IL CURRENCY STANDARDS ...... 264 

III. NOTE-ISSUING PRIVILEGES ..... 269 
IV DECIMAL CURRENCY ...... 274 



CONTENTS ix 

ream 

V. THE BANKS AND SPECULATION . ... 277 

VI. GALT AND CANADIAN BANKING . . 283 

VIL NOTABLE BANK FAILURES ..... 288 

WESTERN EXPLORATION, 1840-1867. By LAWRENCE J. BURPEE 



L THE NORTH-WEST PASSAGE . . . . .295 

Sir John Franklin's Last Voyage Franklin Search Expeditions 

II. THE FAR NORTH AND THE YUKON .... 306 

The Hudson's Bay Company Robert Campbell 

HI. FROM LAKE SUPERIOR TO THE PACIFIC . . . -313 

Dawson, Hind and Palliser Sir George Simpson Paul 
Kane Milton and Cheadle 

INDIAN AFFAIRS, 1840-1867. By DUNCAN C SCOTT 

L THE PROVINCE OF CANADA . . . . -331 

Organized Effort Education The Legal Status of the 
Indians The Indian Department 

IL THE MARITIME PROVINCES . . . . -358 

Nova Scotia New Brunswick Prince Edward Island 
THE POST OFFICE, 1840-1867. By WILLIAM SMITH 

L NEW ERA IN POSTAL AFFAIRS . . . . .365 

A Revolution through Steam Carriage The Burden of High 
Rates Sydenham's Postal Commission 

IL THE MARITIME PROVINCES ..... 372 

Early Postal Effort The Newspaper Postage Question The 
Colonial Post Office Bill Establishment of the Mail Steamer 
Inadequate Mail Services A Demand for Reduced Rates 

III. POST OFFICE REFORM ...... 387 

Clanricarde's Policy The Nova Scotia Postal Committee 

IV. PROVINCIAL CONTROL ...... 392 

A Period of Progress Railway Mail Service The Ocean 
Mail Service A Setback through Steamship Disasters 



ILLUSTRATIONS 

LORD ELGIN Frontispiece 

From an engraving in tkt Dominion Archivei 

SIR CHARLES BAGOT Facing page 32 

Fnm an tngraving in tin Dominion Archives 

MEMORANDUM FROM MR LA FONTAINE TO SIR 

CHARLES BAGOT ,,36 

SIR CHARLES METCALFE 

*r*r 

From an engraving by William Warner afttr tkt fainting 
by A. Bradiih 

SIR LOUIS H. LA FONTAINE .... 54 

After a photograph by Not man, Montrtal 

ALEXANDER MORRIS ,,96 

From a photograph by ffotman, Montrtal 

JOHN RAE ,,298 

From an engraving in tht Dominion Archives 

ADMIRAL SIR JOHN ROSS .... 304 

From the painting by B. K. Faultnir in the Scottilk 
National Portrait Calltry 

THE ARCTIC COUNCIL DISCUSSING A PLAN OF 

SEARCH FOR SIR JOHN FRANKLIN . ,,306 

From the fainting by Stephen Pearci in tkt National 
Portrait Gallery 

A BLACKFOOT CHIEF AND HIS SUBORDINATES 320 

From the painting by Paul A'tnt in tht Dominion Arckivts 



THE UNION: GENERAL OUTLINES 

1840-1867 



VOL. V 



THE UNION: GENERAL OUTLINES 

1840-1867 

THE period 1840-67 saw the working out of responsible^ 
government and full liberty given to Canada to. 
commit her own mistakes. In this period was laid 
the foundation of a new system of colonial policy to which 
federation added the superstructure. In Lord Durham's 
great Report were combined both elements of the eventual 
solution, responsible government and federation, for it must 
not be forgotten that responsible government alone proved 
inadequate, and worked in its fulness only when to it federa- 
tion was added. 

The history of United Canada begins with Sydenham and 
ends with Macdonald, between whom there is a strong 
resemblance ; each a mixture, in what proportions we must 
agree to differ, of parliamentary strategist and statesman. 
The London of the Regency and of George iv differed widely 
from the rough pioneer life of the Bay of Quinte and the 
whiskificd gaieties of early Kingston ; but the men who 
formed and worked the first cabinets after the Union and 
after Confederation are essentially the same : autocrats 
both, veiling the autocracy behind a smile and a jest ; con- 
structive opportunists, who did not worry overmuch about 
principles, but carried on Her Majesty's government, and 
slowly developed a little state into a great one. Neither 
was squeamish ; Sydenham gerrymandered Montreal, and 
Macdonald gerrymandered Ontario ; if an opponent had his 
price and was worth buying, bought he was ; if the one had 
'a dangling after an old London harridan,' all Canada knew 
of the early amours of the other. But in a time of doubt 
and uncertainty and faintness of heart they never despaired 
of Canada or of the Empire ; their follies and their weak- 



4 THE UNION : GENERAL OUTLINES, 1840-1867 

nesses are buried with them ; their nobler part lives. The 
difference between them, to Canadians all-important, is that 
Sydenham was an Englishman, Macdonald a Canadian ; at 
the beginning Canada was still under tutors and governors, 
at the end she had developed an ' old parliamentary hand ' 
of her own. This development is traced in this volume 
by Professor Morison in a chapter at once original and 
sane. Professor Morison has strong views, and expresses 
them with a clearness which does not stop to regard estab- 
lished reputations. In his desire to avoid the falsehood of 
extremes he does not spare those two very typical Scots, 
George Brown and Bishop Strachan, and probably more 
than one lance will be broken in their defence. Strachan's 
multifarious and, on the whole, beneficent activities as teacher 
and churchman are treated elsewhere, 1 and Professor Morison 
would be the first to acknowledge that his portrait of the 
Aberdeen bull-dog needs to be supplemented. Of one of his 
criticisms of Brown a word must be said later on. But that 
the general development is rightly and wisely sketched, few 
will deny. 

Our period opens with Lord Sydenham. Under him 
Canadian parties begin to assume coherence ; gradually an 
administration, with separate heads of departments, takes 
the place of the chaotic council of pre-Rebellion days. But 
a cabinet must consist not merely of heads of departments, 
but of heads of departments working together in unity, 
carrying out a systematic policy. ' It doesn't matter a 
damn what we think, gentlemen,' said Lord Melbourne on 
a famous occasion, ' but we must all say the same thing.' 
A cabinet requires a leader, and alike in Canada and in Great 
Britain history proves the necessity of a prime minister. To 
give this keystone to the arch, Sydenham was forced to 
become his own prime minister, and we thus have the para- 
dox that the governor who introduced responsible govern- 
ment is also the governor whose personal interference 
was most marked, whose personal predominance was most 
absolute. 

Sydenham was followed by Bagot, who had the absence 

1 See ' History of Secondary and Higher Education ' in section ix. 



THE UNION : GENERAL OUTLINES, 1840-1867 5 

of strong convictions natural to a diplomat, and whose 
admission into the cabinet of the reform leaders paved the 
way for a Canadian prime minister ; for although the cabinet 
was a coalition, Baldwin and La Fontaine were its strongest 
members, and the illness of Bagot threw power more and 
more into their hands. Then came the famous quarrel with 
Lord Metcalfe, in which the very worth of the tory leader 
made the downfall, when it came, the more complete. If 
Canada could not be trusted to look after herself, she could 
have found no better guides than Metcalfe and his chief 
Canadian adviser, William Draper, afterwards the much- 
loved Chief Justice of Upper Canada. When the system 
broke down under such men, it was useless for blunderers 
like Sir Allan MacNab to try to work it. It is significant of 
the distance travelled from the days of Dalhousie and Bond 
Head that Metcalfe acknowledged himself bound by the 
resolutions of September 3, 1841, which the reformers had 
won from Sydenham. But Canada would not remain in a 
half-way house ; the governor's personal triumph in the 
elections of 1844 brightened his death-bed, but did not retard 
for more than a year or two the triumph of Canadian 
autonomy. 

Under Durham's son-in-law, Lord Elgin, the more obvious 
half of the views of the master are worked out to their logical 
conclusion. When Elgin gave the royal assent to the 
Rebellion Losses Bill, on the ground that it was supported 
by a majority of the representatives from both parts of the 
united province, the battle of responsible government was 
won. Confederation was for the time in abeyance, and 
necessarily remained so till the carrying out of the policy 
of material development begun under Elgin. 

From this point of view transportation l has great con- 
stitutional importance, for the history of the Confederation 
movement in Canada cannot be understood save in connec- 
tion with that of railway development. Constitutional 
changes are conditioned by mechanical advances. Just as 
the building of good roads made possible the real union of 
England and Scotland ; just as the lack of roads in Wales 

1 See ' National Highways Overland ' in section v. 



6 THE UNION : GENERAL OUTLINES, 1840-1867 

before the days of the Tudors and the width of the Irish Sea 
are responsible for much of the present misery of Ireland ; 
so the union of British North America would have been a 
farce till the success of railways was an economic fact. This 
also Lord Durham had seen. It is a good instance of the 
difference between a great statesman and a mere adminis- 
trator that in the Government of Dependencies, written by 
Sir George Cornewall Lewis in 1841, railways are only men- 
tioned once, and then in a footnote ; whereas in Lord Durham's 
Report, published in February 1839, the eye of imagination 
sees what they may do to solve Canadian difficulties, and the 
building of a railway from Quebec to Halifax is advocated 
not as an economic measure, but as the real solution of 
the chief constitutional problem. Under Elgin began an 
era of railway building, accompanied, as all eras of material 
expansion must be, with not a little jobbery and corruption, 
and such unfortunate financial experiments as the Upper 
Canada Municipal Loan Fund ; but bringing happiness and 
increase of comfort to thousands, making life endurable to the 
farmer's wife, and, above all, making possible the expansion of 
two riverine provinces into the Dominion of to-day. Before 
Lord Elgin left Canada, the Grand Trunk Railway was an 
established fact ; and, in a far nobler sense than Dorion 
dreamed when he sneered at Confederation as a Grand Trunk 
job, the father of Confederation was the Grand Trunk 
Railway. 

Yet though Confederation did not come till railways had 
made it possible, that it came when it did is due to the self- 
sacrifice and statesmanship of a few great men. In his 
account of the coalition of 1864 Professor Morison seems to 
me to over-emphasize the initiative of Macdonald. His 
later services at Quebec and at Westminster cannot be over- 
estimated ; once committed to the policy he took the lead. 
But for the coalition the chief credit is due to Brown and 
Cartier. The breadth of mind of the latter made it possible 
to persuade Lower Canada that in union with British North 
America lay not the destruction but the salvation of her 
cherished liberties. Equal praise is due to Brown's splendid 
leap in the dark. It is true that the first ministry to give 



THE UNION : GENERAL OUTLINES, 1840-1867 7 

federal union a place in its programme was the conservative 
administration of 1858 ; but that was almost entirely to win 
the support of Gait, and when Gait's hopes seemed to come 
to nothing, he had scanty sympathy from his colleagues. If 
the conservatives were the first to offer the maiden their 
somewhat Platonic affection, it was the perfervid Scottish 
ardour of Brown which in 1864 seized her in his arms. The 
testimony of Lord Blachford, who as permanent under- 
secretary of state for the Colonies was present at all the 
discussions in London in 1866, is that ' Macdonald was the 
ruling genius and spokesman ' ; but the coalition, consum- 
mated in 1864, gave him his chief strength. 

From this point of view the chapters by Mr Smith on the 
Post Office and by Mr Scott on Indian Affairs have a con- 
stitutional importance, showing that the grant of responsible 
government in these departments increased not only content 
but efficiency. From a wider point of view, in setting aside 
a whole chapter for what at first sight may seem the mere 
details of postal administration, the truth is emphasized 
that constitutional arrangements, however perfect, remain 
mere dry bones unless upon the various parts of the province, 
the country, or the empire, there blows a great wind of 
common knowledge. When the annals of the British Empire 
come to be written, it will probably be found that till 1912 
the greatest steps in imperial development were those taken 
by Cecil Rhodes, when he sent the picked youth of the 
British Empire to mix with each other at Oxford, and by 
Sir William Mulock, when he forced the hands of the perma- 
nent officials of the British Post Office and inaugurated inter- 
imperial penny postage. Similarly, Sir Hugh Allan is too 
much remembered as the corrupter of Canadian statesmen, 
of whose connection with the Pacific Scandal it may be said, 
that whatever record leap to light he never shall be cleared. 
Mr Smith shows his place as the founder of the ocean-going 
marine, who made Canadian steamers the fastest on the 
Western Ocean, and who, when the Nova Scotian Cunard 
left Halifax for Boston, was true to Montreal and the flag 
of the triple crosses. 

The breakdown of paternalism in Canada coincided with 



8 THE UNION : GENERAL OUTLINES, 1840-1867 

the triumph of free trade in England. This great change 
in policy necessarily involved that to the gift to Canada of 
political liberty that of economic liberty was added. To 
take away the preference on Canadian grain and timber, 
as was done in 1846-49, while forcing that grain and timber 
to come solely in British ships, was manifestly unfair, and 
in 1849 the historic Navigation Acts, so long considered the 
corner-stone of the British colonial system, were finally 
abolished. Canada accepted the gift of economic liberty 
with reluctance. Some despaired and issued the Annexa- 
tion Manifesto ; but the mass of the Canadian people had 
too much self-respect to whimper at being thrown on their 
own resources, and with the aid of Lord Elgin found in the 
Reciprocity Treaty of 1854 the economic benefits of annexa- 
tion without its spiritual stultification. Soon the rising 
spirit of Canadian nationalism led to a desire for economic 
self-sufficiency, and to the growth of a protective spirit 
which was one of the causes which led the United States to 
denounce the treaty, whereupon nationalism combined with 
the desire for wider markets to promote Confederation. The 
economic development of the period, told by Professor Shortt, 
should therefore be read in close connection with the political 
and constitutional. 

The Dominion of 1867 stopped at the Great Lakes, so that 
while in the period from 1841 to 1867 the union of Eastern 
Canada was accomplished, the winning of the West was 
reserved for a later date. But to this two qualifications must 
be made. Though the West was won later, it was won under 
the constitution framed by the Fathers. In a sense it is 
true, as Professor Kylie says, that ' Confederation was an 
awkward compromise." But it is far more true that in that 
compromise was the root of the matter. The constitution of 
Canada is as superior to that of Australia as an instrument 
of government as it is inferior as a work of draftsmanship. 
Ambiguities in the preambles to certain clauses have led to 
concurrent jurisdiction ; it is easy to be merry at the expense 
of an act which puts ' marriage ' under the Dominion and 
' solemnization of matrimony ' under the provinces. A 
deeper wisdom sees that in giving to the Dominion the 



THE UNION : GENERAL OUTLINES, 1840-1867 9 

residue of power, Canada went to the root of the matter. 
If East and West are ever rent in twain, rebellion will be able 
to find no such specious cloak of constitutionalism as it found 
in the United States. It was this provision which, among 
a hundred other benefits, made possible the creation of the 
North-West Mounted Police under federal control, with all 
the regard for law which from the banks of the South Sas- 
katchewan to the Yukon differentiates the Canadian from 
the American West. 

The second qualification is, that though during this period 
the West was neither peopled nor brought under Cana- 
dian government, it is in some ways the halcyon period of 
exploration. England has had a noble record ever since 
Drake went round by the Horn. From Mackenzie Bay to 
Hudson Strait there is hardly a name of cape or inlet or 
island but recalls some deed of heroism ; Davis and Frobisher 
in the sixteenth century, Hudson and Foxe in the seven- 
teenth, Mackenzie at the end of the eighteenth, and then in 
the nineteenth the names come as thick and fast as those of 
the heroes in Homer. None of them glow with a purer 
radiance than those of the British seamen who sailed with 
Franklin, or in search of him. Was there ever a finer heroism 
than that of Franklin, leaving at the call of the Arctic his 
quiet colonial governorship in the southern seas, and faring 
forth again to die within a few miles of victory ? Who of 
British blood can read unmoved the dry statement of facts 
cited by Mr Burpee, written by the men who with Crozier 
and Fitzjames abandoned their ships and their dead leader, 
and set off on that long hopeless journey to Back's Great 
Fish River, of which all that we know is summed up in the 
sentence of the old Eskimo woman to MClintock that ' they 
fell down and died as they walked.' Most of them must 
have known, as they put that scanty record under the cairn, 
that the end was near, but no whimper breaks through the 
official phraseology. Theirs was no self-conscious heroism, 
such as that which moved Sir Humphrey Gilbert to disdain 
change or fear ; they went forward, the leaders at the lure 
of the northland, the followers because it was an order ; they 
tramped on till agony gave place to weakness, and at last 



io THE UNION : GENERAL OUTLINES, 1840-1867 

they lay down and died in the snow ; but theirs was as high 
a daring and as enduring a heart as that of any conquistador 
who sailed with Cortez or Pizarro, and when Franklin and 
his men went ' to join the lost adventurers his peer:,' they 
proved that there was as good blood in the English race as 
any that ever glowed in the veins of the lordliest Elizabethan. 
The age of Victoria is the golden age of exploration, and its 
most crowded years are those from 1845, when Franklin set 
sail, to 1859, when M c Clintock brought back such scanty 
record as remains. 

Stat sua cuique dies ; breve et irreparabile tempus 
Omnibus est vitae ; sed famam extendere factis 
Hoc virtutis opus. 

Alike to Brown and Macdonald, to Franklin and 
M c Clintock the epitaph is due ; one star differeth from 
another star in glory ; it is not for the historian to determine 
whether to the dauntless explorer or the nation-building 
statesman shall be given the higher meed of praise. 




PARTIES AND POLITICS 

1840-1867 



PARTIES AND POLITICS, 1840-1867 

I 

LORD SYDENHAM'S ADMINISTRATION 

SOCIAL AND POLITICAL CONDITIONS 

ON October 19, 1839, Charles Edward Poulett 
Thomson 1 landed at Quebec to assume supreme 
authority in British North America, and the date 
may well be considered that from which to count the founding 
of modern Canada. For political and social progress demands 
a certain foundation in organized institutions, and political 
order was the chief gift which Sydenham had to bestow on a 
land where society was still in a state of chaos. 

It is impossible to deal with Canada at this period in 
the grand style, for she had barely yet escaped from the 
sordid and harsh essentials of the struggle for corporate 
existence. One has only to dip into the material clustering 
round Durham's Report to gauge the immaturity of society 
and politics in the provinces on the eve of Sydenham's 
government. Here and there growing cities, from Quebec 
and Montreal to Toronto, gave promise of a great future, 
and formed rallying points for Canadian culture ; but true 
municipal and local government had not yet come into being, 
and regulations, where they existed, often existed only to 
be abused. Outside the cities there was a confused and 
sometimes painful process of land settlement wherein the 
most hopeful feature was the rough selection of the fittest 
made by the struggle for existence, from which there seemed 
likely to emerge a hardy generation with more leisure than 
their fathers to devote to higher forms of communal life. 

1 He became Baron Sydenham of Sydenham and Toronto on August 19, 1840. 

U 



14 PARTIES AND POLITICS, 1840-1867 

Education, so far as the masses were concerned, was 
seriously defective. In the cities schools of no inconsiderable 
merit had been organized, and in Lower Canada the church 
had her own educational policy. Nevertheless, there were 
districts where the proportion of children attending school 
was one in twelve and where the schoolmaster's earnings 
amounted to a poor 20 a year. 1 Medical knowledge was 
naturally irregular in its distribution, and country doctors 
were known to have acquired a quick and easy professional 
training across the border in three months ; and the treat- 
ment of the sick, the insane and the criminal demanded 
radical reformation. 

Where the common facts of life were so ill-ordered it was 
hardly likely that political methods would be sound. Among 
the United Empire Loyalists there were men whom not 
even their prejudices could rob of a clear title to statesman- 
ship, while Robert Baldwin in Upper Canada and Louis 
Hippolyte La Fontaine in Lower Canada proved that agita- 
tion was educating true constitutional leaders. Nevertheless, 
the Canadas were spending too much of their energy on mere 
friction, and it was the unanimous verdict of cool contempo- 
rary observers that Canadian politics consisted too largely 
of fierce but petty party warfare, the pursuit of private and 
corrupt ends, and of administrative methods which Syden- 
ham could only designate ' the present abominable system of 
government.' Up to the year of the Union the true leaders 
of Canada, and the only men with a gleam about them of 
that romance with which the earlier history of Canada is 
so full, were the settlers before whom the forests were re- 
treating, the engineers who were improving Canadian water- 
ways, and the pioneers in inland and oceanic navigation. 

It lies beyond the scope of this chapter to deal with the 
abnormal conditions created by the Rebellion, but it must 
be recognized that race hatred and division were perhaps 
the most powerful foes that civilization had to face, and that 

1 'A common farm servant,' says the Rev. Mr Alexander of Leeds in his 
evidence before a committee of the House of Assembly in 1836, ' is allowed ^15 
per annum for wages, and, in addition, washing, board and lodging. A school- 
master rarely gets more than 20 per annum, and none of the above-mentioned 
extras.' Lord Durham's Report, Appendix D 



LORD SYDENHAM'S ADMINISTRATION 15 

the political confusion in which the rising found its oppor- 
tunity set this ' maker ' of Canada the task not only of 
creating a sound government, but of educating men to 
work that government. Nothing astonishes the reader of 
Sydenham's dispatches so much as the ignorance of the 
very fundamentals of parliamentary government displayed 
by men who were agitating for more control of affairs by 
themselves. ' When they come to their own affairs,' he 
said in two vivid sentences, ' and above all to the money 
matters, there is a scene of confusion and riot, of which 
no one in England can have any idea. Every man proposes 
a vote for his own job ; and bills are introduced without 
notice, and carried through all their stages in a quarter of 
an hour.' 

To make Canada, it was not merely necessary, in 1839, 
to create a Union and to quench the last sparks of rebellion. 
Facts called for a reorganization of society : the creation of 
a sound educational system ; the pacification of warring 
churches ; the cleansing and rationalizing of mistaken 
methods in land-granting ; some attempt at least to grapple 
with the errors of existing immigration. Above all else a 
scheme of government had to be created which, while it 
offered the full advantage of constitutionalism to Canadian 
citizens, should first fit them for their rights by teaching 
them their responsibilities. The work could be accomplished 
perfectly only after a generation had passed, and even 
then there remained vast tracts of political ' wild land ' ; 
but the man who first made it certain that there was to be 
government, and not anarchy, was Poulett Thomson, one 
of those many servants of the Empire whom Britain finds - 
it so easy to forget, and concerning whom Canada herself 
was, until recently, somewhat indifferent. 

CHARACTER AND TRAINING OF POULETT THOMSON 



It would^ba absurd to ma^re a karr. r>( th p man He 
belongetr~to a school of British radicalism, very useful, 
but almost on principle unromantic ; and where he 
diverged from his fellows into fopperies and conceits, the 



16 PARTIES AND POLITICS, 1840-1867 

divergence hardly raised him in the scale of manhood. That 
sound and concrete critic of politicians, Charles Greville, 

r records the impression Thomson made on him before he 
left Britain : ' Civil, well-bred, intelligent and agreeable,' 
high in the good opinion of his political leaders, counting in 
the house through a knowledge which Greville half sus- 
pected to be borrowed, unable to recommend himself abso- 
lutely to the sceptical analysis of the man of the world. 
He had not yet had his chance, but the undoubted self- 
complacency, not to say vanity, which helped him so much 
in Canada, his minor moral defects, the valetudinarian 
element in him, and the absence of a definite certificate of 
aristocratic standing, made most men hesitate in their 
judgments. Not excepting the Duke, there were few heroes 
in early Victorian politics, and a man ' with a finikin manner, 
and a dangling after an old London harridan,' seemed hardly 

^Jikely even to approximate to the heroic stature. Yet 
Thomson had an immense reserve power for administrative 
purposes, a mind of great strength and self-sufficiency, an 
unflagging industry, a disinterestedness which came as a 
revelation to Canadian politicians, and, most unsuspected of 
all, a persuasiveness and power of managing men which 
even enemies were bound to acknowledge. ' He was,' says 
Greville, ' in the habit of talking over the most inveterate 
opponents of his government, so much so, that at last it 
became a matter of joking, and the most obstinate of his 
enemies used to be told that if they set foot in Government 
House, they would be mollified and enthralled whether they 
would or no.' He came to Canada, then, in character an 
English gentleman with just a dash of the sensualist ; in 
training, one of the aristocracy of British commerce, with 
all the culture and knowledge involved in that training ; 
in politics, a whig joined in sympathy to the radical and 
free-trade wing ; in general power, one of those rare ad- 
ministrators to whom slovenliness in others comes only as 
a challenge to introduce order and energy, and finding in 
work an ever-fresh incentive to further labours. He was 
no Canadian, nor even sought to be one. ' I long for Sep- 
tember,' he wrote in 1841, 'beyond which I will not stay if 



LORD SYDENHAM'S ADMINISTRATION 17 

they were to make me Duke of Canada, and Prince of 
Regiopolis.' Yet he did for Canada what no Canadian could 
have done for her, and must count along with the greatest 
of his successors as a true founder of the Dominion. 



THE POLITICAL STAGE 

Sydenham's political labours in the two provinces before 
Union have been discussed elsewhere ; the present chapter 
must confine itself to parties and politics in the first Union 
parliament. In certain aspects that parliament of 1841 is 
unique in the annals of the country. 1 1 was the first elaborate 
experiment in democratic government since democracy had 
seriously entered the arena of Canadian politics ; it was the 
first national gathering after the various risings ; it saw 
French Canadians and Upper Canada Britons meeting on 
a new footing ; and it introduced to the collective politi- 
cal intelligence of Canada a governor-general whose ideas 
on democratic colonial assemblies promised interesting 
developments. 

There was a vast amount of work to be done ; and when 
the speech from the throne was delivered at Kingston on 
June 15, 1841, besides alluding to such exciting issues as 
Anglo-Saxon diplomacy presented, it promised bills in 
connection with public works, the postal system, immigration, 
education, local self-government, and in addition to general 
finance it intimated a loan of ^1,500,000, made on imperial 
guarantees, to assist the united provinces. With the eye of 
a great parliamentary strategist Sydenham estimated the 
dangers and the possibilities. Where so much hard labour 
was called for, mere party politics were out of place, and 
yet party politics seemed almost certain to emerge. French 
Canada lay in sullen discontent, and the spent issues of 
the great rising might possibly revive in the assembly at 
Kingston. ' There,' said Sydenham, ' the elections will 
be bad. The French Canadians have forgotten nothing 
and learnt nothing by the Rebellion and the suspension of 
the constitution, and ' are more unfit for Representative 

VOL. v B 



18 



PARTIES AND POLITICS, 1840-1867 



Government than they were in 1791.' Even had the pro- 
spects been rosier, the hardly veiled hostility of these words 
promised doubtful peace between the governor-general and 
his French-Canadian subjects. Fragments of the Family 
Compact would still survive, and the unintelligent activities 
of MacNab suggested the possibility of tory ' excursions ' ; 
while the responsible government men, realizing to the full 
the shortcomings of the imperial definition of self-govern- 
ment, could hardly be expected to accept their fetters without 
a struggle. 

Sydenham faced the situation with characteristic assurance 
and definiteness. Long before the parliament met in June he 
was preparing the way. As early as September 1840 he could 
write : ' My candidates are everywhere taken for the ensuing 
elections. . . . The mass only wanted the vigorous inter- 
ference of well-intentioned government, strong enough to 
control both of the extreme parties, and to proclaim whole- 
some truths, and act for the benefit of the country at large 
in defiance of ultras on either side.' In his endeavours ' to 
make the province essentially British,' he had given French 
Canadians the impression that he was tampering with con- 
stituencies against their interests, and all Canada -felt-sure 
that he had unduly-concerned hnself in. th_aeiuaj elections. 
If only his method had been legitimate, his general conception 
of Canadian politics would have been not merely sound but 
incontrovertible. There were, he held, no real parties, and 
no real dividing issues. Parliamentary strife must needs 
consist of battles of kites and crows, in which local jobs 
would provide the objects, and personal animosities the 
inspiration for battle. He desired a central Canadian party, 
and here Sydenham's enemies and critics may remember that 
when the colony had learned its lesson, it came back, in the 
practice of the liberal-conservatives under Macdonald and 
Carrier, to the identical political ideal with which Sydenham 
began. 

His success seemed in his own eyes complete, for he was 
able to declare in June 1841 : ' I have got the large majority 
of the House ready to support me upon any question that 
can arise ; and, what is better, thoroughly convinced that 



LORD SYDENHAM'S ADMINISTRATION 19 

their constituents, so far as the whole of Upper Canada, and 
the British part of Lower Canada are concerned, will never 
forgive them if they do not.' There was one serious storm 
when parliament met. Robert Baldwin, who, although he 
had accepted office, was perhaps the most conscientious and 
persistent advocate of completely responsible government in 
the province, had no intention of allowing the governor- 
general to break up parties by selecting strong men from 
each, to form a central and non-party administration. On 
the very day before parliament met he informed Sydenham 
that it would be ' expedient that Mr Sullivan, Mr Ogden, Mr 
Draper, and Mr Day should no longer form a part [of the 
government], and that some gentlemen from the Reformers 
of Eastern Canada should be introduced.' Whatever faults 
there may have been in his tactics, Baldwin was attempting 
to regulate Canadian practice in accordance with the best ^A. 
British cabinet precedents, and if in any sense these held ' 
good for Canada, he was right when he contended that a 
cabinet should be as nearly homogeneous as possible, and 
that popular government demanded that no interest should 
be so excluded from recognition as were the French Canadians 
under La Fontaine. Baldwin's tactical mistakes gave the 
governor a chance to read him one of his stiffest lectures, but 
the political tutor, as he corrected the manners of his dis- 
obedient pupil, hardly realized that in the future of Canada 
the man he scolded for unbecoming conduct, and whose 
memorandum he accepted as a resignation, was the true 
master and teacher. 

But the storm blew past, and although there are indica- 
tions of opposition in his dispatches, Sydenham's language 
from first to last is that of a victorious master. As late as' 
August 28, and on a topic so controversial as the establish- 
ment of local government, he reported unanimity in his 
council and a clear majority in the assembly. The success 
of his parliamentary manoeuvres may be discovered not only 
in his letters and dispatches, but in the list of acts with which 
the session closed. But the price which he paid, or which 
he forced his successor to pay for him, is written in a long 
and confidential dispatch of Sir Charles Bagot, which stands 



S 



^ 



20 PARTIES AND POLITICS, 1840-1867 

out as the most searching and adverse estimate of Lord 
Sydenham's parliamentary career in Canada. 

Were I to lift the thin veil of success which covers it 
; [Lord Sydenham's policy], much of deformity would be 
found underneath. Towards the French Canadians, his 
conduct was very unwise. . . . He treated those who 
approached him with slight and rudeness, and thus he 
converted a proud and courteous people which even 
their detractors acknowledge them to be, into personal and 
irreconcilable enemies. . . . The mode in which several 
lof the elections were carried in both provinces, but 
^specially in Lower Canada, weakened his position with 
jthe honest and uncompromising Reformers of the Upper 
/Province, and gave even Sir Allan M c Nab a pretext for 
(annoying and opposing him. ... It was only by dint 
of the greatest energy, and, I must add, the unscrupu- 
lous personal interference of Lord Sydenham, combined 
with practices which I would not use, and your Lordship 
vould not recommend, in addition to the promise of the 
pan, and the bribe of the Public works, that Lord 
Sydenham managed to get through the session. . . . Lord 
jydenham was in fact the sole government, he decided 
(everything and did it himself sometimes consulting his 
council, but generally following hisown opinion, and seldom 
bringing them together or consulting them collectively. 

Nor was it only in voting strength that his government 
declined. It had been formed, as will be shown below, in 
accordance with a theory hostile to the complete grant of 
responsible government as Canadian radicals defined it. Yet 
when Baldwin introduced his resolutions on responsible 
government on Friday, September 3, Harrison only warded 
off defeat by counter-resolutions, really drawn up by Syden- 
ham himself, which gave to the enemy practically every 
position for which he had contended. More particularly 
his third resolution swept away the refinements and limita- 
tions to which the imperial government clung as essential to 
the British connection : 

That, in order to preserve between the different 
branches of the provincial parliament, that harmony 
which is essential to the peace, welfare, and good govern- 






LORD SYDENHAM'S ADMINISTRATION 21 

ment of the province, the chief advisers of the repre- 
sentative of the Sovereign constituting a provincial 
administration under him, ought to be men possessed of ' 
the confidence of the representatives of the people, thus 
affording a guarantee that the well understood wishes 
I and interests of ihgjpeople, which our gracious Sovereign 
I hasjdeclared shall be the rule of the provincial govern- 
ment, will on all occasions be faithfully represented and 
/ advocated. 

So passed the first session of the Union parliament, and 
the last chapter of Lord Sydenham's life. 



SYDENHAM'S SERVICES TO CANADA 

A general estimate of his work must, however, be based 
on something more comprehensive than the few short months 
of parliament at Kingston. There were the pioneer labours 
in the separate provinces, the sallies beyond the Canadas 
themselves into general British North American politics, 
and the arrogant assertions of his right to dictate and change 
at his will the instructions of the British government to his 
province. 

It is possible, and perhaps correct, to contend that his 
main service to the country lay in ' things done ' ; for he 
left Canada the richer by two years of the most incessant 
work. He was a kind of Hercules, attempting with amazing 
success the seemingly impossible tasks set him by British 
North America. Under him local government became a^/^TN 
practical thing : schools were called into existence, public 
works were started, immigration controlled, the United 
States taught to respect the decencies of the border, land- 
granting systematized, and the clergy reserves troubles 
modified, if not ended. In this sphere a simple list of the 
statutes passed in the first Union parliament is the best 
\evidence of his success. More important perhaps than any 
of these he set a new standard of efficiency in public admini- 
stration, rebuking, dismissing, economizing. Even Bishop 
Strachan had to own a master, and put on a humility which 
ill became him, when Sydenham, discovering that a large 



22 PARTIES AND POLITICS, 1840-1867 

sum of money had been borrowed from the funds of the 
university by the Right Rev. President of King's College 
' for his private purposes, on the security of various notes 
of hand, and that several of these notes had not been paid 
when due,' proceeded to read a lesson to him, and at the same 
time to the whole community. ' It appears,' wrote his secre- 
tary in his name, ' that a loan of a considerable sum was made 
by one of the Council to one of the members of the Board. 
Such a proceeding His Excellency cannot by any means view 
in the light of an ordinary money transaction. The employ- 
ment of the funds of a public trust, by one of the Trustees, 
for his own advantage, is a proceeding which in His Excel- 
lency's opinion is highly objectionable, and calculated to 
destroy tie confidence of the public in the management of 
the University.' The British standard in the administration 
of public money has ever been high, and Canada, between 
1839 and 1841, received more than one lesson in this first 
postulate of public life. 

But the most vital and important service rendered by 
j| Sydenham to Canada was something subtler and more diffi- 
^ I cult to describe he gave her an organized political life. To 
have effected a union was only the beginning of the battle. 
It is true that Sydenham's part in the Union was more im- 
portant than that of the imperial legislature which sanctioned 
it, for he conciliated the individual interests antagonistic to 
the measure. ' It was by playing with men's vanity,' says 
an eccentric pamphleteer, ' tampering with their interests, 
their passions and their prejudices, and placing himself in a 
position of familiarity with those of whom he might at once 
obtain assistance and information, that he succeeded in 
carrying out what Lord Durham had left to some more 
practical person to effect.' What is this, if only we change 
the temper of the utterance, but to confess the man a great 
diplomatist, and possessed of one of the first essentials of 
the practical statesman ? 

Still there was sterner work than mere diplomacy to be 
accomplished. Before Union could be regarded as secure, 
there had to be created, not only a new system of political 
machinery, but a school of public manners, and that atmo- 



LORD SYDENHAM'S ADMINISTRATION 23 

sphere of compromise and understanding which is at least 
half of the British constitution. How little Sydenham could 
rely on the material at his disposal a brilliant dispatch of 
December 15, 1839, reveals. It was written in Toronto, and 
from his picture of Upper Canada politics and their chaotic 
conditions it is easy to imagine what the Union parliament 
would have been if some higher power had not intervened. 
l The assembly was a chaos, in which not even the members 
(of government had any coherent scheme. On the most 
^important questions public officers were to be found on both 
(sides, and the desires of government had no apparent influence 
on the conduct of its so-called upholders. Individualism 
ruled supreme, with its usual satellite, jobbery, in its train. 
Above the assembly, the council was conducted on lines 
which necessarily involved collision with the more popular 
body. ' The whole power of this branch of the legislature 
has been really exercised by a very few individuals, repre- 
senting a mere clique in the capital, frequently opposed both 
to the government and the Assembly, and considered by the 
people hostile to their interests.' In the same way, while 
the governor had practically abdicated his power in favour 
of the executive council, and while all men counted the 
council the responsible body, it was ' composed of men, not 
only in whom confidence is not placed, but whose opinions 
are known to be opposed to those of the people.' In keeping 
with all this confusion worse confounded, the administration 
of the province had fallen into such disrepair that, said the 
governor-general, ' if the province should escape without loss, 
the circumstance is to be attributed rather to the character 
of the public servants than to any precautionary measures.' 

Such were conditions on the eve of a great gift of 
popular government to Canada, and the situation became 
all the more critical because it had not yet become clear 
what relation the growing colony was to have to the mother 
country. It is easy to be wise in the light of later experiences, 
and to point out the obvious advantages of home rule ; but 
absolute home rule was both unthought of then, and impos- 
sible of achievement even had it been advocated. Sydenham 
came at a transition stage in Canadian political life, and / ' 



24 PARTIES AND POLITICS, 1840-1867 

while his system depended too exclusively on the man who 
worked it, and was certain to involve its own defeat, Canada 
could only attain her true government through this ' Syden- 
ham ' stage, and Sydenham was almost the only man who 
could have done the work. 

The key of the situation, for him, lay in the governorship. 
He was a radical entirely imperial in his outlook, and he 
could have brooked the peaceful dissolution of the Empire as 
little as Lincoln was prepared to accept the claim of the 
individual states against the Federal Union. Now the 
# * imperial power resided for Sydenham in the governorship, 
and that he could delegate to no executive, nor stultify to 
please any popular assembly. Time and again he asserted 
his doctrine, correcting the colonial secretary himself where 
he seemed to require tuition. When the Upper Canada 
provincial assembly inquired whether any communication 
had been received from the colonial secretary on the subject 
of responsible government, Sydenham coldly intimated his 
regret that it was not in his power to communicate to the 
House of Assembly any dispatches upon the subject referred 
to, and Lord John Russell had his procedure corrected for 
him from Canada. 

' The governor,' to quote his own terse phrase, ' must be 
personally responsible for all his administrative acts, and 
an executive council cannot therefore be made so.' He repre- 
sented at once the royal power, and, through it, the bond 
V)f imperial union, and nothing must weaken either. Equally 
valid in its own way with this imperatorial power was popular 
right, but the people in Sydenham's eyes were a flock to be 
guided, and he believed in the oriental fashion of the shepherd 
going before his sheep. In the House of Assembly, the ex- 
press image of the people, it was his ambition not to see petty 
divisions he knew that Canada was too small in politics, 
had too few great exciting issues, to be able to support real 
party divisions but to see a union of the moderates. 

Nowhere is the man more splendidly clear-sighted than 
when he dismisses existing so-called ' parties ' with a sweep 
of the pen. ' Party, according to our English sense, can 
scarcely be said to exist, and the English party names, though 



iiu 



LORD SYDENHAM'S ADMINISTRATION 25 

adopted here, do not in the slightest degree describe the 
opinions of those who assume them or to whom they are 
assigned.' And, again, he refers to ' the delusive nature of 
the party nicknames borrowed from England.' With the 
instinct of a great administrator he determined, like 
ifiismarck and Cavour, to govern through a liberal-con- 
servative party ; for that is really what his support from 
the moderates amounted to. But such a party is always 
the creation of some master influence, and in Sydenham's 
relation to this party we face the most remarkable aspect of 
his governmental practice. It was his desire, in spite of 
autocratic leanings, to meet the wishes of the people, although 
at times these were ill-informed ; but to divest himself of his 
viceregal and imperial authority would be both a crime 
/and a blunder. Between him and the popular assembly 
\ there came an executive, but that executive was not the 
\creature of the people ; it was his own instrument. Looking 
mack, he saw instance after instance where a dictatorial 
(governor had flaunted a hostile executive in the face of his 
assembly. In his opinion the fault there lay, not in the power 
\possessed by the governor, but in the use he made of it. ' I 
consider it,' he wrote in 1840 during trouble in Nova Scotia, 
' both unwise and imprudent to have persevered in main- 
taining a particular set of men in such a capacity in whom 
the Assembly had notoriously no confidence, rather than 
select others more acceptable to them.' To him a colonial 
governor, because of his peculiar position, represented the' 
royal power as it had been when the king was his own prime 
minister, the council really his servants, and the one check 
on his autocracy the knowledge that government was possible 
only when the people's wishes were considered. 

It is easy to see the dangers involved in Sydenham's 
position. He feared that the representative of monarchy 
should be deprived of all real power, and, in his place, there 
should arise a cabinet, the creature of uninstructed and 
irresponsible public opinion. That, on the whole, would 
mean separation, and separation never occurred to Syden- 
ham as a possible solution to anything. But was there 
not as serious a risk, even on his theory ? Assume a grave 



26 



PARTIES AND POLITICS, 1840-1867 






divergence of opinion between the governor and his executive, 
and the people ; what then ? If the king or his represen- 
tative has all the power, he has the power to do wrong ; and 
constitutional government is erected on the maxim that he 
cannot. Sydenham saw the point and accepted the risk. 
It says much for his logic that when the Nova Scotians did 
differ from their governor, and actually petitioned that he 
might be removed, the governor-general approved of their 
line of action as contrasted with the claim of the people to 
control the executive council. However unusual, it was 
' the legitimate mode for the legislature to adopt when 
it was dissatisfied with the executive government ' ; and 
he proceeded in luminous words to speak of ' the mischief 
which must inevitably arise from intrusting the delicate 
and difficult task of governing with a popular assembly, to 
persons whose previous pursuits have left them practically 
unacquainted with the management and working of such 
bodies.' What he dreamed of was a popular government, 
but one where the truest popularist was the autocrat 
at the top ; and I suppose he justified himself, as against 
critics of all such ' patriot princes,' by pointing out that, in 
the case of Canada, the governor was chosen, not born, and 
that it was easy to get the right man. At least, he cherished 
no doubts as to his own appropriateness. 

At the same time, Sydenham was fortunate in the period 
set to his work by death. He seems to have been conscious 
that he had played his part, for the fatal accident of September 
merely precipitated the termination of an administration 
which would have ended with 1841. While the political 
and social life of Canada was crude, it was only for lack of 
opportunity ; and when once a proper start had been made 
and a fit example set, Canadians learned so rapidly that the 
viceregal pedagogue-prime-minister was certain to find his 
position untenable. Even before the end of the first parlia- 
ment symptoms of trouble had appeared. The faculty for 
accepting tuition, more particularly in politics, is one of the 
least permanent elements in ordinary humanity ; and not 
all Sydenham's tact could disguise the fact that Canada 
was being consciously and firmly educated by her governor- 



LORD SYDENHAM'S ADMINISTRATION 27 

general. Besides, the united legislature was no ideal group 

of men, but a turbulent and divided mass, with racial hate 

at the centre lying in wait for its opportunity. Sydenham's 

success, as has been shown, was less than he himself thought, 

thanks chiefly to the French. He tried to conciliate those 

restless spirits, but ' members of that party who accepted 

office were invariably rejected from their seats, when they 

sought to be re-elected, and an overture made to the party 

through Mr La Fontaine was abruptly broken off. As the 

session advanced, the supporters of the government, thus 

.weakened, were so reduced in numbers that, with all their 

f exertions, some of the most important ministerial measures 

\were passed by a bare majority, and in one or two cases 

py the casting vote of the speaker.' 

It may seem a lame conclusion to a great man's work 
the lamer because his political practice has been chosen as 
the most eminent contribution made by Sydenham to 
Canadian progress. But there are things, doomed to failure, 
which yet are necessary before the next step in progress can 
be made, and in his two short years Sydenham taught / 
I Canada the meaning of true authority, the importance of 
public honour and spirit, the methods by which honourable 
politicians combine in cabinet and party, and the possibility 
of being popular without pandering to the low inclinations 
f the political mob. I doubt if he ever could have compre- 
ended the real danger of his system, but then he was perhaps 
the one man living who might have made it work. And, 
if the opposition to him grew, it is well to remember that, 
coincident with that opposition, he was carrying through a 
mass of legislation such as no ordinary legislature would 
/accomplish in ten years ; and that" in addition he had taken 
\from discontent all its real sting and danger. To recur once 
Vnore to Greville's estimate of the man : 

He was always known to be a man of extraordinary 
industry, but nobody knew that he had such a know- 
ledge of human nature, and such a power of acquiring 
influence over others. . . . Though of a weak and 
slender frame, and his constitution wretched, he made 
journeys which would have appeared hard work to the 



28 PARTIES AND POLITICS, 1840-1867 

most robust men. . . . These are the materials out of 
which greatness is made indefatigable industry, great 
penetration, powers of persuasion, confidence in himself, 
decision, boldness, firmness. 

Few groups of men have so disguised the higher things of 
life its heroics in utilities, as that to which Sydenham 
belonged. Yet free trade, and the relief of the poor, and 
the quest for peace, and the bringing of innumerable 
humanities into our average lives are no despicable achieve- 
ments, and if the establishment of decency and order in 
Canada, and the origination of a great experiment in colonial 
democracy, have little in them to win popular cheers, wise 
men appreciate in silence, and remember. 

II 

BAGOT, METCALFE, AND THE POLITICAL CRISIS 
A TROUBLED PERIOD 



second stage in the political development of United 
Canada extends from the death of Sydenham to the 
departure of Lord Metcalfe, his second successor, in 
1845. In these years, as in those which preceded them, the 
centre of political interest is still rather the governor-general 
than the assembly, or rather is the relation of the governor 
to the spirit of independence which made such rapid strides 
in parliament after the first ' non-political session ' if Gibbon 
Wakefield's phrase may be accepted. By his virtues and 
his defects Sydenham had scattered the seeds of tempest, 
and his successors reaped the whirlwind. 

The causes of trouble were many and obvious. First and 
foremost came the need for readjustment of the British theory 
of colonial autonomy. The timid days of paternalism were 
past, but neither whigs nor tories understood the system for 
which the colonial leaders were calling responsible govern- 
ment nor the actual constitution of the bonds which were 
to hold Canada to Britain. A colony in their eyes was 
something tentative, its population British, no doubt, but 
rudely British, and its government a compromise between 



BAGOT AND THE POLITICAL CRISIS 29 

a crown colony and the British parliament, but with the 
emphasis on the crown colony features. Sydenham's logic, 
as has been shown, had fixed on the governor-generalship as 
the key of the situation. As his own prime minister he 
had determined to create, if necessary, a party. This party 
was to support an administration of the recognized liberal- 
conservative type, and his ministers were to represent not 
a predominant factor, but all shades of Canadian opinion. 

The fundamental error in this logical device was that 
Canadians, being Britons living abroad, naturally claimed 
the privileges of self-government enjoyed in the mother 
country ; that they were divided into parties ; and that 
they expected party opinion to be as dominant in Canadian 
government as it was in England. Burke's eloquent re- 
futation of non-party rule was as valid for nineteenth-century 
Canada as it had been for Rockingham against the scheme 
of George in. To a modern critic nothing seems more obvious 
than that parliamentary government, exactly as it was 
practised in Britain, in all its details and with all its liberties, 
was the only possible method of satisfying Canadian claims. 

It was nevertheless difficult for any British government 
to consent to what seemed simple and logical. The fate 
of the American colonies hung still over the councils of the 
Colonial Office, like the clouds of some storm, spent for the 
present, but with possibilities of recurrence. Catastrophes 
were still possible in the colonial world. Nor did the colonial 
reformers make matters simpler. ' Politics,' said the Hon. 
Isaac Buchanan to Ryerson, ' in a new country are either 
the essential principles of society, or parish business ' ; and, 
unfortunately, not only were parochial details discussed 
with all the seriousness of essential principles, but the prin- 
ciples, wedded to obscure local matters, and darkened with 
the violence and personality of village disputes, led Canadian 
reformers into action neither mannerly, nor useful, nor wise. 
The work of Somers, Walpole and Pitt, in England, had 
sometimes to be done in Canada by eccentric reformers and 
party intriguers. Members of the administration were not 
always faithful to their cabinets ; responsible officials had 
to be reminded even of so elementary a duty as attendance 



30 PARTIES AND POLITICS, 1840-1867 

in the cabinet or assembly ; and the air of compromise and 
consideration for the other side, which is the most valid 
explanation of British efficiency, was usually absent in 
Canadian political crises. Friction in practically every 
serious political resettlement delayed and weakened the 
work of administration. In spite of Sydenham's work as 
political tutor to the colony, the conventions of the game 
were not yet understood. 

The racial question complicated the merely political 
situation. Durham's scheme of self-government for Canada 
had presupposed the swamping of French national spirit 
as the condition of future peace. Sydenham had systemati- 
cally ignored French-Canadian claims, and he had not 
restrained himself from the use of most improper influence 
to secure predominance for the British party in Lower 
Canada. The national consequence, more especially of 
Sydenham's action, was ' something very like a private 
quarrel on his part, with the whole mass of the French 
inhabitants of Lower Canada.' Sydenham's successors, then, 
had to count, not merely on the normal party divisions, but 
on this rampant nationalism, dividing existing divisions, and 
running deep into the social as well as the political fabric 
of the colony. So tense had the state of French-Canadian 
feeling become, that the acceptance of government office 
by one of their number automatically set him apart and 
ensured his impotence in all matters of active political 
influence. 

Add to the various troubles the youth and crudity of the 
community, the lack of political education in the new masses 
of immigrants, the difficulties attached to mere existence in 
a new land, the slow operation of any but material motives 
and appeals, the naturalness of what more advanced com- 
munities would call corruption, and all the elements of an 
acute political difficulty are present. 

SIR CHARLES BAGOT'S ADMINISTRATION 

The selection of a successor to Lord Sydenham fell to the 
great Peel cabinet of 1841, and Stanley, who was Peel's 



BAGOT AND THE POLITICAL CRISIS 31 

secretary of state for the Colonies, made what seemed a 
whimsical choice in Sir Charles Bagot. For Bagot belonged 
to an age and world very different from those of his Canadian 
subjects. He had been one of Canning's men, filling in suc- 
cession the positions of minister plenipo ten tiary at Washington, 
St Petersburg and The Hague. His years of service had 
included those in which Canning made his reputation as the 
greatest foreign minister of Britain since William in and 
Marlborough ; and the greatness of the minister over- 
shadowed the performances of his colleagues. In the history 
of diplomacy Bagot remains noteworthy as the negotiator 
of the Rush-Bagot treaty, the ambassador at St Petersburg 
when the definition of the north-west boundary of British 
North America was being arranged with Russia, 1 and the 
recipient of Canning's famous rhyming dispatch of January 
31, 1826. In the caprice of imperial statesmanship he had 
been chosen to fill the governor-generalship of India, and 
through the same caprice he was deprived of the opportunity, 
which he had barely had time to refuse, because his brother 
had voted against Canning on a vital question. 

In his voluminous correspondence before and after 1842 
he presents himself as an admirable representative of the old 
and fading world of the eighteenth century and the Georges 
witty and cultured, knowing the whimsies and foibles of 
men, and a little suspicious of their enthusiasms and their 
serious moods. Belonging to Canning's set, he was a man 
rather enlightened than of fixed political principle, and more 
at home with ' men ' than with ' measures.' He might have 
formed a bright and kindly figure in Thackeray's Vanity Fair ; 
and they were sending him to Canada, the antipodes of the 
world in and for which he had been bred. 

At first sight he seemed hardly the man to mollify political 
bitterness. Doubts were expressed as to his fitness for facing 
an unusually troublesome popular temper, and the unrelent- 
ing tories, whose support was a very doubtful gift to any 
governor-general, looked to the member of an ancient English 
family, who was also the nominee of a great tory ministry, 

1 He has therefore a secondary interest for Canadians as being indirectly 
responsible for the facts connected with the Alaska Boundary Award. 



32 PARTIES AND POLITICS, 1840-1867 

to exalt them over the heads of their rivals. Stanley, too, 
had his clear-cut opinion of the proper course for Canada. 
' You cannot,' he had written in his instructions, ' too early, 
and too distinctly give it to be understood that you enter 
the province with the determination to know no distinctions 
of natural origin or religious creed ' an admirable sentiment, 
but one which rather overshot the mark. His desire to 
extinguish hatreds and divisions and proscriptions went 
farther than English usage permitted, and planned some 
such administrative despotism as Bismarck imposed on 
Germany, or George in attempted to create in England. If 
the people were not to be permitted to elect their rulers 
through the operations of party distinctions and prejudices, 
then the phrase ' Responsible Government, 1 to which govern- 
ment had consented in the declarations passed under Syden- 
ham, was meaningless. 

But by a whimsical chance the tory nominee of a great 
Conservative government proved the means by which Canada 
won her first substantial victory for self-government. Bagot 
had been chosen, partly with an eye to more amicable diplo- 
matic relations with the United States, but also because he 
had never committed himself to any violent political posi- 
tion, and could conduct himself with firmness, discretion 
and temper. But the British ministry was hardly prepared 
to find their nominee force their hand, and precipitate a 
condition of self-government far beyond anything that even 
their moderate men could concede. 

Bagot's actual administration lasted only from January 
12, 1842, when he arrived in Kingston, until, on March 29, 
1843, he was able to write, from his death-bed, ' The new 
Governor-general is this moment arrived in the town I am 
to see him at 4 o'clock.' Yet in these fourteen months he 
had accomplished what not all the efforts of his successor, 
backed by a powerful English ministry, could check, and 
prepared Canada for the self-government which she received 
at the hands of the Earl of Elgin. 

There is really only one central political situation during 
the administration, and even important secondary details 
must give place to the main issue. The need of Canada was 




Km,-. Walker. |.h. v 



SIR CHARLES BAGOT 
From the painting by H. W. Pickersgill, R. A. 






BAGOT AND THE POLITICAL CRISIS 33 

efficient administration, yet Sydenham had left, as a means 
to that end, a ministry which had ignored the entire French- 
Canadian element, a majority which had disappeared, and a 
theory of state which contradicted the known desires of all 
the progressive elements in the land. To defeat the policy 
of the party of government, tories, French Canadians, and 
radical ' ultras' were in the habit of uniting and obstructing. 
Questions concerning the civil list, the new municipal 
council and the clergy reserves, to mention no others, gave 
the opposition ground for attack whenever they cared to 
advance. 

After a short hesitation parliament would not meet 
until autumn Bagot saw his policy, and acted with a resolu- 
tion the more admirable because he was by no means sure 
of British backing. It was a case of the man with genuine 
local information and sympathy changing the instructions 
which had been composed in remote ignorance. He began 
by appointing a distinguished French Canadian, Vallieres de 
St Real, to the chief justiceship of Montreal ; and a moderate 
reformer, Francis Hincks, who was thoroughly trusted by 
the reform party, to be inspector-general of accounts. 

In both cases he was met with an encouraging loyalty, 
which compensated for minor disappointments in his French- 
Canadian experiments. 1 Then he advanced to the main 
attack. His council had, fortunately for him, most sympa- 
thetic interest in the situation, and, while one or two of the 
more negligible were absent, men of keen mind among the 
moderate conservatives, of whom W. H. Draper was the 
most notable, not only urged him to act, but offered to make 
necessary changes possible by resignation. The key of the 
situation lay in the French party, although matters were 
somewhat complicated by the fact that the French could not 
in honour accept office without stipulating that Robert 
Baldwin, the conscientious, intractable and pragmatic 
minister, whose resignation had threatened to destroy the 

1 Of Hincks he writes : ' He has accepted the office, and accepted it in a 
manner which I think does him much credit, making no exception to any one of his 
future colleagues in the cabinet, nor any stipulations for himself of any kind.' 
Bagot to Stanley, June 12, 1842. 

VOL. V C 



34 PARTIES AND POLITICS, 1840-1867 

peace of Sydenham's first parliamentary session, should enter 
office along with them. 

On September 10, certain that, if he remained inactive, 
he would have to face overwhelming parliamentary opposi- 
tion, he sent for the recognized leader of the French party, 
La Fontaine. He had resolved on a partial surrender, and 
even if Baldwin had to receive a place, he would consent, 
but as an associate of the French reformers, and not on his 
own terms. To his frank confession that he required French 
support La Fontaine answered with his terms four places 
in the council and a willingness to accept Baldwin. At the 
very moment of success an unexpected difficulty arose ; for 
Baldwin's conscience, which was accustomed to operate with 
a very wayward persistence, was uneasy at entering a ministry 
not entirely homogeneous, and in which reforms might be 
swamped by the other elements ; and none of the new 
ministers was willing to consent at once to the pensions 
which Bagot wished to grant to certain of the retiring 
councillors. On the 1 3th La Fontaine refused to accept office 
on the terms which he himself had dictated, and the situation 
was the more critical since Bagot's present ministers spoke 
of resignation, and Baldwin had already commenced the 
attack in an onslaught on the address. Bagot met the crisis 
by publishing in the assembly through Draper his very frank 
offers ; after which, not only did the house approve, but the 
minister-elect came quietly in, and, writes Bagot with pardon- 
able pride, ' the House is now prepared to pass any measure 
or adopt any course I may suggest.' 

That Sir Charles Bagot had accomplished a political 
stroke of the first importance, no one will now deny. It is 
true that the complete ruin of his health flung the reins of 
administration more completely into the hands of his new 
councillors than he had anticipated. It is also true that he 
was preparing trouble for a successor who did not care to 
follow in his footsteps. But the results in Canada were 
immediate and beneficial. Administration on sound lines 
became once more possible, and Bagot's ministers stood by 
his memory in loyal defence, long after loyalty to the man 
could be of any personal advantage to them. In a time not 



BAGOT AND THE POLITICAL CRISIS 35 

overburdened with political sympathy and honest loyalty, 
Bagot's minister of Finance was able to write : ' Sir Charles 
Bagot's policy was consistent from first to last, and there 
was never any reason to suppose that he would have obstructed 
a ministry which he had taken an active part in forming. 
To the last he maintained the most cordial relations with all 
his ministers, and took an affectionate leave of them shortly 
before his death, appealing to them to defend his memory.' 

But British opinion hardly kept pace with the sound 
developments of the governor-general. It is true that 
Sydenham's very able political secretary, Murdoch, wrote 
to say how entirely he agreed with Bagot's new arrangements, 
but even among the radicals the principles of home rule 
were hardly yet understood by British politicians, and Stanley 
had no intention of granting what Lord John Russell himself 
suspected as separationist in its consequences. The actual dis- 
pleasure shown towards Bagot, and the extent to which that 
displeasure weighed him down, have been exaggerated, but 
there is no doubt that Peel and Stanley yielded with a bad 
grace, and changed the system as soon as Bagot's resignation 
gave them a chance. Stanley thought that Bagot should 
have rallied round him an essentially governmental party, 
and, strong in their support, have defied the hostile sections. 
In violation of all the most valid parliamentary traditions 
he and Peel cherished the hope that this party, formed by the 
detachment of individuals from both extremes, was a possi- 
bility, and that, even faced by a hostile majority, he could 
still carry on the ' Queen's Government.' 

Peel gave his opinion in a letter pregnant with his calm 
wisdom, but undoubtedly mistaken in relation to Canadian 
facts. ' I think,' he wrote, ' he should fight the battle as long 
as he possibly can, in the hope that by great prudence, and 
moderation, and strict adherence to constitutional forms, 
even where the extreme exercise of his power is necessary, 
he may call to his aid whatever there may be of a sound 
public opinion out of the Chamber, or may betray his opponents 
into some false steps which will give him an advantage.' 

The precedent of the younger Pitt was obviously in the 
writer's mind ; but there was really no resemblance between 



3 6 PARTIES AND POLITICS, 1840-1867 

the cases. Pitt was backed by royal influence ; Bagot had 
no such munitions of war. Pitt had to control a chamber 
peculiarly susceptible to the means of persuasion then at the 
disposal of the king's minister, and, being gentlemen of 
intellectual tastes, equally susceptible to arguments and 
manoeuvres, which appealed to them as members of the 
political aristocracy ; Bagot had to face a keenly democratic 
assembly. Pitt happened to be fighting against an un- 
scrupulous alliance of parties, with popular feeling on his 
side ; Bagot was asked to thwart the people of Canada in 
one of their most dearly cherished ambitions. Parallels, 
despite Plutarch, are of little value in history and politics, 
and the circumstances in politics make each new venture 
something unique and unprecedented. 

Stanley could not but feel regret that things happened 
as they did, and while he admitted necessity as a plea, he 
said explicitly to Bagot that he should have preferred to see 
the necessity ' demonstrated ' a phrase which means, if it 
have any meaning, that Stanley was prepared to see Canada 
plunged into disorder before he yielded. In the end he gave 
a reluctant assent, not disapproving in so many words, but 
hoping even yet that Bagot might be able to recover in other 
directions his concessions in the council. ' The present seems 
to me a favourable time for impressing on your government 
as a body, the propriety and necessity of adopting that act 
[the Act of Union] as a whole ; and of declaring their inten- 
tion to stand by the provisions, including civil list, and 
any other debatable point to take it, in short, as a fait 
accompli' 

That Bagot felt the underlying distrust is no doubt true. 
He bade Peel and Stanley give frank expression to their 
displeasure, if it existed in excess, by public recall. But 
there is nothing to suggest that he brooded over the feeling. 
On the contrary, there are repeated expressions of pleasure, 
in his latest dispatches, at the support he had received. 
' I think I could satisfy you,' he wrote on November n, 
1843, ' if it should become necessary, that I took the least 
of two evils.' A little later he was ' abundantly satisfied, 
and gratified, and fortified, by the light in which the govern- 



MEMORANDUM FROM MR LA FONTAINE 
TO SIR CHARLES BAGOT 

(Translation ^ 

KINGSTON, 37 lh S,-/>t. 1842. 

MR LA FONTAINE has the honour to inform His Excellency the 
Governor General that, complying with the authorization he 
received, he communicated with Mr Girouard, making known 
to him His Excellency's wish to offer him the office of a Land 
Commissioner, with a seat in the Executive Council. 

Mr La Fontaine has to express sincere regret that the failing 
and uncertain health of Mr Girouard will not allow him to accept 
this office. In addition to the official reply of Mr Girouard 
transmitted with this, Mr I.* Fontaine feels it to be a duty to 
send His Excellency also a private letter from this gentleman on 
this subject. 

Mr I,a Fontaine more than any one will feel the loss of the 
active services of Mr Girouard ; but at the same time he feels it 
his duty, in the interests of the same object that His Excellency 
has in view, respectfully to suggest the name of Mr Morin, whose 
integrity, talents and ability are so well known. 

Mr La Fontaine is still confined to his room by sickness, and in 
consequence l>egs His Excellency to accept his apologies for not 
being able to wait upon him in person. 



un- 



:niW firfc(.-i-) ion' 

\'.(. 








(If 




-- JT~^; ^ 



^f /-> Cf> ^ 

%_-. cx^er^-^- f f '.~C+-*Z'Om~-** 




METCALFE AND THE POLITICAL CRISIS 37 

mcnt is disposed to view my late measures ' ; and just before 
the end he could assure Peel, at once of his confidence that 
the surrender had been wise, and of his happiness in Peel's 
approval : ' Your letter, the communications, both public 
and private which I have received from Lord Stanley, and 
the language held in the House of Commons, as to my recent 
measures, which I always knew might be as hazardous as 
they were clearly inevitable, have carried me through a 
period of anxiety such as I hope will never befall me 
again.' 

Few men have done their inglorious duty with more 
unswerving honesty, and with less credit from headquarters, 
than Bagot. It is always easy to be relentlessly dogmatic 
in error the conventional pose of the hero. The difficulty 
lies in accommodating preconceptions fortified by dignity 
to suit things as they are. That Bagot accomplished, but 
he certainly laid up a store of troubles for his successors ; 
for Metcalfe was the man that Bagot was not a Quixote 
with fixed principles. 

AN EXPERIENCED COLONIAL RULER 

Nothing could have promised better than the appoint- 
ment of Bagot's successor ; for few among the public ser- 
vants of Britain had a better administrative record than 
Sir Charles Metcalfe. He had been born into the tradition 
of imperial service, and his education had been that of the 
governing classes in Britain. At a very early age he had 
undertaken most responsible work in India, and he had passed 
through all the stages of Indian promotion until he had 
been chosen to fill temporarily the highest place, after Lord 
William Bentinck's retirement. He had proved himself 
something better than a mere efficient functionary, for, 
sharing in the reforming work of Bentinck, he had kept an 
extraordinarily open mind in matters of liberty and fair play. 
At the cost of great discomfort to himself he had exposed a 
financial scandal in which his superiors had been inclined 
to acquiesce ; and to him belongs the credit of freeing the 
Indian press from harassing restrictions. Nor was his admini- 



38 PARTIES AND POLITICS, 1840-1867 

strative liberalism a facile go-as-you-please mood. The man 
had that highest kind of political imagination whose fruit is 
self-criticism. He saw with an amazing clearness the dangers 
confronting British rule in India, and expressed his fears in 
language adequate to their importance : 

Our power does not rest on actual strength, but on 
impression. ... In their feelings, they [the inhabitants 
of India] partake more or less of the universal dis- 
affection which prevails against us, not from bad govern- 
ment, but from natural and irresistible antipathy. . . . 
Our greatest danger is not from a Russian invasion, but 
from the fading of the impression of our invincibility 
from the minds of the native inhabitants of India. The 
disaffection which would willingly root us out exists 
abundantly : the concurrence of circumstances sufficient 
to call it into general action may at any time happen. 

This is something more than mere shrewd insight : it is 
evidence that the man had a sympathetic insight into the 
minds of those whom he governed of an unusual power and 
depth. Passing from India, he had done work of great 
importance in removing causes of friction in the government 
of Jamaica, and Bagot confessed that his was the first name 
which presented itself to his mind as his successor, if indeed 
it was not too humble a position to offer to so distinguished 
a public servant . 

In Canada, whatever his political errors, he impressed all 
with his admirable qualities and his generosity. According 
to credible evidence, he had unlimited patience in granting 
and enduring interviews, never attempting ' to close an 
interview, except by occasionally wearing out importunity 
by silence.' He carried charity and thoughtful generosity to 
a heroic pitch ; and if his years in Indian authority had given 
him the over-simplicity of great despotic public servants 
(his critics called him Square-toes), he had also the high 
civilian's hatred of mean compromise and trickery. Canada 
was to be governed by a more intellectual and powerful 
Colonel Newcome. 



METCALFE AND THE POLITICAL CRISIS 39 



POLITICAL STORMS 

Metcalfc's first beginnings were not unpeaceful. In a 
tour through part of the province he was received ' with 
demonstrations of loyalty to H.M. the Queen, and with 
kindness towards himself,' and in his first parliament the 
address was adopted without opposition. But the air was in 
a highly electric condition. The question of a change in the 
seat of government threatened to set the British against the 
French inhabitants ; and both of them against the little 
circle of dwellers near Kingston, Lord Sydenham's choice of 
capital. Not only was the eternal trouble of the clergy 
reserves ready to fill any gap in the proceedings of govern- 
ment, but there was a strong anti-Anglican movement to 
secularize the provincial university, and the political and 
religious turbulence of Orange societies demanded some kind 
of solution. Deeper down in men's minds were the doubts 
entertained by Canadian reformers as to the reality of the 
self-government granted them by Britain. 

In the struggle which followed, pamphleteers and speakers 
contradicted and asseverated with reckless disregard for 
truth. To Gibbon Wakefield it was ' a great disturbance, 
apparently about nothing,' a complication of reforming 
ambition with sheer bad manners. 1 To Egerton Ryerson it 
was a factious attempt of unscrupulous politicians to snatch 
from the governor-general powers of patronage which they 
had previously disavowed as undesirable in administration. 
To Metcalfe and Stanley it was a bold attempt to erect an 
independent Canada ; and the former was convinced enough 
of the villainy of his earlier ministers to write : 

I regard their faint profession of a desire to perpetuate 
their connection of the colony with the mother country 
as utterly worthless ; although I do not imagine that 
generally they have separation as their immediate 
object, their present views being to establish the power 

1 W.ikefield, in his View of Sir Charles Metcalfe's Government of Canada, 
declares that it was Kingston town-talk that Metcalfe's ministers ' called him 
Square-toes, to intimate that they deemed him an old-fashioned person of very 
inferior capacity.' 



40 PARTIES AND POLITICS, 1840-1867 

of their party, and to be sustained at the expense of the 
British nation, but with perfect independence of its 
supremacy in the government of the province. 

Through the summer and autumn of 1843 relations 
between the new governor and his ministers grew more and 
more strained. Harrison, who was member for Kingston, 
resigned over the question of the change of capital. The 
control of the Orange society organization could not be 
effected along the lines desired by the ministers. The legis- 
lative council remained weak through the impossibility of 
getting politicians from Lower Canada to accept positions 
in it. The differences in temper and political ideal between 
governor and ministers grew, and were not simplified by the 
ill-mannered disregard for Metcalfe's feelings, which allowed 
his councils to propose measures without consulting him, 
and to indulge in ill-tempered criticism behind his back. 

The crisis came on November 24. There had been some 
petty strife over minor appointments, and on that day the 
two leaders, Baldwin and La Fontaine, came to demand that 
Metcalfe should ' not make any appointment, without first 
taking their advice ; and then should make it with a view 
to sustain their influence.' It is quite fair to say that the 
ground of resignation was a demand, ungranted, concerning 
patronage ; but the whole question of responsible govern- 
ment lay beneath, and the views entertained on that subject 
by Baldwin and La Fontaine on the one hand, and by Metcalfe 
and Stanley on the other, were absolutely irreconcilable. 
Nothing remained but battle h outrance. Nor must sup- 
porters of the modern system of British democratic govern- 
ment allow surface crudities or rudenesses to conceal the fact 
that on the main issue the Canadian statesmen were as 
completely in the right as the British tories were in the 
wrong. Even on the assumption that ill-manners in politics 
often amount to constitutional error, and that Metcalfe 
was pressed beyond decent limits in matters of personal 
patronage, it was still true that he was supporting an un- 
tenable position in constitutional practice. He had come, 
he said, to govern Canada, not in the interests of a party, 
but of the whole ; and he had no intention of yielding to 



METCALFE AND THE POLITICAL CRISIS 41 

party pressure. But there was really no such thing as the 
will and mind of the Canadian population apart from that of 
the majority, and the majority is most easily expressed in the 
usual party form. Had Metcalfe been perfectly frank with 
himself he would have admitted that, since his desires in 
government coincided with those of the Canadian tones, 
he must use all his strength and influence to maintain in 
power not a United-Canada party, but a tory party which 
could hope for but temporary supremacy, if even that, in 
the minds of the general mass. Even assuming that the 
Canadian conservatives were all that he declared them to 
be ' the men of wealth and education . . . those to whom 
the country is deeply indebted for putting down the rebellion 
in Upper Canada . . . those who were formerly most con- 
spicuous in their devotion to connection with the British 
Empire ' they could only secure practical expression for 
their patriotism by securing a majority in the country ; and 
when Metcalfe and his supporters sought to evade that 
penalty by talking of ' the violence of party spirit,' or by 
accusations of factiousness, they were not merely ignoring 
the whole tendency of British politics since 1660, but for- 
getting that the rebellion in both provinces had been the 
result of that very position which they seemed inclined to 
support. 

But there was a second and perhaps more excusable error 
in Metcalfe's stand. He had adopted Sydenham's position 
with regard to the governorship. He had a double responsi- 
bility to the Canadian people, whose wishes he must con- 
sider, but also more seriously to the British crown, whose 
representative he was, and to the British connection, of 
which he was the most concrete and dignified symbol. It 
had been Sydenham's theory that, where discontent existed 
with the governor in the popular mind, it was much more 
correct to petition the crown for his removal than to ask him 
to change his ministers at popular dictation. Metcalfe re- 
emphasized this position. ' I could not assent to it,' he 
declared, when his ministers asked for guarantees in matters 
of patronage, ' without degrading the office of the governor, 
and submitting to the supremacy of the Council, which it 



42 PARTIES AND POLITICS, 1840-1867 

has been the tindeviating endeavour of Messrs La Fontaine 
and Baldwin to establish since their accession to office.' He 
regarded these endeavours as pretensions whose consequence 
would be the subversion of Her Majesty's government, and 
he determined to resist them at all cost. 

A PERIOD OF DEADLOCK 

Both parties, then, had defined their positions with re- 
markable frankness. The practical question was how to 
carry on government. In the assembly there was an absolute 
deadlock, for the ex-councillors could count on a majority 
of over twenty. This, in Metcalfe's words, consisted of 
' the French party, who, with only two exceptions, followed 
their leaders ; of the extreme party, which supports Mr 
Baldwin ; and generally of the party called reformers, 
who, the cry of Responsible Government having been set 
up, . . . gave their voices in support of the ex-councillors.' 
Here there appeared no gleam of hope. No doubt the 
legislative council gave him a majority, but complications 
grew when the executive council had to be faced. Faithful 
among the faithless, and faithful because his lack of strong 
political feeling co-operated with the need of a salary, 
Dominick Daly remained, ' The Perpetual Secretary,' for a 
month the sole member of the administration. Even after 
a provisional council had been constructed, consisting of 
Viger, Daly, Draper and Harrison, important offices remained 
unfilled, and when, on September 2, 1844, a complete ad- 
ministration was reported, it was anything but representative 
of strong Canadian feeling. 

The real issue, however, lay in the country, for a dis- 
solution was inevitable, and no one could say how matters 
would go there. In December 1843 Metcalfe had held 
that popular feeling lay with him, and certainly his sup- 
porters indulged their taste for wordy and pretentious 
addresses ; but, a little later, Egerton Ryerson's brother 
spoke in very different fashion : ' At the present, more than 
nine-tenths of our people, in these Western parts, are the 
supporters of the late Executive Council ' ; and Lower 



METCALFE AND THE POLITICAL CRISIS 43 

Canada might be regarded as beyond hope. Moreover, the 
opposition had many things in their favour : the cry of 
responsible government, the desire for undenominational 
education, the French national feeling, the Roman Catholic 
sympathy for any politicians who opposed Orangeism, and 
the extreme difficulty of the governor-general in escaping 
from the crisis without offending innumerable individual 
susceptibilities. 

In the late spring, at an election at Montreal wherein 
violence, the former substitute for modern corruption, 
played its part, the ex-councillors won a victory, utilizing 
the Irish vote and the desire for repeal of the Union. The 
elections came on in autumn, and, since the cry of loyalty 
to the connection never fails to secure the waverers and to 
awaken the indifferent public, Metcalfe's new ministry found 
itself with a precarious majority of about six in the legis- 
lative assembly. The governor's admirable persistency, for* 
he never moved from his initial position, may have done 
something to convert those who admire the appeal of im- 
portunity. He could count on the old tones, on the Orange- 
men, on all who had the sentiment of loyalty strong within 
them. His council, by excluding tory extremists, had 
appealed to moderate men, and there can be no doubt that 
it contained sound statesmen, like W. H. Draper, of proved 
ability and honesty. But the ominous fact was that the 
majority was only six, and that it was entirely an Upper 
Canada majority. 

It was clear that ' tactics ' of some sort or other must 
be resorted to, and Draper, acting through Caron, the speaker 
of the legislative council, made approaches to La Fontaine 
and the French, to see whether any movement were possible 
there. It was an ill-managed business. Draper could, of 
course, hardly be sincere in his desire for French partner- 
ship ; Caron seems to have been injudicious in communicating 
Draper's letters ; and La Fontaine made an unwarrantable 
use of the whole correspondence, apparently with the in- 
tention of gaining a point for the opposition. The whole 
affair carried with it a suggestion of imperfect political 
honour, and led to a discussion, not unlike those in which 



44 PARTIES AND POLITICS, 1840-1867 

local councils indulge, except that in this case the personalities 
were flavoured with a strong dash of pretentiousness. If 
there is anywhere a gleam, it conies in the sound sense of 
La Fontaine's words to Caron : ' If under the system of accept- 
ing office at any price, there are persons who, for a personal 
or momentary advantage, do not fear to break the only bond 
which constitutes our strength, viz. union among ourselves, 
I do not wish to be, and I never will be, of the number.' 

Meanwhile, the end of the affair so far as it affected Met- 
calfe was close at hand. Before he had arrived in Canada 
he had been afflicted by a cancerous growth on the cheek, 
and throughout 1845 his ailment complicated and grew 
worse. On April 4 he wrote to Stanley of the possible 
necessity for his retirement he had already lost the sight 
of one eye. 

In October he ' considered it to be his duty to apprise 
Stanley of the probable impossibility of performing his 
official functions ' ; and by the end of November he took 
advantage of the permission granted him to transfer the 
provisional charge of the government to Earl Cathcart. 
With the pertinacity of purpose and sense of public duty 
which have always characterized his class, he stood by 
his government under the most trying circumstances, and 
apologized, when he retired, for leaving another man to face 
a situation which he had not yet solved. ' Nothing but the 
apparent impossibility of my discharging my duties with 
the requisite efficiency,' he wrote, ' induces me to take this 
step.' In his case it is very possible to separate the governor- 
general from the man in passing judgment on him. He 
had behaved according to the strictest code of honour from 
first to last, modifying a stern constitutionalism only by 
gracious privafe acts of kindness, and adding another chapter 
to those already completed of very faithful service to his 
country, accomplished not for gain he was the poorer by 
his Canadian appointment but from a high sense of imperial 
duty. He was opposed with a rudeness which no mere 
newness of culture could excuse, and his opponents were 
not above using his affliction to point their taunts. 




SIR CHARLES METCALFE 
From an engraving by William Wainti- after the fainting hy A. Bradish 



METCALFE AND THE POLITICAL CRISIS 45 



ATTITUDE OF THE COLONIAL OFFICE 

But admiration for the man must not be permitted to 
obscure the real issue ; and the significant fact lies, not in 
the gallantry with which Metcalfe faced the storm, but 
rather in the inability, not merely of Stanley, but even of 
Peel, and his second secretary of state for the Colonies, 
William Ewart Gladstone, to read the signs of the times. 
When Canadian reformers suspected the whole episode as 
a move of Stanley's to wreck Canadian self-government, 
they had this at least on their side, that the last great ad- 
ministration of Peel had no intention of granting what 
Baldwin and La Fontaine desired so passionately. It is easy 
to establish the point ; for at every critical point in Met- 
calfe's struggle he was met by the strongest approval from 
the Colonial Office. In May 1844, not only was his conduct 
approved, but the British government was ' prepared to give 
him any support which is constitutionally within their power, 
in maintaining the authority of the Queen, and of Her 
Representative against unreasonable and exorbitant pre- 
tensions.' In December of the same year he received the 
honour of a barony of the United Kingdom for his ' zeal, 
ability and prudence.' And when, a year later, he was 
granted release from his painful duties, the queen expressly 
commanded Stanley to express her entire approval of the 
' ability and prudence with which Lord Metcalfe had con- 
ducted the affairs of a very difficult government.' 

Incidentally, the secretary of state for the Colonies found 
occasion to reaffirm his opinions on colonial government. 
Like Sydenham, Gladstone was not prepared to regard 
Canadian opinion as anything better than an approximate 
guide to the selection of colonial ministries ; their rough 
energies required a certain amount of judicious leading ; 
and their parties were not, as in Great Britain, recognized 
constitutional expedients, but factions, making, in so far 
as they did anything, towards separation from the mother 
country. Like Metcalfe, Gladstone drifted, without realiz- 
ing that he was doing what he reprobated in the colonists, 



46 PARTIES AND POLITICS, 1840-1867 

into accepting a party, and a small party, as the privileged 
exponents of loyal doctrine. ' You will not fail to impress on 
your Council,' he wrote confidentially to Metcalfe, ' . . . the 
extreme risk which would attend any disruption of the 
present conservative party of Canada. Their own steadiness 
and your firmness and discretion, have gone far towards 
consolidating them as a party, and securing a stable ad- 
ministration of the Colony.' In the same dispatch he 
encouraged Metcalfe to anticipate government carried on 
in the teeth of popular opinion, arguing that this had been 
done in England, and that, in any case, the bonds which 
united public men in Canada were much more feeble than at 
home. It would be difficult to find in shorter compass an 
exposition of the principles which threatened the young 
existence of the British Empire. 

But it was not only the party of correct and educated 
conservatism in Britain which assumed this attitude. Stanley 
was followed, at the very end of 1845, by Gladstone, as 
secretary of state for the Colonies. At this date Gladstone 
had completely surrendered to the commercial doctrines of 
Cobden, and it is possible to see most of his later practical 
theories incipient in his actions of 1846. He has no doubt, 
for example, that the development of railways in Canada 
must depend, not on British governmental support, but 
' on private enterprise and capital.' He is equally con- 
vinced of the virtues of laisser-faire doctrines in trade matters, 
advocating for Canada the nearest approach ' to perfect 
freedom that the disposition of its inhabitants, and the 
exigencies of the public revenue there may permit.' But 
in matters of government Gladstone stood practically 
where his late colleague had stood. In a verbose but ad- 
mirable dispatch to Cathcart he defined a position precisely 
similar to that held by Stanley and Metcalfe. He was, 
perhaps, a little further ahead when he declared that ' the 
deliberate sense of the Canadian community at large, to 
which electoral, and therefore also legislative functions, 
had been entrusted, must determine the form of Canadian 
laws and institutions.' But when the occasion for action 
came, the governor-general was to avoid identifying the 



METCALFE AND THE POLITICAL CRISIS 47 

crown with any colonial party ; he was to ' act with great 
aloofness from local influence in all appointments' ; in 
short, he was to be the self-limited tyrant of an immature 
democracy, and he must not anticipate by one hour the date 
when democracy would come of age. To conclude, he was 
to see in Metcalfe one whose administration, ' under the 
peculiar circumstances of the task he had to perform, may 
justly be regarded as a model for his successor.' 

It is difficult in these matters to avoid judging times past, 
but not dissimilar to our own, by standards which have 
been accepted in the interval. Under the shadow of accom- 
plished facts the modern critic forgets all modifying circum- 
stances in the past. Canada had barely achieved an entrance 
into civilization, and British statesmen might be pardoned 
as they looked doubtfully across three thousand miles to 
a land of rough farms and wild forest, peopled at best by 
half-pay officers and adventuresome agricultural aristo- 
crats ; at worst by turbulent Irish savages and paupers, 
incompetent to guide their own, apart altogether from 
national affairs. It is difficult sometimes to have faith even 
in civilized democracy ; why should we quarrel with men 
who distrusted it in the earliest making ? Reports from 
trusted representatives had told of crude and hurried legis- 
lation ; recent rebellion had proved that Canadians had 
not yet learned the subtleties of peaceful agitation ; and the 
very loyalists who crossed the Atlantic to apply in person 
for some small recompense for loyalty, hardly recommended 
their land as one of enlightened political altruism. There 
were rumours, too, of separationist agitation. French Canada 
lay there as a political terra incognita within whose limits 
another republican outburst might at any time occur. Across 
the border was a great semi-hostile state, and England 
might be pardoned for doubts when a governor-general's 
dispatch could report a toast, as disloyal as it was un- 
grammatical, to ' British Constitutional Liberty if possible 
. . . and in the event of the British government losing sight 
of us, we will become the adopted sons of Uncle Sam.' There 
was no precedent, except that of the New England colonies, 
for concessions such as the colonial reformers claimed, and 



48 PARTIES AND POLITICS, 1840-1867 

the price of New England liberty had been the Declaration 
of Independence. It was a dark outlook, but the building 
of an empire, like other vast speculations, has risks attendant 
on it, at least equivalent to its advantages ; and neither 
Metcalfe nor his fellow-governors in Britain had yet learned 
the imperial lesson of audacious faith. 



Ill 

LORD ELGIN'S ADMINISTRATION 
AN EMINENT PEELITE 

IT is a significant fact that the seven years of Canadian 
history during which the Earl of Elgin and Kincardine 
held office are the last in which one thinks rather of 
the British representative in Canada than of the Canadian 
parliamentary leaders. The concession of popular govern- 
ment was at last to have its free operation, and the last real 
political leader among the governors-general was last because 
it fell to him to secure the final triumph of responsible 
government. 

Elgin's place in the parliamentary development of Canada 
is outstanding, without being in any sense abnormal. He 
seldom cared to fling his unrestrained personal influence into 
the work, to achieve a triumph, possibly complete, but dis- 
tinctly personal and irregular. He was always the constitu- 
tionalist in Canada, with a clear perception of real issues in 
politics, and bent on convincing men, even when he was most 
personal in his application, that they were to seek not his 
friendship, but the political good of the community. He 
belonged to the most distinguished school of politicians and 
administrators produced in England during the nineteenth 
century the Peelites. His fellow-students at Oxford in- 
cluded Gladstone, Dalhousie and Canning, and all of them 
reflected the calm wisdom, the faculty for imperial and 
objective judgment, and the love of peace and order which 
distinguished their great master. The accomplishment of 
constitutional government in Canada is of a piece with the 



LORD ELGIN'S ADMINISTRATION 49 

reorganization of India, which Dalhousie superintended, the 
revolution in commercial theory and practice, secured by 
Peel himself, and the beginning of scientific administration 
in Ireland, made by Gladstone. Although they never used 
the name, these men formed such a liberal-conservative 
party in England as Bismarck created for his work in 
Germany, as Macdonald found essential for Canada ; in 

(other words, they struck a happy average between routine 

(administration and the excitement of reform. 

Elgin had already won his spurs ; and if he added little 
to Mctcalfe's beneficent labours, he was able to boast that 
his rule in Jamaica had been one of considerable social 
progress. He had other recommendations. He was a Scots- 
man, coming to a colony where the name of Bruce awakened 
memories of Scottish glory ; and once at least, in 1849, he 
found the adage ' Highlanders, shoulder to shoulder ' operate 
in his favour among his fellow-countrymen in Glengarry. 
He was also the husband of the daughter of the man who had 
reawakened hopes of popular control in Canada ; and the 
name of Durham was a personal link between him and the 
reformers, who looked to Durham as their first real friend in 
high quarters. 

PROBLEMS TO BE FACED 

When the new governor arrived at Montreal on January 
29, 1847, it was soon apparent that all his peaceful energies 
would be called into active service. In the interregnum 
Cathcart had held office, appointed to face a crisis in Anglo- 
American relations in which it seemed desirable to vest 
supreme civil and military authority in the same hands. 
The crisis being over, he had, perhaps most wisely, followed 
a policy of inactivity. Such a policy, however, his ministers 
found it impossible to imitate. The Metcalfe struggle was 
still a matter of living politics. Draper's cabinet was both 
feeble and divided, and the fact was now fairly obvious that 
the majority in the lower house did not represent the feeling 
in the country. Apart from the actual weakness of the 
ministry, there were many awkward political facts which 

VOL. v v 



50 PARTIES AND POLITICS, 1840-1867 

Elgin must face and solve. It was still true that the lines 
of party distinctions concerned, not alternative policies on 
the basis of an accepted constitution, but the actual character 
of central constitutional principles ; so that a party defeat 
savoured of a general revolution, and the reform party might 
be accused of subverting the commonwealth. Conservatives 
still formed the party of British domination, and reform had 
an aspect in which it seemed over friendly to the French. 
The small numbers and petty issues of the two houses gave 
government a personal and irritable temper, and the struggle 
for existence, which kept many sound men fast bound to farm 
or office, tended to throw politics into the hands of ' land- 
jobbers, swindlers, young men who wish to make a name 
when starting into life.' 

I There were many vexed questions waiting for solution, 
I chief among them the clergy reserves, which had awakened 
(into vigorous life during the session of 1846, and government 
had neither a policy nor a secure majority. Even imperial 
events seemed to be bearing down on Canada to effect her 
destruction, for 1846 had been the year of Peel's commercial 
revolution, and Canada had paid more dearly than any other 
part of the Empire for the triumph of free trade. The same 
year, too, saw the lowest depths in misery yet reached in 
Ireland, and squalid masses of immigrants, poverty-stricken, 
tainted with disease, and full of hatred against the land which 
seemed to be driving them from home, were pouring into 
Canada, and at once straining the resources of Canadian 
administration and kindling feelings of resentment against 
England. 

It was impossible to do more than just hold ground. 
Early in the year overtures had been made to the French, 
but Morin had declined Elgin's advance, and Tache assured 
him that he had found no disposition among his countrymen 
to ally themselves with the ministry. A reorganization of 
the cabinet, in which the most notable changes were the 
retirement of Draper and the entrance of John A. Macdonald 
into office as receiver-general, enabled them to face parlia- 
ment on June 2 ; but the speech, which hinted and suggested 
without giving any definite promise of a programme, revealed 



LORD ELGIN'S ADMINISTRATION 51 

the poverty, in ideas and strength, of the tory govern- 
ment. The opposition, advancing to the attack under cover 
of Durham's name, moved for more legislative activity, 
suggesting education and municipal reorganization as fit 
subjects for attention ; but they were still too weak in the 
lower house, and the government triumphed, even if only by 
two votes. As late as June 28 Elgin believed that, if the 
party remained loyal, they might hold their own, but party 
loyalty and public support were both absent. On July 28 
the house was prorogued ; on December 6 it was dissolved, 
and the government went to the country, knowing that 
defeat lay in store for it. Before the tory ascendancy vanished 
the ministry had attempted, by compromise, to save some- 
thing for their educational policy ; only to be defeated by 
the obstinacy of the Bishop of Toronto. 

The new year opened with a great political change. The 
election had gone hopelessly against the government. Even 
in Upper Canada they were in a minority of twenty and 
the French formed a solid phalanx in opposition. From 
the imperial point of view it seemed ominous that Papineau, 
the centre of French disaffection, should once more have 
entered politics, and been elected ; still more so that, to the 
still inexperienced judgment of the governor-general, the 
French had not yet distinctly enough declared their aliena- 
tion from him. 

A TURNING-POINT IN CANADIAN HISTORY 

Had Elgin really known it, matters were in train for one 
of the most beneficial changes in Canadian history. The 
fate of the ministry was quickly settled. Their candidate 
for the speakership, MacNab, was defeated by fifty-four 
votes to nineteen. Morin, the opposition nominee, took his 
place, and the inevitable vote of no-confidence, proposed on 
March 3, was carried by a majority of thirty-four. Proro- 
gation came at the end of March, and the new administration, 
led by La Fontaine, Baldwin and Hincks, promised when 
next they met parliament a livelier programme for ' develop- 
ing the resources of the provinces, and promoting the social 
well-being of the inhabitants.' 







52 PARTIES AND POLITICS, 1840-1867 

It was a turning-point in Canadian history, the peaceful 
establishment of absolutely popular government. A ministry, 
backed by the whole strength of a previous governor, and 
with the prestige attaching to the claim of unquestioned 
, loyalty, had appealed to the country, had failed, and their 
successors, chosen without reserve or check from a party 
which, only a short time previously, had been called disloyal, 
\were accepted by the representative of British authority on 
le sole ground of their approval by the people. 

But the second La Fontaine-Baldwin administration had 
another noteworthy characteristic. Previously there had 
been little solidity or permanence about Canadian party 
politics. Reformers, eager for definite reforms but failing 
in the conception of organic progress, had fought heedlessly 
for their ends, and flung away the chances of permanent 
influence to catch some passing good. Ultras, on the tory 
side, had translated imperial unity into terms of their own 
sordid prejudices, and risked rebellion to gain a brief and 
accidental authority. On neither side had ' the carrying on 
of the Queen's government ' been the first ideal. It was to 
be the work of La Fontaine and Baldwin to make adminis- 
tration, varied and assisted by necessary reform, the first 
call on government. The term ' Liberal-Conservative ' has 
been definitely appropriated by a later government ; but 
| all the essentials of liberal-conservatism, its solid legislative 
\ advances, its desire for the development of Canada, its union 
y of British and French, and its stretching out after new 
| triumphs of interprovincial co-operation, were present in 
I the ministry which, with certain drastic changes, lasted from 
f 1848 until Elgin received their resignation in September I854. 1 

1 In this and subsequent pages I have ventured to use the term liberal- 
conservative in a sense differing from that recognized in ordinary Canadian politics. 
One party in the Dominion has appropriated a name which, strictly used, should 
apply to the union of factions before and after Confederation. But this seems to 
me too meagre and local an interpretation of the word ; for, as is explained later 
in the chapter, it was liberal-conservatism, i.e. the subordination of party divisions 
to national ends, and the elevation of administrative above purely political ideas, 
which enabled Peel, Bismarck and Cavour to achieve the triumphs associated with 
their names. In this sense liberal-conservatism is a method of government rather 
than a party nickname ; in Canada both Sir John A. Macdonald and Sir Wilfrid 
Laurier present notable examples of liberal -conservative leaders. 



LORD ELGIN'S ADMINISTRATION 53 

For the moment, however, the centre of importance 
seemed about to move elsewhere. It was the year of European 
revolution, when even English stability was feeling the strain 
of popular demands. Ireland, too, broken with famine and 
decimated through emigration, seemed about to ruin herself 
finally in a fierce challenge to English authority. In Canada,"! 
while politically there was merely sporadic disaffection, the I 
commercial conditions made directly for a movement of I 
separation from Britain and annexation to the United States. * 
Since 1846 the British connection had meant commercial 
loss to Canada, although the new freedom for importation 
into Canada, which 1848 brought, must effect some relief. 
The most obvious cure for the commercial ills seemed to be 
a simple transference of allegiance to the country the tariff 
of which was the chief stumbling-block in the way of Canadian 
prosperity. 

Of the three dangers two happily came to nought. The 
revolutionary storm spent its force without reaching Canada. 
A reform ministry was in power, and men saw their hopes 
about to be realized in peace. It was not worth even a riot 
to hasten that which time was sure to bring. Throughout 
the year French feeling moderated, and in La Fontaine it 
found an exponent not merely of great weight and dignity, 
but endowed with an admirable moderation ; and if ever 
there had been anything in the nationalist cry, the grotesque 
and foolish parodies of it, which Papineau published or 
declaimed from time to time, reduced that aspect of dis- 
affection to a negligible quantity. It took personalities like 
that of Mazzini, grievances like those of Ireland, to make the 
national ideas concrete and effectual. French Canada was 
now without the grievances, and La Fontaine, not Papineau, 
was the true national leader. So the year passed without 
its French-Canadian rebellion ; and Irish discontent fared 
no better. Rumours of general risings to be, passed over to 
Canada ; the Irish- American party faction in the United 
States could be heard, if not felt, and malcontents whispered 
that ' an American general lately returned from Mexico, was 
engaged to take command, presumably in Canada, when the 
proper time came.' But there was too little reality in the 



. 



54 PARTIES AND POLITICS, 1840-1867 

agitation, and it passed. It was otherwise, however, with 
the annexation movement, and not until reciprocity brought 
to theTCanadian merchant the prosperity he looked for, did 
annexation pass from among the irritating issues in Canadian 
politics. A great commercial revolution had been accom- 
plished, not without haltings and inconsistencies; revolu- 
tions, no matter how beneficent, always claim their victims, 
and Canada was paying for the policy that Peel had intro- 
duced for the benefit of England. ' I care not,' wrote Elgin, 
1 whether you be a Protectionist or a Free Trader ; it is the 
inconsistency of the imperial legislation, and not the adoption 
of one policy rather than another, which is the bane of the 
colonies.' 

And so a fateful year in the world's history drew to its 
close : with little real political discontent in the province ; 
with a government promising great things for the future ; 
and with a governor-general, not merely soundly consti- 
tutionalist, but sure that if one thing had guaranteed Canadian 
peace more than another, it was the unreserved confidence 
which he had given to a ministry approved alike by French 
and British. 

With 1849 it might seem as though Canada had passed at 
last into smooth water. The La Fontaine-Baldwin ministry 
had now settled to their work. In his speech at the opening 
of parliament Lord Elgin promised a year fruitful in reform. 
The last fragments of former discontent were to be lost in 
an act of mercy towards all who were still suffering from 
penal consequences of the Rebellion. The houses were 
recommended to consider legislation on the judicature of 
the province and its municipal institutions. Immigration 
was to be regulated, a university bill introduced to rectify 
previous mistakes, and a financial provision made in support 
of the common schools. When prorogation came in June 
the deputy-governor could congratulate parliament on ' the 
many important measures which you have been able to 
perfect,' -and even a visionary grumbler like William Hamilton 
Merritt could record in his journal that parliament had been 
prorogued ' after a session of unusual and singular produc- 
tiveness of new acts.' Among the measures to which the 




SIR LOUIS H. LA FONTAINE 
Afttr a phologratk by Nc/man, Monlrfal 



LORD ELGIN'S ADMINISTRATION 55 

royal assent was given were a University Bill, a Municipal 
Corporations Bill for Upper Canada, and one for the more 
effectual administration of justice in the Court of Chancery 
in Upper Canada. 

THE REBELLION LOSSES BILL 

But, by a freakish irony of fate, this year of solid govern- 
ment the most notable since the great session of 1841 is 
known chiefly as the year of the Rebellion Losses Bill. 1 , 
The matter is important, not in itself, but in its consequences, 
and as an illustration of the political conditions of the day. 
It was natural that there should have been destruction of 
property during the Rebellion ; natural, too, that some 
attempt at compensation should be made ; and according 
to the varieties of loss, so would the justice of the several 
claims also vary. The simplest came with the wanton 
destruction by rebels of loyalist property. But what was to 
be said where, as at the village of St Benoit, property seized, 
but guaranteed, by the British commander, was destroyed 
by volunteers as soon as Colborne left the place. The 
problem was laid before the imperial government early in 
1838. In the same year an ordinance authorized the appoint- 
ment of commissioners to investigate the claims of certain 
loyal inhabitants of Lower Canada a phrase altered, in the 
month of March 1838, to certain inhabitants. The govern- 
ment in Upper Canada, following suit, sought to compensate 
its loyal subjects. Even when Russell intimated the un- 
willingness of the British government to pay any indemnity 
to the provincial treasury, the provincial governments still 
persisted. Sydenhgm found, on his arrival in Lower Canada, 
that Colborne had already awarded 21,000 to claimants ; 
and in Upper Canada new acts not merely set apart 40,000 
from the provincial funds, but recognized that claims might 
arise through ' violence on the part of persons in Her Majesty's 
service.' 

1 A measure, according to Elgin, ' to which an importance so disproportionate 
has been attached in the recent history of our affairs, only because the British 
public bestows no attention upon us, except at seasons of agitation.' Elgin to 
Grey, October 5, 1852. 



56 PARTIES AND POLITICS, 1840-1867 

The first chapter of events closed when Sydenham ended ; 
the operations of the commission, since provincial credit 
could not face the strain of paying claims. Up to this point 
the only criticism which suggests itself is that war and revolt 
bring their necessary consequences with them, and that it 
is not easy, in restoration, to keep pace with the earlier work 
of destruction. 

The second stage was reached when Metcalfe, in answer 
to certain claims from Huntingdon, Lower Canada, suggested 
a general review of the situation followed by final settlement. 
This his parliament planned to accomplish in a series of 
acts, appropriating the duties on tavern licences to the 
purpose of compensation in Lower Canada, and the proceeds 
of the Marriage Licence Fund to those in Upper Canada. 
The commissioners entrusted with the inquiry were first 
instructed to classify carefully the cases of those who were, 
and of those who were not, engaged in the Rebellion ; and 
then, in a sentence which became notorious, they were told, 
' It is not His Excellency's intention that you should be 
guided by any other description of evidence than that furnished 
by the sentences of the courts of law.' In their report the 
commissioners included 2176 claims, in all amounting to 
241,965, IDS. sd. ; but they were of opinion that 100,000 
would meet all real losses. 

Then came the crisis under Elgin. Metcalfe had, for 
practical purposes, pledged his successor's support to the 
project ; and even if he had not, La Fontaine made it plain 
that refusal to support some measure of compensation would 
probably break up a ministry which had been the choice of 
the people and of their representatives. Yet the compensation 
about to be secured to French Canadians, many of whom had 
been actively or passively in revolt against England, roused 
afresh the old loyalty cry, and irritated racial prejudice 
into vigorous life. The tory ' die-hards ' in Canada and in 
Britain, politicians who regarded concessions to the French 
as a kind of treason, at once became vocal. But, in spite 
of criticism from the party of British ascendancy in Canada, 
and from statesmen in Britain, who were ignorant of the 
actual facts, it is difficult to see how Elgin could have acted 



LORD ELGIN'S ADMINISTRATION 57 

otherwise, even had he been opposed to the measure. The 
majorities, too, in the House of Assembly never fell below 
twenty, and the measure finally passed by forty-seven votes 
to eighteen. Nor must it be supposed that the majority was 
French as opposed to British. As Elgin pointed out, there 
was a majority for the bill, not merely among the British 
members for Lower Canada, but even in Upper Canada. 
In other words, assent was asked to a bill approved, as few 
other bills had been, by the representative opinion of both 
French and English. The bill passed in the lower house on 
March 9 ; on April 25 the governor-general was insulted as 
he came from meeting his parliament, the House of Parlia- 
ment was set on fire, mob law prevailed in Montreal, and 
on April 30 Elgin was once more insulted and the safety of 
his person endangered by another mob attack, the mob 
throughout the incident being reinforced by citizens of 
better standing. The natural conclusion was reached when, 
in November, Elgin had to report a change in the seat of 
government, since Montreal had proved itself unsuitable for 
the purpose. Apart from the exciting details of the outrage, 
two aspects of the incident concern the political history of 
Canada : the behaviour of the governor-general and the 
revelation made through it of Canadian party spirit. 

Of Elgin's calm wisdom there can now be no doubt. 

i Indeed, it is impossible to trace a single error in his conduct. 
He judged aright that his predecessor and his ministers left 
him no option in the matter.- His only alternative was to 
reserve the bill, but, as he pointed out, in words not without 
their heroic touch : ' I considered, therefore, that by reserv- 
ing the Bill, I should only cast on Her Majesty, and Her 
Majesty's advisers, a responsibility which ought, in the first 
instance, at least, to rest on my own shoulders, and that I 
x should awaken in the minds of the people at large, even of 
(those who were indifferent or hostile to the Bill, doubts as 
|to the sincerity with which it was intended that constitutional 
(government should be carried on in Canada.' Happier than 
his father-in-law, he found a response in Britain, and although 
Gladstone in the Commons and Brougham among the 
Peers led a fierce attack on awarding compensation to 



58 PARTIES AND POLITICS, 1840-1867 

' persons engaged in, or having aided or abetted the Re- 
bellion/ their criticism was more than balanced by one of 
Peel's stately and judicial utterances, congratulating Elgin 
on his firmness, resolution and impartiality, and urging 
that nothing be done to reawaken feuds and racial dis- 
tinctions. Enemies taunted the governor with his pusil- 
lanimous refusal to enter Montreal after the second insult ; 
but only to give him an opportunity to reveal himself at his 
very best, for he quoted Wellington's words in 1830 : ' I 
would have gone if the law had been equal to protect me, 
but that was not the case,' and he preferred the misreading 
of his motives to ' possible bloodshed and a conflict between 
races.' He had faced the crisis, and had come out more 
than conqueror. 

But there is a political interest as well as a personal. 
It may be questioned whether anything did more, on the 
one hand, to bring the French populace and the Canadian 
government into absolutely sound and friendly relations, and, 
on the other, to discredit tory ultras. In truth 1849 was 
a fatal year for the latter party. Born into the possession 
of unjust privilege and petty prejudice, governing in the 
narrowest spirit of caste feeling, incapable of any larger 
view of union, in which British and French might seem one, 
the tories of the older school were at last to reduce them- 
s to absurdity and nonentity. It had become apparent 
that they were the party of law and order only when law 
secured their privileges and order meant acquiescence in 
their claims ; and that their imperialistic sympathies faded 
and died when they could no longer dictate what the imperial 
policy should be. The gallant protectors of British ascend- 
ancy over French intrigues in 1837 found themselves, in 
1849, traitors as militant as any of their quondam opponents. 
It is significant, too, that when the annexationists made their 
boldest bid for power, at the end of the year, tory politicians 
and merchants found themselves hand in glove with radical 
malcontents in calling for a breach with that empire of 
which they had once regarded themselves as a forlorn 
remnant of defenders. 



LORD ELGIN'S ADMINISTRATION 59 

A CONSTRUCTIVE STATESMAN 

The year, then, of the Rebellion Losses Bill marks the 
decease of ancient and unreasoning toryism ; and it became 
possible for John A. Macdonald to plan a reconstructed 
conservative party on more general lines. It is this change 
in party relations which gives its importance to the foun- 
dation of two organizations towards the end of the year. 
In December the Annexation Association, which was formed 
out of a curious blend of genuine sympathizers with the 
United States, and tories alienated partly by Elgin's support 
to their opponents, partly by British commercial injury 
to Canada, issued an address to the people of Canada, in 
which the remedy prescribed for all their woes was ' a friendly 
and peaceful separation from British connection, and a 
Union upon equitable terms with the great North American 
Confederacy of Sovereign States.' The movement was con- 
fined mainly to Montreal, but it found sympathizers here and 
there throughout Canada, and the nature of its programme 
made it seem something far more formidable than was 
suggested by the number of its adherents. It was in answer 
to this seemingly fatal stroke at ancient tory policy and 
prestige that Macdonald began his work of conservative 
reconstruction, by suggesting, in opposition, a British 
American League, which should divert the existing feelings 
into less dangerous channels. With the genius for ex- 
pedients which was to distinguish that great constructive 
statesman, Macdonald, not satisfied with a tame assertion 
of loyalty to Britain, Brought forward the idea of which he 
became the most potent exponent, Federal Union. His hand 
framed the address of 1850, in which were the significant 
words : 

To urge our legislature by petition to pass an address 
to our gracious sovereign, and both Houses of Parlia- 
ment, praying them to authorize by an Act, the people 
to whom they profess to have already granted self- 
government, to hold a general Convention of Delegates 
for the purpose of considering and preparing a con- 
stitution for the government of this province, and with 



1 



60 PARTIES AND POLITICS, 1840-1867 

power to act in concert with delegates from such of the 
other British provinces in North America as may be 
desirous to form a federal Canada. 

It was perhaps natural that Elgin should feel coolly 
towards any idea recommended by a party which had in- 
sulted him signally and persistently, and towards any in- 
dividual associated with that party ; but had he only known 
it, Macdonald was of all Canadians the man best fitted to 
carry on the governor's policy of conciliation towards irritated 
interests and personages, and to develop the constitutionalism 
which had now been connected with its issue, Confederation. 

But already we have entered a new year, 1850, in which 
the ministry was to add to its legislative p*?9tige. The 
parliamentary session lasted from May 14 to August 10. 
At its commencement the governor-general had many pro- 
posals to make. He was able to assure Canadians that their 
navigation would now be free from the old laws ; he sug- 
gested the need of modifying commercial relations between 
Canada and the United States, and between the separate 
British North American provinces. Parliament was directed 
to look to its own constitution, and the reorganization of 
justice in the province was not to rest after its labours of the 
preceding year. Even although much of this programme 
was merely pious aspiration, the session saw many useful 
acts passed, including the extension to Lower Canada of 
the municipal reforms effected in Upper Canada, and the 
sanctioning of railway and road construction enterprises. 



THE CLERGY RESERVES 

But again, as in 1849, one measure claims an absolute 
preponderance of interest, not merely on its own merits, but 
because of its influence on general politics the question of 
the clergy reserves. It will be necessary to retrace our 
steps to the administration of Lord Sydenham. Sydenham 
had never concealed from himself the fact that in the settle- 
ment of this vexed question lay as much difficulty as in the 
effecting of the Union itself. Indeed, in one place he refers 
to it as ' of more importance than ten unions.' 



LORD ELGIN'S ADMINISTRATION 61 

He had probably few greater triumphs than when he 
induced the legislature to pass a measure of which James H. 
Price, commissioner of Crown Lands, could say with perfect 
truth, in 1 846: 'Although three-quarters of the people believed 
that arrangement was made in injustice and partiality, they 
quietly submitted as the only means of restoring peace to the 
land.' The basis of his legislation lay in the decisive utter- 
ance of the English judges : in the first place ' that the clergy 
of the Established Church of Scotland constituted one 
instance of clergy, according to the original act, other than 
those of the Church of England ' ; in the second place, that 
they ' did not intend that, besides that Church, the ministers 
of other churches may not be included under the term " Pro- 
testant Clergy " ' ; and in the third place, that ' there was 
no express authority reserved by that Act to the Colonial 
Legislature to repeal the provisions of such latter statute.' 
Accepting the correction of the judges on this last point, 
Sydenham, who thoroughly believed in the retention, for the 
churches, of the clergy reserves provision, secured both 
imperial and provincial legislation, ending the creation of 
fresh reserves, dividing the proceeds of past sales between 
the Churches of England and of Scotland, and securing the 
proceeds of future sales to the Churches of Canada, roughly 
in proportion to their numbers and importance. Moderate 
i men breathed freely when they thought that a main cause 
of friction had been removed from political life. 

But two forces prevented perfect conciliation. In 1843 
Scottish Presbyterianism was shaken to its basis by the great 
Free Church schism, and while the characteristic state and 
church doctrines of the Free Church leaders were not of a 
purely voluntary description, the state connection suffered a 
rude shock, and Scotsmen in Canada, as at home, assumed an 
attitude of bitter hostility towards ' the Establishment.' It 
so happened that the sudden growth of Scottish Voluntary- 
ism in Canada coincided with the arrival of one peculiarly 
well fitted to conduct an agitation on the subject. For, in 
August 1843, George Brown began his work in Canadian 
journalism, first in the Banner ; then, in 1844, in the more 
famous Globe. Brown's political qualities will be more fitly 



62 PARTIES AND POLITICS, 1840-1867 

characterized at a later stage. Meantime it may suffice to 
say that he had brought with him from Scotland more than 
his share of Scottish middle-class Puritanism and of Scottish 
political dialectic. If he often erred in dealing too largely 
in what Burke called ' metaphysics,' it was a fault rare 
enough among his fellow-politicians to be regarded almost 
as a virtue in him. The clergy reserves question, then, had 
found its advocatus diaboli. 

But there was a second and more efficient cause, the 
character of the Bishop of Toronto. Few figures bulk so 
largely as does Strachan's in modern Canadian history in 
comparison with their real ability. Born of a rude stock, 
and carrying with him to the grave the aggressive and uncon- 
ciliatory temper of his Aberdonian ancestors, Strachan was 
'the evil genius of church life in Canada. Of his energy 
' and courage there can be no doubt ; but he_possessed few 
of the qualities usually recognized as Christian. The finan- 
cial episode alluded to under SydenhanTs regime reveals a 
curious moral bluntness even obliquity ; and his succes- 
sive statements of the numbers and nature of Canadian 
sects give but a poor impression of his truthfulness. He 
had changed religion into ecclesiasticism, and thought any 
trickery or intrigue sanctified if only it sought an ecclesi- 
astical end. 

Sydenham, Bagot, and now Elgin, all record in their 
private correspondence the irritation and dislike which 
Strachan's bustling and misguided energy created in their 
minds. And now this headlong folly was to meet with its 
due retribution. Metcalfe's last parliament had had the 
old question forced upon it by ecclesiastical petitions, seeking 
to obtain not simply the annual moneys granted under the 
act, but control of that which produced the income. A 
committee of the house, of which Sherwood was the leading 
spirit, reported on April 17, and although the objects sought 
by the churchmen were denied them on May 22, the fact 
remained that, at the very time when the populace more 
especially in its Scottish sections might be counted on as 
hostile, the whole question of secularization was once more 
likely to enter practical politics. When the move was made 



LORD ELGIN'S ADMINISTRATION 63 

in 1846 to obtain ' a new Act of the Imperial Parliament, 
authorizing a division of the land itself, instead of the income 
arising from the proceeds, among the religious bodies,' 
Baldwin, than whom the Church of England had no more 
faithful friend, prophesied ' that if the question be reopened, 
the former fierce agitation will be resumed, and may end in 
the total discomfiture of the Church. 1 By^jfi^ohis prophecy - 
had been fulfilled, and it seemed unlikely that tKe secularists 
would be content with anything but absolute victory. At 
least the numbers of the churches concerned suggested this 
conclusion, for while the Church of England possessed some 
twenty thousand of a majority over any other sect, Presby- 
terians and Methodists were each of them two hundred 
thousand strong, and there were Anglicans in direct revolt 
against their leader. Faced with popular defeat in the 
province, it had always been Strachan's habit to go behind 
local opinion and to work the oracle in Britain. But while 
such tampering with constitutional government might delay 
the natural conclusion of events for a season, it was certain 
to result in a more complete disaster, apart from the inci- 
dental evils it produced. ' It is an evil of no small magni- 
tude,' wrote Elgin on this point, ' that ... its friends are 
tempted rather to endeavour to influence opinion in England, 
than to resort to measures which may strengthen their 
position in the Colony.' 

But trouble was brewing for others besides the Bishop of 
Toronto. The ministry found itself in a curious dilemma. 
Its leading members assumed an admirably constitutional 
and moderate position. The Imperial Act of 1840 seemed to 
them the true basis for future church and state relations. 
Baldwin was a sincerely devout believer in a measure of state 
support for religion ; La Fontaine could not well be other- 
wise ; and, whether through the influence of his advisers, or 
because their views expressed his own, Elgin took up a 
similar position. 

But many of the supporters of government were rabid 
secularizers, and they had not merely the logic of the situation 
on their side, but they had, in George Brown, an advocate 
whose power of vehement advocacy was equalled only by his 



64 PARTIES AND POLITICS, 1840-1867 

gift of trenchant criticism. Originally Brown had no inten- 
tion of identifying himself with the discontented fragments 
of extreme reform to which the name ' Clear Grit ' was now 
being given. As late as October 1850 he talked of ' Clear 
Grits' comprising 'disappointed ministerialists, ultra English 
radicals, Republicans and Annexationists. ... As a party on 
their own footing they are powerless except to do mischief.' 
But events were driving him into an opposition to the ministry 
even more extreme than that of the ' Clear Grits.' As the 
session of 1850 proceeded, the support given to the ministry 
by the Globe began to waver. The centre of danger seemed to 
be with the French, and Brown, who thought that separation 
from the French was the inevitable fate of the radicals, hoped 
that state connection with religion might be the separating 
issue. What he dreaded most was a political reconstruction, 
in which ' moderate reformers, moderate conservatives, and 
moderate Canadians ' might combine to exclude the changes 
for which he had hoped. Should Brown separate himself 
from his party, it might prove difficult for the La Fontaine- 
Baldwin ministry to maintain its position against a combina- 
tion of the various factions. 

Another circumstance perplexed ministerial action. What- 
ever the provincial parliament might do, its hands were tied by 
the necessity of preliminary imperial legislation. Now, while 
Lord John Russell's ministry, with Grey at the Colonial Office, 
might be trusted to look favourably on change, their position 
was by no means secure from defeat, and, in any case, as the 
movement for disestablishment of the Irish Church was to 
prove, the House of Lords was the last stronghold of keen 
church feeling. As Hincks pointed out at a later stage, even, 
if secularization were decisively accepted in Canada, it might 
be necessary to disguise the end they sought, when British 
legislation was called in. 

As it was, the question, left an open one, was raised by 
Price in a motion which alluded to ' the intense dissatisfaction 
of the great majority of Her Majesty's subjects in Upper 
Canada ' ; and the essence of his case was contained in the 
motion of June 21 : ' That this House is of opinion that no 
Religious denomination can be held to have such vested 



LORD ELGIN'S ADMINISTRATION 65 

interest in the revenue derived from the proceeds of the said 
Clergy Reserves, as should prevent further legislation with 
reference to the disposal of them, but this House is neverthe- 
less of opinion that the claims of existing incumbents should 
be treated in the most liberal manner.' 

In the debate, which was conducted with very praise- 
worthy dignity, it was La Fontaine who made the most 
notable contribution to the subject. Averse himself to any 
policy of secularization, fair-minded enough to see the case 
for all the different contending bodies, he stated his convic- 
tion that the objects of the Constitutional Act must not be 
rescinded, that the property should be divided amongst all 
Protestant denominations, that the "division should be an 
equal division, and that ' the present division of the Revenues 
is unequal, unjus.t, and not in accordance with the opinion 
of* the law officers of the, Crown.' Baldwin, too, spoke in 
similar vein, declaring that the revenues should be applied 
to purposes contemplated by the statute as nearly as possible ; 
and all knew that Elgin's views were on this point those 
of his ministers. The appeal to the imperial authority was 
carried, but the house divided, thirty-six for and thirty-four 
against the address, and among the minority were La Fontaine 
and other French-Canadian supporters of the government. 

It may be well to trace the matter to its end. Already it 
had discredited one party with the populace in Upper Canada, 
and had been one of the most active forces making for the 
Rebellion. Even as it ended, it was to pull down with it the 
government which gave it a final settlement. From 1850 
onwards La Fontaine and the moderate French opinion 
could rank merely as lukewarm in support ; and on the other 
side Brown and the ' Clear Grits ' grew fiercer and more 
impetuous in their attack. Both in the house and through 
the columns of the Globe Brown directed a constant stream 
of bitter comment against the moderatism of the ministry ; 
and it became apparent that if only MacNab and the tories 
could join in factious union with Brown and the radicals at 
a sacrifice of principle, justifiable in their eyes as the means 
of wrecking the ministry the end might come at any time. 
When Hincks formed his ministry in 1851, it was on the basis of 
VOL. v * 



66 PARTIES AND POLITICS, 1840-1867 

secularization as a cabinet issue, the only question being that 
of fitness in the occasion. But again events proved wayward. 

The following year found Russell out of power, and Derby, 
a true church and state man, in. In spite of representations 
from Canada, and from Hincks, who was at the time in 
England, the English government refused to move. It was 
useless, as it was only too easy, to prove that ' the opinions 
of the mass of the people have never wavered during the 
last twenty-five years.' The high and dry conservatism of 
Derby's government, whether worked on from Toronto or 
not, had a profound distrust of colonial sentiment. ' They 
could only regard,' wrote Pakington to Elgin, * any measure 
which would place it in the power of an accidental majority 
of the Colonial Assembly, however small, to divert for ever 
from its sacred object [the Clergy Reserves fund] with the 
most serious doubt and hesitation.' In answer to British 
opposition Hincks proposed his six resolutions in September 
1852 ; and, fortunately, as well for the British connection as 
for the peace of Canada, the end of the year saw Derby once 
more out of power, and an Aberdeen ministry, in harmony 
with Elgin and Grey's more progressive policy in colonial 
matters, ready to co-operate in a solution. 

On December 28, 1852, Newcastle intimated his appoint- 
ment as secretary of state for the Colonies. On January 15, 
1853, he announced the intention of government to give the 
colonial legislature a free hand ; and on March 24 he dis- 
patched a copy of the bill, which by that time had passed its 
second reading by a large majority. A few days earlier the 
Bishop of Toronto had achieved pathos in a letter to the 
secretary, being willing, he said, ' to avert, with the sacrifice 
of my life, the calamities, which the passing of your Bill will 
bring upon the Church in Canada.' 

It must have given at least partial satisfaction to the 
bishop when the clergy reserves question, in extremis, 
contrived to wreck the great reform ministry which had held 
rule so long. But that is to anticipate events. The satis- 
factory conclusion was reached when Elgin, in his very latest 
) dispatch, reported the passage of the bill which finally secu- 
/ larized the reserves by great majorities in either house. The 



LORD ELGIN'S ADMINISTRATION 67 

student of history closes the record with many reflections, 
among others that pugnacious ecclesiastics are doubtful gifts r J 
to any nation, and that religion may not seek support save 
in the willing hearts and generous impulses of those who ,' Q 
truly believe its doctrines and follow its precepts. 

POLITICAL COMBINATIONS AND PERMUTATIONS 

It is now time to return to the fortunes of the La Fontaine 
ministry, at the close of the parliamentary session in 1850. 
They had had other troubles besides those introduced by the 
clergy reserves question. In spite of the difficult position 
with regard to the British connection in Canada, British 
politicians, and among them, unfortunately, Lord John 
Russell, insisted on speaking as though separation were an 
inevitable fate, and Britain coolly prepared for the cata- 
strophe. Baldwin, whose loyalty was as steady as it was 
quiet, felt the unwisdom of Russell's speech acutely, and 
Elgin bluntly told the colonial secretary that he must renounce 
the habit of telling the colonies that the colonial is a pro- 
visional existence. Later in the year Merritt, who had 
accepted office, resigned, on the score of economy. A cry 
had arisen for retrenchment, and although a large and various 
committee had frittered away its time in making useless 
suggestions, and although the ministers saw clearly that the 
possibilities of reduction were very limited, Merritt, who had 
an irritable conscience on the matter, and a gift for impractic- 
able ideas, decided to clear himself from the responsibility of 
extravagance by retirement. 

Meanwhile parties and groups were exhibiting themselves 
in strange combinations and profitless freaks. Enough has 
been said already of the annexationist section and the British 
American League. Besides these there was Papineau, playing 
the ineffectual revolutionist in company with his four or 
five rouges, and MacNab, whom not even the Montreal riots 
had calmed down into decent conservatism. The truth was 
that Canada had not yet learned the methods of conduct- 
ing a true opposition, and ministerial strength produced as 
its natural result inconsistency and lack of principle in the 



68 PARTIES AND POLITICS, 1840-1867 

opposition. How little reality the various opposing frag- 
ments possessed is revealed by such facts as, that the Inde- 
pendent, the only annexationist paper in Upper Canada, died 
in April ' of inanition ' ; that at the end of the parliamentary 
session MacNab made approaches to the governor-general, 
whom he and his paper, the Hamilton Spectator, had previ- 
ously been interested in abusing ; and that in January 1852, 
L'Avenir, the journal through which Papineau expressed his 
views, found the same fate as the Independent. 

Nevertheless the position of the ministry was no longer 
what it had been. Brown's accumulating hostility was 
breaking up the solidarity of reform in Upper Canada, and, 
by connecting violent anti-Roman views with radicalism, was 
beginning to endanger the connection between French and 
British. Here, in fact, lay the most dangerous element in 
the situation ; and Elgin must receive credit for being the 
first to notice it. Aware, as he could not but be, that 
his impartiality and the solid wisdom of Baldwin and La 
Fontaine had done much to give the French section their 
natural place in politics, he saw that the French were natur- 
ally conservative in their outlook, and that the British Reform 
party, with which La Fontaine had co-operated since Union, 
was, under the influence of Brown and the ' Clear Grits,' 
changing its tone. ' If Clear-Gritism absorbs all lines of 
Upper Canadian liberalism,' wrote Elgin, more than a year 
before Macdonald understood what his new policy must be, 
' the French, unless some interference from without checks 
the natural current of events, will fall off from them, and form 
an alliance with the Upper Canadian Tories.' The main 
political interest, then, lies in tracing the decline and fall of 
the reform party to the point at which a new force, liberal- 
conservatism, takes over its duties. 



THE FALL OF THE REFORM PARTY 

In 1851 another step was taken towards dissolution, for 
the course of the year brought with it the transformation of 
the ministry. The commercial strain was no longer acute, 
and Hincks, speaking of financial conditions, was able to 



LORD ELGIN'S ADMINISTRATION 69 

dwell on the great prosperity which prevailed throughout the 
country, and the increase in imports since 1848. The legis- 
lative programme was no less ambitious than in former years, 
and the railway movement found eager support in the govern- 
ment. But the leaders had become restless in office. La 
Fontaine, as has been seen, was out of touch with Upper 
Canadian sentiment concerning the clergy reserves, and the 
rectification of seigneurial tenure opened fresh grounds for 
disquiet in his mind. He was a whig, in days when reformers 
were passing into radicalism. But Baldwin was the first to 
leave. Baldwin, whom the governor recognized as the most 
conservative man in the province and ' worth three regiments 
to the British connexion,' found himself equally out of touch 
with the reform feeling, and when William Lyon Mackenzie, 
whose fervours were once more permitted to express them- 
selves in parliament, precipitated a crisis in a vote for the 
abolition of that Court of Chancery which Baldwin had done 
his best to reform, and when Baldwin's position was saved 
only through the votes of Lower Canada, the minister's 
resignation followed within a week. The following general 
election saw him ousted from parliament, and so there passed 
from public life a man of noble character, strenuous political 
principle, and solid practical wisdom, the most admirable 
public character up to that point produced in Canada. In 
the autumn La Fontaine followed his old comrade-in-arms, 
and by the end of October the new Hincks-Morin adminis- 
tration was complete a second edition of the earlier cabinet, 
with the best financier in Canada at its head, and an amount 
of practical ability at its command probably superior to that 
of any earlier government. 

Yet when parliament was dissolved on November i, and 
the ministry went to the polls with a fair assurance of victory, 
it was still true that things had changed for the worse. 
George Brown redoubled his strokes. It was too apparent, 
he said, that Hincks and his colleagues had surrendered to 
the French, and he asked whether any intelligent reformer 
of Upper Canada could read through the list of the new 
ministry, and honestly say that it presented the slightest 
hope of a policy different from that of its predecessor. 



yo PARTIES AND POLITICS, 1840-1867 

The attack was doubly unfortunate because, in spite of 
Brown's suspicions, there was a change, and that change 
made the French alliance more difficult. Along with other 
reforms the ministry stood pledged to a policy of secularizing 
the clergy reserves the very point which had disquieted 
moderates like La Fontaine. Among the new ministers, 
men like Rolph and Malcolm Cameron represented a very 
different type of politician from those of Baldwin's choice, 
and as Clear-Gritism entered, no matter how modified in 
its expression, French-Canadian sympathy must grow cool. 
And, with all the other considerations, there was the lessened 
confidence of the public in the new leader ; for Hincks was 
neither Baldwin nor La Fontaine, men firmly trusted even 
by those who opposed them. It was already whispered that 
there was a sound financial basis for his friendship with 
Elgin, and that he was too good a business man to let scruples 
of office and leadership hinder him from seizing opportuni- 
ties for private profit. For the present, however, success 
attended their efforts. After an election, in which Elgin 
could flatter himself that there were few treasonous sugges- 
tions of separation and little foolish radical talk, the minis- 
terialists found themselves with a clear majority over all 
other sections, and the tories had to admit the loss of men 
like Henry Sherwood, John Hillyard Cameron, and William 
Cayley. But George Brown was now member for Lambton, 
and the ministers could look forward to a vocal session. 

The main movement in politics the fate of the adminis- 
tration becomes from this moment of so absorbing interest 
that it is necessary to exclude from view other subordinate 
issues. It may, however, be mentioned that during 1852 
Derby's government held office in England, a fact by no 
means favourable to the Canadian ministry ; that in Sep- 
tember of the same year Hincks defined the government 
attitude towards the clergy reserves ; and that the session, 
which lasted, with an adjournment, from August 19, 1852, to 
June 14, 1853, was perhaps the most fruitful of acts of any 
since the provinces had united, including among its labours 
an act for the increase in the number of representatives in 
the lower house, a redistribution act, to come into operation 



LORD ELGIN'S ADMINISTRATION 71 

in 1855, an address to obtain freedom for an elective upper 
chamber, and a bill on seigneurial tenure, rejected, how- 
ever, in the legislative council. 

But through all these labours the ministry was weakening 
in itself and in popular opinion. It had to face Brown's 
hurricane-like onslaught on the address, not the less damaging 
even although Brown was not yet prepared to vote for the 
opposition. The railway policy of the ministry was meeting 
with rude checks, and the line from Halifax to Quebec, which 
had occupied so much of its energies, was as much an event 
of the future as ever. Month after month the complicated 
private financial transactions of Hincks were involving him 
in a network of popular suspicions. At the beginning of 
1853 the domain farm of the seigniory of Lauzon was pur- 
chased by joint owners, of whom he was one. In April shares 
in the Grand Trunk Railway were allotted to him under 
circumstances which certainly required explanation. To- 
wards the end of the year there were rumours that the 
minister had introduced legislation for the improvement of 
the Ottawa, at a locality in which he had an interest, and 
there were other accusations of a similarly damaging char- 
acter. The importance of these in discrediting the govern- 
ment may be gauged by the report of the select committee 
of 1855, which, while it exonerated Hincks absolutely from 
the charges, raised the question 

whether it is beneficial to the due administration of 
the affairs of this country, for the ministers to purchase 
public lands sold at public competition, and municipal 
debentures, also offered in open market or otherwise ; 
and lastly, whether it would be advisable to increase the 
salaries of the Members of the Executive Council to 
such a figure as would relieve them from the necessity 
of engaging in private dealings to enable them to support 
their families and maintain the dignity of their position, 
without resorting to any kind of business transactions, 
while in the service of the Crown. 

The conduct of the attack on the clergy reserves brought 
only additional weakness. As has been shown, the hands of 
the Canadian government were tied by the action of Britain 



72 PARTIES AND POLITICS, 1840-1867 

during 1852, and then, when in 1853 news came of the 
Imperial Act, it did not seem right either to Elgin or to his 
ministers to complete legislation on so vexed a question until 
the new machinery of government had been brought into 
operation. A failing ministry is certain to find new occa- 
sions for discredit, and now chance co-operated with more 
normal factors. 

Gavazzi, an Italian enthusiast, with that unfortunate 
desire to expose the evils of a church in which he had previ- 
ously served which has always proved so fruitful a source of 
trouble, arrived in Canada in June 1853, prepared to expose 
what his class terms ' the errors of Rome.' The natural 
consequences followed. First at Quebec and then at 
Montreal there were furious riots, and at Montreal shots 
were fired at the crowd. Occasion was at once taken by 
Brown and his anti-Romanist following to describe the inci- 
dent as one of ' awful murders ' and ' Roman Catholic 
violence.' When Hincks, for reasons which may only be 
guessed at, protected the Mayor of Montreal, and did not 
push forward an inquiry into the facts concerning the order 
to fire which public opinion attributed to the mayor, he was 
preparing trouble for himself in Upper Canada ; and, in any 
case, the relations between Upper Canadian reform and the 
French party became more strained than ever. In June the 
government lost its attorney-general, William Buell Richards, 
and in September its commissioner of Public Works the 
former to the bench, the latter because the free trade prin- 
ciples which he professed were violated by the talk in which 
the ministry now indulged, of retaliation as a means of 
securing reciprocity with the United States. 

The end came in 1854. Broken in their credit with the 
public, drawn towards violent contradictory policies, on 
the one hand by moderates and French Canadians, on the 
other by reformers and anti-church men, blasted with the 
effective rhetoric of Brown and his newspaper, incapable of 
quick action in the church question, where nothing but quick 
action would satisfy the radicals, the party deserved to die, 
and die it did. It had ceased to be capable of real service 
to Canada, and the happiest fate must be a quick decease. 



LORD ELGIN'S ADMINISTRATION 73 

Brown had now determined to wreck the government, and 
Macdonald, the power behind the throne among the con- 
servatives, saw his way, through a consolidation of the 
moderates jind an alliance with the French, to a new govern- 
ment TTbelieve,' he wrote in Fc-bruury 1854, ' that there 
must be a change of ministry after the election, and, from 
my friendly relations with the French, I am inclined to 
believe my assistance would be sought.' 

The end came more dramatically than was expected. 
When parliament met on June 13 the ministry were at one 
with the governor-general as to the procedure they must 
follow. Two great measures were impending, on the clergy 
reserves and on seigneurial tenure. The cabinet, and, more 
decidedly, Elgin himself, argued that, on the threshold of a 
complete reorganization of the legislative assembly, they could 
not force on measures so drastic in their operation. Dis- 
solution seemed necessary, but, before dissolution, legislation 
must be introduced to hasten the changes which at present 
could not come into operation until 1855. Their policy 
therefore resolved itself into a combination of delay and haste. 
The bills must be postponed ; parliament must be asked to 
antedate the new system of registration ; and an immediate 
dissolution must fling the responsibility of further legislation 
on the revised electorate. Unfortunately for their cal- 
culations, the opposition was too strong. After bearing the 
brunt of an attack on their postponement of the session, 
the ministry found itself in a minority of twenty-nine votes 
to forty-two ; for an amendment by Louis Victor Sicotte, 
to a previous amendment by Joseph Edouard Cauchon, 
expressing regret ' that His Excellency's government do 
not intend to submit to the legislature during the present 
session a bill for the immediate settlement of the Clergy 
Reserves,' enabled all shades of the opposition to unite on 
the clergy reserves delay. An adjournment, a quickly and 
secretly planned dissolution, a furious scene in the house, 
and a constitutional challenge from the speaker on a session 
barren of even a single legal measure, preceded the summons 
to hear Elgin's word of dismissal. 

In a sense the speaker's criticism was the last stroke 



74 PARTIES AND POLITICS, 1840-1867 

discrediting an already discredited ministry. The election, 
which found ' Clear Grits ' and tones fighting side by side 
against the government, saw the ministry maintain a gallant 
fight ; but the combination was too strong, and the de- 
finitive defeat occurred over the speakership, on September 5. 
The remainder of a great session belongs to the history of 
the fortunes of liberal-conservatism. 



RECIPROCITY WITH THE UNITED STATES 

But before liberal-conservatism came into full power, 
Elgin had gone. His last year of office had been, perhaps, 
his most illustrious. Already he had proved himself an 
infallible constitutionalist. He had wooed and won the 
French into ways of quiet government and confidence in 
British administration. He had refused to give way to tory 
violence, and not a little of the confidence which, even after 

'11851, the country placed in their government, was due to 
nis astute moderation. He was to complete the tale of a 

/successful rule by bringing to Canada the measure of reci- 

Iprocity with the United States for which Canadians had so 

(long been calling. 

Not slowly, but surely, Elgin had been winning his way 

linto the good graces of the United States. As early as 
11849 he had found the republican government willing to 
protect his province against improper interference along 
the border-line. In the following year a rapprochement 
between the citizens of Buffalo and Toronto had found 
Elgin the real centre of attraction. ' By Heaven,' one of the 
visitors had declared, ' if he were on our side, we 'd make 
him President. 1 A year later he had met and dominated, 
by his diplomatic friendliness, all sections of American 
society at Boston. And now, during the last months of his 
tenure of office, he turned all this general popularity to 
very definite account. Since the commercial revolution in 
Britain in 1846 the great object before Canadian commerce 
had been to restore the balance lost through the disappear- 
ance of the British preference, and to create freer trafficking 
with the United States. Reciprocity was mentioned in 



LORD ELGIN'S ADMINISTRATION 75 

Elgin's earliest speech to parliament, and he saw from the first 
that the cry for annexation, being really commercial and 
not political, could best be met by gaining without annexation 
all the fruits which Canadian merchants looked for as the 
consequences of annexation. The idea had been flung back 
and forward between the two states in the intervening years. 

The Committee on Commerce, in the House of Repre- 
sentatives, had been instructed, as early as December 1846, 
to inquire into the question. Two years later a bill passed 
through the House of Representatives only to die a natural 
death thereafter, and between that date and 1854 the bal- 
ance swung up and down, the desire to complete negotia- 
tions being as absent among the Americans as the power 
to complete was lacking in Canada. The commercial settle- 
ment has been traced elsewhere. 1 The political interest 
lies in the final proof which it gave of Elgin's diplomatic 
skill. Happily the story of the whole affair, not too whim- 
sically humorous, remains behind in the writings and letters 
of that eccentric genius Laurence Oliphant, who served 
with Elgin throughout the short campaign. 

On May 23, 1854, Elgin arrived in New York, and hurried 
on to Washington. In the next two weeks his assiduous 
friendliness and seeming absence of reserve had won the 
democratic votes, which might have wrecked his work ; 
and on June 5 ' there was concluded, in exactly a fortnight, 
a treaty, to negotiate which had taxed the inventive genius 
of the Foreign Office and all the conventional methods of 
diplomacy for the previous seven years.' To appraise the 
value of his labours it is unnecessary to attribute to Elgin 
any great genius in economic theory, or even to claim 
unusual subtlety in what Europe called statecraft. But he 
understood the genius of the people with whom he had to 
cope ; and where his reason refused acquiescence in their 
political methods, he was courtier enough to seem friendlier 
even than he was. ' He is the most thorough diplomat 
possible,' wrote Oliphant with an admiration which was not 
entirely lacking in wonder, ' never loses sight of his object, 
and while he is chaffing Yankees, and slapping them on the 

1 See ' Economic History, 1840-1867 ' in this volume. 



76 PARTIES AND POLITICS, 1840-1867 

back, he is systematically pursuing that object. The conse- 
quence is, he is the most popular Englishman that ever 
visited the United States.' 

THE CLOSE OF ELGIN'S RULE 

Apart from the few rude moments of party change, the 
last months of office, from June to December, gave the 
departing governor a peculiarly benign ending to his strenuous 
period of^ule. His latest report was able to point to progress, 
alike in commerce, education and general civilization ; and 
its closing paragraph a postscript gave news of the assent 
of Nova Scotia to the Fishing and Reciprocity Treaty. His 
last official dispatch announced the settlement of the two 
outstanding exciting issues, seigneurial tenure and clergy 
reserves. Before that date he had proved his freedom 
from personal bias by calling into power a party, many of 
whom had systematically refused either to call at Govern- 
ment House or to recognize His Excellency in the street. 
In estimating greatness we are accustomed to consider not 
merely the man, but the occasion, and to include the grandeur 
of the whirlwind and the fire in our estimate of the spirit 
which could direct them. Elgin had nothing in him of this 
daemonic and contentious glory. He was a plain man, 
seeking normal and peaceful ends in a province not yet 
free from its parochial limitations. On only one occasion, 
during his time of office, did an opportunity come for what 
the crowd calls heroism, and Elgin chose then to avoid the 
glory of resolute folly, and to seek quietness and law and 
unity instead. They keep the Abbey and St Paul's for 
the warriors and men of crises ; but the British Empire 
stands because there have been men wise enough to avoid 
crises, great enough to prepare a way for democratic triumphs 
by subordinating their personal energies to suit the public 
good. Chief among these stands Elgin. 



LIBERAL-CONSERVATISM, CONFEDERATION 77 

IV 

LIBERAL-CONSERVATISM AND CONFEDERATION 1 
A NEW POLITICAL DAY DAWNS 

" I "HE departure of Lord Elgin from Canada was some- 
thing more than a personal event ; it marked the 
end of one epoch in Canadian parliamentary history, 
and the beginning of another. Up to 1854 fundamental 
constitutional questions were still being settled, and parties 
divided on these questions, in accordance with old prejudices 
and opinions inherited from Britain. At the same time 
the governors-general were, even when opposed by public 
opinion, in every case the foremost figures in politics, and 
not all the suavity and diplomacy of Elgin could disguise 
the fact that his influence over his ministers was deeper 
than even they realized. Canada had been claiming her 
own, but the men who put the case, for her and against, 
were Englishmen, not Canadians. After 1854 a very great 
change occurs ; in which the colony furnishes her own 
governors, and the questions come to be less those of prin- 
ciple than of political expediency. Macdonald, Cartier and 
Brown take the place of Sydenham and Elgin, and a policy 
of ways and means the 'adjustment of political machinery 
to suit local needs takes the place of the struggle, in prin- 

1 As I have chosen in this section to depart from strict chronological order, I 
have thought it advisable to add the following list of the administrations which held 
office between September 1854 and July 1867 : 

MacNab-Morin, September 1854. 

MacNab-Tache, January 1855. 

Tache-Macdonald, May 1856. 

Macdonald -Cartier, November 1857 

Brown-Dorion, August 1858. 

Macdonald-Cartier, August 1858. 

J. S. Macdonald-Sicotte, May 1862. 

J. S. Macdonald-Dorion, August 1862. 

Tache-Macdonald, March 1864. 

Tache-Macdonald-Brown, June 1864. 

In June 1866 the Hon. George Brown retired from the administration, without, 
however, causing any real change of government. 



78 PARTIES AND POLITICS, 1840-1867 

ciple, for responsible government and for free churches in 
a free state. 

The most obvious fact in the years before Confederation 
is the diminution in importance of the governor-general. 
Two men, Sir Edmund Head and Lord Monck, held office 
between 1854 and 1867, their tenure of office extending over 
a period equivalent to that occupied by their four predecessors 
combined. Yet they hardly enter parliamentary history 
except as accessories. It may indeed be a result of their 
comparative unimportance as individuals. It is strange 
to find Sydenham's successor addressed, as Monck was by 
Newcastle (July 10, 1863), in a remonstrance concerning 
inadequate dispatches : ' If, in the present case, a motion 
were made in this country for papers relative to events, 
upon which the Imperial Parliament might justly expect 
Her Majesty's government to be fully informed, the pro- 
duction of your Lordship's despatches would throw no light 
upon the subject.' Monck at least was more concerned with 
questions of diplomacy and defence than with the subtleties 
of Canadian politics, and was satisfied, as his great pre- 
decessors never had been, with leaving ministries to work 
out their own salvation. But the explanation lies some- 
where beyond the mere personal equation. The office itself 
had become less important with the substantial grant of 
responsible government. 

By far the most notorious example of viceregal inter- 
ference was Head's treatment of the Brown-Dorion episode 
in August 1858. In that crisis, in which Head absolutely 
refused to grant his new first minister, Brown, the privilege 
of a dissolution, and so wrecked the new-made administra- 
tion, the governor-general displayed no feebleness of judg- 
ment, and the columns of the Toronto Globe resounded with 
charges of dictatorial conduct, and suggested that a second 
Metcalfe had come to judgment. But, at best, Head was 
able merely to minimize the disturbance caused by mal- 
contents to the Macdonald-Cartier government, and, after 
August 6, power passed once more incontrovertibly into the 
hands of the colonial leaders. Perhaps with injustice, but 
not without some appearance of justification, Head was 



LIBERAL-CONSERVATISM, CONFEDERATION 79 

accused of playing the game of the liberal-conservatives. 
The heroic days of the governor-generalship were over, and 
new Sydenhams must, like the king's ministers in Britain, 
accept quietly a diminished glory. 

Explanatory of this shrinking in power, the great increase 
in national spirit, and in the claims made by that spirit for 
freer play, demands attention. With reciprocity had come 
prosperity ; with prosperity had come independence, and a 
great increase in the numbers of the colonists. The popu- 
lation of Upper Canada, which had been 486,055 in 1842, was 
1,393,710 in 1 86 1, and the lower province had 1,100,731 in 
place of 690,496. Education, in the energetic hands of 
Egerton Ryerson, was playing its part ; every addition to the 
travelling conveniences of the provinces meant additional 
political cohesion ; and the central government, now really 
representative, was quick to feel the change, and to add to 
its momentum. The strong imperial note in John A. Mac- 
donald's speeches bears witness to the popular movement by 
its underlying nationalism it is Canada, no mean national 
unit, which begins to offer a filial assistance to the mother 
country. 

At times the new spirit seemed about to cause friction 
with Britain. The refusal to accept the militia improve- 
ments of 1862 caused a storm of discontent in Britain, and 
responsible organs like the Times sneered at the pretensions 
of Canadians, who, in spite of their assertiveness, consented 
to do nothing when the time came. Developments in tariff 
policy are dealt with elsewhere, 1 but it is worth notice that 
the spirit of Canadian nationalism appeared nowhere so con- 
spicuously as in the development of a national economic 
policy, and nowhere caused stronger feelings of dissent than 
in the mother country. Indeed, Gait's memorandum of 
October 25, 1859, is perhaps the firmest statement of in- 
dependence made by any responsible provincial ministry : 

The government of Canada cannot through those 
feelings of deference, which they owe to the Imperial 
authorities, in any measure waive, or diminish the right 
of the people of Canada to decide for themselves both 

1 See ' Economic History, 1840-1867 ' in this volume. 



8o PARTIES AND POLITICS, 1840-1867 

as to the mode and extent to which taxation shall be 
imposed. . . . The Imperial government are not re- 
sponsible for the debts and engagements of Canada. 
They do not maintain its judicial, educational, or civil 
service. They contribute nothing to the internal 
government of the country ; and the Provincial Legis- 
lature, acting through a ministry directly responsible to 
it, has to make provision for all these wants. They 
must necessarily claim and exercise the widest latitude, 
as to the nature, and the extent of the burdens to be 
placed upon the industry of the people. 

The British people were learning the most difficult of 
imperial lessons the price they had to pay for conceding 
home rule to a colony. 

Canada, then, in politics had come to one of the definite 
crises which all nations who earn legislative independence 
have to face. In England it had come, after the storm and 
clamour of the great Rebellion, when a few English states- 
men, Shaftesbury foremost among them, realized that 
battles had passed from the plain to the assembly hall ; that 
parliamentary tactics were the mode chosen by the new age 
for political advance ; and that, in future, the evolution of 
a great party, which might take the place of the declining 
kingship, meant more for liberty than scores of charters or 
statutes of liberties. In Canada there had been the Rebellion 
and the struggle with Metcalfe ; the home rule declarations 
and democratic practice of Elgin had been their Revolution 
Settlement. It now remained for the populace to prove that 
their new independence was something more than mere per- 
mission to misgovern themselves. 



GREAT NATIONAL ISSUES 

In the thirteen years between Elgin's departure and 
Confederation, Canadian statesmen had three great political 
issues to face. First and foremost there was the settlement 
of party government, on lines which would make it stable 
and efficient. Up to 1854, even tne great Baldwin-La Fon- 
taine ministry had been substantially the stronger for Elgin's 



LIBERAL-CONSERVATISM, CONFEDERATION 81 

secret counsels and support. Now, party administrations 
must stand alone but did parties coherent enough to assume 
responsibility exist ? And to which of them, if they existed, 
should the destinies of the country be entrusted ? But the 
party question carried implicit in it a second difficulty that 
of race ; for the Union settlement was already showing signs 
of possible disruption, and the ministry in power, whatever 
its denomination, must face the religious and racial irritations 
which were fast increasing between Upper and Lower Canada. 
And as party politicians looked for solution of the racial 
question, they were certain to find, immovably fixed in front 
of them, the need for some resettlement of the whole con- 
stitution. On what lines, and with what scope, the future 
alone could teach them. 

It may be well to know what groups and personalities 
existed at the beginning of this great transition period, to 
undertake the work of construction and criticism. Hincks, 
in a manuscript, has left on record the state of parliament 
when he fell. He wrote : 

When Parliament met in 1854 I had a large majority 
of Reformers. The combined Clear Grit and Tory votes 
were a mere trifle, two or three in excess. / We certainly 
were beaten by a combined party ; first ofall the Tories ; 
second the French Rouges ; third the Brown Grits ; 
fourth the Sandfield Macdonald tail, three in number ; 
fifth Cauchon and two or three Liberal-Conservatives. 
. . . The Ministerialist party was the strongest in the 
House, and strong enough, when beaten, to dictate 
terms. . . . Out of ten ministers, we had seven, and all 
our measures were accepted. 

Without acquiescing in all these details one may take the 
summary as generally correct. The minor parties need not 
cause much delay. Malcontents, who signed their own 
resignation from influence, by severing themselves from the 
recognized parties, there always were ; and they were always 
negligible. Even personalities once so potent in influence as 
William Lyon Mackenzie and Papineau had already found 
their power gone through irresponsible political action. A 
fate, almost equally decisive, awaited the rouges. As Elgin 
VOL. v ' 



82 PARTIES AND POLITICS, 1840-1867 

had long since realized, the genius of French-Canadian 
politics tended towards conservatism ; and the ultra-Protest- 
ant British radicals, and the free-thinking French ultras, did 
not recommend the party of so-called progress to French- 
Canadian Catholics. Nothing is more instructive, in these 
confused years, than to watch the disintegration of French 
radical discontent. After George Brown had set the French 
radicals against his ' Clear Grits,' through his factious oppo- 
sition to seigneurial reforms in 1859, the party practically 
disappeared as an influence. In 1860 Dorion, Drummond, 
M c Gee and Papineau were the only Lower Canadian repre- 
sentatives who supported Brown in his constitutional motions. 
In 1 86 1 a single representative from the East, Somerville, 
accepted representation by population as a possible policy ; 
and in the election of J 86l Dorion, Lemieux and Thibaudeau 
fell at the polls along with their ally, Brown. No doubt 
Dorion voiced rouge opinion when, in 1865, he called for 
more popular procedure on the Confederation question ; but 
Carrier, and not he, was the accepted leader of French 
opinion. 

Equally futile, although prominent in their futility, were 
Sandfield Macdonald and his ' tail.' The leader no doubt 
held the highest office from 1862 until 1864, but it was only 
as leader of a ministry of ' caretakers,' who were possible as 
administrators only because they renounced, in practice, any 
distinctive principles they might possess, and administered 
in the spirit of their predecessors. The administration had 
been formed ' on the basis of economy and retrenchment, 1 
those old familiar friends of politicians more anxious for 
place than clear about their programme. They succeeded, 
at least, in retaining office, until something more distinctively 
efficient was ready to enter into occupation. 

The real centre of progressive agitation lay in Brown 
and the Upper Canada reformers. Originally separate from 
them, Brown had been forced into common action with the 
' Clear Grits ' through his differences with the Baldwin and 
Hincks moderates ; and once the transition had been made, 
Brown became the ' Clear Grit ' par excellence, and the Globe 
the chief organ of radical agitation. Brown had a difficult 



LIBERAL-CONSERVATISM, CONFEDERATION 83 

game to play, and he played it badly. Every Canadian 
party is based on some compromise between French and 
British, and Brown could not but see that if he were ever to 
hold office, it must be through some alliance with Dorion and 
Lower Canadian radicalism. It is not too much to say that 
he not only made common action between Upper Canadian 
and Lower Canadian radicalism impossible, but that he 
assisted to destroy Dorion's power as a leader of the French, 
and greatly intensified racial problems by his merciless and 
inopportune preaching of anti-Catholic and anti-French 
political doctrines. It is useless to revive old rancours, and 
the adjectives of the early numbers of the Globe may well 
be suffered to slumber in dusty peace ; but that George 
Brown proclaimed representation by population, in season, 
but chiefly out of it, until he had aggravated the racial- 
constitutional question into a danger, and that he added 
religious to political antagonism in the relations between 
French and English, must be the adverse verdict on his 
political career and that of his party. 

Great as an editor and publicist (for Canadian journalism 
owes much to Brown's management of the Globe) ; great 
also as an agitator, Brown was one of the conspicuous failures 
in Canadian public life. He never learned moderation ; and 
he never acted with that spirit of opportunism which raises 
itself to the level of a principle through its public usefulness. 
Brown, Dorion and the ' Clear Grits ' enjoyed their forty-eight 
hours' possession of power at the expense of the future of 
the party a freak, harmless only because Canada in 1858 
did not happen to be in a crisis ; and in the coalition of 1864 
Brown once more failed to weigh public good against private 
whim when he risked resignation on what was really an 
unessential economic doctrine, so far as the ministry was 
concerned. There stand, nevertheless, to his credit his 
genius for criticism, and the public spirit which in 1864 led 
him to combine with men whom he hated, and hated on 
grounds of political and moral principle. Not all his im- 
practicality and factiousness can disguise his essentially 
Scottish gifts of exasperating but useful criticism. But for 
him innumerable evils would have been allowed to slumber 



84 PARTIES AND POLITICS, 1840-1867 

undisturbed ; and while his claim to be regarded as one of 
the originators of Confederation is impossible, it was his 
ultra-logical development of the evils of the Union settle- 
ment, and his reductio ad absurdum of the solution by repre- 
sentation in proportion to population, which cleared the way 
for Confederation. His agitation for the inclusion of the 
great territories ruled by the Hudson's Bay Company in the 
Canadian commonwealth, and his services to the growth of 
a better feeling between Canada and the United States, prove 
that his mind could take broad views when he cared. He 
achieved a great pioneering work in liberal journalism ; he 
built up a reputation, unequalled in Canada, for agitation 
through speech and writing ; he created a serious party in 
opposition ; and, in an interregnum in faction, his patriotism 
was equal to a heroic sacrifice of personal feeling. But he 
was not a statesman, and his leadership doomed the party, 
which was really only a shadow of himself, to insignificance. 

LIBERAL-CONSERVATISM 

If Brown and his ' Clear Grits' found the political battle 
steadily telling against them, Macdonald and the liberal- 
conservatives saw their future grow steadily brighter. And 
it is but fair to admit that the great liberal-conservative 
leader earned his success legitimately, and through his 
unusual power of recognizing and interpreting facts. Those 
for whom the stars in their courses fight have usually made a 
preliminary study of the ways of the stars. In truth, the 
history of liberal-conservatism in Canada is something more 
than a tale of party faction. Liberal-conservatism was the 
answer given by an ' old parliamentary hand ' to the ques- 
tion, ' What substitute shall be devised to take the place 
of a fallen autocracy ? ' Baldwin, Hincks and La Fontaine 
had made an important political discovery for Canada 
that the country needed solid moderate and even con- 
servative administration much more than it needed party 
conflict. The land required population, development of trans- 
portation, capable financing in other words, efficiency of 
government. 



LIBERAL-CONSERVATISM, CONFEDERATION 85 

As soon as the great vexed constitutional questions had 
been settled responsible government, the clergy reserves, 
seigneurial tenure there were no true party issues left. The 
problems still outstanding must be solved, whether con- 
servatives were in office, or reformers ; and in spite of Brown's 
advocacy of representation by population, no clear-cut and 
decisive alternatives were offered marking conservatives 
from liberals, as these parties were, and are, marked in 
Britain. All questions, then, were administrative questions, 
and in the long run the differences were between success- 
ful and unsuccessful administrations, rather than between 
alternative policies. 

The situation was not peculiar to Canada. Peel in 
England, Bismarck in Germany, Cavour in Italy, each of 
them had to face tasks requiring immense patience, ingenuity, 
and sheer labour. In England the machinery, political, 
social and economic, of the eighteenth century had to be 
altered to suit the needs of a progressive and strenuous new 
age. In Germany and Italy domestic consolidation had to 
go hand in hand with military organization and triumph. 
No doubt, in all these countries, alternative policies seemed 
to exist, but in actual fact the one matter of real importance 
was to have a government, to have men, who had perception 
and energy, with a country or assembly behind them per- 
suaded or bullied into support. 

To justify the liberal-conservative policy it was neces- 
sary, not to argue or theorize, but to act ; and wherever 
the same situation occurred, it became also necessary to have 
some dominant spirit, some heaven-sent opportunist, to 
direct the political array. What was happening in Europe 
happened also in Canada ; and not all their confusions and 
inconsistencies of the years between 1854 and 1867 can 
disguise the fact that in John A. Macdonald, and the party 
which, by the latter date, he had created around him, Canada 
found the political master and solution for which she had 
been searching. Indeed, it is possible to hold that, whether 
under Macdonald or Laurier, Canada has ever since been 
true to liberal-conservatism, although the respective pro- 
portions of the two constituent elements have changed from 



86 PARTIES AND POLITICS, 1840-1867 

time to time. She is governed less by party than by purely 
administrative considerations. 

Be that as it may, liberal-conservatism was the creation 
of many minds. ' The government of the country,' wrote 
Baldwin from retirement in 1854, ' must be carried on. . . . 
If that can be done in no other way than by initial concessions, 
and a coalition of parties, they become necessary.' A few 
months earlier John A. Macdonald had written to Captain 
Strachan that ' our aim should be to enlarge the bounds of 
our party, so as to embrace every person desirous of being 
counted as a " progressive conservative." Elgin had pro- 
phesied the same thing when he hinted at an alliance between 
moderate tories and the French ; and Head reiterated in 
his dispatches the need for ' the formation of an intermediate 
party, neither radical, nor tory, but a party of " conservative 
progress." It is true that not until 1864 was any stable 
administration founded, and that liberal-conservatism did 
not leap full grown and armed into the Canadian political 
arena. But political solutions are made slowly and pain- 
fully, not invented on the spot ; and nowhere so definitely 
as in the minds of Macdonald, Carrier and their friends were 
the theory and practice of liberal-conservatism present. 

The party had errors from which to purge itself ; allies 
to make ; new views to evolve and state. Yet, thanks to 
the genius for opportunism of Macdonald, the liberal- 
conservative principle made its way. One may find many 
joints in the armour of this parliamentary leader over- 
astuteness, the abuse of opportunities and political alliances, 
a serious lack of dignity not altogether disconnected from 
moral faults. But he was the one man who could read the 
lessons of the past twenty years ; he was the ' handy man ' of 
Canadian politics. Realizing that, in his assembly, manage- 
ment and personal address meant much more than even 
political principle, he erected personal influence into a place 
usually occupied by a party programme ; and, sure of his 
usefulness to the country, confident that it was either his 
party or confusion, he ' dished the Whigs ' whenever he had 
a chance, and answered such opposition as cared to present 
itself in the most effective way by adopting all their good 



LIBERAL-CONSERVATISM, CONFEDERATION 87 

ideas. Whatever else may ultimately be ascribed to John A. 
Macdonald, he will go down to history as the greatest 
master of parliamentary management, in a day when that 
commodity was scarce in Canada ; the creator of the party of 
liberal-conservatism, without which the Canadian govern- 
ment would have failed in its task ; and one who, at the crisis 
when fidelity to the mother country had to readjust its 
expressions to meet the growth of independence, was able, 
in his own words, to assist in ' founding a great nation, under 
the fostering care of Great Britain, and our Sovereign Lady, 
Queen Victoria.' 

THE FRENCH-CANADIAN QUESTION 

* Meantime liberal-conservatism, and indeed all Canada, 
was face to face with a political problem of the first magni- 
tude the relation of Lower to Upper Canada!) There is 
this peculiarity about all racial disputes, that they are even 
less susceptible of logical and rational treatment than normal 
political issues ; and many circumstances made the French- 
Canadian question complex and delicate, if not, in the old 
sense, dangerous. Durham had diagnosed the disease, but 
the remedy which he had suggested had, in the form of 
Union, proved at best a temporary one, with a constant 
tendency to grow less and less efficacious. To create a 
united nation in which the frontier lines of races would 
gradually be abolished was a noble political conception, 
but it was a dream. 

French Canada had far too definite a basis in physical 
fact, had too many intellectual and spiritual idiosyncrasies, 
was now too stubbornly wedded to its own political stand- 
ards, to yield to the gentle solicitations of a perfect scheme 
of union. What the Quebec Act and Dorchester had 
acknowledged were now irremovable realities in the political 
world in Canada, and no political system was worthy of 
consideration which did not make room for the intensifying 
fact of French national organization. Troubles, as has been 
seen, had begun under Sydenham. It was difficult to pass from 
the abnormal and revolutionary anti-union conditions into 
a system where the French leaders, most of whom had been 



88 PARTIES AND POLITICS, 1840-1867 

either suspects or definitely acknowledged rebels, might 
be accepted with acquiescence and assurance. The diffi- 
culties before Sydenham were immense, and he may receive 
some of the credit claimed for him by his biographer when 
he speaks of ' his constant endeavours to promote their 
[the French] real interests in spite of their opposition.' 
Appealed to by the irrational strength of national feeling, 
solicited in the other direction by those who called ' for the 
partial dismemberment of the province, with the view of 
conferring on one portion a representative system, while 
maintaining in the other a despotism,' he tried, as far as 
he could, to hold the balance level. But the French oppo- 
sition was very natural. Opinion was still excited, and 
small incidents were readily converted into serious fears. 
Apart from definite charges, the fact was patent that Syden- 
ham's policy meant the end of French nationality as a funda- 
mental political condition. Whatever other successes he may 
have achieved, the conciliation of Lower Canadian opinion 
may not be enumerated among them, and the failure came, 
partly from Sydenham's temper, but still more from the 
knowledge that the British government was seeking to put 
an end to French national organization, as it had existed 
down to the Union. Let it be admitted that union, and union 
upon the lines laid down by the Union Act, was the only 
possible expedient after the Rebellion ; it is nevertheless true 
that it was only a temporary expedient, and almost the mpst 
interesting development in politics between 1840 and 1867 
is the gradual evolution of a plan which permitted to the 
French the free expression of irrepressible nationality, and 
yet asserted the superiority and unity of British rule. 

To Bagot must be given credit for the first move towards 
a new policy. ' I have been in negotiation with the French 
Canadians,' he wrote to Stanley on September 13, 1842, 
' for their admission on a broad and liberal footing into a 
share of the government. ... I turned to them as a race, and 
a people rather than a party, and put myself into direct com- 
munication with M. La Fontaine.' It was one of those 
venturesome acknowledgments of fact which so often con- 
stitute the soundest and safest policy. For what Bagot began, 



LIBERAL-CONSERVATISM, CONFEDERATION 89 

La Fontaine and his faithful ally Baldwin carried safely 
through the second stage. For the present the Union 
constitution \was the one possible instrument of government. 

Under these conditions it became essential to arrange 
some modus vivendi by which British and French politicians 
might unite for common action, without either side of the 
alliance feeling that its independent existence was being . 
undermined. Great as the other virtues of Baldwin and I 
La Fontaine were, none equalled in its contribution to/ 
national well-being their power of concerted action, and ofl 
carrying with them solid fragments of both Upper and/ 
Lower Canadian opinion. After 1842 it had become a 
fundamental condition of success in Canadian politics that 
the alliance, first hinted at in the Sydenham parliament, 
should be fixed beyond possibility of separation. The 
peculiar vice of the Metcalfe regime lay in attempts such as 
Draper made to detach individuals from the French party, 
who should hold office, not as French Canadians, but as 
supporters of a British government ; and La Fontaine, as 
has been shown above, never served his fellow-countrymen 
and Canada better than when he resisted all efforts to 
break up a union which had much more than party signi- 
ficance. pJnder Elgin, whose steady wisdom read the signs 
of the time, here as aptly as elsewhere, it became a fixed 
political convention that the existing administration should 
be a nice balance between French and British ; that the 
equality should be made manifest by a joint-headship ; and 
that, by all arts of political diplomacy, it should be con- 
trived to have neither Upper nor Lower Canadian questions 
decided in the face of hostile majorities in the region affected 
by the proposed legislation!^ In this period of understanding 
and management the high-water mark of success and wisdom 
was reached in La Fontaine's attitude towards the clergy 
reserves question, and the caution in legislation with which 
Baldwin responded to his colleague's honourable conduct. 

But political diplomacy, while it may do almost every- 
thing, cannot overcome the malign influence of actual con- 
stitutional defects. Thanks to Bagot, Elgin, La Fontaine 
and Baldwin, an extremely adaptable and potent parlia- 



90 PARTIES AND POLITICS 1840-1867 

mentary machine had been invented to make the Anglo- 
French government peaceful and useful. But the mis- 
calculations of the Union settlement were now becoming 
more apparent. To quote words spoken by George Brown 
when the true solution for the difficulty had almost been 
achieved : 

Our constitution of 1840 brought together under one 
government two countries peopled by two races, with 
different languages, different creeds, and different laws 
and customs ; and unfortunately, while making us 
nominally one people, it retained the line of demarcation 
between Upper and Lower Canada, and gave the same 
number of representatives in Parliament to each section, 
without regard to their respective populations, their 
contributions to the general revenue, or any other 
consideration. 

Like every other inherently vicious settlement the first 
complications involved deeper and subtler complications. 
It had been necessary to unite the provinces, and that sug- 
gested the extermination of la nation Canadienne. Then, 
to safeguard French interests, the number of representatives 
allotted to them was stereotyped, to prevent an increase in 
Upper Canada having its natural influence on parliament. 
But not even this stereotyping of the representative system 
could prevent racial friction. There were two masses of 
conflicting political interests and objects ; religion, law, 
land-tenure, each had its British and its French aspect. 
Yet there was no guarantee, except the mechanical contri- 
vance of numbers, that British interests should be secure 
against a French majority, or French interests secure against 
one from Upper Canada. Political management and the 
spirit of compromise had accomplished wonders, and while 
the great La Fontaine-Baldwin ministry held office, their 
perfect success disguised the actual danger of the situation. 
When that ministry broke up, the problem presented itself 
in all its terrors, for the Globe, using the gift of irresponsible 
and unrestrained criticism of which newspaper editors in 
general, and George Brown in particular, have always been 
so fond, forced Upper and Lower Canada to realize the full 



LIBERAL-CONSERVATISM, CONFEDERATION 91 

extent of the error in machinery ; and the unchaining of the 
evil spirits of religious bigotry further emphasized the point. 

It was a supreme test to which to put the new energies 
of liberal-conservatism. That party and its British leader 
had already fallen heir to the policy of conciliation and 
compromise created by La Fontaine and Baldwin ; for it 
was another of the political virtues of Macdonald, that 
while the old tory leaders like MacNab had been willing to 
support agitations so furiously anti-French as that directed 
against the Rebellion Losses Bill, he and the moderates 
early saw the place in their system open to moderate French 
Canadians, and the series of new alliances, first of Tach6 
with Macdonald, and then of Macdonald with Carrier, was 
clear evidence of the fact that, while the name of the party 
in power had changed, the British leader realized, as Baldwin 
had done before him, how much depended on joint action of 
the strictest and most honourable kind. It will one day 
be acknowledged, if the truth is not already manifest, that 
along with Durham, Sydenham and Elgin, as makers of 
modern Canada there must be placed, and placed not as 
individuals but in alliance, La Fontaine and Baldwin. 
Macdonald and Carrier, the four men who taught a united 
Canada that Frenchman and Briton may realize to the full 
each his own national character, and yet act together for 
the common weal. 

POLITICAL EXPEDIENTS 

Nevertheless liberal-conservative moderation was not a 
sufficient answer to the difficulty. (There were many features 
in politics between 1854 and 1867 which made stable adminis- 
tration almost impossible. There was the lack of any real 
difference in principle between the contending parties, and 
the irresponsible use of an opinion, only too easily excited 
by leading articles in the Globe, or by speeches as bitter and 
unrestrained. Political morality and honour, too, were 
painfully lax, and the scandal of ' the Double Shuffle,' in 
1858, remains to this day one of the conspicuous blots on the 
fair fame both of Macdonald and of his party.} It is true 



92 PARTIES AND POLITICS, 1840-1867 

that Brown and his friends had brought punishment on 
themselves by their thoughtless occupancy of office which 
they could not continue to hold, and which yet made re- 
election necessary. It is also true that when Macdonald 
led his men, after their brief retirement, into power once 
more, he had law on his side when he evaded the need for 
re-election by a general ' shuffle round ' of offices, and a 
reshuffle into the old places all within twenty-four hours. 
No doubt the law read that a minister who ' shall resign his 
office, and within one month after his resignation accept any 
other of the said offices, shall not thereby vacate his seat ' ; 
but no politician who cared for the honour of his party 
would have induced his cabinet to perform the sorry farce ; 
and the episode goes far to justify the taunts of lack of principle 
and of honour which his opponents flung so freely at the 
great liberal-conservative leader. But, after all, the supreme 
question was, ' By what machinery shall Canada at once 
maintain a union, and yet give to either side its due 
recognition ? ' 

Brown and his ' Grits ' had at first a ready answer, ' Repre- 
sentation by population ' ; and, no doubt, had Durham's 
vision of the future of Canada been realizable, a measure of 
representation by population, introduced by politicians less 
vocal and more tactful than Brown, might have satisfied 
all longings. But the idea was quite impracticable. It 
swamped the French vote without granting any kind of 
compensation to French nationality. It would have been 
a species of terms dictated by a triumphant Protestant West 
to a defeated and humiliated Catholic East. No man recog- 
nized the practical limitations of the idea so directly, if also 
so unconsciously, as George Brown ; for in the leading articles 
of the Globe for Monday, August 2, 1858, written in his 
brief moment of power, there is a vagueness and verbosity 
curiously unlike Brown's usual point and strength he knew 
that his favourite measure was impossible of support in its 
native baldness. The Toronto gathering in 1859 gave more 
convincing evidence that the prophet of representation bv 
population found his burden inconvenient when the day for 
action came. The importance of the great agitation, and 



LIBERAL-CONSERVATISM, CONFEDERATION 93 

its real value, proceeded from the reality of the difficulty 
at which it pointed. As a suggested remedy it lacked the 
firsl elements of practical usefulness. 

Vine other early answer was the ' double majority,' an 
expedient which at least created fewer points .of friction than 
representation by population. But the policy of the double 
majority was too futile to be accepted by any responsible poli- 
ticians, or to be practised long without having its impossibility 
revealed. Head never proved himself so sound a statesman 
as when he wrote, ' I have told Colonel Tache that I expect 
the government formed by him to disavow the principle of 
a " double majority." It was the chief practical exponent 
of the policy, John Sandfield Macdonald, who, in the irony 
of fate, reduced his own theory to a final absurdity. That 
ministry of ' caretakers," the Macdonald-Sicotte, later the 
Macdonald-Dorion administration, had, if it really did 
possess any principles, the practice of the double majority 
as its distinctive ideal. R. W. Scott and the separate 
schools applied the necessary test, and as the ministry reeled 
out of the struggle, intact, but with its fundamental prin- 
ciple annihilated, even ' double majority ' men realized that 
their maxim would not work in real life. It cut at the very 
roots of cabinet unity ; it introduced a new complexity into 
a cabinet system already complex enough ; and it made 
the life of every administration dependent on stray currents 
and twists in political opinions, to the elimination of all 
solidity and permanence. 

It was at this stage that the true solution of the difficulty 
became plain : Confederation, with the local differences safe- 
guarded by local assemblies, and the general balance read- 
justed in a joint or general parliament. With the constitu- 
tional aspects of the question the present chapter does not 
profess to deal, but only with its relation to political move- 
ments before 1867. 

THE CONFEDERATION MOVEMENT 

The question of Confederation as a practical solution to 
existing difficulties entered Canadian politics with Gait's 



94 PARTIES AND POLITICS, 1840-1867 

action in 1858. No doubt the idea had often been expressed 
in books and speeches at an earlier date. Pre-Rebellion 
leaders like Robinson and Sewell had given it very concrete 
expression ; the Durham Report may be quoted as one of the 
sources ; Macdonald's British American League had made 
the idea the chief plank in its platform. Russell and Grey 
had speculated on Confederation as a means of raising the 
tone of Canadian politics ; and the action of the Maritime 
Provinces, and more particularly Nova Scotia, some years 
earlier, preparatory to a smaller scheme, had its due influ- 
ence on the western colony. But in politics an idea dates 
from the day when some responsible politician makes a 
definite proposal, and is prepared to stand or fall by his 
measure. There are many putative ' Fathers of Confedera- 
tion,' but Gait gave it definite place in the programme of 
a recognized political party. On October 22, 1858, Head 
wrote to Lytton : 

Early last session Mr Gait, then unconnected with 
the ministry, put on the votes a notice for the considera- 
tion of it [Confederation]. ... I found him and several 
of the gentlemen about to assume office, deeply im- 
pressed with the idea that in some such union alone, 
could be found the ultimate solution of the great 
questions which had been made a ground of agitation 
by Mr Brown and his friends at the general election, 
viz. the existing equality of representation of Upper and 
Lower Canada, and the alleged injustice inflicted on the 
former by such equality. 

Thereafter, events moved as quickly as might be expected 
in an agitation which involved so many different interests, 
and where the British ministers were necessarily in ignorance 
of the needs of the case and the appropriateness of the solu- 
tion. Gait's first move came to nothing, thanks chiefly to 
British immobility. Then came Brown's great Toronto 
Conference of 1859. The policy there elaborated passed into 
parliament in the following session. As some still count 
Brown one of the 'chief founders of Confederation,' it is well 
to state his position as defined in these years. 

In the motion of April 16, 1860, he held 



LIBERAL-CONSERVATISM, CONFEDERATION 95 

that the existing Legislative Union . . . has failed to 
realize the anticipations of its promoters, has resulted 
in a heavy debt, burdensome taxation, great political 
abuses, and universal dissatisfaction ; and it is the 
natural conviction of this assembly, from the antagonism 
developed through difference of origin, local interests, 
and other causes that the Union, in its present form, can 
no longer be continued with advantage to the people. 

But Brown was unwilling to await the slow solution of a 
combined movement of all the British North American pro- 
vinces. That, in the language of the conference, ' would be no 
remedy for our present difficulties ' ; and he proposed a minor 
movement, with full representation given to local feeling, and 
some ' joint authority ' acting in place of a federal government. 
In other words, Brown and his friends were open enemies to 
the practical proposal for a general union. In clear contra- 
distinction are the decisive support of Confederation by Gait, 
and the unqualified approval of John A. Macdonald : ' The 
only feasible scheme which presents itself to my mind as a 
remedy for the evils complained of, is a confederation of all 
the provinces.' 

As time advanced the British government saw more and 
more clearly how greatly it stood to gain by the Union. 
The action of the United States over the Trent affair, the 
growing alienation between Britain and the Northern States, 
after 1861, and the Fenian plans for the invasion of Canada, 
which kept British consuls and diplomatists busy throughout 
1865 and 1866, all forced on the mother country the truth 
that a united British North America was a much more avail- 
able imperial asset than the straggling and dislocated units 
of the status quo. 

With the separate conferences this chapter has not 
specially to deal ; the issue is rather the relation of Confedera- 
tion to Canadian party politics, and one may pass at once 
to the crucial years 1864 and 1865. By 1864 the party 
difficulty had reached the expected impasse. Liberal-con- 
servatism under the guidance of Macdonald, Tache and 
Cartier had done its best with the existing material, and had 
registered its comparative failure in 1862. But no opposi- 



96 PARTIES AND POLITICS, 1840-1867 

tion could attempt what the one adequately organized party 
had found itself too weak to perform. The Sandfield 
Macdonald ministries simply registered new failures, and 
when even Sandfield Macdonald gave up in 1864, and the 
liberal-conservatives once more found themselves in a 
minority of two, the final crisis had been reached. 

Then occurred what is perhaps the most important 
episode in modern Canadian politics. Events had been 
surely making very plain the truth, that for Canada to play 
at British party politics was a serious error, since the old 
.j British opinions had long since grown unreal, old British 
party names become mere nicknames, and the local divisions 
of the Canadian parliament as hurtful as they were need- 
lessly exciting. Let it be once more asserted Canada had 
need, not of parties, but of a collective and representative 
administration which would take all the sound propositions 
of all groups, and weld them into a great national adminis- 
trative policy. And foremost among the propositions of 
such a party must be, not a measure granting representa- 
tion by population in all its bald simplicity, nor yet a sanction 
to the double majority principle, but a statesmanlike bill 
uniting Canada and the other provinces on a federal basis. 

In the events which followed the government defeat of 
June 14, 1864, it is hard, perhaps unnecessary, to allocate 
- the honours, for all concerned acted as true-hearted Canadian 
patriots Morris and Gait in negotiating for the meeting, 
Brown for consenting to what was the most heroic act of 
self-restraint and of patriotic moderation in his career, 
Macdonald and Cartier for seeing clearly the exact terms 
on which the coalition should be made, and for proclaiming 
Confederation as the one true goal for Canadian politicians. 

Between Friday, June 17, and the following Wednesday 
the plans along which modern Canada was to progress were 
made, and a government both liberal and conservative, 
strongly tinged with Upper Canadian feeling, and yet equally 
fair to the French-Canadian population, came into existence, 
to secure a scientific government for a great self-governing 
dominion. It is true, of course, that Brown was not at first 
willing to accept the larger scheme, but he and his party 




ALEXANDER MORRIS 
From a photograph I'y A'olnian, .Montreal 



LIBERAL-CONSERVATISM, CONFEDERATION 97 

combined with their old enemies ' to bring in a measure next 
session for the purpose of removing existing difficulties by 
introducing the federal principle into Canada, coupled with 
such provisions as will permit the Maritime Provinces and 
the North-West Territory to be incorporated into the same 
system of government.' So it came about that, when parlia- 
ment was prorogued on June 30, and a new government was 
announced including George Brown, Oliver Mowat and 
William M c Dougall, the future of Confederation was assured. 
It is difficult to find a fairer summary of these events than is 
contained in the words of the Honourable Alexander Morris, 
to whose good offices was due the first meeting : 

I am aware from personal knowledge that the leaders 
in this great movement, on both sides, were actuated by 
the highest obligations of patriotism, and that their 
action was approved by the great majorities of their 
parties in the House, and I have always held that neither 
party could claim the sole credit of this movement. . . . 
But while saying this, it has become a matter of duty to 
show that there were two divergent lines of policy the 
one urged by the Conservative leaders, which eventu- 
ally prevailed that of the Union of Canada with the 
Lower Provinces, and the other, that of Federation of 
Upper and Lower Canada, urged by Mr Brown and the 
Reform party in accordance with the policy of 'joint 
authority,' adopted by them after a convention held 
some time before. 



A UNION OF PARTIES 

With the Tache-Macdonald-Brown administration this 
section may well close. Party politics, as such, really came 
to an end with the coalition. In the months which inter- 
vened between that event and Confederation there were 
many interesting negotiations, both with Britain and with 
the Maritime Provinces. A great debate, reflecting immense 
credit on the colony whose statesmen could rise so well to a 
serious situation, took place, in which adverse views were 
stated with great ability, whether by radicals like Dorion, 
or recalcitrant and faddist tories like Dunkin. But Dorion's 

VOL. v o 



98 PARTIES AND POLITICS, 1840-1867 

democratic criticism sounds very hollow to present-day 
critics, and Dunkin's long and detailed assault does greater 
credit to his legal acumen than to his statesmanship, although 
he must receive credit for foreseeing some of the most char- 
acteristic difficulties of the federal plan. The battle was 
over, and Monck could write home in November assuring 
the British government ' that the desire for a consolidation 
of British North America has taken strong hold of the minds 
of the most earnest and thoughtful men in these provinces.' 

Of all the orations which adorned or concealed the states- 
manship of these days, two may be singled out for special 
note those of the two men, one British, the other French, 
whose patient co-operation and parliamentary skill had 
brought their country to the great event, and who together 
were to give the final justification to Confederation by making 
it a practical working instrument of government. For Cartier 
the event was notable, since it marked a union which still 
allowed his fellow-countrymen all their privileges ; and the 
note of his speech is ' unity in difference.' 

The idea of unity was Utopian, it was impossible. 
Distinctions of this kind would always exist. Dis- 
similarity, in fact, appeared to be the order of the 
physical world, and of the moral world, as well as in the 
political world. ... In our own federation we should 
have Catholic and Protestant, English, French, Irish 
and Scotch, and each by his efforts and his success would 
increase the prosperity and glory of the New Confeder- 
acy. He viewed the diversity of races in British North 
America in this way : we were of different races, not for 
the purpose of warring against each other, but in order 
to compete and emulate for the general welfare. 

For John A. Macdonald, his fellow-in-arms, the event was 
imperial, and nowhere is it more evident that, beneath moral 
peccadilloes and assembly jobs and merely party politics, 
there existed in Macdonald's mind a great and overmastering 
principle the love of, and pride in, the British Empire, and 
an intention to do something which would add to its glory 
through the creation of a new British nation, Canada. 

If we wish to be a great people ; if we wish to form 



LIBERAL-CONSERVATISM, CONFEDERATION 99 

... a great nationality commanding the respect of the 
world, able to hold our own against all opponents, and to 
defend those institutions we prize ; if we wish to have 
one system of government, and to establish a commercial 
union, with unrestricted free trade, between people of 
the five provinces, belonging, as they do, to the same 
nation, obeying the same Sovereign, owing the same 
allegiance, and being, for the most part, of the same 
blood and lineage ; if we wish to be able to afford to each 
other the means of mutual defence and support against 
aggression and attack this can only be obtained by a 
union of some kind between the scattered and weak 
boundaries comprising the British North American 
Provinces. 

He closed his speech with respectful and manly tributes 
to Great Britain and its Sovereign Lady, Queen Victoria. 

The pity of it is that the historian may not conclude 
with some picture of fervent loyalty and happy unity for 
Canada, long in travail, had brought forth men fitted and 
prepared for her government. But before the final stage was 
reached, George Brown, whose really heroic sacrifice of feeling 
had made the new system possible, chose to resign on a minor 
issue, and so endanger all that his previous actions had accom- 
plished. Two men, indeed, both faithful servants of Canada 
and their own provinces, Joseph Howe and George Brown, 
after having done yeomen's work for union, fell from their 
own traditions and below the standard of true statesmanship. 
But in such matters the poet's words are false ; for men's 
follies only are written on water, their statesmanlike moments 
endure ; and the errors of neither Howe nor Brown are 
now permitted to separate those who made them from the 
company of true Canadians who saw their perfect work 
accomplished on July I, 1867. 



A RETROSPECT 

The course of Canadian politics has now been traced from 
the advent of Union to Confederation Day, through a period 
which, unless Canada have still to earn her title to nationhood 
through blood and iron, must ever rank as the great formative 



ioo PARTIES AND POLITICS, 1840-1867 

epoch in her history. Viewed as a whole, it is characterized 
by two decisive slow movements, which commence with 
Durham's mission and are perfected only in 1867. The first 
is the education of Great Britain, through her Canadian 
experience, in the art of governing an empire on democratic 
principles. Nothing is more conspicuous in the British state 
documents earlier in these years than the lack of confidence, 
the note of distrust in colonies which had begun to ask 
autonomy. From the Iron Duke himself down to the veriest 
radical shouting laissez faire none has a confident future 
vision, and the self-styled imperialists are those least confident 
in the permanence of empire. 

In Canada a succession of great public servants Durham, 
Sydenham, Elgin, Head who had been flung into the realities 
of empire, made for the first time the discovery that Danton's 
maxim held good in colonial administration, and that faith 
which is also boldness is the first of the cardinal imperial 
virtues. . A period which began with gloomy prognostications 
in Great Britain ended with the triumphant loyalty of an 
independent Canadian ministry ; and the conservative and 
monarchical plans which Macdonald. laid for a ' Kingdom of 
Canada ' were thwarted not by colonial republicanism, but 
by some remaining shreds of imperial timidity, which treated 
Confederation ' as if the British North American Act were a 
private bill, uniting two or three English parishes.' 

The second movement is that which includes all the 
advances in political experience and knowledge of public 
affairs allied with the concession of home rule. Beginning 
in crude ignorance, and schooled at first by that imperial 
pedagogue Sydenham, Canadian statesmen may be watched 
in clumsy efforts ' at their book.' First party and cabinet 
combination is learned, then the potency and expansiveness 
of responsible government. Canadian ministers pass in a 
single generation from the erratic uncertainty of Baldwin's 
first attempts to play the game, to the finished skill in 
management of the great Confederation leaders. The evolu- 
tion of the ' old parliamentary hand ' is the last and perfect 
evidence that political civilization had been attained ; and 
it is possible to gauge how far Canada had travelled towards 



LIBERAL-CONSERVATISM, CONFEDERATION 101 

such civilization by the substitution of Carrier for Papineau, 
Macdonald for MacNab ; and of the skill and peacefulness 
of the Confederation campaign for the crude democracy and 
pitiful appeal to force of the Rebellion. Durham's dream 
and earnest desire had been more than accomplished, for his 
successors actually saw the connection of Britain with her 
North American colonies perpetuated and strengthened, and 
these colonies, indeed, ' one of the brightest ornaments in 
Her Majesty's Imperial Crown.' 




CONSTITUTIONAL DEVELOPMENT 

1840-1867 






CONSTITUTIONAL DEVELOPMENT 
18401867 

I 
RESPONSIBLE GOVERNMENT 

LORD DURHAM'S REPORT 

IN order to remove the evils which led to the Rebellion 
Lord Durham had recommended that in the internal 
government of the colony the governor should take 
the advice of responsible ministers. The suggestion seems 
so reasonable that we are disposed to inquire almost with 
impatience why it was not adopted at once. The answer is 
suggested by the development of the English constitution. 
Though the Revolution of 1688 shattered the theory of 
divine right, the new relations between the king and the 
people were not determined immediately. Many continued 
to regard the sovereign in the old light, and from their struggle 
with those who pressed for the revolutionary settlement was 
slowly evolved the constitution as we know it. The mere 
business of constructing the party system, the cabinet, and 
all the devices and conventions necessary to ensure popular 
control over the administration took more than a hundred 
years. In the case of Canada the theory of the governorship, 
which Lord Durham criticized, resembled rather closely the 
view which the Stuart kings held of their position. What 
Providence was to them, Downing Street was to the governor. 
Just as they had acknowledged their responsibility to God 
alone, and refused to allow the authority given them by Him 
to pass into the hands of parliament, so the governor felt 
that he could discharge his responsibility to the mother coun- 
try only by controlling the administration. Lord Durham's 



106 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

Report may be taken, therefore, as in many ways parallel 
with the constitutional documents of the English Revolution. 
A considerable period was needed for its results to gain 
general acceptance. 

A great number of those interested in colonial affairs 
clung to the conviction that Canada could remain part of 
the empire only so long as the governor chose his advisers 
where he pleased. If only those persons could be named 
who enjoyed the assembly's confidence, they would naturally 
endeavour to force their views upon him, on the ground that, 
in order to retain their places in the assembly, they must 
shape the government's policy. But to yield to their demands 
would simply mean that the colony was independent, and free 
to adopt measures prejudicial to the interests of Great Britain 
and the Empire. Even those matters which Lord Durham 
regarded as purely local might easily take on an imperial 
character, and a piece of legislation calculated to have a 
purely local effect might in reality operate far beyond the 
boundaries of Canada. Such was the position of the powerful 
party which hesitated to adopt Lord Durham's Report. Over 
against them stood an increasingly large body who looked 
upon the Report as the Great Charter of Canada. # These 
felt that it was quite impossible to govern Canada by keeping 
the executive distinct from the legislature as had been done 
before the Rebellion^ They contended, therefore, that the 
governor's advisers should be acceptable to the assembly, 
and should be held responsible by it. They believed that 
for practical purposes the division between internal and 
imperial affairs could be maintained. In purely local matters 
the governor should take the advice of his council, but when- 
ever a measure seemed to him to affect the interests of the 
home government he could use his authority to restrain the 
colonial legislature. They pressed, in other words, for the 
establishment of the limited monarchy and the constitutional 
machinery which the mother country had created. However, 
even had they not been confronted by a vigorous body of 
opinion which looked upon this solution as incompatible 
with the colonial status, their scheme could not have come 
instantly into operation. -/Men require training and experience 



RESPONSIBLE GOVERNMENT 107 

to form parties, to serve in the ministries which in the British 
system secure harmony between the executive and the legis- 
lative powers.'* The Canadian people and their representa- 
tives had to be prepared for self-government. Thus the 
constitutional problem presented in Canada at the beginning 
of our period was virtually the same as that which con- 
fronted England after 1688. A similar solution had to be 
found. In the colony this required less time than in England, 
for the simple reason that the mother country had led the 
way. f*Hence between the years 1841 and 1849 the history 
of the British constitution during the eighteenth century 
was reproduced in microcosm on Canadian soil.X" 

In neither case did any large part of the constitutional 
practice find expression in the statute-book. /The Act of 
Union, for example, determined that ' all powers, authorities 
and functions ' vested by former acts in the governor or 
lieutenant-governor ' should ... be vested in and may be 
exercised by the advice and consent of, or in conjunction, as 
the case may require, with such Executive Council or any 
member thereof as may be appointed by Her Majesty for 
the affairs of the Province of Canada or by the said Governor 
of the Province of Canada individually and alone in cases 
when the advice, consent or concurrence of the Executive 
Council is not required.'/ The question as to whether the 
governor's privilege of acting alone would be reduced to a 
vanishing point, or would be so far extended as to destroy 
the effectiveness of the executive council, the act left entirely 
unanswered. 1 We must look for the answer in the custom 
of the constitution which the governors and the colonial 
secretaries established in their conduct of Canadian affairs. 



LORD SYDENHAM 

Lord John Russell and Lord Sydenham were both guided 
by the conviction that they must look to the affectionate 

1 In the same way the Instructions to the Governor, though they required 
that he alone should lay business before the council and obviously contemplated 
that ho would be compelled to act against its wishes, left it quite open to him to 
work in harmony with it. The text of the Instructions, bearing on this point, 
underwent no change in our period, in spite of the revolution in practice. 



io8 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

attachment of the Canadian people as the best security for 
British dominion. Hence in their judgment the immediate 
duty of the first governor after the Union was to secure 
harmony between the executive and the legislature. He 
could not, however, take a step in this direction until he 
became perfectly free to choose his advisers. For this reason 
Lord John Russell changed the character of the executive 
council, which had not merely been composed of the persons 
most obnoxious to the majority of the assembly, but had 
been virtually irremovable. Sydenham grasped the oppor- 
tunity of appointing active politicians who would find support 
in the country and in the legislature. He considered it 
almost essential that they should have seats in one or other 
of the two houses, in order that they might explain and 
defend the policy of the administration. He agreed to the 
demand made by the assembly that the councillors should 
command its confidence, and drafted the resolutions of 
September I84I. 1 Finally, he yielded to the requirements 
of public business so far as to make the councillors heads 
of departments, of which they were to assume the charge. 
There were to be two secretaries and two attorneys-general, 
one each for Upper and Lower Canada, Canada East and 
Canada West as they were called ; a registrar of the province 
to fix the great seal, a receiver-general, an inspector-general 
of Public Accounts, a commissioner of Crown Lands, a 
surveyor-general, a president of the Board of Works, a 
solicitor-general, and the president of the council. 8 

Beyond this point, however, neither Russell nor Sydenham 
was prepared to go. The former believed that any plan 
which required a separation between the affairs of Canada 
and those of the Empire at large rested on a fallacy, for 
measures which were from one aspect purely local might from 
another have a direct bearing upon the reputation of the 
Empire. He laid stress, therefore, on the part which the 
governor should play in the administration. Sydenham 

1 See ' Parties and Politics, 1840-1867 ' in this volume. 

1 Changes were made in the offices, as occasion required. In the Baldwin- 
La Fontaine ministry of 1848 there were an assistant-commissioner of Public 
Works and two solicitors-general. After 1851 the duties of the registrar were 
performed by the provincial secretary. 



RESPONSIBLE GOVERNMENT 109 

took a similar view because of his keen sense of the responsi- 
bility under which the governor stood to the mother country. 
If the assembly advanced so far as to choose the governor's 
advisers and to hold them to account, they in their turn would 
insist on directing the government, and the governor would 
be compelled to take their advice and abide by it. Such 
Sydenham considered to be the inevitable outcome of ' the 
responsible government cry in its inadmissible sense.' It 
would make the governor sovereign in the colony, whereas 
he was actually a minister of the home government. The 
only means of forestalling this result was to treat the council 
as ' a council for the governor to consult, but no more.' 
' I shall apply to them for advice when I think it expedient 
to do so if they cannot agree, there will be time for 
me to decide between their conflicting opinions and act 
according to what I deem best for the interests of the 
Crown.' 1 Hence, though Sydenham put his councillors 
at the head of departments, he did not intend that they 
should become a cabinet, or exercise that joint control of 
affairs which as a cabinet they would necessarily have 
assumed. 2 The division of work put the real burden on 
his shoulders. He was quite prepared to govern, himself, 
and even to interfere actively in the elections. 

With one powerful section of the population frankly 
hostile and with no strong and united parties, like those in 
England, upon which responsible ministries could be built 
up, Sydenham naturally felt it impossible to establish the 
British constitutional system. In his judgment it was 
necessary to begin with the foundations, and to create 
municipal institutions as the means of forming in the people 
habits of self-government. Meanwhile he was determined 
to provide such an efficient administration that in the enjoy- 
ment of prosperity the country would put aside internal 

1 Letter to Baldwin, June 13, 1841. 

1 Scrope, Lift of Sydenham, p. 234 : ' . . . the absolute necessity of sending 
out as my successor some one with House of Commons and ministerial habits, . . . 
a person who will not shrink from work, and will govern, as I do, himself. Such a 
man . . . not a soldier but a statesman . . . will find no difficulties in his path 
that he cannot easily surmount ; for everything will be in grooves, running of 
itself and only requiring general direction.' 



I io CONSTITUTIONAL DEVELOPMENT, 1840-1867 

dissensions and constitutional theories. In his eagerness for 
a settlement and his impatience of political controversies he 
took much the same attitude towards constitutional questions 
as William of Orange had adopted in England, with the same 
result, a mixture of personal rule and parliamentary institu 
tions, two elements which unite no more readily than oil 
and vinegar. Sydenham's attempt to combine them by 
playing the parts both of governor and prime minister led 
to the misunderstanding between himself and Robert 
Baldwin. 1 If the assembly had declared its want of confid- 
ence in the council and had asked him to take as his advisers 
the advocates of a policy opposed to his own, the constitu- 
tional arrangements which he devised could scarcely have 
stood the test. He would have experienced great difficulty 
in observing his pledges to respect the wishes of the assembly 
and to consult the council. The fact that such a situation 
was bound to arise accounts for John A. Macdonald's 
opinion that 'Sydenham's triumph would have been short- 
lived,' and for Elgin's admission ' that when reading Syden- 
ham's dispatches he never ceased to marvel what study 
of human nature or of history led him to the conclusion 
that it would be possible to concede to a pushing, enterpris- 
ing people, unencumbered by an aristocracy and dwelling 
in the immediate vicinity of the United States, such con- 
stitutional privileges as were conferred on Canada at the 
time of the Union and yet to restrict in practice their power 
of self-government as he proposed.' 

SIR CHARLES BAGOT 

Yet neither the home government nor Sydenham's suc- 
cessor had at the outset any intention of departing from his 
course, as appears from Lord Stanley's instructions to Sir 
Charles Bagot : 

In civil matters, it must be your policy to seek to 
withdraw the Legislature and the population generally 
from the discussion of abstract and theoretical questions 

1 See ' Parties and Politics, 1840-1867 ' in this volume. 



RESPONSIBLE GOVERNMENT in 

by which the government of Canada in former times 
has been too often and too seriously embarrassed, to 
the calm and dispassionate consideration of practical 
measures for the improvement and advancement of the 
internal prosperity of the province. In maturing 
measures of this description you will endeavour to avail 
yourself of the advice and services of the ablest men, 
without reference to distinctions of local party which 
upon every occasion you will do your utmost to dis- 
courage ; and in framing them for the consideration of 
the provincial legislature, you will endeavour to present 
them in the form in which they are likely to be most 
favourably received by the House of Assembly. 

The governor should strive to avoid clashes between the 
assembly and the legislative council and the necessity of 
vetoing bills. Bagot himself was the more willing to follow 
his instructions, since, like Sydenham, he recognized the 
narrowness of the basis of colonial parties. No party had 
a majority ; there were no leaders ; no concert and co-opera- 
tion were possible. If the patronage went to one group, all 
the others united against it. 

Unfortunately for Bagot, however, the advisers bequeathed 
him by his predecessor were far from being a broad-bottom 
administration. It became necessary, therefore, that the 
governor, if he were to take in the strong French section, 
or even to retain the confidence of the assembly, should call 
to the council some members who had consistently opposed 
the government. The very issue which Sydenham avoided 
was immediately raised, and the secretary for the Colonies 
expressed his fear that disaffected persons, once placed in 
control of the executive, would snap the ties binding Canada 
to the motherland. Hence he urged Bagot ' to pull against 
the stream, to get men who would pull with him and not be 
cutting crabs or backing water when they were most wanted 
for " hard all." Rather than yield this point it might be 
\\ ise to hold out against a majority of the assembly. Peel 
himself wrote to Stanley describing the tactics which the 
governor could employ in such a struggle. There was no 
ri.-k in remaining on the defensive ' until some act was done 
by the majority which should paralyse the government.' If 



112 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

ultimately no alternative presented itself but the selection of 
a ministry from the majority, the governor could attempt 
to choose his own servants. Should he be prevented from 
doing so, and be asked to accept individuals notoriously unfit, 
he could appeal to the good sense of the province. Or proroga- 
tion might be tried and the parties obstructing made respons- 
ible for any embarrassment that might arise from it. Still, 
the one essential fact in the situation had not escaped Peel : 
' The weapon of dissolution, as a last resource was not in the 
governor's hands.' Bagot could not appeal from the assembly 
to the people without the risk of having an even stronger 
opposition returned. The battle had to be fought out in 
the narrow field of the legislature, where he feared that, if he 
did not win over the leaders of the hostile section, even 
greater concessions might be wrested from him in the hour 
of defeat. Hence, though Lord Stanley criticized the manner 
in which the negotiations had been conducted, forgetting that 
it was almost as unreasonable to look for correct constitu- 
tional usage in the Canada of 1842 as in the England of the 
early eighteenth century, he had finally to accept the outcome. 
To assume, however, that the reconstruction of the 
executive council under Bagot involved the immediate 
establishment of complete responsible government is to run 
ahead of the period. It was not a case, as with us, of the 
government changing hands, when one party goes out of 
office and a new ministry is installed. There were no such 
clear-cut party divisions, there was no such symmetry in 
the parliamentary arrangements of the period, as would have 
rendered possible a complete transformation of the council. 
Several of the old members remained ; the leaders of the 
opposition were taken in mainly to give the government a 
broader foundation. Bagot did not intend to hand over the 
administration or to cease supervising business. He meant 
to distribute the patronage impartially among all sections, 
consulting the council, it might be, in extraordinary cases, 
but not necessarily yielding to its advice. His responsibility 
remained the same. As Lord Stanley expressed it, 

his position was different from that of the Crown in 
England. The Crown acted avowedly and exclusively 



RESPONSIBLE GOVERNMENT 113 

on the advice of the ministers and had no political 
opinion of its own. The Governor acted in concert 
with the Executive Council, but the ultimate decision 
rested with himself, and he was recognized not only as 
having an opinion but as supreme and irresponsible, 
except to the Home Government, for his acts in his 
executive capacity. Practically he was to a certain 
extent controlled by the advisers he received, and by 
motives of prudence in not moving counter to the advice 
of those who commanded a majority in the Legislature ; 
but he could not throw on them the onus of his actions 
in the same sense that the Crown could in England. It 
was all the more necessary to exercise some caution lest 
he should so identify himself with a particular party in 
the colony as to be compelled to follow in their wake, 
rather than exercise over them a salutary authority and 
an independent control. 

Owing, however, to Bagot's illness-, this salutary authority 
was not exercised. The failing health of the governor had 
the same bearing upon Canada's constitutional development 
as the German speech of the first two Georges had upon that 
of England, and his action in calling in the leaders of the 
group opposed to him assumed a much greater importance 
than it would otherwise have had. The administration did 
pass largely into the hands of the council. The members 
developed a spirit of cohesion and solidarity, and attained 
some measure of that unity which a cabinet must possess, 
at least before the eyes of the world. In the same way the 
sections of the assembly which followed Baldwin and La 
Fontaine came nearer than before to forming a compact and 
serviceable party. It may be said, therefore, that as a 
general result of Bagot's administration the advocates of 
responsible government were strengthened in the belief 
that they could conduct the business of the country and 
should be allowed to do so. 



SIR CHARLES METCALFE 

This conviction put them at odds with the succeeding 
governor, Sir Charles Metcalfe, whose views may be clearly 
VOL. v H 



H4 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

ascertained from the dispatches in which he interpreted Lord 
Sydenham's policy and set forth his own. 

Though Sydenham had apparently been of the opinion 
that the Governor was the responsible government, that 
his subordinate executive officers were responsible to 
him, not to the Legislative Assembly, and that he was 
responsible to the Ministers of the Crown and liable 
to appeals from the colony against his proceedings, yet 
he introduced the very form of administration calcu 
lated to destroy this conception of his position. In 
composing his Council of the particular executive 
officers under his authority, in requiring that they 
should all be members of the Legislature, and chiefly 
of the popular branch, and in making this tenure of 
office dependent upon their commanding a majority 
representing the people, he seems to have ensured, with 
the certainty of cause and effect, that the Council of 
the Governor should regard themselves as responsible, 
not so much to the Governor as to the House of 
Assembly. In adopting the very form and practice of 
the Home Government by which the principal Ministers 
of the Crown form a Cabinet acknowledged by the 
nation as the Executive Administration, and them- 
selves acknowledging responsibility to Parliament, he 
rendered it inevitable that the Council here should 
obtain and ascribe to themselves in at least some degree, 
the character of a Cabinet of Ministers. 

Metcalfe felt that such an outcome, the existence of a 
council in reality appointed and maintained by a majority 
in the popular branch of the legislature, must tend to impair 
the power and influence of the governor. It inevitably 
involved government by party, the use of patronage for 
party purposes, the proscription of all opposed to the adminis- 
tration, the destruction of the governor's independence, and 
possibly, were the majority so inclined, the loss of the colony. 
The party system was desirable in an independent state, for 
there presumably all parties sought the welfare of the whole 
community. But in a colony one party might be hostile 
to the mother country ; hence a governor with a spark of 
British feeling could not stand aside and let the parties, as 



RESPONSIBLE GOVERNMENT 115 

they came into and went out of office, assume control of 
affairs. 

From ' the heavy shackles ' which the existing system 
placed upon him Metcalfe tried by several means to break 
free. He was as eager to escape from the domination of his 
advisers as George in had been to throw off the yoke of 
the whigs. Hence where George essayed the role of patriot 
king, he attempted that of patriot governor, describing his 
aims in phrases as vague and lofty as any employed by Boling- 
broke or Disraeli in praise of patriot kingship. If he had a fair 
open field he would endeavour to conciliate and bring together 
the good men of all parties, and to win the confidence and 
co-operation of the legislative bodies by measures calculated 
to promote the general welfare in accordance with public 
feeling. He would have preferred, therefore, to keep the 
executive branch of the government independent of the 
legislative. 

All the essential principles of Responsible Govern- 
ment might have been secured by the constant exercise 
of a due regard to the rights and feelings of the people 
and the Representative Assembly without creating 
those embarrassments which arose exclusively from the 
assumed dependence of the executive officers on^ that 
body a system of government which, however suitable 
it might be in an independent State, or in a country 
where it was qualified by the presence of a sovereign 
and a powerful aristocracy, and by many circumstances 
in correspondence with which it had grown up and 
been gradually formed, did not appear to be well adapted 
for a colony, or for a country in which those qualifying 
circumstances did not exist, and in which there had not 
been that gradual progress which tended to smooth 
away the difficulties otherwise sure to follow the con- 
founding of the legislative and executive powers, and 
the inconsistency of the practice with the theory of the 
constitution. 

If, however, such a separation of powers were no longer 
possible, the authority of the governor could be preserved 
in other ways. Even Lord Durham had not gone as far as 
Sydenham towards its destruction. He had proposed that 



n6 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

all officers of the government except the governor and his 
secretary should be made responsible to the united legis- 
lature, and that the governor should carry on his government 
by heads of departments in whom the united legislature 
reposed confidence. Metcalfe felt that at the worst this 
suggestion would leave the governor a secretary not respon- 
sible to the legislature through whom his orders could be 
issued, instead of secretaries who, as a result of Sydenham's 
action, were responsible to the assembly, while at the best 
it would secure the establishment of heads of departments 
acting under the orders of the governor, each distinct in his 
own department, not combined ' to act bodily with the 
character of a Cabinet.' This last was precisely the con- 
ception of a ministry held by George in. Metcalfe saw no 
other means of showing that in the colony final power belonged 
to the governor and not to the assembly. ' When he found, 
therefore, that his Council had gone far beyond these limits 
he regarded it as one of his first duties to resume the autho- 
rity of the Governor with respect to the ordinary transaction 
of business, conducting the administration of the Governor 
through the secretaries without reference to the Council, 
except in cases in which the law required that he should 
have their consent or in which he was desirous to avail 
himself of their advice.' 

It would be a mistake, however, to judge Metcalfe entirely 
by the written expression of his views. He was by no means 
lacking in that generous spirit and reasonableness upon 
which the working of all British constitutional systems 
depends. His councillors, on the other hand, inclined a 
little to what George Meredith has called ' the politics of 
impatience.' Still the conflict was inevitable, and the occa- 
sions which gave rise to it illustrate better than anything 
else the state of the constitution. The governor-general had 
made some appointments without consulting the council, 
and the council asked that in future, before appointments 
were made, its advice should be taken. Similarly the gover- 
nor had declared his intention of reserving a bill for the 
consideration of the home government, and the council con- 
tended that it should have been informed of his intention 



RESPONSIBLE GOVERNMENT 117 

before it advocated the measure in the assembly. 1 This 
statement of fact embraces two views of the Canadian con- 
stitution which were as far apart as the poles. 

If the council were at once to hold its position in the house 
and in the country and to defend the government, it would 
have to know everything that was being done in the ame 
of the administration, and to control the distribution of 
offices and the management of public affairs. What, then, 
became of the governor ? Would he have to see all offices 
passing into the possession of one political party, and all 
business transacted independently of him ? If so, how 
could he possibly retain the confidence of all sections of the 
community, and at the same time discharge his responsibility 
to the mother country ? Metcalfe saw only one answer to 
the question. He had to make this matter of patronage his 
Torres Vedras, and to hold out there against the assaults of 
a party which, once possessed of the appointments and 
supreme over the governor, would go on to throw off their 
allegiance to the crown. Following the advice which Peel 
had given to Bagot, he withstood the majority, and in the 
end resorted to a dissolution. He gained the day, just as 
George in had done against the coalition of Fox and North. 
How far he sacrificed his office to party ends and surrendered 
to his new advisers the patronage which he formerly defended 
we need not determine, though there is reason to believe 
that as in England the victory of Pitt undermined the 
personal rule of the king, so in Canada the friends upon 
whom Metcalfe was compelled to lean encroached upon his 
prerogative. 

We can scarcely expect that in the course of such a 
conflict constitutional etiquette would be strictly observed. 
In fact, the practice of the constitution had not yet been 

1 Metcalfe, dispatch, January 27, 1844 : with reference to a bill to secure 
the greater independence of the legislative assembly, ' as in some cases in which 
my consent was given to the introduction of Bills I considered the details to be 
open to discussion in Parliament and to further consideration on my own part after 
having the benefit of such discussion.' In the matter of the Secret Societies 
Metcalfe had expressed his opinion in the council that he would prefer legislation 
to arbitrary action : ' this sentiment was seized on in order to extract from me a 
promise that I would consent to the bringing in of a measure before Parliament, to 
which I unwarily agreed.' 



Ii8 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

fully established. When it became necessary to publish the 
reasons for the council's resignation the governor asked the 
members to state the grounds for their action, while he would 
do the same, ' so that the different statements would then 
be before the public.' In England only one statement, which 
both crown and ministers accepted, would appear on such an 
occasion. After Baldwin and La Fontaine, however, had 
drawn up their explanation, Metcalfe objected to it ' as a 
most disingenuous production,' and protested against what 
he considered ' a loose and general representation,' not ' a 
correct statement of facts. 1 His former advisers ignored the 
protest, for they, like the governor, realized that in the cir- 
cumstances two statements must necessarily be issued. The 
truth is that neither side found it easy to state what had 
occurred without instilling into the account their own inter- 
pretation of the motives of the opposite party. Metcalfe 
erred in this respect, even more seriously than the governors 
before the Rebellion who had opposed the popular demands. 
He persisted in giving as the council's request what was, in 
his judgment, its inevitable result ; instead, that is to say, 
of writing ' the council demanded this, which involves in my 
opinion the destruction of my office,' he wrote simply, ' the 
council demanded that my office be destroyed.' The result 
was that no accurate account of the events appeared, and 
that those in England who were following the situation 
naturally concluded that an insidious attack had been made 
on the governorship and on the British connection. 



LORD ELGIN 

The Canadian constitution was not made in Canada. 
The position of the country required that just as the status 
of a Roman dependency was decided in the curia, so the 
character of the Canadian constitution should be determined 
at Westminster. Hence, though all the parliamentary debates 
dealing with colonial questions have a far-away ring and 
frequently display a large ignorance of local conditions, they 
bring out the phases through which colonial policy passed 



RESPONSIBLE GOVERNMENT 119 

and the principles which animated the home government in 
its management of colonial affairs. English opinion as 
reflected in the debates fell into two main schools, and it 
will be useful, before considering how Metcalfe's successor 
approached his task, to define and distinguish them. 

Many people had always believed that the sovereignty 
of the mother country and British institutions could be main- 
tained in a colony only by governing it from home, and they 
had been confirmed in their opinion by the American revolt, 
where an excess of liberty seemed to have intoxicated the 
colonists. Hence, when Canadian affairs began to engage 
attention, they resisted every extension of colonial privileges 
from the honest conviction that, in proportion as the local 
authorities developed and the control of the home govern- 
I ment relaxed, the unity of the Empire would be impaired 
and the growth of unqualified democracy encouraged. Far 
from the throne, without a hereditary aristocracy, without 
those traditions by which English liberty and order were 
secured, the colony would throw off all restraints and abolish 
all guarantees of social stability and permanence. English 
statesmen, to whose minds the heaving surface of Europe 
still recalled that earthquake in France which their own 
well-balanced system had allowed them to escape, could 
entertain no sympathy for what they believed to be revolu- 
tionary tendencies in their own colonists. Those, on the 
other hand, who witnessed with satisfaction the destruction 
of ancient institutions and the advent of democracy, saw 
nothing but good in the rising spirit of colonial independence. 
They agreed that the Empire could be kept together only 
by the directing hand of the mother country, but believing 
that colonial ambition would no longer tolerate such guidance, 
they looked forward to the day when the colonies would 
become free communities, spreading British freedom over 
the world. Both schools of thought committed the same 
error of shaping a dilemma either the home government 
must be supreme or the colony must go and of seeking to 
confine within it the political genius of the race. Lord Elgin 
avoided the difficulty by proceeding in characteristic British 
fashion to solve the problem immediately confronting him. 



120 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

He put aside both alternatives. He rejected also as inade- 
quate a logical device to which, as we have noticed, many 
resorted as the only escape from the dilemma. They felt 
that it was quite simple to separate imperial and local issues, 
to make the administration of the Empire double-tracked, 
with the home government running on one side and the 
local government on the other, and with all chance of collision 
removed. Lord John Russell had already objected that this 
involved a divorce between functions which could not be put 
asunder. Elgin based his objection on the sounder principle 
that no division could be made in advance ; in each case the 
governor must decide whether or not imperial interests were 
affected. Having thus dismissed paper-difficulties and paper- 
solutions alike, he brought his shrewdness and sense of 
humour to bear on the existing situation. 

Elgin saw at once that his predecessor's mistake lay in 
suspecting of revolutionary designs one whole party in the 
province which ordinarily carried with it the mass of the 
constituencies. ' When this party was forced upon him, he 
supposed that he could check the revolutionary tendency 
by showing his distrust of them more especially in the dis- 
tribution of patronage, thereby relieving his advisers in a 
great measure from that responsibility which is in all free 
countries the most effectual security against the abuse of 
power and tempting them to combine the r61e of popular 
tribunes with the prestige of Ministers of the Crown.' Elgin 
laid the foundations of his administration by reposing con- 
fidence in the good faith of the constitutional reformers and 
in the loyalty of the mass of the province. This principle 
enabled him to accept the working of the party system 
according as it brought one section or another into office. 
Not merely, however, did he regard the party system as a 
convenience, thus going far beyond Lord Stanley and Sir 
Charles Metcalfe, but he considered it of peculiar value in 
the constitution : 

That Ministers and Opposition should occasionally 
change places is of the very essence of our constitutional 
system, and it is probably the most conservative ele- 
ment which it contains. By subjecting all sections of 



RESPONSIBLE GOVERNMENT 121 

politicians in their turn to official responsibility, it 
obliges heated partisans to place some restraint on 
passion, and to confine within the bounds of decency 
the patriotic zeal with which, when out of place, they are 
wont to be animated. 

From this impartial and common-sense standpoint Elgin 
attacked the root of the constitutional difficulty. ' The two 
propositions which,' in the words of Lord Stanley, ' Metcalfe 
could never reconcile, namely, the existence of a Government 
responsible to the local Legislature and the authority of the 
Crown exercised through a Governor responsible to the 
Crown and a Parliament of this country,' had to be brought 
into harmony. There was nothing easier than to show that 
these two propositions were irreconcilable, by constructing 
a number of hypothetical cases where the wishes of the local 
legislature would inevitably conflict with the policy of the 
home government. Any one who wished to do so could 
carry the argument to its obvious conclusion, namely, that 
the whole system of responsible government was incompatible 
with the British connection. On paper the position was un- 
assailable ; there was not a weak link in the chain which 
bound the conclusion with the premises. The mistake, 
however, lay in beginning with imaginary difficulties and not 
with actual facts. Elgin's success was due to his recognition 
that interference on the part of the home government was 
at once futile, vexatious and dangerous. So far from checking 
the colony, it served merely to arouse resentment and to 
incline the local executive to reckless or violent courses. 
He concluded that Her Majesty's ministers must stand aside 
and repose a large measure of confidence in the local govern- 
ment. There existed ultimately no other way, apart from 
force, of holding the country. His decision led at once to the 
solution of the constitutional problem. (All British experience 
proved that men of the most extreme opinions were sobered 
and restrained by responsibility !*) The Canadians, once given 
executive power, would act with prudence and caution. 
They would recognize and respect the rights of the crown 
even where it hindered their own action, for the crown would 
no longer be regarded as an enemv to be thwarted by every 



122 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

means, but as a necessary and valuable part of the constitu- 
tion. They would understand and appreciate the true 
meaning and value of the imperial connection. Occasions 
on which the home government and the local executive were 
likely to clash would scarcely arise. The spirit animating 
all parties would be so generous and conciliatory that causes 
of quarrel would tend rather to disappear. J In any event, 
the one possible subject of dispute could count for little 
beside the ninety-nine subjects on which the two governments 
would be in thorough accord ; and while the system built 
on the single case was too narrow and rigid, calculated to 
produce friction and ill-will, that resting on the ninety- 
nine cases would be broad and solid enough to resist the 
shock caused by any exceptional disturbance. The former re- 
sembled a valetudinarian who, fearing that a chance draught 
may destroy him, lives in perpetual discomfort ; the latter 
would correspond with a normally healthy person who can 
withstand infection, and, in consequence, gives little or no 
thought to the danger of it. Instead, therefore, of reminding 
the colony that self-government was incompatible with 
imperial sovereignty, Elgin believed it would be wiser to 
insist that the institutions and interests of both colony and 
mother country were at bottom the same, and that with good 
feeling on both sides no breach could occur. He reconciled 
the two propositions which Stanley had considered to be 
mutually exclusive by the simple device of trusting the colony 
and calling upon it to be worthy of the trust. 

Lord Elgin's method of approaching the colonial problem 
enabled him to determine more accurately than had yet been 
done the duties and position of the governor. He penetrated 
at once to the fallacy underlying the theory of the patriot 
governorship. The patriot governor, like the patriot king, 
wished to stand above his advisers and to make an inde- 
pendent appeal to the people on non-party lines. He could 
not succeed, however, in any country where the government 
depended on the outcome of a popular election, without 
becoming the ally or the leader of a political party ; where- 
upon his influence was impaired and the administration 
crippled. If the party to which he attached himself came 



RESPONSIBLE GOVERNMENT 123 

into office, it was inclined to depend for its existence upon 
his prestige and not upon the character of its measures. If, 
on the other hand, the opposition forced itself upon him, its 
members naturally felt that they were there ' less as servants 
of the Crown than as tribunes of the people, bound to press 
popular opinion and party interests on a reluctant and 
irresponsible executive.' Elgin decided that the duty of 
the constitutional governor, like that of the constitutional 
monarch, was to act not above or beside his ministers, but 
only ' on or through them,' and to offer them ' his unreserved 
confidence.' Half-measures were useless. Some of those 
who upheld the governor's authority had contended that 
the council might be responsible to the assembly, and might 
be offered as a sacrifice to an indignant majority, but that 
this in no way bore on the governor's position. The difficulty 
was that no one showed any eagerness to serve on such terms ; 
those who served would be careful to take the credit for 
popular legislation, while leaving the crown to bear the odium 
of unpopular measures. A full system of responsible govern- 
ment, as Sydenham saw, in requiring that the advisers of 
the crown should become responsible to the assembly required 
also that they should assume executive authority. There 
existed obligations on the part of the governor, as well as 
on that of his ministers. They were all in the grasp of a 
principle which Elgin put very simply : ' while you continue 
my advisers you shall have my unreserved confidence ; and 
en revanche you shall be responsible for all acts of govern- 
ment.' He advised Lord Grey ' to weigh on the Ministry 
as heavily as possible ; if necessary, the Governor and the 
Opposition could do something to check them.' 

By thus bringing the governorship well within the limits 
of the constitution, Elgin increased the usefulness and 
enhanced the dignity of the office. His advisers realized 
that he was not trying to circumvent them by means of his 
secretary or of his prerogatives. They came, therefore, to 
work cordially with him and to give to his views a higher 
value than they were likely otherwise to obtain. ' Far from 
finding in his advisers a desire to entrap him into proceed- 
ings of which he might disapprove, he found a tendency con- 



124 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

stantly increasing to attach the utmost value to his opinions 
on all questions, local or general, that arise.' 

Placed by his position, above the strife of parties . . . 
holding office by a tenure less precarious than the 
ministers who surrounded him having no political 
interests to serve but that of the community whose 
affairs he was appointed to administer the governor's 
opinion could not fail, when all cause for suspicion and 
jealousy was removed, to have great weight in the 
Colonial Councils, while he was set at liberty to con- 
stitute himself in an especial manner the patron of those 
larger and higher interests, such interests, for example, 
as those of education, and of moral and material pro- 
gress in all its branches which, unlike the contests of 
party, united instead of dividing the members of the 
body politic. 

Above all else the office of governor was to be ' the link 
which would connect the mother country and the colony, 
and his influence the means by which harmony of action 
between local and imperial authorities was to be preserved.' 

With the object of discharging this last function success- 
fully, Elgin exercised great care in framing his dispatches. 
The methods by which Her Majesty's ministers kept in touch 
with Canadian affairs had never been very satisfactorily deter- 
mined. Dispatches sent from the governor were frequently 
brought down in the British house, with the inevitable 
result that information intended for the ear of the govern- 
ment alone and calculated to embroil the governor with local 
parties filtered through to the colony. On the other hand, 
documents sent from home and intended only for the governor's 
perusal might be demanded by the Canadian executive. 
Such difficulties could not, of course, be removed entirely 
as long as the imperial connection in any form remained, but 
Elgin attempted to reduce them by deliberately refraining 
from sending out dispatches when the circumstances of the 
time made it inevitable that their publication in England 
would increase disturbance in Canada, or by conveying the 
will of the Canadian government only through minutes of 
the executive council. He wished to avoid separating 
himself from his Canadian advisers, so that the ministers 



RESPONSIBLE GOVERNMENT 125 

and people at home should hear only one harmonious voice 
and not two discordant notes issuing from the colony. 

By his treatment of legislation Lord Elgin still further 
defined the position of the governor. According to the Act 
of Union the governor could assent to or veto bills, or reserve 
them for the consideration of the home government. If he 
gave assent, his action could be disallowed by the imperial 
authorities within two years. A reserved bill would become 
law if the royal approval were granted at any time during 
the same period. Instructions subsequent to the act granted 
the governor unlimited power to assent to laws ' which pro- 
perly belonged to the internal government of the province, 
and which did not involve what was dishonourable or unjust.' 1 
It was left to him, however, to distinguish between measures 
of local and of imperial bearing, to say nothing of drawing 
the line between honour and dishonour, justice and injustice. 
A weaker man might well prefer to have advice from home, 
or even, if feeling in the colony ran high, to bury a bill 
quietly in the pigeon-holes of the Colonial Office. Elgin, 
however, welcomed responsibility. Hence he preferred to 
deal with bills himself rather than to reserve them or even 
to consult the home government about them. He was moved 
by the general consideration that the governor was in the 
best position to understand the attitude of the Canadian 
people. Cases might arise when a timely concession to 
local opinion would strengthen the imperial connection. It 
was not enough in all circumstances simply to set the wish 
of the colony over against the immediate interests of the 
Empire and to decide in favour of the latter. The permanent 
well-being of the Empire had also to be kept in mind, and it 
might be better by respecting colonial aspirations to avoid 
inflicting on the soul of the Empire a wound such as the 
rejection of a particular measure would undoubtedly cause. 

There were other and more powerful reasons for Elgin's 
course. In deciding upon the fate of bills himself the governor 
could play the part of a constitutional sovereign. He could 
demand that the pubHc should regard him, not as an autocrat 
to be approached either by direct intercession or by back- 

1 Gladstone to Cathcart, February 3, 1846. 



126 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

stairs intrigue, but as part of the constitutional machine to 
be acted upon only through the branches of the legislature 
and the ministers. Elgin observed during the Rebellion 
Losses agitation that one whole section of the community, 
by appealing to the governor alone, ignored the existence 
of the colonial legislature and its executive. He was con- 
vinced that, if responsible government were to succeed, this 
attitude had to be abandoned and the constitutional relation 
between the governor and his advisers thoroughly appre- 
ciated and respected. Hence he refused to act as a deus ex 
machina who would intervene at opportune moments to exalt 
one party at the expense of another. His conduct had the 
even more important object of shielding the imperial govern- 
ment from the shafts of colonial resentment. When a 
governor, instead of determining for himself upon the merits 
of a bill, sought advice from home, or reserved it for Her 
Majesty's consideration, he at once brought the ministers 
of the crown into direct contact with local interests, and no 
matter what conclusion they arrived at in the matter, they 
were certain to incur the displeasure of some colonial party. 

Factions in the colonies would be clamorous and 
violent with the hope of producing effect on the Im- 
perial Parliament and Government just in proportion 
to their powerlessness at home. ... If a line of demar- 
cation between the questions with which the local 
Parliaments could deal and those which were reserved 
for the Imperial authority could be drawn, as had been 
recommended by the Radicals and Gladstone, it might 
have been different. 1 As it was, there was nothing 
for it but that the Governor should be responsible for 
the share which the Imperial Government might have 
in the policy carried out in the Responsible Government 
colonies, with the liability to be recalled and dismissed 
whenever the Imperial authorities thought it expedient 
to repudiate such a policy. 2 

In the House of Commons, June 14, 1849, Gladstone asked, ' Is the theory 
that the Governor General should not consult the Secretary of State until an act 
is passed and sent for confirmation or disallowance ? ' Gladstone divided local 
from imperial measures, and thought that on the latter consultation should begin 
at once. Lord John Russell answered the question in the negative, and added that 
the governor-general decided when to consult. 

' Elgin to Grey, January 14, 1850. 



RESPONSIBLE GOVERNMENT 127 

If, for example, the governor formed his own judgment 
of a measure, he alone bore the brunt of the storm and he 
gave the home government the invaluable opportunity of 
deciding after the event. Seeing for itself what consequences 
the governor's action involved, it could, in case these proved 
detrimental to imperial interests, disallow his action and 
even command his recall. Elgin's conviction was that by 
this means the authority and prestige of the imperial govern- 
ment, instead of being cheapened in men's sight by the base 
uses to which local parties would inevitably turn them, 
would be enhanced and rendered so much the more effective 
for those rare occasions when their exercise was required. 
The colonists should gaze at the sovereign legislature through 
the dark glass of the governorship. That the position of 
the governor was thereby rendered more difficult goes without 
saying. He had to stand on his own feet and rely upon his 
own judgment, not upon the promptings of the Colonial 
Office. Elgin concurred in Lord Grey's opinion that good 
men should be chosen governors, and should be granted that 
freedom which good men always require ; no strong governor 
who was given freedom of action would hesitate to assume 
the responsibility which liberty involves. 

THE FULL MEASURE OF RESPONSIBLE GOVERNMENT 

Lord Elgin completed the structure of responsible govern- 
ment, and brought practically to an end the process by which 
a constitutional practice similar to that evolved in England 
during the eighteenth century took shape in Canada. The 
executive council was now virtually a cabinet, and its 
members, while each had charge of a department, shared 
a common responsibility. The governor ceased to attend 
its meetings regularly, leaving the president of the council 
in the chair, and, just as in England the absence of the sove- 
reign from the Council Board during the reigns of the early 
Hanoverians contributed greatly to the development of the 
cabinet, so in Canada the withdrawal of the governor did 
much to strengthen the sense of independence in his advisers. 
The governor could not absent himself, however, without 



128 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

raising doubts as to the validity of the decisions which were 
reached by the council alone. In 1858 the colonial secretary 
forwarded to Canada the opinion of the law-advisers of the 
crown with reference to the governor's position in the Bahamas. 
The royal instructions treated the presence of the governor 
there as necessary at every meeting of the executive council ; 
only ' where the Governor was prevented from attending by 
a physical impediment, measures might be taken by the 
Council with the subsequent concurrence of the Governor.' 1 
In his reply the governor-general of Canada, Sir Edmund 
Head, pointed out 

that, since the seventh clause of the Royal Instruc- 
tions allowed the Governor to appoint a member of the 
Council to preside, the occasional absence of the 
Governor from the Council must have been contem- 
plated. The ordinary practice in Canada was that the 
minutes were discussed in the absence of the Governor, 
and when drawn by the Clerk of the Council, were 
counter-signed by the President of the Committee. 
They were then laid before the Governor who, if he 
approved, wrote ' approved.' This was constantly done 
in the Council, but often by the Governor in his own 
rooms at the Council Office or at home. If he enter- 
tained any objection to a minute or recommendation of 
the Council, he either discussed it in the Council before 
approving of it or returned it for reconsideration by the 
Committee through the presiding officer or one of the 
members. 

Head confirmed his own opinion by consulting the 
attorney-general, Canada West, at that time John A. Mac- 
donald, who reported that the words ' Governor-in-Council ' 
were taken to mean ' Governor acting by and with the advice 
of the Executive Council,' so that under such an interpreta- 
tion His Excellency did not need to be present. 2 Having 
thus explained the Canadian practice, the governor made a 
striking comment on the broader aspect of the question : 

Where Responsible Government is established, it is, 
in my opinion, most inexpedient as a general rule that 

1 Labouchere to Head, January 28, 1858 
1 Head to Labouchere, March 4, 1858. 



RESPONSIBLE GOVERNMENT 129 

the Governor should be present during the discussion 
in Council of particular measures. He is at liberty at 
all times to go into Council and discuss any measures 
which he or the Council thinks require it, but his 
presence as a regular and indispensable rule would check 
all freedom of debate and embarrass himself as well as 
his advisers. 

There could be no clearer indication of the change which 
had come about since Sydenham's time in the relations 
between the governor and the council. The place of the 
governor, as active head of the council, was taken by the 
prime minister. The latter was not needed so long as the 
council consisted merely of departmental officials, each inde- 
pendent of the other and of the assembly, but, when it came 
to act together and to represent a party, one of its number 
had to lead the party and to choose his colleagues. The office 
developed on the lines with which we are familiar in England 
from the days of Walpole to those of Pitt, though its progress 
was relatively slower in the colony, where the division of 
races kept the leadership of each party divided. 

It may be said, therefore, that in general the governor 
was confined to the part of a constitutional sovereign, who 
should call upon the leaders of parties to form ministries and 
open and dissolve the legislature. We should not conclude, 
however, that the role was an unimportant one. Sir Edmund 
Head's refusal to grant the dissolution asked for by George 
Brown in 1858 made it impossible for the new ministry to 
stand, and without his consent the ' double shuffle ' could not 
have been effected. In the second case he urged as his 
justification, that there was no other means of carrying on 
the government or of saving the country from an election ; 
that parliament and the law-advisers had approved of the 
expedient, and that the matter would be submitted to the 
courts. Probably, however, he should have awaited the 
judgment of the courts and sustained it with his own decision. 
A final proof of the influence which the governor still exerted 
was furnished by the prominent share which Lord Monck 
took in the negotiations leading to Confederation. 

The system of responsible government was accepted at 
VOL. v i 



130 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

Confederation. Even though, unlike the recent act establish- 
ing the Australian Commonwealth, the British North America 
Act made no mention of a ministry, it was thoroughly under- 
stood that the future government of Canada would be con- 
ducted according to the existing practice. At times, between 
1858 and 1864, when George Brown was finding any stick 
good enough to beat the ministry with, he complained that 
the executive dominated the helpless assembly, and urged 
that the only remedy was the removal of ministers from the 
house and a separation of the legislative and executive 
functions according to the American plan. Metcalfe had 
advised this step in the fear that the assembly would tyran- 
nize over the executive ; Brown advocated it on the ground 
that the executive was crushing the assembly. Fortunately 
every one realized that a return to the old colonial system 
from which it had taken so much effort to escape would be 
sheer folly, and that no better guarantee of liberty could be 
found than the responsibility of the executive to the elected 
representatives of the people. Even in the provincial govern- 
ments which were the outcome of Confederation, no de- 
parture from the accepted practice was allowed. During the 
negotiations at Quebec Brown urged that the provincial 
legislature should be elected for three years, on one day in 
each third year, that there should be no power of dissolution, 
and that the departmental officers, i.e. the executive or 
business board, should be elected during pleasure or for 
three years, and should be allowed to speak but not to vote. 1 
His intention was to keep ' political matters ' out of the 
local legislature by setting up virtually an exalted municipal 
or county council with an extended term of office, and an 
executive corresponding to municipal or county officers. 
M c Cully's reply, * We must have miniature responsible 
Governments,' was taken as a sufficient argument against the 
proposal. Canada may have been prevented thereby from 
developing the same readiness as that which Lord Elgin 
noticed ' of each power in the Republic to go habitually the 
full length of its tether, Congress, the State Legislature, 
Presidents, Governors, all legislating and vetoing without 

1 Pope, Confederation Documents, p. 75. 



THE EXTENSION OF CANADA'S POWERS 131 

stint or limit till pulled up short by a judgment of the Supreme 
Court ' a readiness which tends to create at once a legisla- 
tive habit and a contempt for law. 



II 

THE EXTENSION OF CANADA'S POWERS 

THE development of responsible government was accom- 
plished and followed by an enlargement of the field 
within which the Canadian government exercised its 
power. Yet the relation between the two movements can 
scarcely be regarded as one of cause and effect. They were 
both rather the results of a growing strength and self-asser- 
tiveness on the part of the people. Colonial interests were 
expanding, with the result that matters reserved for the 
imperial government had to be surrendered to the discretion 
of the colony. The line between imperial and local concerns 
was being constantly shifted, and always into the territory 
formerly set apart for imperial action. Such changes, how- 
ever, did not take place without alterations in the acts which 
formed the basis of the Canadian Constitution, and it will be 
well to examine these alterations before proceeding to review 
the history of the legislative bodies. 

No sooner had the legislature found its voice after the 
Union than it demanded control over that portion of its 
revenue which was consigned to the civil list. The home 
government was called upon at once to decide how far the 
honour of the Empire and the fate of its servants should be 
entrusted to the colony. When in 1846 the assembly 
amended the civil list by lowering the salaries of the judges, 
reducing the salary of the governor's civil secretary, and 
abolishing the office of private secretary to the governor, 
General Cathcart pointed out that the civil secretary was 

the accredited agent of the Crown rather than a pro- 
vincial officer, for the purpose of taking charge of and 
conducting the correspondence between the Governor- 
General and the Home Government, which is always of 



132 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

a confidential and often of a secret nature, and without 
seriously compromising the interests of both, this cor- 
respondence could not be allowed to pass out of the 
hands of the Governor-General himself or of his Civil 
Secretary, who must necessarily have no connection 
with the Legislature or with any office in the Provincial 
administration. 

He felt that in attacking this office the advocates of 
responsible government wished to make the governor's 
secretary ' a mere appendage to his personal staff, with the 
ultimate intention that the whole of the correspondence with 
the Government at home should pass through the depart- 
ment of the Provincial Secretary, leaving the Governor- 
General without any discretion as respects this responsible 
branch of his office, and entirely in the hands of his Executive 
Council.' Still, the civil list had to be surrendered, and 
when in 1850 Lord Elgin's council asked Her Majesty's 
government to sanction reductions in pensions and certain 
salaries, he advised that the request should be complied with, 

on the ground that it was unwise to leave room for 
the impression that a higher scale of salaries than public 
opinion approved was being maintained by the authority 
of the Crown, or to allow factious persons, by raising the 
issue of a simulated conflict between Colonial and 
Imperial jurisdiction, to withdraw attention from the 
facts that the British Government could have no interest 
in keeping up the emoluments of offices for which it had 
ceased to nominate ; and that security against aggres- 
sion from without and the advantage of representation 
in foreign countries are enjoyed by the inhabitants of 
Canada under the protection of England, which it would 
be difficult to parallel in the history of any other people. 

The difficulty of the situation appeared even clearer when 
the colony asked for the repeal of the clause in the Act of 
Union making English the one official language, and when it 
sought the right to dispose of the clergy reserves. In the 
first case the imperial authorities deliberately delayed action 
in the hope that the request would be withdrawn, but they 
had finally to give way, ' when it appeared that the wishes of 
the Provincial Legislature and the inhabitants of Canada 



THE EXTENSION OF CANADA'S POWERS 133 

were unaltered and unanimous in favour of the proposed 
change.' The clergy reserves had been dealt with at the 
Union by the imperial parliament itself, and in 1852 the 
colonial secretary decided that the peculiar character of the 
question made it an exception to the rule ' that questions 
which affected exclusively local interests should be decided 
and dealt with by the local Government and Legislature.' * 
Nothing could be done until his successor frankly acknow- 
ledged that the principle underlying colonial administration, 
that the government and parliament of Great Britain should 
not withhold ' from the Canadian people through their 
representatives the right of dealing as they might think 
proper with matters of strictly domestic interest,' applied 
even to this case. 

The best evidence, however, as to the growth of colonial 
autonomy is afforded by the history of the tariff. Though 
it was ' a rule of Imperial policy to reserve to Parliament the 
consideration of any question of differential or protective 
duty which may arise in the colonies,' * the application 
of the rule proved extremely difficult. Gladstone himself 
was compelled to draw a characteristically fine distinction 
between maritime commerce and such commerce as Canada 
might engage in by inland routes, for example, with the 
United States : in the latter field the colony might reasonably 
act for itself. Yet the difficulty of distinguishing between 
local and imperial jurisdiction did not end there. The 
colonial tariff fell on the supplies required for Her Majesty's 
troops and on the wines intended for the officers' mess. One 
branch of the Empire seemed prepared to tax another for 
defending it. Still, the imperial government did not feel 
disposed to grant an exemption over the head of the legisla- 
ture. Gladstone urged that the legislature should give 
redress, and commanded the governor in case of its refusal to 
employ any legal power to secure the result. As Lord Elgin 
pointed out, however, the executive had no authority in the 
matter, and it was not until he prevailed on his ministers 
to secure the consent of the legislature that ' the gentlemen 

1 Sir John Pakington to Elgin, December 16, 1852. 
" Gladstone to Cut heart. February 3, 1846. 



134 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

of Her Majesty's Army were able to drink confusion to 
the Governor-General and his administration, in untaxed 
liquor.' * 

Though difficulties of this nature might arise in the 
colony, the control exercised by the imperial government over 
foreign trade was not yet disputed, and when the home country 
threw off her tariffs the advocates of free trade expected that 
their principles would be adopted throughout the Empire. 
Lord Grey expressed the hope that the colonies would remove 
their duties favouring British as against foreign imports ; 
instead of enabling the colonial legislature to do this, parlia- 
ment would have acted itself had it not been for the lateness 
of the season and the difficulty of finding out how the finances 
of the colonies would be affected. Four years later Grey had 
the imperial veto called into force against acts of the New 
Brunswick and Prince Edward Island legislatures, imposing 
differential duties against the United States. The inevit- 
able collision between local and imperial policy as regards 
Canada came in 1859, when Gait raised a revenue tariff into 
a protective tariff. There was on record, however, the reply 
which Sir Edmund Head had given the year before to Lord 
Stanley's request that he should throw his influence against 
protection : ' Self-government which is unable to operate 
when its acts disagree with the opinion of others, is a con- 
tradiction in terms.' Hence, after a feeble protest, Canada 
was allowed to control its trade policy. It did not, during 
the remaining years of this period, seek or obtain further 
privileges in this connection, but its recent claims to negotiate 
its own commercial treaties may be considered a logical out- 
come of its action in 1859. 

It is unnecessary to dwell upon the other departments of 
government in which the colony increased its power. Public 
services like the Post Office 2 were taken over by the local 
authorities ; currency and banking were made subjects of 
colonial legislation ; as early as 1848 the legislature tried to 

1 Elgin to Grey, August 2, October 9, 1850. 

1 Elgin to Grey, May i, 1849. Elgin had promised in three speeches from 
the throne that it would be given over to Canada, but the necessary legislation 
could not be put through. Grey to Elgin, April 27, 1848. 



THE EXTENSION OF CANADA'S POWERS 135 

impose restrictions on immigration. The process was irre- 
sistible owing in large measure to the difficulty of governing 
the same country from two places at one and the same time. 
Lord Elgin pointed out on one occasion how the refusal of 
the home government to approve of some colonial proposals 
forced his ministers to defend the imperial parliament against 
themselves. In other cases measures of prime importance to 
the colony had to be held over until the attention of the 
British house could be diverted from Irish or foreign affairs. 
Still, it was quite inconsistent with British colonial tradition 
to make a sudden or complete transfer of authority. The 
home government continued to keep watch over colonial 
legislation. Between the years 1836 and 1846 some 341 bills 
were reserved in the North American colonies, and of these 
forty-seven did not receive the royal assent. 1 

There was only one field in which Canada showed no 
eagerness to press its claims. The desire for power naturally 
grew faster than the sense of responsibility ; so that, while 
the colony was prepared to assume the management of its 
own affairs, it was reluctant to undertake its own defence. 
The matter assumed considerable constitutional importance, 
for many at home felt that the unreasonable attitude of the 
colony justified them in crying an end to colonial empire, and 
many in the colony contended in turn that the affection of 
the mother country was obviously of little value, and her 
indifference would justify them in joining the United States. 
Elgin, who wished to avoid playing into the hands of either 
party, insisted that no sudden or extreme demand should be 
made upon the Canadian administration, and that, on account 
of Canada's proximity to the American Republic, it would be 
better to go more slowly than in Australia. Owing to his 
warning the status quo was maintained until 1855, when 
Canada definitely undertook to meet the cost of the militia. 

1 In the matter of railway legislation the admonitions of Lord Grey that the 
colony should take every care to safeguard the public interest were most timely. 
He urged tli.u dividends should be limited, and that income in excess of the legal 
dividends should be spent on the roads. 



136 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

III 

THE LEGISLATURE 
THE ASSEMBLY 

THE student of constitutional history turns with interest 
to examine the composition of the legislative bodies 
which had gained control over the executive, and 
thereby over the government of the country. In eighteenth- 
century England parliament grew more indifferent to popular 
opinion in proportion as its powers increased. In Canada, 
on the other hand, both houses underwent the changes 
necessary to keep them in touch with the community. Lord 
Elgin expressed the opinion in 1853 that the assembly was 
unduly small, and that when the parties were nearly balanced 
' individual votes became too precious, which led to mis- 
chief.' Hence, with his approval, the number of represen- 
tatives was in that year increased to one hundred and thirty, 
sixty-five from each division of the province. The act 
provided also for a new distribution of constituencies. All 
the more important counties were broken up, and the princi- 
pal cities given additional representation. This Canadian 
Reform Bill had been prepared for by an extension of the 
franchise carried earlier in the session. Within munici- 
palities property of the yearly value of ,7, IDS. was to entitle 
the owner or occupier to a vote, outside municipalities the 
qualification was to stand at ^5. In 1858 the property 
qualifications were changed to $300 or $30 a year in cities 
or towns, and $200 or $20 in other constituencies. A series 
of measures also provided for the preparation and revision 
of the voters' lists and for the proper conduct of the elections. 1 
It is significant that bribery and corruption were so frequently 
condemned, and that in 1849 the approach of persons ' armed 

1 12 Viet. cap. xxvii ; 23 Viet. cap. xvii ; 29 Viet. cap. xiii. In 1851 the 
assembly empowered the speaker to name six members as the ' General Com- 
mittee of Elections,' which should refer election petitions to special committees. 
A special committee, if the expense were likely to be too great, could appoint 
commissioners agreed on by all parties, who might be circuit or county judges. 



THE LEGISLATURE 137 

with offensive weapons of any kind, such as fire-arms, swords, 
staves, bludgeons or the like ' within two miles of a poll was 
forbidden, and the carrying of party ensigns and flags and the 
wearing of badges declared illegal. The state of the country 
also made necessary the payment of members. In the first 
session after the Union the members of the assembly voted 
themselves fifteen shillings a day and travelling expenses. In 
1859 the amount was fixed for both the legislative council 
and the assembly at six dollars a day, if the session did not 
go beyond thirty days, and at $600 in all if it did, with ten 
cents a mile travelling allowance. 1 

THE LEGISLATIVE COUNCIL 

The fortunes of the assembly were tranquil as compared 
with those of the legislative council. After the Union 
everything possible had been done to rehabilitate this body. 
Sydenham ' affixed an engagement on the part of the members 
bona fide to give their attendance, and not convert this high 
trust into a mere mark of distinction, as had formerly been 
too much the case.' He chose men of standing, scarcely 
any of whom held office under the crown. He passed over 
the judges of the common law courts, appointing only the 
vice-chancellor of Upper Canada to preside. He omitted 
churchmen on the ground ' that it would be very inexpedient 
to require any Prelate or Minister to divert any portion of 
his time from the performance of his higher duties in order 
to engage in political discussions within the Council.' Yet, 
in spite of these excellent arrangements, the council soon fell 
into disrepute ; the average attendance during the session 
of 1846 was only fifteen out of a membership of thirty-four, 
and the conviction became general that the power of nomina- 
tion resting in the hands of the administration provided it 
with too ready an opportunity of affecting the character of 
the chamber. The charge that the Baldwin-La Fontaine 

1 An intermediate stage was reached in 1849, when the members of the 
assembly received twenty shillings a day and sixpence a mile. The salary of 
fioo a year drawn by each member of the executive council was continued by 
Sydenham as having come from the beginning of the office. Metcalfc, however, 
took advantage of the resignation of the ministers in 1843 to abolish the salary. 



138 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

ministry had added six members in order to carry the Rebellion 
Losses Bill, which passed by a majority of four, found counte- 
nance even in the House of Lords. 1 A still further explanation 
of the dissatisfaction may be found in the ground-swell of 
discontent which continued, especially in Lower Canada, 
since the stormy days before the Rebellion when the legis- 
lative council had been attacked as the stronghold of the 
irresponsible executive.* 

The situation could not escape the notice of the governor. 
In 1848 Elgin described the legislative council as worse than 
useless : it had no weight whatsoever in the community. 
A government which counted on it to resist the majority in 
the assembly would rest on a broken reed, while, if creations 
were made to bring the two bodies into harmony, the changes 
would be denounced as appointments made in the interests 
of the administration and, by a false analogy, as parallel 
with attempts to pack the House of Lords. In his opinion 
the only way of reforming ' the weak part of the constitution 
of our North American colonies ' was to introduce into the 
council the elective principle ; high qualifications for the 
electors might be established, based not on property but on 
their having held certain offices or situations as members of 
the assembly, mayors, or, in large towns, councillors, etc. 
The general list of electors could be formed in this manner 
for the whole province, and then, to secure the representation 
of different interests, it might be provided that an election 
should never be held when there were fewer than three 
vacancies, and that each elector, having as many votes as 
there were vacancies to be filled, should be allowed to give 
them all, if he pleased, to one man ; thereby the minority 
would be ensured a fair representation. The members might 
be chosen for life, though in the event of an irreconcilable 

1 House of Lords debate, May 15, 1849. Lord Brougham contended that 
while some twenty appointments were made under Sydenham, five under Bagot, 
and six under Metcalfe, during ten months of Elgin's regime twelve members had 
been nominated. However, Sydenham seems to have made twenty-two appoint- 
ments, and Bagot seven. It was also pointed out by the home government that 
the increase in the council under Elgin had been agreed upon before the Rebellion 
Losses Bill came up. 

2 ' The elective Legislative Council has always been a standing dish with 
revolutionary parties.' Elgin to Grey, August 7, 1849. 



THE LEGISLATURE 139 

quarrel between the two houses a majority of two-thirds 
in a newly elected assembly could carry an address for the 
dissolution of the legislative council, and the crown could 
be empowered to dissolve it. By the following year Elgin 
had abandoned his difficult scheme for securing a class of 
experienced electors, and was ready to accept the same 
voters as those who chose the members of the assembly, 
provided there were the necessary differences in the time and 
mode of election. 

The movement against the upper house reached a head in 
J853, when the assembly petitioned the home government 
for leave to remodel it on the elective principle. The governor- 
general supported the petition, though he recognized that 
' difficulties of execution and detail of a very formidable 
character present themselves, when the attempt is made to 
combine two elective chambers with a system of government 
conducted on the rules of British constitutional practice ; 
difficulties, it may be observed, for which no solution is 
afforded by precedents drawn from the United States, inas- 
much as Parliamentary Governfnent and Ministerial Respon- 
sibility in the British sense of the term are unknown to the 
constitution of that country.' The measure which accom- 
panied the petition of the legislative assembly proposed 
that the same constituency as that which elected the lower 
house should choose the Hpper. This, in Elgin's judgment, 
was better than that ' a pretence should be afforded for 
raising a prejudice against the former body and weakening 
its moral influence by the allegation that it represented only 
a privileged class.' In other respects, however, the legis- 
lative council would hold a stronger position. Composed 
of sixty members, thirty from each part of Canada, it would 
represent larger constituencies. Its members would sit for 
six years, one-third retiring every two years, which meant 
that they would at once enjoy the confidence based on a 
long tenure of office and at the same time be kept closely in 
touch with popular opinion. The council could be dissolved 
only when, in two successive sessions and after a six months' 
interval, a bill passed the assembly twice, and on the last 
occasion by an absolute majority of the members. The 



140 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

qualifications of age, fortune and previous service were to 
be comparatively high ; a member must be at least thirty 
years of age, and either own property of ^1000 or upwards, 
or have been a member of some legislative body. 1 The upper 
house would be still further strengthened by a clause in the 
same bill removing the money qualification for members of 
the assembly. It would profit, moreover, by the experience 
of the present members, who were to retire in two sections 
chosen by ballot, after a lapse of two and four years. These 
provisions ' would, it might be hoped, give to the council a 
considerable weight in the political scale and render a seat 
in it an object of ambition to the leading statesmen of the 
Province. On the other hand, it was not proposed that the 
contemplated change in the Council should have the effect 
of abridging in any respect the privileges whether as regards 
money-votes, or other matters which the practice of the 
constitution had conferred on the Legislative Assembly.' 

The arrival of the assembly's address in England raised 
the same constitutional question which had already been 
presented by the clergy reserves. As the Duke of Newcastle 
informed the House of Lords, there were three courses open 
to the home government. It could adopt the draft bill 
submitted by the Canadian assembly, which would mean that 
the Lords and Commons settled the matter on their own 
responsibility, or it might ask for another bill and confirm it 
by act of parliament, or, finally, it might leave the matter 
to the colony by repealing that part of the Act of Union 
which determined the character of the legislative council. 
The first method would prevent a quarrel between the 
assembly and the legislative council in Canada, the second 
would leave an excellent opportunity for a quarrel ; both 
would involve an assertion of the powers of the imperial 
parliament. The last method was the simplest and most 
direct. Action would be still further facilitated if the require- 
ment that colonial bills should lie thirty days on the table, 
which had been dispensed with in the case of the clergy 
reserves, and which might give time for private parties to 

1 E.g. the legislative council or assembly in Upper or Lower Canada, or one 
of the existing houses. 



THE LEGISLATURE 141 

interfere, could be let drop. In the House of Commons 
Frederick Peel urged that Canada should be given power to 
make the necessary change in its constitution. Colonies 
which received their institutions from the crown were at 
liberty to alter them ; or, where a constitution was granted 
by parliament, the power to amend it could be expressly 
conferred as in the case of the Australian colonies. Canada 
had not been granted the privilege in 1840, because a large 
part of the population was regarded with distrust. Respon- 
sible government, however, had removed all cause for alarm. 
There had been no revolutionary outbreak in Canada in 
1848, the civil list had been respected, and the party system 
substituted for the rancour of factions. 

Yet by leaving the matter in the hands of the local authori- 
ties the home government could not escape responsibility 
for the proposed change in the legislative council, since 
every one knew what the fate of the council would be if it 
were committed to the mercy of the colony. The ministers 
contended, therefore, that the alterations would strengthen 
the upper house. It had been difficult to find good men, and 
the members were likely to become subservient to the govern- 
ment in power. No aristocracy existed in the colony, no 
belief in the hereditary principle, so that it was idle to look 
for any firmly established body like the House of Lords. 
The attempt to set up an aristocracy had failed, and even the 
author of the act of 1791 had admitted that the time might 
come when the upper house would be elected. Elected second 
chambers had been created in Australia and at the Cape. 
In 1850 New Brunswick, with the approval of its governor, 
had asked permission to change its constitution in the same 
direction, and had been accorded the privilege by the colonial 
secretary. Hence the step proposed in Canada could not be 
considered foreign to British constitutional practice. 

Against the case presented in favour of its destruction 
the legislative council and its friends naturally urged a 
great variety of arguments. Lord Derby, who four years 
before had admitted that the influence of the ministry over 
the legislative council might induce him to accept the 
elective principle, was now convinced that so far from being 



142 CONSTITUTIONAL DEVELOPMENT. 1840-1867 

conservative, the measure suggested would lead straight to 
democracy, republicanism, separation from Great Britain, 
and the election of the governor. The dissolution of the 
council was to be compelled by a method which would destroy 
the independence even of the House of Lords ; the age limit 
was low, and those who had been members of the assembly 
could enter by a back door without any property qualification. 
There was no analogy between an elected legislative council 
and the United States Senate, for the division of powers and 
the unchanging constitution preserved the status of the 
latter body. In Canada, on the other hand, nothing would 
be stable or permanent when the colony by a mere majority 
vote could throw its constitution into the melting-pot. The 
existing legislative council could be given more weight and 
rendered more attractive to prominent men if the governor 
lent it his support. Lord Derby's arguments found some 
echo in the House of Commons, where it was also pointed 
out that the term of years was longer and the property 
qualification higher at the Cape. 

The same fear, that the proposed change would open the 
flood-gates of radicalism, found expression in Canada in the 
petition presented by the legislative council as a counter- 
blast to the address of the assembly. Elgin himself had 
observed that radical organizations were advocating the 
measure in the hope that the elective principle would spread 
throughout the constitution, 1 and in the course of the Canadian 
debates George Brown remarked that, while the bill was 
upheld by conservatives as a means of strengthening the 
upper house, it was supported by radicals for exactly opposite 
reasons. Brown himself, however, attacked the proposals 
not, like English statesmen, because they would prepare the 
way for unrestrained democracy, but because the election 
of the legislative council would involve a departure from 
the British system as reproduced on colonial soil. 2 As the 
existing council had already urged in its address, ' the royal 

1 Klgin to Grey, October 25, 1849. A motion to elect sheriffs, clerks of the 
peace and registrars was introduced inlo the legislative assembly on November 9, 
1854, and given six months' hoist. 

1 Baldwin had been of precisely the same mind when a similar change in the 
council had been suggested to him. Elgin to Grey, March 23, 1850. 



THE LEGISLATURE 143 

authority would be brought into direct contact with the two 
Houses, both deriving power from, and owing responsibility 
to, the people. . . . Jealousies would be fostered between 
bodies each equally assuming to represent the people and the 
chances of collision between them increased.' It would no 
longer be possible, in Brown's opinion, to fix the centre of 
gravity in the constitution. Ministerial responsibility would 
disappear, for no one would be able to determine which house 
should hold the ministers accountable. Brown saw looming 
up the spectre of an autocratic ministry which would shield 
itself now behind one house and now behind the other, and 
which no power in the state could dethrone. If it were really 
desirable to strengthen the legislative council, the end could 
be reached by the appointment of better men, as had been 
done in Nova Scotia and New Brunswick, where the agitation 
for an elected second chamber was thus rendered ineffectual. 
For himself, he preferred the weak, spineless legislative 
council which his opponents described. Such a body could 
never become an obstacle in the path of reform, and the 
assembly would be free to deal with the ministers to its own 
liking. 

The advocates of the change were less concerned, however, 
to secure harmony in the constitution than to provide a 
strong and efficient upper house, and, once in possession of 
the authority to reshape the council as they saw fit, they 
made their intentions perfectly clear by introducing a second 
and much more conservative measure in 1855. The term of 
office was lengthened from six to eight years, one quarter 
of the members going out every two years. The body was 
reduced in size from sixty to forty-eight members, twenty- 
four from each part of the colony, and the old members 
instead of being guillotined in batches, as the first proposal 
required, were left to be a conservative leaven in the new 
body. Even the power of the governor to dissolve the 
council in case of deadlock was removed. The ministers 
thought that any such prerogative would either bring about 
the same evil as the power of nominating councillors which 
llu> government formerly possessed, or would result in an 
endless series of dissolutions. They were satisfied that 



144 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

without special machinery good working relations could be 
established between the two houses. The lower house would 
think twice before risking a conflict ; if, however, it decided 
to do so, its leaders could go to the country and, once sus- 
tained there, they would be almost certain to find the legis- 
lative council tractable. The fact that in any case one 
quarter of the members of the upper chamber were to be 
newly elected every two years would render adjustment 
easier. At the same time, since the assembly alone enjoyed 
the right to initiate money grants and would come more 
frequently from the people, it was bound to remain the 
dominant house and to keep its hold on the ministers. Sir 
Edmund Head considered that the withdrawal of the power 
to dissolve the council was to be welcomed by the governor, 
for it would keep the crown and its representative out of 
any possible quarrels and thereby improve the system of 
government. 

The second reading of the bill was carried in the assembly 
by eighty votes to four, with the minority, as the governor 
reported home, not belonging to one party or opposing the 
measure on common grounds. The numbers probably 
furnish a true index to popular feeling. The legislative 
council, however, held out until the following year, when 
after its amendments had passed the assembly, it accepted 
its fate. The clause enacting that no councillors should be 
nominated hereafter by the crown was struck out ; arrange- 
ments were made for introducing the elected members into 
the existing chamber and the qualification was raised from 
I ooo to 2000. Four years later the council was empowered 
to elect the speaker, whose appointment had under the act 
of 1856 rested with the governor. 

The advocates of the change had maintained that the 
new body would act with vigour and serve as a real check 
upon the popular assembly. They were not to be altogether 
disappointed. The remodelled council was opposed to the 
transfer of the seat of government to Quebec, and, when a 
supply bill came before it in 1859, it objected that no item 
to cover the expense involved by the transfer was inserted. 
It had evidently hoped that the appearance of such an item 



THE LEGISLATURE 145 

would offer an opportunity of voicing its protest against the 
policy of the government. In the circumstances it could 
only declare that it would not sanction the bill of supply 
until satisfactory assurance had been given that a temporary 
removal would not take place. 1 This, in the opinion of the 
governor, meant ' objecting because the Bill was unobjection- 
able.' Though the consent of the council was necessary to 
money grants, it had no recognized power of originating 
money votes, altering the amounts, or changing the appropria- 
tion. If, however, it could say, 'We will not vote supplies 
unless they insert a particular item in the bill,' what became 
of the exclusive right of the crown to initiate money votes 
or anything else ? Head believed that the crown could 
choose the place for meetings of parliament, and that its 
judgment need only be acquiesced in by the assembly. A 
quarrel was avoided by the action of the speaker, who ruled 
the protest out of order. But the vote of twenty-four to 
twenty in favour of the supply indicates the feeling of the 
council. The danger remained that it might wrest from the 
assembly control over finance,* and Head admitted that, 
in forfeiting the power of dissolution in order to strengthen 
the upper house, the ministers had possibly gone too far. 
Five years later Monck was told ' that the elective Upper 
House showed a growing desire to claim a voice in the imposi- 
tion and appropriation of taxation.' 

We may conclude, therefore, that while the elected 
council was somewhat more vigorous than its predecessor, it 
had scarcely succeeded in finding the most natural or useful 
channel for its energy. It had abandoned the wide field of 
legislation for the disputed territory of finance. The result 
was a certain uneasiness in the public mind. Men wondered 
if they had not set up an engine for their own destruction, 
if they had not divided the sovereignty between two elected 

1 An amendment to this effect was introduced into the legislative council on 
May 3, 1859. 

' During the discussion on the supply bill in the legislative council, May 18, 
1860, a motion was introduced ' that it was inexpedient, taking into consideration 
the heavy charges upon the Consolidated Revenue Fund of the Province, to abolish 
the tolls at present charged on merchandise and vessels passing through the 
Provincial canals.' It was ruled out of order. 

VOL. V K 



146 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

bodies, and thereby weakened ministerial responsibility. 
Hence, at Confederation, George Brown's argument that the 
nominated upper house corresponded more closely with 
British tradition carried greater weight than it had done ten 
years before. Other factors in the situation also told against 
the existing council. As John A. Macdonald contended, 
the character of the electoral districts had rendered the 
elections difficult and expensive, and there had not been 
such an improvement in the type of member as to justify 
his original expectations. It has been said that this was a 
characteristically indirect way of putting the fact that as party 
leaders both he and Brown found the expense and trouble 
of conducting the second set of elections too severe a strain 
upon the party funds and machinery. However that may 
be, we are safe in assuming that the old difficulty of securing 
active and painstaking members had not been overcome. 
Finally, we must take into account the attitude of Nova 
Scotia and New Brunswick, which were familiar only with 
a nominated council and would not accept any other form. 
For all these reasons the experiment had to be abandoned. 
Yet all parties at Confederation were agreed that they 
should carry out the purpose which had suggested the change 
to an elected council, that of making the revising body 
vigorous and independent. They hoped that the duty of 
representing the several provinces which was now imposed 
upon the Senate, the class from which it would be drawn, 
the limitation upon its numbers and the life-tenure of office, 
would lend it dignity and strength. They did not feel, 
however, that it would be so likely as an elected chamber to 
come into conflict with the lower house, since the ministry 
possessed the power to nominate its members. The non- 
hereditary character of the office was a still further guarantee 
that the Senate would not hold out against the genuine 
wishes of the people. Hence, the Canadian delegates ignored 
even the advice of the home government, that some safe- 
guard against an arbitrary use of its authority should be 
devised. 



CONFEDERATION 147 

IV 

CONFEDERATION 
THE FAILURE OF THE UNION 

" I "HE development of responsible government and the 
changes in the legislative council made necessary 
several amendments in the Act of Union. The inten- 
tion of those who framed the measure had undoubtedly been 
that it should be accepted as a final solution of the Canadian 
question ; in 1843 Stanley urged upon Metcalfe that Cana- 
dians should take the act to be unfait accompli and, instead 
of seeking to destroy the very basis of their constitutional 
existence, devote their energies to the improvement of the 
country. It has never been found possible, however, even 
by the most carefully constructed documents, to set limits 
to the growth of a people. Resolutions were introduced in 
the very first session of the new Canadian legislature insisting 
upon the purely temporary character of the Act of Union, 
while, as the country gained confidence in itself, the system 
which placed the management of its affairs elsewhere inevit- 
ably broke down. The provision by Canada of the civil list, 
the removal of the restrictions laid upon the official use of the 
French language, the transformation of the upper house, all 
made serious breaches in the act. Even the specific precautions 
against too rapid and too easy changes in the constitution, that 
in certain cases bills of the legislative council and assembly of 
Canada should be laid for thirty days before both houses 
of the imperial parliament, and that a bill of the legislative 
council and assembly altering the number of representa- 
tives in the legislative assembly should on its second and 
third reading in the council and assembly be passed with 
the concurrence of two-thirds of the members of both bodies, 
were abandoned. 1 It was estimated in 1860 that thirty out 
of the sixty-two clauses in the act had gone by the board. 
Still, the explanation of its ultimate failure lay deeper. 

Lord Durham had expressly warned the authors of the 

1 The Union Act Amendment Act, 1854. 



148 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

Union against any attempt to favour the English minority, 
' by means of new and strange modes of voting or unfair 
divisions of the country.' A system of representation based 
on the census returns would have blotted out the interpro- 
vincial line at least for electoral purposes. When, however, 
the two existing provinces were each assigned an equal number 
of members in the assembly a permanent barrier was set up. 
They might in any case have retained their own laws and 
judicial procedure, but so far from neutralizing the evil 
effects which this division would have involved, the electoral 
arrangements increased them. Each section of the country 
had its representatives in the ministry and in the party 
councils, and John A. Macdonald could contend at Confedera- 
tion that the Canadian settlement of 1840 corresponded more 
nearly with a federal than with a legislative union. But the 
punishment which the neglect of Durham's advice entailed 
did not stop there. The division into Canada West and 
Canada East, serious as it would have been in itself, meant 
that the representation could not be based on population 
so long as the Union endured. Canada East suffered at the 
time, Canada West later, and the one or the other section 
always enjoyed a vested interest in injustice. When, there- 
fore, the Act of Union is described as Lord Durham's solu- 
tion of the Canadian problem, we should always remember 
that where the act departed from his instructions the germs 
of decay and dissolution entered in. 

With the various stratagems by means of which the 
politicians of the period tried to ride the two horses we are 
not concerned, except in so far as they illustrate the working 
of the constitution. It immediately became obvious that 
if the party line could be drawn at right angles across the 
provincial line, some of the worst effects of the separation 
between the two parts of the country would be overcome. 
The parties attempted, therefore, to unite in their ranks both 
French and English members. It proved difficult, however, 
to retain the party divisions, especially among the French. 
' Their coherence enabled them to organize a powerful opposi- 
tion to any Ministry from which they were excluded, but it 
no less certainly provoked among the British both of Lower 



CONFEDERATION 149 

and Upper Canada a feeling of antagonism to one of which 
they formed a part.' ! In fact, the government of Canada 
could scarcely be prevented from becoming a seesaw ; when 
one section of the country was up, the other was down. This 
situation gave rise to the demand that the administration 
should possess a double majority a majority, that is to say, 
in each half of the country. When, under Lord Metcalfe, 
after the resignation of Baldwin and La Fontaine, the French 
had little or no voice in the government, the necessity for a 
double majority was urged in Lower Canada.* When the 
tables were turned and the majority of the French repre- 
sentatives, but a minority of the English, supported Baldwin 
and La Fontaine and later the conservative administration, 
the demand came from the English side of the house. Yet 
it cannot be said that the double majority was ever accepted 
either as a principle or a convention of the constitution. 
Party leaders would have been only too glad to secure it, and 
in opposition they were sometimes ready to insist upon it, 
but they were not deterred from holding office by a failure 
to command it. The governors consistently opposed it. 
Though Sir Edmund Head in 1856 ' looked on MacNab's 
resignation as a virtual dissolution of the existing adminis- 
tration, he did not by this admit or sanction in any way the 
doctrine of double or sectional majority as necessary to a 
government in Canada. On the contrary, he stated unhesi- 
tatingly that it was a doctrine at once irrational and uncon- 
stitutional, and if carried out might involve the consequence 
of a ministry being obliged to resign although the party by 
whom they were defeated did not and could not possess the 
confidence of the Legislative Assembly.' When the new 
ministry was constituted, the governor ' told Colonel Tach6 
that he expected the Government formed by him to disavow 
the practice of a double majority.' The idea lingered, how- 

1 Elgin to Grey, April 26, 1847. 

1 General Cathcart, writing to Gladstone on April 14, 1846, referred to Draper's 
attempt to get in the French Canadians, ' without yielding to unreasonable 
demands or admitting the principle contended for by Mr I,a Fontaine, the govern- 
ing of the united province by the majority of each section of it, the evils of which 
are too manifest to require notice from me.' It is well known that Baldwin was 
strongly opposed to the double majority. 



150 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

ever, and to those who could not accept representation by 
population seemed to offer the only escape from what they 
regarded as a fundamental change in the whole constitution. 
The ministry of John Sandfield Macdonald, for example, 
' though formed in part of advocates of representation by 
population, decided to oppose any revision of the representa- 
tion in the sense of making population its basis.' But it was 
stated, in order in some measure to meet the views of Upper 
Canadians, that the government on questions of a local 
character should secure not merely an absolute majority of 
the house, but also a majority of the representatives of that 
section of the province to which the measure under debate 
especially applied. The governor-general, however, ' felt at 
the time that this arrangement was vicious in principle and 
impracticable in action, but as it only assumed the form of 
an understanding amongst the members of the Administra- 
tion, he did not think it advisable to carry his opposition to 
it so far as to prevent the formation of the Ministry, feeling 
convinced that it must be abandoned in practice.' His 
judgment proved sound, and, when the ministry decided to 
appeal to the country, he was able to announce that ' no change 
had been made in the general policy of the Administration 
beyond the abandonment of the double majority practice 
and making the question of representation an open one.' 

Yet, while the double majority was not, and could not 
be, insisted upon, legislation affecting exclusively the one or 
the other section of the country was referred to the members 
from that section. John A. Macdonald described the 
practice in his Confederation speech and compared it quite 
properly with the custom of the British house, which still 
requires that proposals to change the law of Scotland shall 
be dealt with in committee by the Scottish members. This 
device, however, did not satisfy the advocates of represen- 
tation by population. In their opinion Canada was a badly 
set limb which had to be broken a second time before it could 
knit firmly. Hence, during several years before Confedera- 
tion they pressed for an arrangement which would leave to 
each part of the country the management of its own affairs, 
while entrusting to the central government those matters in 



CONFEDERATION 151 

which the interests of both parts were affected. They had 
not worked out the scheme in detail, but it seemed to imply 
that the local legislature would be given final authority, and 
that the common body would be little more than a com- 
mittee or a conference. How the central government was to 
enforce its decisions, how common and local affairs were to 
be distinguished, and how an agreement was to be preserved 
between the two provinces, they did not accurately deter- 
mine. It may safely be said, however, that if the proposal 
had been carried out, Canada would have become at best a 
loose alliance of two independent states, as were Norway and 
Sweden until a few years ago. Fortunately, the pressure of 
events was driving together all the provinces of British North 
America, and those in Canada who demanded representation 
by population had the good sense and patriotism to see that 
they could gain their point by sinking their plan in the 
larger scheme of Confederation. The settlement of 1867 left 
local affairs to those immediately concerned and, by making 
Quebec the unit, provided for the automatic adjustment of 
the representation to the population. 

Confederation cannot be regarded, however, as a solution 
of Canadian problems only. It was intended also to remove 
the difficulties experienced by the neighbouring colonies. 
The means of uniting British North America had long been 
sought by imperial statesmen. In adopting a legislative 
union for Upper and Lower Canada instead of his original 
scheme which would have divided the two provinces into 
three sections as the units in a federation, Lord Durham 
looked forward not merely to creating a community of feeling 
in Canada, but to extending the system so as to include the 
adjoining colonies. At the beginning of his correspondence 
with Elgin, Lord Grey inquired what prospect there was of 
doing anything to effect a closer union of the British 
dominions than at that time existed. The governor replied 
that the constitutional difficulties were very great. It was 
doubtful 

whether the free and independent legislature of British 
North America could ever be induced to consent to grant 
to delegates even of their own naming such powers 



152 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

as the well-drilled, bureau-ridden council and diets 
of Germany conferred on their representatives in the 
Zollverein. On the other hand, if an attempt were 
made to create a federal system on a more extended basis 
after the model of the United States, the central body, 
having no foreign policy, army, or navy, etc., to manage, 
would either occupy itself in doing mischief or in the dis- 
charge of duties which then devolved upon the Provincial 
Legislatures. In other words a federal could hardly fail 
to become either a nuisance or a legislative union. 

Lord Elgin felt, however, that in certain circumstances 
it might be judicious to introduce the federal scheme as a 
step towards the accomplishment of a closer union. As to 
the desirability of some bond of union Lord Grey had no 
doubt, though he recognized that the questions whether the 
union ought to be legislative or only federal and if federal, 
whether it ought to be more or less complete would have 
to be answered according to the state of the public mind when 
the measure was adopted. Elgin's complaint about the 
smallness of the numbers in the legislative assembly seemed 
to point to a legislative union coupled with an improved 
municipal organization as the goal. He was confirmed in 
his conviction that something should be done by Lord John 
Russell, who in a letter to him reverted to the old idea of 
forming a union of all the British North American provinces 
in order to give the inhabitants something more to think of 
than mere local squabbles. Russell went so far as to say 
that if a separation of the two Canadas were necessary to 
bring this about he could see no objection. No immediate 
steps were taken, however, for Elgin realized how seriously 
local interests would object to a legislative union, while in 
a federal union the federal legislature would have almost 
nothing to do. He reaffirmed his previous opinion that ' a 
Congress without foreign relations, armies and navies and 
ambassadors would be a very insipid concern.' Lord Grey 
agreed that it might indeed be difficult to find an occupation 
for the federal legislature without transferring to it what 
belonged to the imperial government. 

As Lord Elgin had foreseen, the obstacles in the way of 
a legislative union proved insuperable. Lord Monck, the 



CONFEDERATION 153 

governor-general at the moment, expressed the opinion that 
' there would not have been much difficulty in obtaining the 
consent of the Quebec Conference to a complete legislative 
consolidation of the provinces if it had not been for the 
extreme, and in his opinion unfounded, jealousy of the French 
population of Lower Canada lest their peculiar rights and 
institutions might be interfered with by the general Govern- 
ment.' The absence of any complete municipal system in 
the Maritime Provinces made it still more difficult to con- 
template a legislative union which would necessarily have 
depended to such a great degree on the vigour and indepen- 
dence of municipalities. The long-established local traditions 
of these provinces also hindered them from entering into 
any closely knit scheme. Hence, though the home govern- 
ment and Macdonald pressed for a legislative union, the result 
was a federation in which the legislative authority, instead of 
being localized at one point in the state, rested with two 
separate bodies. 

The Central Government was given those high func- 
tions and almost sovereign powers by which general 
principles and uniformity of legislation might be secured 
in those questions which were of common import to all 
the Provinces; and at the same time each Province 
retained so ample a measure of municipal liberty and 
self-government as would allow it, and indeed compel 
it, to exercise those local powers which it could exercise 
with great advantage to the community. 1 

The provinces were assigned their peculiar spheres of 
activity, such as education, within which they were supreme. 
They were expected to set up their own legislative and execu- 
tive machinery. They exercised large powers of taxation and 
received substantial subsidies from the central government. 

Yet the impression prevailed among all those who had to 
do with Confederation that the Union was both strong and 
close. Even the badly cemented Union of 1840 had pre- 
pared the two sections of Canada to yield more than as 
separate provinces they would ever have consented to give 
up, apart altogether from its effect in teaching Canadian 

1 Carnarvon in the House of Lords, February 19. 1867. 



154 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

public men to work together and to appreciate different points 
of view.! But perhaps the strongest force making for unifica- 
tion was the respect of all parties in Canada for the crown. 
There was to be no breach in Canadian history, no separation 
from the throne. The monarchical principle was accepted as 
a fundamental condition of the constitution. The governor- 
general was to stand at the head of the state, discharging the 
functions of a constitutional sovereign. The flood of demo- 
cracy which at each presidential election submerged the 
United States administration was to be kept back in Canada 
by a chairman of the nation, placed by reason of his appoint- 
ment and dignity high above local controversies. Canadian 
statesmen had never been in sympathy with unrestrained 
democracy. They had always dreaded the tyranny which 
majorities could exercise. Hence they shrank from setting 
up a ruler like the president of the United States who was 
' the leader of a party, and obliged to consider himself as 
bound to protect the rights of a majority.' The monarchy 
retained their devotion, because on the one hand it secured 
popular government, and on the other preserved the tradition 
of fair dealing and justice between strong and weak. 1 

The imperial connection had the second important result 
of throwing into the hands of the federal parliament the 
residuum of authority. The British North American pro- 
vinces were not like the American states, independent com- 
munities which came together for the purpose of giving 
something away. In that case they would have been almost 
bound to keep what was left for themselves. They had 
merely drawn small shares of authority from the imperial 
parliament in which all authority reposed, and, at Confedera- 
tion, they were simply handing back their holdings in order 
that the imperial government might make a new allotment. 
The imperial government had everything to give. It gave, 
therefore, certain well-defined powers to the provinces, but 
left the surplus authority with the federal body. The 

1 See Pope, Confederation Documents, p. 56. Lord Monck believed that in 
the electoral system ' an endeavour would be made so to distribute the members 
as to obtain a representation of classes similar to that which prevails in England ' 
(Dispatch, November 7, 1864). He wished to have the monarchy shielded by some 
form of aristocracy. 



CONFEDERATION 155 

central parliament was granted, in addition, some specific 
prerogatives, the exercise of which was intended to keep the 
provinces in check. It had the power of disallowing their 
legislation, and it appointed the lieutenant-governors. 

The result of these arrangements was expected to be such 
a strong and vigorous body at the centre that, in the judg- 
ment of Lord Monck, Canada would not be a federation at 
all. He proposed, however, that a still further safeguard 
should be provided to prevent any province from becoming 
an imperium in imperio, by the introduction of a rule ana- 
logous to that in the British House of Commons with regard 
to education, religion and trade, 

that no Bill could be introduced on any of these sub- 
jects without having its principle first affirmed by a re- 
solution in a committee of the whole House. It would 
be easy to provide that no such Bill should be introduced 
into the Commons of all the Provinces without its 
principle having first been affirmed by the resolution of 
a committee consisting of all the members from Lower 
Canada. This would put the rights of Lower Canada 
under the protection of the members in the general 
parliament, not under the local legislature, and would 
have the effect of protecting the French and English alike 
in Lower Canada. It would remove the blot on the 
Quebec plan whereby legislation affecting property and 
civil rights and the administration of justice in civil 
cases were left to the local governments. 

Though his interesting suggestion was not adopted, the 
governor, on the eve of the final adoption of the measure, 
could still assure the colonial secretary that ' the members at 
Quebec wanted a strong central power, and that a majority 
of them would rejoice if the imperial government should be 
governed by their principles rather than by the expressed 
deviation from them.' 



THE BRITISH NORTH AMERICA ACT 

How far the plans for strengthening the federal govern- 
ment were successful can be seen from an examination into 



156 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

the working of the British North America Act. 1 It need only 
be said here that, while ' the provincial bodies have not, as 
was hoped, approached more nearly to the character of 
municipal institutions, the distinct advantage possessed by 
the division of powers of leaving to the several provinces 
much of that private and local business which in England was 
discharged by Parliament at so much cost to the suitors 
and so much inconvenience to the members,' has been fully 
realized. 2 What has proved to be the main flaw in the 
system, that in some departments both the central and local 
governments exercise jurisdiction, received at the time little 
or no attention. No one anticipated the warning which Sir 
Wilfrid Laurier recently felt called upon to give to the 
framers of the South African union : ' Above all else, beware 
of the pitfall of concurrent jurisdiction.' Confederation was 
in fact a rather awkward compromise. A few public men 
had made up their minds as to whether the Union should be 
legislative or federal, but hardly any one had worked over 
the ground to convince himself or others as to the character 
of the forces making in one direction or the other. Con- 
federation became, therefore, a political arrangement, not 
the expression of definite and well-founded principles, as was 
the case with the recent South African union. There were 
many ragged edges in the agreement. A more careful word- 
ing of the preamble to the clauses which specified the powers 
of the Dominion parliament would alone have done much to 
prevent subsequent confusion. There was much ill or half 
expressed which we have been interpreting ever since as the 
obvious intention of the Fathers of Canada. The further 
we go the clearer become the defects of a paper constitution, 
and of judicial decisions as the only outlet for a nation's 
progress. It is to be hoped that by failing to provide 
machinery for amending the British North America Act, 
similar to that which now exists in Australia and South 
Africa for a similar purpose, we have not tied our hands. 

1 See ' The Federal Constitution ' in section iv. 
1 Cardwell to Monck, February 28, 1867. 



THE JUDICIARY 157 



THE JUDICIARY 

JUDGES INDEPENDENT OF THE CROWN 

" I ""HE same influences which we have seen altering the 
character of the administration in Canada, namely, 
the desire for self-government and the development 
of the country, affected the judiciary. The earlier colonial 
system embodied the Baconian principle that 'judges should 
be lions, but lions under throne.' The two parts of the 
government, the executive and the judicial, were inter- 
locked. The judges held their places at the pleasure of the 
crown ; they could sit at the council-board beside purely 
executive officers ; a court like the Court of Appeals in 
Upper Canada was composed of the lieutenant-governor or 
chief justice of the province, and two or more members of 
the executive council. The break-up of the old system and 
the transformation of the executive which we have already 
described set the judiciary free. In 1843 an act of the 
Canadian legislature declared it ' expedient to render the 
Judges of the Court of King's Bench in that part of this 
Province which heretofore constituted the Province of Lower 
Canada, independent of the Crown.' Such judges were 
hereafter to hold their offices during good behaviour, not 
during pleasure, and they could be removed only on a 
joint address of the legislative council and the legislative 
assembly. In 1849 the same principle was applied to the 
Court of Queen's Bench and the Superior Court newly con- 
stituted in Lower Canada, and to the Courts of Common 
Pleas and of Chancery in Upper Canada. The only exception 
seems to have been made in the case of the District Courts 
which were created for Upper Canada. By the act of 1845 
appointments to these courts were to hold during good 
behaviour, but a year later the clause was withdrawn : the 
judges were to retain their offices during pleasure, and the 
governor was free to remove them without an address from 
the legislature, though he was required to give cause and 



158 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

reason to the legislative council and assembly. In 1857, 
however, this practice was altered in the County Courts, 
which had superseded the District Courts. The judges hold- 
ing office as well as those appointed thereafter were to hold 
office during good behaviour, provided always that the 
governor could remove a judge for inability or misbehaviour 
when such inability or misbehaviour should have been estab- 
lished to the satisfaction of the Court of Impeachment. This 
was to be a Superior Court of Record composed of the 
chief justices of Upper Canada, the chancellor and the chief 
justice of the Court of Common Pleas. Meanwhile the 
removal of the judges from the executive and legislative 
bodies was being made complete. No justice in any of the 
courts established in Lower Canada was allowed to sit or 
vote in the executive council, or in the legislative council or 
assembly. The privilege of sitting to the end of the exist- 
ing parliament which was conferred in 1841 on the District 
Court judges of Upper Canada could not be renewed after the 
act of 1846. The judges in the other Upper Canadian courts 
were likewise restricted to the discharge of their peculiar 
duties. 

GROWTH OF THE JUDICIAL SYSTEM 

The main influence, however, which kept reshaping the 
judiciary was the opening up of the province. Justice had 
to follow the settler. The judiciary changed and expanded 
constantly in the face of new conditions. In 1841 District 
and Division Courts were established in Lower Canada, only 
to be abolished two years later, giving place to Circuit 
Courts. These several Circuit Courts were united into one 
court by the act of 1849. The same year saw the several 
Courts of Queen's Bench in Lower Canada replaced by a 
Court of Queen's Bench, made up of four judges, and exer- 
cising appellate civil jurisdiction, jurisdiction of a Court of 
Error and original criminal jurisdiction. At the same time 
a Court of Record of civil jurisdiction was formed with ten 
judges, possessing original civil jurisdiction throughout 
Quebec. Some years before, in 1843, provision had been 
made for the appointment of commissioners who would hold 



THE JUDICIARY 159 

summary trial of small causes. In 1852 an act allowed for 
the appointment of justices of the peace in remote parts of 
Lower Canada. The important act of 1857 simply developed 
these principles. The territory, which had been divided into 
seven judicial districts, was now to comprise nineteen : a 
fourth puisne judge was to be added to the Court of Queen's 
Bench, making five judges in all, and the court was to be a 
Court of Error in criminal as well as in civil cases ; the 
Superior Court was to be increased to eighteen judges ; 
the Circuit Court was to hold sessions in many of the 
counties, and arrangements were made for the meeting of 
courts of Quarter Sessions in new sections of the country. 
The preamble to the act expresses quite clearly the character 
of the forces which were moulding the judicial system : 

Whereas the increasing wealth and population of 
Lower Canada, the recent subdivisions thereof into 
counties for the purposes of representation in Parlia- 
ment, and the establishment of a complete and effective 
municipal system therein, render it expedient to provide 
more generally for the local administration of justice 
in every class of cases. 

Meanwhile successive steps had been taken to ensure 
the maintenance of justice in Gaspe, which finally came 
under the arrangements of 1849 and 1857. 

Reference has already been made in another connection 
to the establishment in 1845 of District Courts for Canada 
West. Little else of moment was done until the great year 
1849, when there were set up the Court of Common Pleas, 
with three judges, the New Court of Chancery, and a Court 
of Error and Appeal, formed by the judges of the Court of 
Queen's Bench, the judges of the Court of Common Pleas, 
and the judges of the Court of Chancery. The revolution 
in the Court of Chancery was due mainly to the pressure of 
business. The governor-general was chancellor, but the 
judicial duties of the office had always been discharged by 
the vice-chancellor. The latter proved unable to keep his 
head above the flood of cases pressing upon him, so that a 
commission had to be appointed in 1844 to ' make diligent 
inquiry whether and what alterations could be made in the 



160 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

practice ' of the court. As a result of the commission's 
report, an act was passed in 1849 determining that the court 
should consist of a chancellor and two vice-chancellors, that 
the judges should hold office during good behaviour, subject 
always to removal by the governor or person administering 
the government upon the address of the two houses of the 
provincial parliament. The act also empowered the judges 
to make such rules and orders and such changes in procedure 
as would improve the working of the court. After 1849 we 
move again from the centre of the judicial system to the 
circumference. The erection of the counties into units for 
local government meant that the District Courts of 1845 
had to be superseded by County Courts in 1851. To these 
equity jurisdiction was entrusted two years later. In 1850 
the practice of Division Courts within the counties was regu- 
lated and their jurisdiction extended. The chief interest 
of the period, however, lies in the attempts ' to make better 
provision for the administration of justice in the unorganized 
tracts of country.' Even the bald language of the statute 
cannot conceal the romance which surrounded exploration 
and settlement in this new world. In the-territory ' bordering 
upon and adjacent to Lakes Superior and Huron, including 
the Islands on those Lakes which belong to this Province, 
and also all other parts of Upper Canada which are not now 
included within the limits of any County or Township,' it was 
necessary 

to provide for the laying out of roads and for the 
general well-being and protection of those who may 
resort thither for purposes of settlement or temporary 
residence connected with mining, lumbering or other 
business pursuits, and to deter evil disposed persons 
from inciting the Indians and half-breeds frequenting 
or residing in those tracts of country to the disturbance 
of the public peace, or to the committing of any other 
indictable offence, and to prevent and punish such dis- 
turbance of the public peace and violation of the laws. 

Hence the acts of 1853 and 1857 allowed the governor 
to arrange for the appointment of judges and for the holding 
of courts in provisional districts. 



THE JUDICIARY 161 

While carrying through a difficult and serious surgical 
operation on the constitution of Canada, the makers of 
Confederation left its judicial organs practically undisturbed. 
The British North America Act merely determined that the 
appointment of the Superior, District and County Court 
judges in each province, except those of Probate in Nova 
Scotia and New Brunswick, should rest with the governor- 
general. It left room for the constitution of a Court of 
Appeal for Canada, and for the establishment of any addi- 
tional courts for the better administration of the laws. The 
failure to set up at once a Supreme Court, resembling that in 
the United States, for the interpretation of the constitution, 
was remarked upon in the House of Commons. The colonial 
secretary admitted that the omission constituted a defect ; 
'but the point had undergone consideration by the delegates, 
who thought it would be better to leave things in this state,' 
that is, to let the colonial courts and then the Privy Council 
decide the cases as they arose. Though the Supreme Court 
was soon established, Canada has nevertheless maintained the 
Privy Council as the umpire in its constitutional disputes. 

While increasing beyond measure the dignity and import- 
ance of British North America, the Confederation Act did 
not fundamentally alter the character of the connection 
between the colony and the Empire. The request of the 
delegates that the new community should be described as 
the Kingdom of Canada was refused. There is reason to 
believe that the home government was influenced not so 
much by unwillingness to alarm the United States, as by the 
fear that the creation of a kingdom might ultimately disturb 
the balance of the imperial constitution. A sovereign ruling 
over two such states might easily be persuaded to use his 
influence in one as an offset to the will of the other. The 
relations between England and Scotland, as later between 
England and Hanover, did not encourage British statesmen 
to convert the Empire into an alliance of kingdoms. Yet the 
new Canadian government, as Lord Grey and Lord Elgin 
had foretold years before, was bound to claim larger powers 
and to encroach on the province of the imperial parliament. 

VOL. v L 



i62 CONSTITUTIONAL DEVELOPMENT, 1840-1867 

The makers of Confederation intended to meet this con- 
tingency by a provision, which has never received due atten- 
tion, that ' the Parliament and Government of Canada 
should have all Powers necessary or proper for performing 
the obligations of Canada or of any Province thereof, as Part 
of the British Empire, towards Foreign Countries, arising 
under treaties between the Empire and such Foreign Coun- 
tries.' 1 Confronted with the necessity of performing our 
obligations, we might revive the suggestion which Lord 
Grey put forward in 1851, that ' colonies having responsible 
government should appoint a member of the Executive 
Council with a suitable salary to reside in England and 
communicate with the Government and also make known the 
opinions and wishes of the colony to Parliament on all ques- 
tions affecting colonial interests ; both Houses would hear 
him. He would serve better than colonial representatives 
in parliament and, being a member of the Executive Council, 
he could exchange duties with his colleagues.' 

Yet even this striking proposal does not indicate how 
decidedly the period between 1841 and 1867 affected the 
future of the empire. Responsible government and Con- 
federation became examples for the British world, and have 
resulted directly in the development of what we now describe 
as colonial nationalities. They have demonstrated, at the 
same time, that the Briton beyond the seas can find an 
outlet for his political aspirations within the corners of the 
Empire. So that, while the years from the Union to the 
British North America Act saw disappear the old dilemma, 
that the colony must either be governed from home or must 
go its way in peace, they saw arise the new principle which 
is still maintained, that, in the words of Elgin, ' without 
severing the bonds which unite them to Great Britain, the 
colonies may attain the degree of perfection and of political 
development, to which organized communities of freemen 
have a right to aspire.' 

1 Clause 132, British North America Act. 



HISTORY OF PUBLIC FINANCE 
1840-1867 



HISTORY OF PUBLIC FINANCE 
1840-1867 

A CONFLICT OF INTERESTS 

OF the problems of reconstruction involved in the 
union of the Canadian provinces, few were as 
complicated or as difficult as the establishment of 
the system of public finance on a safe and prosperous basis. 
The absence of popular control over the civil expenditure 
ranked first among the ostensible causes of the revolt against 
the administration in Lower Canada. Upper Canada was 
hopelessly in debt. The prospect of finding assistance in 
bearing its financial burden had inclined the upper province 
to regard the scheme of union with distinct favour, but at 
the same time, the danger of being held responsible for 
obligations which it had not assumed seemed to prejudice 
the lower province against the proposed union. The Act of 
Union had apparently settled the question of the civil list ; 
it had consolidated the provincial revenue, and had deter- 
mined the order of its responsibility for public expenditure. 
There still remained the task of moulding into one the diverse 
elements which had formerly constituted two systems of 
administration, and the still greater problem of the public 
debt, with its conflicting interests. 

The introduction of the element of public responsibility 
for the administration of the public funds was a distinctive 
feature of Lord Sydenham's scheme. John Henry Dunn, 
who for several years had been receiver-general of Upper 
Canada, was retained as receiver-general or treasurer for 
the united province, and received official recognition as an 

adviser of the crown by being called to the executive 

m 



166 HISTORY OF PUBLIC FINANCE, 1840-1867 

council. The office of inspector-general of Public Accounts 
was continued, but the duties of the office were enlarged 
so as to include the direction of the general financial policy 
of the government. Francis Hincks, who was appointed 
inspector-general in 1842, was admitted to the executive 
council, and at the same time was required to secure a seat 
in the House of Assembly. By entrusting the Finance 
minister with the responsibility of presenting and defending 
the financial policy of the administration, it was proposed 
to preserve harmony between the executive and legislative 
bodies, and thus to avoid the disputes which had proved so 
disastrous in Lower Canada. 

The very heavy debt which the improvement of the water- 
ways had created, placed the united province under a serious 
financial handicap. According to a statement submitted by 
Poulett Thomson in June 1840, the annual revenue would 
be inadequate to meet the estimated necessary expenditure. 
The following general statement gives a survey of the con- 
dition of the province's finances : 



EXPENDITURE 

Interest on debt 

Lower Canada . . ^6,769 
Upper Canada . . 65,768 

Payments to the clergy 

Upper Canada . . 5i73i 
Charges for civil list . 75,000 

Charges payable by law 

or usage 

Lower Canada . . 12,502 

Upper Canada . . 20,978 

Annual vote for civil ex- 
penditure 

Lower Canada . . 64,369 
Upper Canada . . 18,424 

Total . ^269,541 



REVENUE 

Ordinary revenue 

Lower Canada . . ,107,075 
Upper Canada . . 77,234 

Duties under 14 Geo. m, 
cap. 88, resumed 
Lower Canada . . 19,665 
Upper Canada . . 15,286 

Crown revenues ceded 

Lower Canada . . 23,400 
Upper Canada . . 30,000 



Total 



On this estimate, an annual balance of only 
remained to provide for the contingent expenses of the 



SYDENHAM'S BANKING SCHEME 167 

legislature a sum which was entirely inadequate. On the 
existing revenue basis it was quite impossible for the pro- 
vince to undertake new public works or to launch any scheme 
of public advantage which involved claims on the public 
treasury. 

SYDENHAM'S BANKING SCHEME 

The general prosperity of the province depended at this 
time in a peculiar manner on the state of the public finances. 
The political disturbances which preceded the Union would at 
any time have seriously impaired the public credit, but, coming 
as they did, at a period of general commercial depression, 
this completely crippled the work on public improvements. 
In addition, the suspension of operations on the public works, 
by depriving new settlers of the employment needed to 
enable them to become safely established, not only destroyed 
a profitable local market, but seriously reacted on the tide 
of immigration. The completion of the St Lawrence water- 
way was confidently expected to open a larger market for 
Canadian produce. The resumption of activity upon the 
public works became therefore a matter of the greatest public 
concern, and Sydenham felt obliged to remind the imperial 
government of its offer of financial assistance as an induce- 
ment to secure the consent of Upper Canada to the proposed 
union. The actual debt was represented as 1,226,000 
sterling, while a further appropriation was needed to render 
the canals capable of receiving traffic. Under these cir- 
cumstances Lord John Russell, on the part of the British 
government, proposed to guarantee a loan of 1,500,000. In 
submitting this offer .to the House of Assembly, Sydenham 
presented a comprehensive survey of the works which the 
province would require during the succeeding few years. In 
the light of this larger policy the imperial loan was en- 
tirely inadequate to meet the demands of the province. To 
finance the new public works, which he estimated would cost 
1,470,000, Lord Sydenham proposed a resort to three 
different schemes. There would remain a balance of nearly 
300,000 from the imperial loan after the debt had been 



168 HISTORY OF PUBLIC FINANCE, 1840-1867 

liquidated, while the saving of interest would liberate 
15,000 per annum. Sydenham then proposed the estab- 
lishment of a provincial bank which should enjoy the exclu- 
sive right of issuing paper money payable on demand. In 
this manner the government would secure a loan approxi- 
mately equal to the difference between the total amount of 
issue and the amount of reserve for resumption. From this 
source Sydenham expected an annual revenue of 15,000, 
while for the balance he looked to a revision of the tariff. 

The British government refused to guarantee interest on 
a loan in excess of the 1,500,000 originally contemplated. 
Sydenham's banking scheme was forced to give way in the 
House of Assembly before the powerful interests on which 
it seemed to encroach. A provincial act was passed, however, 
authorizing the issue of new debentures to the extent of 
1,500,000 sterling, and the redemption of those outstanding. 
Provision had yet to be made for the financing of the improve- 
ments necessary to complete the public works already under- 
taken. Authority was therefore given the governor to issue 
debentures to the extent of 1,659,682 sterling. The prin- 
cipal items in this amount were 691,682 for the improve- 
ments of the St Lawrence navigation and 450,000 for the 
Welland Canal. The following year, however, a provincial 
statute was passed appropriating the funds to be raised for 
the imperial loan for the purposes of the public works specified 
in the act of 1841. At the same time a sinking fund for the 
redemption of the loan was established, chargeable to the 
Consolidated Revenue Fund, and consisting of not more than 
five per cent per annum of the principal sum raised. 

By 1846 the full amount of this loan had been realized 
by the issue of provincial debentures for 1,360,000 sterling. 
The guarantee of the imperial parliament still extended to 
the sum of 140,000 sterling, which, however, the government 
could not raise for lack of the authority of the provincial 
legislature. An act was accordingly passed authorizing the 
sale of debentures for this amount. During the same session 
authority was given for floating a loan on the credit of the 
Consolidated Revenue Fund, which, with the balance of the 
imperial loan, should amount to 520,833. 



THE TARIFF UNDER THE UNION 169 

THE TARIFF UNDER THE UNION 

In accordance with Sydenham's recommendation, the 
revision of the tariff was undertaken by the legislature in 
1841. Certain of the former revenue acts were repealed, 
while the customs regulations were consolidated in a single 
statute. The following is a schedule of the duties : 

I 5. d. 
Madeira wine, per gallon . . . .010 

All other wines . . . . . .006 

Spirits . . . varying from 6s. to I 7 o 
Sugar, refined, per pound . . . .002 

Sugar, raw, ,, . o o I 

Coffee, green, ,, . . . .002 

Coffee, ground, . .004 

Tea, . .003 

Molasses or syrups, per cwt. . .026 

Salt, imported by sea, per ton . .010 

Tobacco, unmanufactured, per pound . .001 
Tobacco, manufactured ,, . .002 

Articles not mentioned in this schedule were, with certain 
specified exceptions, subject to an ad valorem duty of five per 
cent. Complaint was made by the agricultural interests that 
the burden of the tariff was unequally distributed, with the 
result that in 1843 duties were imposed on live stock and 
agricultural produce. In addition, the following duties were 
placed on provisions : 

s. d. 

Bacon and hams, cured, per cwt. . . .50 

Meat of all kinds, fresh, ,, . .40 

Meat, salted, MM .20 

Butter, per cwt. . . . . . .20 

Cheese, ,, . . . . . .26 

Lard, ,, . . . . . .60 

Eggs, 10 per cent ad valorem. 

These duties remained in force until 1845, when a new and 
elaborate scheduleof duties was drawn up, including practically 
all articles imported for commercial purposes. Changes were 
again made in the tariff in the years 1847 and 1849. 



170 HISTORY OF PUBLIC FINANCE, 1840-1867 



THE CIVIL LIST 

The question of the civil list, which the British parliament 
had hoped to have set at rest, was still the occasion for con- 
tention. At this time, however, the issue was approached 
more with a desire to eliminate unnecessary expenditure, 
than for the purpose of receiving party advantage. The 
House of Assembly had never taken kindly to the system 
which, on the authority of the imperial parliament, had im- 
posed a definite civil list. The independence of the Canadian 
assembly seemed to demand that the appropriations for a 
civil list should be made on the initiative of the colonial 
legislature. Accordingly, the Canadian parliament in 1846 
undertook to revise the schedules of salaries forming part 
of the Act of Union. The appropriation of 1000 sterling for 
the salary of a lieutenant-governor was eliminated, while 
the total allowance in Schedule A was reduced from 50,000 
currency to 34,638, 153. 4d., and provision was made for 
a further reduction, when vacancies occurred in the offices 
concerned, to 33,031. Several changes were made in the 
salaries and allowances to the chief offices of state. An 
appropriation was made for the newly formed Board of 
Public Works. The sum of 6666 currency was allowed 
for Indian annuities, while the contingent account was raised 
to 7500 currency. The total appropriation for Schedule B 
was raised from 33,333 currency to 39,245, l6s. currency. 
On the basis of the minimum schedule prepared by the 
assembly, a reduction was effected in the civil list of approxi- 
mately 13,000 currency. 

THE REBELLION LOSSES CLAIMS 

The claims for damages inflicted during the period of 
the Rebellion constituted another demand on the public 
treasury. The question of Rebellion losses had already been 
agitated in Upper Canada, and the legislature of that pro- 
vince in its last session had appropriated 40,000 in com- 
pensation for damages. No payments were made on this 



REVENUE AND THE PUBLIC DEBT 



171 



account until 1845, when the Draper government set aside 
the revenue from tavern licences in Upper Canada for the 
special purpose of redeeming the pledge of the assembly of 
Upper Canada. The settlement in Upper Canada naturally 
created an agitation in the lower province, and in 1846 the sum 
of 10,000 was voted for the payment of claims certified 
before the Union. The question was settled in 1849, when 
authority was given the governor to raise debentures not 
to exceed 100,000 for the satisfaction of damages, and the 
payment of all expenses in connection with the determina- 
tion of claims. 



REVENUE AND THE PUBLIC DEBT 

The variations in the net revenue and in the expenditure 
during the first decade of the Union, will be observed from 
the following table. A statement is added showing the 
steady increase in the interest on the public debt. 

STATEMENT OF REVENUE AND EXPENDITURE, 1841-49 



V-, 


Tout Revenue 


Interest on Debt 


Total Expenditure 




* d. 


*. <L 


* d. 


1841 . 
1842 . 


314,082 4 of 
363,605 411} 


60,343 4 8J 
79,644 8 i 


240,801 7 9j 
374.482 9 6 


1843- 


320,987 13 8 


96,354 19 2 


292,949 4 7 


1844 . 


515,783 9 6 


123,641 12 8 


500,355 n 4} 


'!*! 


524,366 16 9$ 


143,733 7 o 


523.453 o 6 


1846 . 


512,993 18 8 


147,951 16 5 


522,982 15 o 


I *o 4 l- 


506,826 14 8 


I5M45 8 3 


480,217 6 n 


1848 . 


379,645 7 8 


169,187 10 6 


474,491 3 6 


1849 . 


513,431 2 I' 


182,727 19 ii 


477,067 15 o 



The debenture debt of the province was payable both 
in Canada and Great Britain. A return made in March 
1848 showed a debt payable in Canada of 500,314, 7s. 6jd. 
currency. Of this amount, 2637, los. bore two, three, four, 
five and six per cent, 149, 53. lod. was at five percent, 5000 
at five and seven-eighths per cent, and 343,166, 173. 6jd. at 
six per cent. The period for redemption extended to 1875. 

In July 1850 Francis Hincks reported debentures out- 
standing payable in London to the amount of 2,195,225 

r 



172 HISTORY OF PUBLIC FINANCE, 1840-1867 

sterling. The interest on this loan was divided as follows : 
1,360,000 at four per cent, 288,725 at five per cent, and 
546,500 at six per cent. The principal of the various loans 
matured in the following years : 



1857 
1859 
1863 
1864 
1865 
1866 
1874 



30,000 
16,500 
677,725 
300,000 
400,000 
271,000 
500,000 



The tests which in the past had been made on the credit 
of the province were most severe, but the period on which it 
was entering at the middle of the century was destined to 
try its strength to an even greater extent. Hitherto the 
attention of the province had been directed to improving 
its natural highways. Canals and roads were being built 
and harbours formed, but the day of the railway and the 
subsidized corporation was at hand. The financial position 
of the province is set forth in the following statement of 
liabilities and assets, prepared by Francis Hincks : 



LIABILITIES 



s. d. 



Imperial Guaranteed 

Loan . . . 1,500,000 o o 
Debentures, principal 

and interest, pay- 
in London . . 1,018,375 7 7 
Debentures payable 

in Canada . . 530,729 19 10 
Small debentures . 71, 749 6 4 
Unfunded debt . . 102,985 3 n 
Balance Consolidated 

Revenue Fund . 170,855 19 9 
Redemption of debt . 291,041 10 10 
Special provincial 

funds . . . 481,021 8 3 
Debentures issued on 

security of specific 

taxes . . . 133,315 i 4 
Sinking Fund . . 44,000 o o 



Total 



4,281,074 6 10 



ASSETS 

i . i. 

Public works . . 3,703,781 9 4 
Debentures held on 

account of special 

funds . . . 337,709 15 3 
Cash in band . . 62,267 IJ XI 



Liabilities to the pro- 
vince for deben- 
tures loaned . 

Investments in Bank 
of England 

Total 



133,315 ro 4 

44,000 o o 
,4,281,074 6 10 



THE RAILWAY POLICY 173 

The steady increase in the interest on the public debt 
and the uncertain fluctuations in the provincial revenue were 
causing much anxiety. The government was continually 
being urged to protect the credit of the province by a deter- 
mined policy of retrenchment. The reduction of the salaries 
of the officers of civil government and the abandonment of 
all but the most necessary public works, were suggested as 
means of reducing the expenditure. The existing system of 
public finance was too rigid to enable the government to take 
full advantage of favourable conditions in the money market, 
and the Sinking Fund too uncertain to inspire confidence in 
the country's loans. In 1849 a serious attempt was made 
to place the management of the provincial finances on a sound 
basis, and to free the government from certain unnecessary 
burdens. 

Authority was given the government to redeem out- 
standing debentures at any time by the issue of new deben- 
tures, provided that the total debt was not increased. Sanc- 
tion was given to a new form of debenture which, although 
not legally authorized, had been found very useful during the 
previous year. Debentures of a small denomination, and 
payable on demand, had been used to secure a public loan. 
This practice was now legalized, and authority given for the 
issue of small debentures to the extent of 250,000 currency, 
provided the total amount of debentures did not exceed the 
amount authorized by law. An attempt was made to restore 
confidence in the Sinking Fund by assigning to it all of the net 
annual revenue from the public works, excepting 20,000, and 
by crediting it with whatever balance was available from the 
Consolidated Revenue Fund. At the same time provision was 
made for the transfer to municipal or private corporations of 
public works of a local character. With this reorganization 
of the system of public finance, the government looked for- 
ward to a restoration of the public credit. 

THE RAILWAY POLICY 

The year 1849 marked the beginning of the government's 
policy of aid to railways. In connection with the granting 



174 HISTORY OF PUBLIC FINANCE, 1840-1867 

of aid to the Halifax and Quebec Railway, general regulations 
were introduced designed to govern public assistance to all 
railway corporations. Under certain conditions, the govern- 
ment was prepared to guarantee the interest on loans raised 
by any company chartered by the province and building a 
railway within the province of not less than seventy-five miles 
in length. Interest was not to exceed six per cent, and the 
amount guaranteed was not to exceed the sum actually 
expended by the company. The company was required to 
pay a specified sum to the government to constitute a 
sinking fund for the redemption of the debt, while the pay- 
ment of interest was made a first charge on the receipts of 
the railway. As further security, the government held 
after the bond-holders a first mortgage on the assets of 
the company. 

The prospect of a general guarantee of assistance to 
railway corporations did not exert a salutary influence, and 
the government was soon compelled to resort to the policy 
of adapting its aid to the special needs of the particular 
occasion. This policy was followed in its dealings with the 
Grand Trunk Railway Company, incorporated in 1852. The 
guarantee of the province was given to the extent of 3000 
sterling per mile. An amendment to the charter in 1854 
authorized a guarantee of 2,211,500, while two years later 
a further guarantee was made of 2,000,000 in preferential 
bonds. By 1857 debentures had been issued on behalf of 
the Grand Trunk Railway to the extent of 3,298,991 
currency. 

At this period aid was being granted to the railways, not 
only by the government, but by municipal corporations. 
During the early fifties, various statutes were passed permit- 
ting municipalities to buy shares in railway corporations and 
to assist in the construction of public works of local import- 
ance. The claims on the money market created by the 
normal expansion of Canadian municipalities were alone 
sufficient to create a severe financial stringency, but, when to 
these were added the demands caused by the frenzied haste 
of municipalities to rush to the assistance of railway corpora- 
tions, the stress became most serious. It was with great 



THE MUNICIPAL LOAN FUND 175 

difficulty that municipalities could secure loans for strictly 
legitimate purposes. Under these circumstances the aid of 
the government was sought, and in 1852 the Consolidated 
Municipal Loan Fund was established. 



THE MUNICIPAL LOAN FUND 

On the credit of this fund the government was author- 
ized to issue debentures for amounts already determined by 
the by-law of the municipality. Each municipality partici- 
pating in the fund was required to pay at the rate of eight 
per cent per annum on the loan. From this fund the interest 
on debentures was drawn, while the balance was set aside as 
a sinking fund for the redemption of the loan. A munici- 
pality which had borrowed money on the credit of the fund 
at any time, could not raise a further loan without the sanction 
of the governor in council, and in case of default of any of 
its payments, provision was made for levying airears on the 
property of the municipality. In 1854 the main provisions 
of the act were extended to Lower Canada. Two loan funds 
were established, and each limited to 1,500,000. Full 
advantage of the loan fund was taken in both Upper and 
Lower Canada. On December 31, 1858, there were out- 
standing the following debentures : 

Upper Canada . . . $7,294,792 

Lower Canada . 1,763,000 

Total . . $9,057,792 

More significant, however, is the statement of the amount 
of arrears on interest owed by the municipalities. The 
arrears of interest, together with the interest accrued, 
amounted in Upper Canada to $1,393,792.26, and in Lower 
Canada to $249,036.36, or a total for the two provinces of 
$1,642,828.62. In Upper Canada loans had been granted to 
forty-seven municipalities, which in two cases had been 
redeemed. Of the forty-five municipalities with loans out- 
standing, only two had been able to pay the interest required 



176 HISTORY OF PUBLIC FINANCE, 1840-1867 

by statute, while in Lower Canada each of the thirty-one 
municipalities was in debt for arrears of interest. The case 
of the towns of Port Hope and Cobourg in Upper Canada 
presents in somewhat aggravated form the story of the 
Municipal Loan Fund. On a loan of $500,000 the town 
of Cobourg in 1858 owed $171,775, while Port Hope had 
allowed arrears to the extent of $238,625 to accrue on a 
loan of $860,000. 

The operation of the Loan Fund Act revealed the deter- 
mination of the municipalities to borrow beyond their power 
of redemption. The result was that the burden fell on the 
provincial government, and the public credit was correspond- 
ingly weakened. This situation called for vigorous action, 
and in 1859 a bill was passed preventing the issue of new 
loans, excepting for the purpose of renewal. In order to 
place the Sinking Fund on a firm basis, authority was given 
for the collection of a percentage of the assessed value of 
property in the various municipalities. The increase in 
indebtedness due to this fund had been effectively checked 
while the government was compelled to await more favour- 
able financial conditions for the redemption of the debentures 
outstanding. 

THE PUBLIC ACCOUNTS 

A reform in the system of auditing the public accounts 
was introduced in 1855, when a board of audit was estab- 
lished consisting of the deputy inspector-general, who acted 
as chairman, the commissioner of customs, and a provincial 
auditor appointed by the governor. A further change was 
introduced in 1864 when the board was enlarged by the 
addition of the deputy receiver-general, the deputy post- 
master-general, the assistant commissioner of Crown Lands, 
and the deputy commissioner of Public Works. Under the 
new arrangement the provincial auditor acted as chairman. 
Much of the work of the board of audit was divided among 
the executive officials, while the final audit was conducted 
under the supervision of the provincial auditor. 

The growth of revenue and expenditure, and the increase 



FINANCIAL DEPRESSION 



177 



in the public debt for the years 1850-57 is seen in the following 
table : 



Yv 


Total Reraine 


Interest on Dttx 


Tool Expenditure 




' * 


* d. 


' d. 


1850 


7<H,234 a 5 


202,130 12 5 


541,663 16 i 


1851 


842,184 5 2 


225,350 3 ii 


647,177 i i 


1852 


880531 6 4 


215,442 14 3 


810,957 6 n 


'853 
1854 


',"95-'73 '3 i 
1,369,306 6 5 


7,383 '5 i 
226,131 18 7 


777.4" 4 5 o 
954,962 8 10 


1855 


1,019,059 1 8 8 


319,470 12 n 


1,111,464 8 o 


1856 


1,238,666 18 4 


225,223 15 7 


1,105,228 n 6 


1857 


1,070,263 9 5 


281,036 12 5 


1,274,301 13 7 



FINANCIAL DEPRESSION 

The year 1858 marked a period of the most severe financial 
depression in Canada. The entire continent was passing 
through a serious financial crisis, which was rendered more 
disastrous in Canada by crop failures in 1857 and 1858. The 
effect of the stringency on the public treasury was to reduce 
revenue and increase expenditure. The total imports for the 
years 1856-58 showed a steady decline with a corresponding 
reduction in the customs receipts. The revenue from customs 
alone for these years was : 



1856 

1857 

is 5 x 



$4,508,882.08 

3,925,051-19 
3,368,157.76 



The Consolidated Municipal Loan Fund suffered most 
severely from the general commercial depression. Munici- 
palities were unable to meet the interest on debentures, so 
that the burden fell on the government. The Treasury was 
required to advance on this account : 



in 1857 
in 1858 



$159,096.55 
368,503.51 



The guarantee of the bonds of the Grand Trunk Railway 
and of the Ontario, Simcoe and Huron Railway constituted 



VOL. v 



178 HISTORY OF PUBLIC FINANCE, 1840-1867 

a more serious demand on the government. In 1858 the sum 
advanced on this account was $1,061,756.87. The result 
of these conditions was that Alexander Tilloch Gait, the 
inspector-general, was compelled to report a deficit of 
$1,132,295.63. 

The direct public debt of Canada at this time stood at 
$22,675,024.22. As the following statement shows, the 
largest part of this had been incurred in the construction of 
public works : 

Welland and St Lawrence Canals . 14,155,206.35 

Other canals .... 2,766,146.40 

Harbours and lighthouses . . 2,817,057.92 

Roads and bridges . . . 1,610,267.34 

Miscellaneous .... 1,326,346.21 

Total . . $22,675,024.22 

The indirect debt amounted to $30,522,575.32, composed 
as follows : 

Railways ..... $20,295,098.47 
Municipal Loan Fund . . . 9,057,792.00 
Sundries 1,169,684.85 



FINANCIAL EXPEDIENTS 

In 1858 a new method had been adopted for the redemp- 
tion of the provincial debentures outstanding. The govern- 
ment was authorized to create a permanent provincial four 
and a half per cent stock to be known as the Canadian Con- 
solidated Stock. Interest on this stock was payable half- 
yearly from the Consolidated Revenue Fund of the province, 
while the principal could not be redeemed before January i, 
1890. It was proposed with the proceeds of the sale of this 
stock to redeem a part at least of the outstanding debenture 
debt of the province. The Canadian Consolidated Stock 
was to be employed likewise in assisting the Municipal Loan 
Fund. During the period of depression the debentures 
issued under this fund had suffered a severe slump. It was 



FINANCIAL EXPEDIENTS 179 

now proposed that the government from time to time should 
buy in municipal debentures with the proceeds of the sale of 
Canadian stock. This arrangement was modified in the 
following year when authority was given for the creation of 
a new five per cent stock to be exchanged for the existing 
provincial debt. An agreement was at this time made with 
the imperial government by which the annual contribution 
to the Sinking Fund for its redemption was reduced to one- 
half per cent. The Sinking Fund, which formerly was in- 
vested in securities bearing a low rate of interest, was now 
used to purchase securities bearing a rate of interest at least 
equal to the rate of the original loan. The province gained 
a distinct advantage by this arrangement. The annual 
expenditure on Sinking Fund was decreased, while the Sinking 
Fund itself became a more profitable investment. 

Another departure in the method of raising a loan was 
instituted in 1866 when the government was authorized to 
issue provincial notes redeemable in specie on demand. The 
government was empowered to arrange with the chartered 
banks for the surrender of the right to issue notes. As com- 
pensation for the surrender of this right, the banks received 
five per cent of the amount of their circulation. In exchange 
for the provincial notes issued to the banks, the government 
received the provincial debentures held by the banks in 
accordance with the provisions of their charters. The total 
amount issued was not to exceed $8,000,000. In order to 
guarantee the redemption of the notes, the receiver-general 
was required to hold specie to the extent of twenty per cent 
of the amount in circulation up to $5,000,000, and twenty- 
five per cent of the excess above that amount. The 
balance was covered by provincial debentures held by 
the Treasury. 

As the result of the issue of five per cent stock and of the 
agreement with the British government, Gait was able to 
report that in 1860, by the sale of stock to the extent of 
$3,806,224, a net annual reduction of $374,657 had been 
made in the burden imposed by the imperial loan. The 
total amount of five per cent securities issued during the 
year 1860 amounted to $27,264,011.77, of which $11,504,245 



i8o HISTORY OF PUBLIC FINANCE, 1840-1867 

went to the redemption of a six per cent debt of 2,106,000 
sterling held in London. By an annual expenditure of 
only $17,781 in excess of the amount formerly paid in 
interest, Gait was able to arrange for the liquidation in 
fifty years of the entire amount of the debt. The debt 
in April 1861 was $58,292,469, but of this nearly one-half 
was issued on such terms as would provide for its ultimate 
liquidation. 

During the year 1861 no attempt was made to exchange 
five per cent for six per cent debentures. Municipal Loan 
Fund bonds to the value of $2,537,505 were redeemed, so 
that there remained outstanding at the end of the year 
$399.3 worth of bonds. The total expenditure for the 
year, including the redemption of the debt, was $2,087,252 
in excess of the revenue. 

The civil war in the United States reacted seriously on 
the public finances of Canada. The demand for Canadian 
products decreased, and with it the value of imports fell. 
The receipts from customs for the years 1860-62 and 1865-67 
were : 

i860 $4,756,724 

1861 4,774,562 

1862 . . . 4,652,183 

1865 ... . . . 5,660,740 

1866 . 7,328,146 

1867 . . . 6,973,261 

CONFEDERATION AND FINANCE 

The movement to secure a confederation of the Canadian 
provinces now promised to reach a successful issue. The 
financial basis of union was not the least difficult to determine. 
The geographical features of the province, which to no small 
extent determined the character of provincial public works, 
differed greatly in the four provinces. Different conditions 
had existed during the period of expansion, and in conse- 
quence the liabilities assumed bore a different relationship 
to the population of the provinces. The liabilities and assets 
of Canada on June 30, 1867, stood : 



CONFEDERATION AND FINANCE 



181 



LIABILITIES 

Direct debt . . $62,734,797.63 
Indirect debt 
Miscellaneous 
Trust funds . 
Consolidated fund 
Bank accounts 

Total 



848,456.64 
4,094,712.90 
10,325,028.49 

7,a3 2 .73- 6 
3,209,163.85 



$88,444,890.11 



ASSETS 

Sinking fund. . $1,888,555.58 
Provincial works . 27,605,989.53 
Indirect debt 
Miscellaneous 
Consolidated fund 
Bank accounts 

Total 



848,456.64 
54,506,085.53 
1,881,461.11 
1,714,341.72 



$88,444,890.11 



A very necessary condition of the financial agreement 
between the provinces was that their various duties and 
revenues should become merged in a Consolidated Revenue 
Fund. At the same time, the Dominion became liable 
for all the debts and liabilities of the uniting provinces. 
This general condition was modified by the provision that 
the provinces should be liable for their own debt in excess 
of a certain amount, in the case of Ontario and Quebec 
$62,500,000, Nova Scotia $8,000,000, and New Brunswick 
$7,000,000. For the support of the government of each 
province, the Dominion undertook to pay the following 
annual amounts : 



Ontario 
Quebec 
Nova Scotia 
New Brunswick 



Total . 



$80,000 
70,000 
60,000 
50,000 

$260,000 



In addition to this, the federal government was required 
to pay each province a sum calculated on the basis of eighty 
cents per head of the population in 1 86 1. In the cr.se of 
Nova Scotia and New Brunswick, this amount was permitted 
to increase until the population reached 400,000. A special 
grant of $63,000 per annum for a period of ten years ~was 
made to the province of New Brunswick. 

The period from 1841 to 1867 was one of rapid expansion 
in the public finances of the province. The beginning of the 
period found public works suspended and the credit of the 



182 HISTORY OF PUBLIC FINANCE, 1840-1867 

province at a very low ebb. Through careful administra- 
tion, confidence was restored and funds raised for the com- 
pletion of the necessary works. The success of the financial 
policy of the earlier years of the Union led to more extravagant 
ventures. The province then became saddled with a series 
of heavy debts in aid of railways and in security of loans 
made by municipal corporations for the purpose of local 
works. The years 1858 and 1859 witnessed a most severe 
financial crisis, but again skilful administration restored con- 
fidence, and despite the temporary setback of the early 
sixties, the finances were in a flourishing condition when the 
province became part of the larger Union. 



ECONOMIC HISTORY 

1840-1867 



ECONOMIC HISTORY, 1840-1867 

I 

GENERAL VIEW OF ECONOMIC CONDITIONS 

IN spite of the strenuous efforts of the anti-British 
element of Lower Canada and of the ultra-British 
element of Upper Canada to frustrate the designs 
of Durham and Sydenham for the reunion of the provinces, 
the progressive policy of a united Canada, with a still larger 
union in view, was realized in 1841 under Lord Sydenham. 
Rallying the progressive forces of the country under the new 
system of responsible government, hope supplanted despair, 
and the colony once more resumed its industrial and com- 
mercial expansion. 

For many years after the Union of 1841 economic condi- I 
tions in Canada, even in their domestic aspects, were entirely ) 
dominated by forces which lay beyond her own borders, and j 
therefore largely beyond her own control. While this was 
true of both the Canadian and Maritime Provinces in the 
period before 1841, it was still more significant for the period 
between 1841 and 1867. In the earlier period the economic 
life of the British provinces had consisted on its domestic ^ 
side chiefly in living frugally upon the ample natural products 
of the country with little dependence upon the luxuries and 
refinements of European civilization. On its commercial 
side it involved simply the exchange of surplus natural 
products for those of other climates, and for a few staple lines 
of manufacture drawn almost entirely from Great Britain. 
But in the period between 1841 and Confederation, colonial ~-\ 
trade was becoming ever more complex, especially in Canada. 
An increasing volume of capital was being invested in those A 

manufacturing industries which transformed the natural - 



186 ECONOMIC HISTORY, 1840-1867 

products of the country several stages beyond the condition 
of raw materials, though seldom as yet into finished articles 
of consumption. Much capital also was being sunk in the 
-rapidly expanding transportation systems of the country, 
combining both land and water routes. Larger and more 
varied supplies were acquired in lines of imported manufac- 
tures, and, in consequence, the commercial interests and 
^capital involved in wholesale and retail trade, and in the 
banking and exchange facilities, were on a rapidly increasing 
and ever more permanent scale. 

But, while the economic interests of the British American 
provinces were thus expanding, and at the same time 
becoming more inflexible, they were still as completely 
dependent upon foreign conditions as the smaller and more 
, adjustable interests of the earlier period. The greater part 
of the capital invested relied upon a foreign rather than upon 
a domestic trade. Industries were not sufficiently developed 
to support a population so well balanced in the production, 
exchange and consumption of its own products as to be 
essentially independent of foreign countries or strong enough 
to hold its own in regulating the trade with them. 

For capital the provinces were still absolutely dependent 
^ upon the mother country. They were forced to find markets 
abroad for the greater part of their own natural products, 
and to foreign markets they were compelled to look for the 
purchase of the greater part of the manufactured goods which 
the people were demanding in increasing volume and variety. 
We may appreciate, therefore, the growing interest and 
anxiety with which the leading citizens of the provinces 
watched the economic conditions and commercial policies 
of Britain and the United States, the countries upon which 
British American interests mainly depended. 

Under these conditions Canadian economic history 
during the Union period will be found to centre around 
certain outstanding movements and changes of economic 
policy on the part of Great Britain and the United States. 
The first and most important of these influences was the 
development of the free trade movement in Britain, which, 
alike in its intermediate and final stages, had most important 



GENERAL VIEW OF ECONOMIC CONDITIONS 187 

consequences for the leading Canadian industries, such as 
the production of wheat and other articles of food, the manu- 
facture of flour for the British market, and the timber and 
ship-building industries. The grain and milling trades, on 
the other hand, largely determined the economic relations 
of Canada to the United States. In the first place, we find 
much the most important phase of the attempt to make 
Canada, by artificial means, at once the commercial medium 
and the geographical highway by which the middle and 
western states tributary to the Great Lakes should send 
their natural products to the British and other European 
markets, and by which they should receive the corresponding 
imports. This transport of Western American grain through 
Canada supported extensive milling and financial interests, 
which were heard from with no uncertain voice on the termi- 
nation of the incidental sjtuation from which they temporarily 
profited. When complete free trade was achieved in Britain, 
and the British American preference abolished, readjustment 
on the part of the colonial interests v/as naturally required to 
meet the new conditions. Deprived of their advantages in 
the markets of the mother country, the British American 
provinces claimed a corresponding emancipation from the 
special privileges enjoyed by British shipping in colonial 
ports and in the carrying of colonial exports and imports. 
The British government soon recognized the logic of the 
situation, with the result that the historic Navigation Acts, 
long considered vital to British commercial supremacy, were 
absolutely abolished in 1840. 

The Canadians, having now lost all special advantages 
in the British markets, clamoured for access to the protected 
American markets, and solicited the assistance of the British 
government in procuring that boon. This led to the interesting 
negotiations and general campaign for reciprocity, a move- 
ment which began with Canada but was extended to take 
in all the British American provinces. After the Reciprocity 
Treaty went into effect in 1854, some very interesting and 
instructive economic experiences resulted which led to much 
discussion on both sides of the international boundary, and 
the ultimate determination on the part of the Americans to 



188 ECONOMIC HISTORY, 1840-1867 

terminate the treaty. When the lapse of the treaty became 
certain, interest developed in the possibilities of mutual 
trade between the British parties to it. There was also con- 
sidered the special advantage of all the provinces being able 
to speak with a united voice in both national and inter- 
national trade relations. The pros and cons of this problem 
were much discussed during the negotiations for Confederation. 

Incidental to these larger factors in the economic history 
of Canada, we have further evidence during this period of 
the beneficent influence of war upon Canadian prosperity, 
though this prosperity was afterwards offset by a disastrous 
reaction when peace was re-established, and the unfortunate 
survivors had to redouble their industry and practise un- 
wonted economies in order to recover from their international 
debauch. The Crimean War and the American Civil War 
were the special godsends for Canada during the Union era, 
as the American Revolution and the War of 1812 were the 
bright spots during the previous period. 

In summarizing the period under review we shall find that 
the economics of the British preference occupied the first ten 
years, and the economics of reciprocity practically the last 
ten years, while the intervening years, from 1849 to 1854, 
were occupied in the transition from one condition to the 
other. From these dominant forces domestic trade and 
industry also took their character and direction. 

II 

CANADIAN INDUSTRY AND FOREIGN TRADE 

HAVING taken a bird's-eye view of the course of 
Canadian economic development during the period 
under consideration, we may now enter upon the 
history of the several movements with some detail. Atten- 
tion has already been drawn to the interesting forecast of 
the leading economic issues of the forties which was made 
in the address to the crown presented by the House of 
Assembly of Upper Canada in 1836. In this the home 
government was asked to secure for the people of the upper 



, 



CANADIAN INDUSTRY AND FOREIGN TRADE 189 

province free access for their products to the American 
markets, the privilege of bonding their exports and imports 
through American ports and territory, freedom from the 
restrictions of the Navigation Acts, and more particularly 
the abolition of the remaining duty of 55. per quarter on 
Canadian wheat on entering the British markets. It is true 
that in most of these requests the assembly was simply 
following the lead of the promoters of the free trade move- 
ment in Britain. Owing, however, to the immediate develop- 
ment of the political and economic crisis in the Canadas, 
nothing came of this petition beyond its indication of a trend 
of policy on the part of an important section of the Canadian 
public. 

When the acute stages of the Canadian crisis were over 
and the reunion of the Canadas was assured of a trial at 
least, the agitation for the free access of Canadian wheat and 
flour to the British markets was once more revived, though 
some of the other proposals which accompanied it remained 
dormant for a time. 

In 1840 the House of Assembly of Upper Canada sent a 
further petition to the crown, dealing with the improvements 
in trade policy required to place Canada on as prosperous a 
footing as the adjoining states, thus enabling her to obtain 
her fair share of British capital and immigration. 

It was claimed that the American markets for grain were 
sometimes higher than those of Canada. For the past four 
or five years, it was said, bread stuffs had been twenty-five 
per cent higher in the United States than in Canada. Such 
a statement, however, had little validity, as there was no 
uniform price throughout either Canada or the United States 
for any of the various grains coming under the term ' bread 
stuffs.' At any rate, in the case of wheat, these conditions 
seldom occurred in any of the regions adjacent to Upper 
Canada and in possible competition with it. It was fre- 
quently true, however, with reference to other grains than 
wheat, and to certain miscellaneous agricultural products 
which could not be profitably exported and therefore depended 
mainly upon the local home markets. Naturally, owing to 
the advanced development of the United States and the 



igo ECONOMIC HISTORY, 1840-1867 

larger influx of immigrants, the home markets for miscel- 
laneous agricultural products were, as a rule, much better 
there than in the Canadas. This general fact, as we shall 
find, was a matter of vital importance in relation to the 
subsequent question of reciprocity. 

The fact that American wheat, when imported through 
Canada or ground into flour there, was admitted to the 
British market on the same basis as Canadian wheat, led a 
number of the farmers of Upper Canada to imagine that this 
prevented their receiving better prices for their grain. But, 
inasmuch as the prices of grain in the British and not in the 
Canadian markets determined the prices received for both 
Canadian and American grain, this opinion was erroneous. 

Endeavouring to belittle the existing preference on 
Canadian grain entering Britain, the assembly remarked in 
its petition : ' Your Majesty's faithful Commons are aware 
that the products of these colonies are admitted into the 
ports of die mother country at a duty of 53. per quarter, 
when wheat is below an average of 675. per quarter, but 
from the expense of transportation from the interior to the 
sea, and thence to the United Kingdom, experience proves 
they derive very little advantage from this protection.' 
Further, as regards their preference in the West Indian 
markets, the great distance and incidental expenses were 
represented as quite consuming all possible profits. Having 
thus apparently disposed of all their present advantages, 
they desired their trade conditions to be improved in several 
ways. In the first place, they sought fiscal protection for 
their home markets in agricultural products. This meant, 
in practice, that American grain imported to Upper Canada 
should not be available for the supply of local markets, but 
should be shipped through in bond or ground in bond on its 
way to the British markets. When imported for local con- 
sumption, the duties on American agricultural products 
should be the same as the duties levied in the United States 
on imports from Canada. In the second place, they asked 
a further preference in the British market, to be accom- 
plished by the abolition of the remaining duty of 53. per 
quarter on Canadian wheat. 



CANADIAN INDUSTRY AND FOREIGN TRADE 191 

In transmitting this petition to the home government, 
Lord Sydenham indicated that its promoters had considerably 
exaggerated the difficulties of their situation. He pointed 
out that almost the only advantage left to Britain in return 
for her very heavy expenditure on the military and naval 
protection of the colonies, was her right to regulate their 
external trade so as to favour her own industries and shipping. 
At the same time, as he pointed out, it was very inconvenient, 
alike for the colonies and the mother country, to have every 
change in the colonial trade relations made in Britain. He 
suggested, therefore, that the provincial legislature might be 
permitted to make at least such minor changes as they found 
to be necessary and at the same time not inconsistent with 
British interests. None of these acts, however, should be 
permitted to come into force until approved by the British 
government. In reply to this suggestion, Lord John Russell 
promised that the change recommended should be made. 

As a sequel to this petition, an act was passed by the 
legislature of Upper Canada imposing a duty on such Ameri- 
can grain as was entered for consumption in Canada, but the 
act was reserved by the governor. The opposition to this 
measure came from the transporting and milling interests, 
who pointed out that the sale in Canada of flour ground from 
American wheat simply enabled it to take the place of the 
same amount of Canadian flour in local markets, thus per- 
mitting a larger amount of Canadian flour in the aggregate 
to be sent to Britain. Instead of being an injury to' the 
Canadian farmer, this arrangement, it was claimed, enabled 
the dealers to adjust their supplies to meet local needs without 
a large extra cost in transportation, and this, in turn, per- 
mitted them to give somewhat higher prices for Canadian 
grain throughout most parts of the province. 

Lord Sydenham found it necessary to deal with this same 
question in 1841, when the farmers and millers were once more 
in debate upon it. The governor regarded the millers as 
having the best of the argument. 

At this time the farmers of Lower Canada did not produce 
sufficient wheat to meet the requirements of their own pro- 
vince. For some years previous their crops had suffered 



i 9 2 ECONOMIC HISTORY, 1840-1867 

from the wheat-fly and rust. In Upper Canada, however, 
' wheat was the chief article of production for export. In 
1840 there had been an exceptionally large harvest in both 
Canada and the United States, and prices were low in conse- 
quence. This condition had given rise to a double agitation, 
first, for greater protection in their home markets, and 
second, for the abolition of the remaining duty on Canadian 
grain in the British market. Sydenham's own opinion was 
that the American imports did not affect prices in Canada ; 
at the same time he strongly urged that the remaining duty 
on Canadian wheat entering Britain should be abolished, for 
this would be a real boon to the Canadian farmers. As a 
British free trader, he naturally considered that such a change 
would be of some slight advantage to the British consumer. 

During 1841 a strong petition was sent to the home 
government from the leading merchants and shippers of 
Montreal, in which they endeavoured to effect a compromise 
between the agricultural and commercial interests of the 
united provinces. It was proposed that the existing British 
duties on the chief Canadian agricultural products should be 
abolished, and that duties, if necessary, equal to those abol- 
ished, should be levied upon the corresponding American 
produce entering Canada, but that when these import duties 
had been collected the American produce should be export- 
able as Canadian produce and received in Britain on the 
same terms. The articles involved in this proposal were : 
wheat, rye, Indian corn, barley, oats, peas, beans, and other 
grains, and the flour or meal produced from them ; also beef, 
pork, butter and lard. 

The Liberal government in England having been defeated 
in the latter part of 1841, it fell to the lot of Lord Stanley, 
the new colonial secretary in the government of Sir Robert 
Peel, to reply to the petition of the Montreal merchants and 
several other memorials on the same subject. This he did in 
March 1842. In explanation of the position of the British 
government, which did not feel itself justified in admitting 
Canadian grain at a nominal duty, he stated that it was 
influenced by the geographical relations of Canada to the 
United States. In order to encourage transport of Ameri- 



CANADIAN INDUSTRY AND FOREIGN TRADE 193 

can produce from the western states and the manufacture 
of American wheat into flour in Canada, they had admitted 
American produce to the British markets as Canadian pro- 
duce ; the British government must therefore protect itself 
from admitting too much American produce through that 
channel. The British government did not wish to impose 
a special tax on American grain coming through Canada 
because it was observed that when such a tax was proposed 
in the Canadian legislature it had been rejected. In the bill 
now before the imperial parliament, however, the 55. per 
quarter duty on Canadian wheat would apply only when the 
price was below 553. per quarter, instead of below 673. as 
formerly ; above 553. the duty would be only is. per quarter. 
Moreover, Canadian flour was to be admitted to Ireland for 
the first time. 

Seizing upon the explanation of the colonial secretary, 
the Canadian advocates of the abolition of the British duty 
on Canadian wheat and flour determined to take the British 
government at its word. Assuming that the risk of admitting 
too much American grain along with the Canadian was the 
only obstacle to the free admission of Canadian grain, the 
legislature, without further communication with the Colonial 
Office, immediately passed an act during the session of 1842 
imposing a duty of 33. sterling per quarter on American 
wheat entering Canada. It was therefore incumbent upon 
the British government to abolish the duty on Canadian 
wheat. The long preamble to this act cleverly interprets the 
dispatch of Lord Stanley to suit their purposes. The dis- 
patch, it says, ' affords the strongest ground for the confident 
belief and expectation that, upon the imposition of a duty 
upon foreign wheat imported into these provinces, Her 
Majesty's government will be graciously pleased to recom- 
mend to parliament the removal or reduction of the duties 
on wheat and flour imported into the United Kingdom from 
Canada.' Sir Charles Bagot, who had succeeded Lord 
Sydenham as governor, naturally reserved this act on account 
of the special interpretation which it placed upon the 
minister's dispatch. In sending the bill over, he promised 
to give a more detailed explanation of it. 

VOL. V N 



194 ECONOMIC HISTORY, 1840-1867 

The detailed explanation furnished a couple of months 
later (January 1843) consisted mainly of the report of the 
Select Committee of the Canadian legislature, which gave 
details as to the relative cost of transportation for Western 
Canadian and American produce to the British market by 
way of the Canadian and American routes respectively. The 
cost of freight on a barrel of flour from the Welland Canal 
to England via the St Lawrence route was $2.90, and via the 
Erie Canal and New York $2.27 >. Under the sliding scale 
of duties in England, the duty being reduced as the price of 
wheat rose, when the price of wheat was above 673. per 
quarter, New York had an advantage over the St Lawrence 
route, while below that price the St Lawrence had the advan- 
tage, although the lower freight rates, by way of New York, 
tended to offset the higher duty on American grain. When 
the new Canadian canals, then under construction, should 
be completed, there was expected to be a reduction of at 
least fifty cents per barrel in freight rates from Western 
Canada and the adjoining states. In this discussion of 
relative costs it was assumed that the Canadian farmer 
should receive from 80 cents to $1.00 per bushel for growing 
the wheat. 

The sliding scale of duties in England rendered impossible 
any accurate forecast of the profits on the shipment of wheat 
to Britain, and was particularly confusing in any attempt 
to compare Canadian and American figures. Even in the 
case of Canadian wheat and flour, although they had been 
admitted at a fixed duty of 53. per quarter when the price of 
wheat in England was below 673. per quarter, yet when the 
price was above that rate they were admitted at 6d. per 
quarter. The problem, therefore, was to find what quantity 
of Canadian wheat would be admitted above or below the 
marginal price of 673. The actual results, of course, could 
be discovered at the close of each season, but they were 
apparently of little value as guides for the following season. 
Thus the British returns show that the average rates per 
quarter paid on all Canadian wheat entering the British 
markets from 1838 to 1842 were as follows : 



CANADIAN INDUSTRY AND FOREIGN TRADE 195 

... Average Rate on 

Wheat per quarter 

1838 . . . .2s. id. 

1839 . . 6d. 

1840 .... 45. od. 

1841 . . . .is. <>d. 

1842 . . 2s. sd. 

It will be observed from these figures that only in 1840 
did the average rate of duty approach the standard rate of 
53. per quarter. The matter was necessarily much more 
complex in the case of foreign grain, for the sliding scale 
involved a number of different duties for different prices. 

The general object of the assembly's memorandum was 
to show that the proposed rate of duty on American wheat, 
namely 33. per quarter, was quite sufficient to protect the 
British markets from a special influx of American wheat 
through Canadian channels. Within a few months, however, 
they wished to amend this by requiring a drawback of the 
33. duty on all grain and flour shipped from the United 
States to Britain via the St Lawrence when the price of 
flour at Montreal or Quebec exceeded 205., or $5.00, per 
barrel. 

Taking advantage of a speech of Sir Robert Peel's, in 
which he had said, in the large loose terms common in such 
addresses, that henceforth the colonies were to be treated 
as integral parts of the British Empire, the committee of the 
Canadian assembly attempted to base upon this statement a 
series of resolutions intended to encourage the home govern- 
ment to give effect to the prime minister's rhetoric by 
admitting Canadian agricultural produce in general entirely 
free of duty. The most interesting of these resolutions, 
especially in the light of subsequent events, was the second, 
which promised that, if Canadian produce were admitted to 
Britain free of duty, the Canadian legislature on its part, as 
soon as the finances of the province would permit, would 
abolish all duties on British manufactured goods entering 
Canada directly from the sea. It is explained in the third 
resolution that the expenses of the Canadian government 
would soon be met by the duties on foreign imports and the 



196 ECONOMIC HISTORY, 1840-1867 

tolls of the new St Lawrence canals. In other words, it was 
expected that henceforth the Americans would finance the 
Canadian government. Thu^ did the Canadian assembly 
meet the British premier on common ground. On the whole, 
however, Sir Robert Peel had the best of the argument, for 
he did abolish practically all the duties on Canadian produce, 
not confining himself to this alone, while the Canadian 
assembly, even after Britain had fully adopted the policy 
of free trade, went on steadily increasing the duties on 
British manufactures until the government of the mother 
country found itself compelled to make an official protest. 

The North American Committee of the Colonial Association, 
an organization which in those days performed the functions 
undertaken by the United Empire League in later times, took 
part in the tariff discussion, and urged special tariff conces- 
sions to the colonies, on the ground that this would encourage 
British immigration, and on the further ground that, unless 
the colonies were encouraged to devote themselves exclusively 
to the production of agricultural produce and of their other 
raw materials, they would undoubtedly turn their attention 
to manufacturing before long, and attempt to pass laws for 
its protection from outside competition. 

In the meantime, owing to the rapidly growing clamour 
in Great Britain for the abolition of the corn laws, the govern- 
ment found it expedient to yield to the petitions of the 
Canadians and their friends. Accordingly, in 1843, Lord 
Stanley introduced in the British legislature the Canadian 
Corn Bill, which, on becoming law, admitted Canadian wheat 
and flour at the nominal rate of is. per quarter. Wheat from 
the United States, on passing through Canada, was not 
admitted to this privilege as formerly ; but flour, ground in 
Canada from American wheat, was admitted on the same 
basis as Canadian flour. The wheat from which it was ground, 
however, was required to pay the duty of 33. per quarter on 
entering Canada, as agreed upon by the Canadian legislature. 

The preference which would thus be enjoyed by the 
Canadian millers was estimated at 6s. per quarter. Though 
this preference does not appear to have affected Canadian 
agriculture to any appreciable extent, it certainly gave a 






THE TEA TRADE 197 

great impetus to Canadian milling, especially at the large 
centres on the route from the North-West to the Atlantic 
ports on the St Lawrence. 

Quite regardless of the obvious fact that this preference 
conferred upon Canadian grain was simply due to the excep- 
tional progress of the free trade movement in Britain, Canadian 
capitalists, especially in the Montreal districts, invested 
heavily in milling establishments of an extensive and per- 
manent character, and for a few years drove a very profitable 
trade. 

In the meantime were completed the St Lawrence canals, 
which were to transfer the control of the traffic from Western 
Canada and the adjoining states to the St Lawrence route, 
and to bring much wealth, not only to Canadian traders and 
shippers, but to the government coffers as well. In spite of 
these advantages, however, the repeal of the English corn 
laws in 1846 brought consternation to the Canadian milling 
and grain trade. Owing to the gradual reduction of duty, 
the full effect of the repeal was not felt until 1849, when only 
a registration duty of is. per quarter remained on all wheat 
or flour imported into Britain. 

As regards the general body of the Canadian farmers, the 
abolition of the corn laws did not especially injure them, 
while the free admission of most of their other agricultural 
produce was of considerable benefit, and might have been of 
much greater advantage had the commercial and transporta- 
tion system been organized to handle it. 

Ill 
THE TEA TRADE 

MEANTIME some interesting trade problems had been 
worked out in other lines of colonial commerce. As 
settlers extended along the international boundary 
line, and the facilities for transportation were improved, 
intercourse between the United States and the British 
American provinces became more easy, but more difficult to 
control. Thus, before the railroads had concentrated traffic 



ig8 ECONOMIC HISTORY, 1840-1867 

at specific points, which could be guarded by an adequate 
staff of revenue officers, smuggling had become very common, 
and apparently reached its culmination during the forties. 

The article of tea was subject to special imperial restric- 
tions and prohibitions, which were not very generally approved 
by public opinion in the British provinces. Being easily 
transported, and of considerable value in proportion to its 
weight, it had always been an article of extensive smuggling. 
Up to the year 1842 the importation of tea from the United 
States had been prohibited by an imperial act. From 1836 
to 1839 the British North American provinces had repeatedly 
petitioned the home government to repeal the prohibition 
and to substitute a regular rate of duty. Lord Sydenham, 
as president of the Board of Trade in the British cabinet, 
had dealt with some of these petitions. On looking into the 
question more closely, and from the Canadian point of view, 
he recognized the necessity for change. 

From special reports made by imperial customs officers 
in America, it was found that from one-half to three-fourths 
of all the tea used in Upper Canada was smuggled from the 
United States. One of the chief explanations of this was 
that the quality of the tea commonly used in the United States 
and Canada differed greatly from that imported by the 
British merchants for their home consumption. The British 
customers preferred the milder grades of black tea, while the 
Americans and Canadians used almost exclusively a strong 
green tea, imported directly from the East to the United 
States ports. To obtain this grade of tea, the Canadian 
merchants who sought to comply with the law had been 
compelled to purchase it in New York, and then have it 
shipped over to Liverpool and back again to Canada. Inci- 
dentally this situation illustrates some of the trade difficulties 
between the mother country and the colonies, in which 
ignorance of each other's situation and a certain self-centred 
complacency, which prevented a mutual adaptation to each 
other's needs, accounted for most of the troubles and the 
prolonged controversy over them. 

A practical man of affairs such as Lord Sydenham, once 
on the ground, recognized the absurdity of the situation, and 



THE TIMBER TRADE 199 

strongly urged the repeal of the prohibition on the import of 
tea from the United States, and the substitution of a duty 
which might be ten per cent higher than that on British teas 
imported directly from Britain or the East Indies. The 
British government accepted his advice in the matter, and 
the necessary alterations in the acts were introduced, although 
they did not pass until the following year. When, however, 
the proposed change was announced in the Maritime Pro- 
vinces, the merchants of Halifax remonstrated, on the ground 
that it would transfer the whole of the tea trade to the 
American importers and would not check smuggling, inas- 
much as there would still remain a duty of twenty-five per 
cent as an incentive. 

In dealing with this tea problem, Lord Sydenham inci- 
dentally referred to the peculiar attitude of the people of 
the British North American provinces towards the practice 
of smuggling, particularly in New Brunswick, the Eastern 
Townships of Lower Canada, and the St Lawrence frontier 
in Upper Canada. Smuggling, he found, was systematically 
practised, not merely by the lower orders, but by persons 
who were otherwise most respectable and influential citizens, 
including justices of the peace and officers of the militia. 
A little later, when the system of protection for native 
industries came to be advocated as a political principle in 
emulation of the American example, a number of prominent 
citizens in various sections of the British provinces were 
accused of being ardent advocates of protection by day and 
equally ardent practical free traders by night. 



IV 
THE TIMBER TRADE 

DURING the forties the long- vexed question as to the 
fiscal encouragement to the Canadian timber trade 
was finally set at rest. In 1841 those interested in 
this industry became greatly alarmed lest the movement 
towards free trade in Britain should deprive them of their 
preference in the British markets. Thus the movement 



200 ECONOMIC HISTORY, 1840-1867 

which ensured a preference on colonial grain threatened to 
take away the preference on colonial timber. The Boards 
of Trade of Quebec, Montreal, and Bytown (now Ottawa) 
memorialized the government on the subject, praying for 
the retention of the existing preference. It fell to the lot 
of Lord Sydenham to forward these and other petitions on 
the subject. While not repudiating his well-known con- 
victions that the timber duties should be altered, he urged 
upon the home government the injustice of making any 
sudden or drastic changes which would affect existing con- 
tracts. In forwarding addresses to the queen from the 
Canadian assembly and council on the subject of the timber 
duties, he says : ' I am bound to remark that, notwithstand- 
ing the authorities from which they proceed, I am not disposed 
to attach very great importance to them.' He states that 
Western Canada beyond Kingston has very little interest in 
the question. The special interest, indeed, centres among 
the lumbering interests on the Ottawa and the timber mer- 
chants of Quebec. However, the sympathy and support of 
the legislature can always be successfully evoked ' where 
the protection is beneficial in any degree, however small, 
to the colony, and the burden of it is borne by the mother 
country alone.' 

The merchants and shipowners of Halifax saw nothing 
but blue ruin facing them should the timber duties be inter- 
fered with. Were this to happen, they would find their trade 
transferred to foreigners, both the shipping and the shipbuild- 
ing trade would be destroyed, immigrants would be unable 
to come to the Canadas and would go to the United States 
instead. The sale of British goods in America would be 
curtailed, the supply of British sailors would be cut off, and 
they would cease to be available in case of need, and the 
British Empire would pass to ruin and decay. 

Similar memorials were sent from New Brunswick, 
especially from the corporation of the city of St John, and 
from the timber merchants of the Miramichi. But here 
again Lieutenant-Governor Colebrooke, in transmitting 
these memorials, declared that, from his observation, the 
timber trade was not of such vital interest to the province 






THE TIMBER TRADE 201 

as they tried to make out. He found that it drew off labour 
from other and more profitable callings, such as agriculture, the 
fisheries, etc., which were better for the country both economi- 
cally and socially. As hitherto carried on in New Brunswick, 
the timber trade had fostered dissolute and improvident 
habits, and thus demoralized the people engaged in it. In any 
case, he considered that there would continue to be quite a 
sufficient market for the timber products of New Brunswick. 

Undoubtedly the Liberal government of the day fully 
intended to alter the timber duties, but it went out of office 
in the latter part of 1841, and was succeeded by the Conserva- 
tive administration of Sir Robert Peel. Those engaged in 
the timber trade naturally expected that the change in 
government would avert the threatened danger to their 
interests. They were not long in discovering, however, that 
the policy of the new government was to be even more 
drastic than that of its predecessor. 

The Montreal Board of Trade had sent to the new govern- 
ment, in April 1842, a memorial praying that the changes 
in the timber duties proposed by the late government, if 
still to be carried out, should not be brought into effect for 
four years, and even then should be introduced very gradually. 
But Lord Stanley replied that ' the prayer of their petition 
could not be acted upon without producing the greatest 
inconvenience to all parties interested in the trade and con- 
sumption of timber.' This decision of the minister, when 
made known in America, brought forth vigorous remon- 
strances from the city of Quebec and the Ottawa district, 
as also from New Brunswick. Owing to the recent severe 
fires in New Brunswick, which had largely interfered with 
lumbering, the chief industry of the province, the general 
commercial situation was very depressed, more particularly 
in the city of St John and in the towns on the Miramichi. 
To add to their difficulties, the province had just received, 
in 1842, a large influx of indigent Irish immigrants for 
whom there was little or no employment, and who 
therefore threatened to become a burden upon the com- 
munity. 

As usual in the British American provinces during the 



202 ECONOMIC HISTORY, 1840-1867 

greater part of the nineteenth century, the depression in New 
Brunswick was to a considerable extent a reflex of a similar 
depression in the adjoining states, with which so much of 
the trade of the province was connected. 

Lieutenant-Governor Colebrooke, while recognizing the 
necessity for changes in the timber duties, urged upon the 
colonial secretary that these might be modified or postponed, 
since they were likely considerably to aggravate the existing 
distress. It appeared also that the new British government 
was contemplating certain changes in the West Indian trade 
with a view to freeing the islands from their economic bondage 
to the British North American provinces. The contemplated 
changes would affect chiefly the trade carried on at the ports 
of St Andrews and St Stephens, which had become the natural 
centres for the reception of American goods from the neigh- 
bouring states, which were first shipped north to British 
territory and, after transhipment there, sent south again 
to the West Indies. The cost of all this roundabout trade 
and the profits thereon had, of course, to be borne by the 
people of the West Indies. 

In consequence of the various protests and petitions sent 
from the British North American provinces to the home 
government, Lord Stanley, in May 1842, set forth very 
clearly and fully his policy with reference to colonial trade. 
He intimated that the people of the British North American 
provinces were unnecessarily alarmed over the proposed tariff 
changes. The actual changes would affect the Maritime 
Provinces in three particulars only : (a) in the timber trade to 
Great Britain ; (b) in the timber trade to the West Indies ; 
(c) in the fishing trade to the West Indies. It would affect 
Canada in the first two sections, and also with reference to the 
changes in treatment of colonial wheat and flour. As regarded 
the timber trade, the colonial secretary could not see that it 
should affect the provinces adversely except in the matter 
of shingles and staves. Of these, however, New Brunswick 
did not export much. As regarded the regular timber trade, 
the natural advantages which New Brunswick in particular 
possessed over the adjoining states, and the fact that the 
latter had so nearly exhausted their forests, must before long 



THE TIMBER TRADE 203 

compel them to depend upon the British North American 
provinces for their supplies. As regarded the trade with the 
West Indies in fish, the government had simply abolished 
the prohibition of the import of foreign fish to the markets 
of the West Indies, substituting a tax of fifteen per cent on 
such foreign fish, which should amply protect the fisheries 
of the Maritime Provinces. 

It was true that the British government had considerably 
reduced the timber duties as regarded the Baltic trade, but it 
had reduced the duty on colonial timber also, and to such 
an extent that it almost amounted to a total abolition of the 
duty. The supplies of available timber in Europe were 
being rapidly reduced, and there would necessarily ensue a 
greater dependence than ever upon the forests of the British 
North American colonies. At the same time the recent 
changes were found to be necessary in order to relieve the 
existing burdens upon the British consumers of lumber of 
various kinds. Moreover, the proposal now under con- 
sideration of opening the British ports to foreign and colonial 
produce at reduced rates should increase all lines of British 
industry, and, in the end, afford an improved market for 
colonial produce. The contemplated measure also for the 
encouragement of the imports of colonial grain should be of 
interest to the people of the Maritime Provinces, and of 
New Brunswick in particular, who certainly ought not to 
confine their attention too exclusively to the business of 
lumbering. 

On these lines the colonial secretary laid down the policy 
of the home government, and definitely brought to an end 
all agitation for the maintenance of the old conditions. 

In 1846 William Ewart Gladstone, who had succeeded 
Stanley as colonial secretary, was able to point out that the 
reduction of the timber duties which had been made in 1842 
had not resulted unfavourably to the colonial trade, as had 
been so confidently predicted in various petitions from the 
British American provinces. The chief lumber exports from 
British America being white pine, of which it had a practical 
monopoly, it did not meet with serious competition from any 
other country. In 1846 the British government proposed 



204 ECONOMIC HISTORY, 1840-1867 

still further to reduce the duty on foreign timber and lumber 
by ten per cent on the former, and twelve per cent on the 
latter. This would still leave a duty of 153. per load on 
foreign timber, which ought to cover the difference between 
freights from the Baltic and from Canada, colonial timber 
being admitted free. 



IMMIGRATION 

BEFORE taking up the question of the consequences for 
the British American colonies of the abolition of the 
corn laws, and the general adoption of the policy of 
free trade by the British government, it is necessary to 
make a brief survey of certain other colonial problems which 
closely affected the economic fortunes of the North American 
provinces. 

After the collapse of the immigration to Canada during 
the later thirties, followed by the development of a consider- 
able emigration from the provinces to the United States, the 
whole question of immigration was seriously reconsidered. 
Dr Rolph was a prominent figure in the discussion of this 
subject, but his proposals, though often interesting and even 
romantic, were not always well founded or in the interest 
of either the province or the immigrants. He had proposed 
to enlist the interest of the larger landed proprietors in 
Britain in the subject. These landlords, finding themselves 
increasingly burdened with the support of an indigent class, 
were shown that, by bearing the expense of sending them to 
Canada, they would be economizing in the end by being 
relieved of them once and for all. The Canadian government, 
on its part, was to furnish these immigrants with lands on 
which to settle. Just how they were to maintain themselves 
in the Canadian wilderness was not very satisfactorily 
explained. The plan, however, successfully appealed to a 
number of the more extensive landlords, yet it proved to be 
a very questionable one from the point of view of national 
advantage and the upbuilding of a strong and self-reliant 



IMMIGRATION 205 

population. The proposal was inaugurated in 1839, when 
Colonel Wyndam, an Irish landlord, undertook to transfer 
to Canada about two hundred poor people from his estates 
in the counties of Clare and Limerick. This he did, and 
his experiment was widely advertised at the time ; hence 
the plan became popular with the Irish landlords, with 
very unfortunate consequences for Canada. Many of his 
immigrants, after a trial of conditions in Canada, finding 
them more burdensome than anticipated, left the districts 
in which they were settled, and either drifted back to the 
towns or passed on to the United States. 

A very intelligent appreciation of what such immigration 
was likely to mean for the future of Canada as well as of the 
immigrant was made in 1840 by a comparatively young man, 
Francis Hincks, who had recently come to Canada with an 
excellent education and a special training in business and 
finance, and who was at this time editor of the Examiner, 
though soon to be seized upon by Lord Sydenham and induced 
to enter upon a political career of much distinction. Hincks 
pointed out that the policy of sending indigent or pauper 
immigrants to Canada at the expense of British landlords, 
if indulged in to any considerable extent, would result in 
converting the country into ' a land of pestilence and famine.' 
This prediction, as we shall see, was disastrously realized in 
1847. He strongly advocated the adoption of the American 
system of selling the land to the settlers at a moderate cash 
price. The capacity to pay the price indicated fairly well 
the ability and opportunity of the purchaser to convert the 
land into a good farm. 

Following the line of criticism made by Mr Hawke, the 
immigration agent of the provinces, he condemned the 
popular idea that it was quite safe to settle the country by 
disposing of the lands to poor settlers on the instalment 
plan. For those without capital the instalment plan would 
simply involve the paying out of all they could obtain over 
and above their bare living, and would thus keep them without 
the means for making a success of their farming. Often he 
claimed : 'It had the effect of converting a number of useful 
labourers into indigent and useless farmers.' This elementary 



206 ECONOMIC HISTORY, 1840-1867 

principle had been constantly overlooked during the settle- 
ment of the provinces, but the corresponding folly in the 
case of tradesmen undertaking to conduct various businesses 
without sufficient capital had been continually criticized and 
commented upon in the colonies. The anxiety to fill up the 

[land as rapidly as possible regardless of the capacity or 
equipment of the settlers, had been one of the strongest factors 
in impeding the progress of the country. 
Dr Rolph, however, as immigration agent in Britain, 
continued to send out a stream of immigrants who were 
virtual paupers. Finally the government found it necessary 
to interfere, and greatly limited his freedom in the matter. 
Lord John Russell, as premier and colonial secretary, did not 
approve of the principle of sending indigent immigrants 
to Canada at the public expense. ' It is a hardship to 
Canada,' he said, ' that she should be obliged to maintain 
the pauper immigrants from the United Kingdom who arrive 
in a state of destitution and disease.' 

So far as there were public or other works available for 
the employment of the poorer immigrants who had good 
physique and a sound mind, they were, of course, acceptable 
immigrants, and, if thrifty and resourceful, they would in 
time own their farms and become very good settlers, applying 
their savings to the improvement of the farm and the purchase 
of the necessary stock, implements, etc. 

The immigrants arriving in Canada in 1841 were reported 
as in better condition and in larger numbers than those of 
some years past. Most of those who arrived at Quebec or 
Montreal were anxious to pass on to the western parts of 
Upper Canada, where they expected high wages and better 
opportunities. Soon, however, they produced a glut in the 
market for unskilled labour, while at the same time there 
was a brisk demand for skilled mechanics in various trades. 
During the later forties most of the immigrants coming to 
Canada were from Ireland, many of them sent out by the 
landlords with the obvious intention of simply getting rid 
of them. 

During the year 1841 a rather wild scheme was submitted 
to the government by Dr Rolph and Edward Gibbon Wake- 



IMMIGRATION 207 

field with the promised assistance of the British North 
American Land Company, the Canada Company and the 
North American Colonial Association of Ireland. The pro- 
fessed objects of the undertaking were the advancement of 
the agricultural interests and commerce of Canada and the 
completion of the public works undertaken before the 
Rebellion. The investors expected to be repaid for their 
outlay from the enhanced value of the lands, and to be guaran- 
teed in the meantime by the government. Lord Sydenham 
declared the purpose of the scheme to be good enough, but 
the method proposed for working it out to be quite vision- 
ary, and its financial features entirely impracticable. This 
analysis seems to have given the project its quietus. 

In the meantime the scheme started by Colonel Wyndam 
was rapidly developing among the Irish landlords. Cheap 
transportation was furnished by the timber vessels returning 
to Quebec, where the immigrants were landed and left to 
find their way up the country as best they could with what 
assistance the local government might afford. These timber 
vessels were mere shells, without the most elementary accom- 
modation for passengers except such flimsy temporary pro- 
vision as was made for the return trips. When they were 
crowded with half-starved and often diseased humanity on 
a long voyage of several weeks, the resulting conditions, 
especially in rough weather, were indescribable. Europe 
being visited from 1846 to 1849 by cholera and typhus 
fever, it was conveyed to these vessels by a number of the 
immigrants, with the result that a regular epidemic ensued 
and a great many were cut off on the voyages. Of those who 
landed in Quebec a considerable proportion at once crowded 
the temporary hospitals provided for them, while, of those 
who were able to pass on to the upper province, many were 
afterwards afflicted, spreading the disease and exciting the 
utmost alarm throughout the country. For a time the trade 
of the province was paralysed, especially in the year 1847, 
when thousands perished from the plague. 

One of the chief difficulties connected with the immigra- 
tion problem in Canada was the lack of capital on the part 
either of the agricultural class or of those who might have 






208 ECONOMIC HISTORY, 1840-1867 

developed the industry of the country. The consequence 
was that regular employment was altogether inadequate 
when compared with the number seeking it, because they 
could not themselves go directly from the land. The province 
was thus condemned to a mere hand-to-mouth existence, 
which largely accounted for the very noticeable backwardness 
of its economic development as compared with the progress 
of the adjoining states. 

Canadian resources were admittedly as good as those of 
the northern states, the people were personally as capable 
of developing their country, and the British markets were 
more accessible. The Canadian highways to the ocean were 
naturally superior to those of the United States, but required 
very considerable capital expenditure to render them thor- 
oughly serviceable for all kinds of transportation. It was 
(only the lack of capital, wisely invested, which caused 
Canada to drag behind her neighbours. It is true that when 
the public works were in process of construction Canada found 
it possible to employ, and thus to hold in the province, the 
larger proportion of the immigrants who came to her shores. 
But the public jworks. which were mainly connected with 
transportation and military establishments, themselves gave 
little permanent employment when they were completed. 
There were few established industries to which the labourers 
could turn their attention ; hence they must needs leave the 
country, which they did in large numbers. 

Undoubtedly the public works undertaken in Canada 
were for the most part highly necessary for the development 
of the country, and it would have been a mistake to construct 
them on any more limited scale ; at the same time the 
general development of the colony did not keep pace with its 
transportation facilities, as had been the case in the adjoining 
states, where the corresponding public works proved to be 
profitable undertakings almost from the start by reason of 
the rapid and well-balanced progress of the country. In 

I Canada, as we have seen, the mistake lay in attempting to 
build up the country with an impecunious body of settlers 
who, however capable they might be in their personal capa- 
city, could not be expected to make encouraging progress 



IMMIGRATION 209 

when simply left to face the wilderness with little else than 
the equipment with which nature had furnished them. Little 
wonder that, when they learned how much more rapidly 
others of the same type as themselves were winning success 
in the adjoining states, they should have become discouraged, 
and, after a short trial of Canadian conditions, journeyed 
to the republic. Thus it was that, in spite of the natural 
inclination of many British immigrants to settle in the 
British North American provinces, they found it relatively f 
unprofitable to do so. Thus the United States gained not 
only the ever-increasing volume of British immigration 
which passed directly from Britain to that country, but 
also a very large section of the immigrants who came to 
the British American provinces with the intention to settle 
there. 

The responsibility for this unfortunate situation is partly 
to be laid at the door of the then prevalent idea that the 
colonies should be discouraged from undertaking anything 
more than a one-sided development which would furnish* 
the mother country with raw materials for her various 
industries, and take from her all the manufactured articles 
which they required. It was thought that only on this basis 
could the colonies be worth anything to the mother country, 
or in any way repay her for the very great outlay which their 
maintenance occasioned her. As yet it had occurred to only 
a limited number of people either in Britain or the colonies 
that a more normal and all-round development of them 
would have led to the reduction of these heavy subsidies, 
and that the advantage of more rapid progress in the colonies 
under a better-balanced system would have occasioned a 
much greater volume of British trade with them than could 
ever be afforded in their restricted condition. Needless to 
say, that element in the colonies and it was long the most 
powerful political and economic factor in them which 
profited so largely and so easily from the heavy British 
expenditure was strongly opposed to the larger and more 
progressive idea of colonial development. 



VOL. v 



2io ECONOMIC HISTORY, 1840-1867 

VI 

CANADIAN AND AMERICAN TRADE RIVALRY 

IN the meantime special favours, on which the Canadian 
economic expansion from 1841 to 1847 was chiefly built, 
were, first, the loan guaranteed by the British govern- 
ment for 1,500,000 for the completion of the St Lawrence 
canal system and other public works ; second, the abolition 
of the duty, except a registration fee of is. per quarter, on 
Canadian grain and flour entering the British market. This 
was to include flour ground in Canada from American wheat 
imported on payment of a duty of 33. per quarter. This 
latter was accomplished by the Canada Corn Bill of July 12, 
1843. This act declares that, in consideration of the legis- 
lature of Canada having, on October 12, 1842, imposed a 
duty of 33. per quarter on wheat imported into that country 
after October 10, 1843, the duty on wheat from Canada on 
entering the British market shall be is. per quarter, and on 
each barrel of flour the same duty as on 38 % gallons of 
wheat ; in other words, the duty on flour to be equivalent 
to the duty on wheat. This afforded a very substantial 
preference over grain and flour sent direct from the United 
States. 

One of the chief results expected from this combination 
of improved transportation and special preference was the 
conversion of the Great Middle West of the United States 
into a commercial, and possibly later a political, adjunct to 
Canada. The interests of this American region were chiefly 
agricultural, and its transportation was tributary to the 
Great Lakes. By offering these western states higher prices 
for their grain and cheaper and more rapid communication 
with the Atlantic, with a correspondingly cheaper and more 
direct means of obtaining their supplies of manufactured 
goods from Europe, the Canadian interests, relying upon 
their special preferences from Britain, were confident of 
separating the American West from the East and making it 
a Canadian annex. In the language of one of the official 



CANADIAN AND AMERICAN TRADE RIVALRY 211 

dispatches referring to the proposed plan of dealing with 
the western states : ' It is thus evident that their commercial 
interests, like those of the southern states, will eventually 
become separated from those of the eastern manufacturing 
states, and, with the high protecting duties imposed on 
British manufactured goods, will prove each day more obnox- 
ious to them.' However, both Canadians and Americans 
were to discover that the most convincing schemes for 
annexing each other's trade were not so easily realized as j 
might appear in advance. 

As illustrating the complexity of the conditions to be dealt 
with, we find that during the autumn of 1842 there was a 
very considerable increase in the amount of American produce 
imported into Canada for reshipment to Britain, but during 
the following year there was a severe falling off in this trade, 
and the merchants of Buffalo were comforting themselves 
with the assurance that the Canadian plans had proved a 
failure. On further inquiry, however, one finds that the 
limited means of the Canadian capitalists had been so heavily 
invested in building mills and otherwise preparing for the 
new trade, that they had found themselves financially ex- 
hausted in 1843, and consequently unable to purchase 
American grain as freely as they wished. This defect was 
corrected in the following year, when the imports of American 
grain largely increased. 

The commercial and milling interests of Montreal, which 
were chiefly benefited by the British preference on Canadian 
grain and flour, and by the transhipment and grinding of 
American wheat for the British market, made another move 
for the special advantage of their interests. They managed 
to get an act through the Canadian legislature establishing a 
differential duty on all goods imported to Canada by inland 
routes, in other words, from or by way of the United States. 
The object, of course, was to force the whole of the trade 
of Western Canada through the gateway of Montreal. Tri- 
butary transportation centres, such as Kingston and St 
Catharines, also favoured the measure, but the traders and 
farmers of Western Canada were greatly opposed to it, and did 
not cease their opposition even when the bill had become law. 



212 ECONOMIC HISTORY, 1840-1867 

The Board of Trade of Toronto gave expression to the 
views of the western merchants in a memorial to the queen 
dated April 7, 1845. Referring to the debate on the bill 
while before the legislature, it was pointed out that the inten- 
tion of the measure, as frankly stated by its sponsors, was to 
force the trade between the Atlantic ports of the United 
States and Western Canada from its existing course via the 
Erie and Oswego Canals around by the St Lawrence route 
in order to secure for the new canals the tolls to be derived 
from this trade. On this the Board of Trade commented that, 
if the public works, which had been constructed at such 
enormous cost to the country, could be utilized only by placing 
ruinous restrictions upon the commerce of Western Canada, it 
were better that they should never have been undertaken. It 
was pointed out that New York was the chief market in which 
American goods were purchased ; the distance from New York 
to Toronto was much the same as from Montreal to Toronto ; 
the freight charges also were much the same. The differen tial 
duty was thus intended to outweigh the cost of freight between 
New York and Montreal, a long and difficult voyage. The 
burden at once of the extra duty and of the inconvenience 
and delay were to be borne entirely by Western Canada ; but 
this was the district which was the mainstay of Canada, since 
it furnishes the greater part of the agricultural produce for 
export, and it should not be placed at the mercy of a few 
capitalists of Montreal. It was true that the rates of duty 
imposed by the recent act were not very heavy, and would 
not accomplish the object sought, but the principle was laid 
down in the act, and if accepted the rates would be in- 
creased as a matter of course until the object was secured. 
The protest, therefore, was directed against the principle of 
the act. 

But undoubtedly the most interesting and far-reaching 
section of this memorial is that in which the board discusses 
the relative powers of the British and Canadian governments 
in dealing with the foreign trade of Canada. It refers with 
approval to the circular dispatch from Lord Stanley to the 
colonial governors dated June 28, 1843. The substance of 
this was that when discriminating duties were imposed on 



CANADIAN AND AMERICAN TRADE RIVALRY 213 

goods imported to any of the British colonies for the purpose 
of protecting British or colonial interests, the colonial legis- 
latures are not likely to have the necessary knowledge as to 
commercial treaties or as to the international consequences 
of their action, nor can several colonies act in harmony with 
each other in such matters ; hence, confusion in imperial 
policy must result. Only, therefore, where the matter has 
been previously arranged with the home government can the r 
colonies be permitted to impose differential duties. The 
various governors are therefore instructed to use all their 
influence towards preventing the introduction of such 
measures, but should they be persisted in, they must, when 
submitted for the governor's assent, be reserved for the con- 
sideration of the home government. The Toronto Board of 
Trade appeals to the principle laid down in this dispatch, 
and strongly approves of its wisdom and necessity. The 
board frankly states that it does not trust the Canadian 
legislature to deal properly with commercial matters, as ' the 
commercial interests of the colony are very inadequately 
represented in the popular branch." 

William Ewart Gladstone, as yet a comparatively young 
statesman, found himself face to face with this interesting 
and delicate question in self-government as one of the 
first which met him on taking over the Colonial Office. In 
his dispatch to Lord Cathcart, February 3, 1846, he stated 
that the essential question was whether this matter was one 
of imperial or colonial concern. From the imperial point of 
view the home government had no intention of imposing 
differential duties on any of the channels of entry to Canada, 
although it was true that the imperial statutes all favoured the 
St Lawrence route. If, however, the colonial legislature, in 
dealing with its own interests, chose to make such a dis- 
crimination in routes, it must be regarded as free to do so, 
provided that it did not interfere with the British interests. 
In another dispatch of the same date Gladstone added that 
the home government objected to the introduction of higher 
rates on British imports than existed previously, and was 
opposed to the general principle of increasing duties. This 
was, indeed, a very cautious treatment of the question, but 



214 ECONOMIC HISTORY, 1840-1867 

characteristic alike of the man and of the new laisser-faire 
policy of the home government. 

Hincks's paper, the Montreal Pilot, was strongly opposed 
to the differential duties proposed, taking the same stand as 
the Toronto Board of Trade and the Western Canadian 
papers. The matter was further complicated by the Ameri- 
can Drawback Act of 1845, which enabled American dealers 
in foreign goods, on re-exporting them to the British North 
American provinces, to obtain a drawback, or refund, of the 
duties which had been paid when they were imported to the 
United States. In Canada it was held, however, and after- 
wards confirmed by official rulings, that this act did not 
particularly affect imports into Canada, because British 
goods obtained from the United States would be treated as 
foreign goods, and pay the rates appointed for such goods, 
but similar British goods could be imported to the British 
North American provinces direct at considerably lower rates. 
The Canadian Differential Act was not disallowed, but 
was not further developed at this time. We shall find, 
however, this same question coming to the front in a more 
serious form during the period of the American Reciprocity 
Treaty. 

VII 
^ BRITISH TARIFF REFORM AND CANADA 

THE historic Imperial Act, which brought long-sought 
relief to the working classes of Britain by terminating 
the corn laws, and which, in doing so, destroyed 
the special preference enjoyed by the Canadian grain dealers 
and millers, was passed on June 26, 1846. It did not at once 
abolish the whole of the duties on grain and flour, but it very 
greatly reduced them, and provided that after February I, 
(1849, all the duties should be removed except the is. per 
quarter registration duty, or fee, on all grains, and 4>d. per 
cwt. on flour and meal. In the meantime the duty on wheat, 
which had ranged from i per quarter, when the price was 
under 513. per quarter, to is., when the price was 733. or 
upwards, was reduced to range from IDS. per quarter, when 



BRITISH TARIFF REFORM AND CANADA 215 

the price was under 483. per quarter, to 43., when the price 
was 533. and upwards. A corresponding reduction took 
place on all other grains and on the flour and meal produced 
from them. 

The proposed change was officially announced to Canada 
in the speech from the throne, delivered on March 20, 1846, by 
Lord Cathcart, who had succeeded Lord Metcalfe as governor- 
general. In announcing the momentous approaching change 
in the commercial policy of the Empire, Cathcart stated that 
he had pressed upon the attention of the home government 
a due consideration of its consequences to Canada. This 
announcement had reference to his correspondence with 
Gladstone as colonial secretary, in which, voicing the senti- 
ments of the executive council, he urged the necessity for 
continuing the protection to the colonial trade in wheat and 
flour, and pointed out that the internal communications of 
the provinces were undertaken on the ground of the advan- 
tages of sending wheat and flour to England via Quebec. 
It was shown also that practically all the surplus grain of 
Canada which was shipped to Britain was grown in Upper 
or Western Canada, and, if the preference were withdrawn 
and the Americans should permit the free export of Canadian 
produce through the United States, Canadian exports would 
go to Europe via the New York channels instead of the 
Canadian. Moreover, the Drawback Law of the United States, 
recently passed, had caused most of the imports of tea, sugar 
and other goods to come to Western Canada via New York. 
Again, the proposed change would directly affect the British 
shipping trade from Montreal. Finally, a decrease in the 
price of Canadian grain, which it was thought must result 
from the change, would lessen the ability of the farmers to 
purchase British goods. 

Most of this line of argument, it may be observed, is 
almost the direct antithesis of that which was put forward 
when the building of the Canadian canals was advocated, and 
the money for constructing them was to be borrowed. Then 
it was maintained that the construction of the Canadian 
canals would undoubtedly render transport from the West 
to the sea so much cheaper by the Canadian route that, 



216 ECONOMIC HISTORY, 1840-1867 

not only would all Canadian traffic outward and inward 
pass through the Canadian canals, but practically all the 
Western American traffic would follow the same route. 
Indeed, so decided would be the advantage and so great the 
traffic via the Canadian route, that not only would the 
Canadian canals be self-supporting, but they would furnish 
so large a revenue that it would permit of abolishing all 
customs duties on British imports. Finally, the mainten- 
ance of a preference on the fragment of British food supplied 
by Canada was sought, the fact that such a preference was 
detrimental to the great mass of the British public being 
ignored. Yet the people who urged this narrow and selfish 
view on a great imperial issue were the members of the legis- 
lative council, and their commercial and financial allies, who 
regarded themselves as almost the only persons in the colony 
whose loyalty was unquestionable, and who had the truly 
imperiaTspint and point of view. 

Gladstone, in making his reply, quietly reminded this 
element that the British government was by no means un- 
mindful of the interests of Canada, but that in a matter of 
British public policy of so great importance ' the supply of 

(food for the people of this country, and the employment of 
its population, must be paramount.' In the changes regard- 
ing both the grain and timber duties, it proposed to regard the 
interests of the colonies by making them as gradual as pos- 
sible. Moreover, it was the policy of the government to 
afford as complete freedom as possible to Canadian trade by 
admitting all forms of Canadian imports as nearly free of 
duty as possible. Thus the duties would be lowered from 
fifty to a hundred per cent on the following articles which 
- might be furnished from Canada : pearled barley, butter, 
cheese, hams, bacon, salt pork, beef, peas, beans, rye and 
y^ oats. Moreover, he reminded them of their claims as to the 
great things which the new canals were about to achieve for 
Canada. 

The radical nature of the change in commercial policy 
upon which Britain had entered, which was not confined to 
removing the duty on food products, led to many second- 
ary speculations and practical consequences. Among other 



BRITISH TARIFF REFORM AND CANADA 217 

things, the adoption of a free trade policy in the matter of 
imports raised the radical and extensive question of the 
protective restrictions involved in the Navigation Acts. 
This question was almost immediately raised by the colonies, 
and was soon the centre of discussion on both sides of the 
Atlantic. 

In the meantime several special and more exclusively 
colonial questions were raised. A speculative discussion 
immediately began in the Canadian and American papers 
as to the comparative advantages of the Canadian and 
American routes to the sea under the changed trade condi- 
tions. A number of American papers, believing that the only 
advantage possessed by the Canadian route was its being the 
medium for the introduction of American produce to the 
British market practically free of duty, were confident that 
when the term for the preference terminated in 1849, the 
American route to the ocean would supplant even the im- 
proved Canadian one, and that, instead of the western 
states becoming a commercial adjunct to Canada, as the 
Canadians had anticipated, Western Canada was more likely 
to become a commercial adjunct to the United States a con- 
summation which was particularly desired by those whose 
interests were associated with the Erie Canal route. 

The Canadians themselves, especially in the chief centres 
of trade, were soon divided into two camps on the subject 
of trade policy. Quite a number, following the lead of the 
English free traders, held that the American claim would be 
justified in its concrete applications, especially in develop- 
ing a new and distinctively Canadian line of policy. The 
majority, however, still adhered to the old lines, and supported 
the rapidly diminishing body of protectionist landlords in 
Britain, hoping for the restoration of the corn laws against 
the world, but with free trade and preference for Canada. 
Montreal, the chief centre of Canadian manufacture and 
finance, naturally took the lead in both the reactionary and 
the progressive policy. Soon after the passing of the act 
abolishing the corn laws, a Free Trade Association was formed 
in the city, the leader of which was George Moffatt. The 
members of this association, and their supporters and 



218 ECONOMIC HISTORY, 1840-1867 

sympathizers throughout the province, in following the 
movement towards free trade in England, had come to 
regard it as natural and inevitable. They felt strongly that 
the colonies had no right to expect a heavy burden to be 
maintained upon the food, timber and other supplies of the 
great majority of the British public, simply for the benefit 
of a few landlords in Britain, and still fewer commercial 
interests in the British North American provinces, where the 
great body of the people enjoyed cheap food and housing, 
and where only the luxuries of life and a few lines of manu- 
factured supplies were high in price. This element, how- 
ever, desired for British North America the full benefit of 
the free trade policy. It was reasonable that Britain should 
seek to obtain the food supply of her people and the raw 
materials for their industries in the cheapest markets avail- 
able, but it was equally reasonable that the Canadians should 
be free to purchase their goods in the cheapest markets, 
which fortunately were mainly British markets, and be free 
also to avail themselves of the cheapest shipping facilities 
which could be obtained, especially when it was a question 
of transporting Canadian grain to the British market. Fre- 
quently, when Canadian grain required to be transported to 
Britain, few vessels were available, and these only at exorbi- 
tant rates. During the season of 1846 British vessels were 
particularly scarce at the height of the season for Canadian 
shipments, and rates advanced fifty per cent. In the language 
of the Free Trade Association : ' Thus this colony is import- 
ing at the same time under a twofold inconvenience, by the 
removal of protection and the prohibition of free trade.' They 
thus definitely advocated the abolition of the navigation 
laws, with the permission to employ any ships available for 
the conveyance of Canadian grain from the Atlantic seaports. 
A point which immediately came up in connection with 
the announcement of the change in the British corn laws, 
was the future of the tariff on grain entering Canada from 
the United States. The duty of 33. per quarter on American 
wheat had been imposed with the object of securing admis- 
sion to the British market on the is. registration duty on 
Canadian flour, whether ground from Canadian or American 



BRITISH TARIFF REFORM AND CANADA 219 

wheat. Now that the preference was to be abolished, there 
was no longer any valid ground for maintaining the duty 
except as a protection to Canadian grain-growers. Glad- 
stone warned the governor-general not to raise the question 
of this duty, but to leave the initiative to be taken by the 
Canadians. If they wished to retain the duty for their own pro- 
tection, well and good, but if they desired to repeal it, then 
well and better. The Montreal Board of Trade, however, 
which was particularly interested in this matter, immediately 
took it up before the British Corn Bill had passed. They 
sent a petition to the home government praying that it would 
recommend to the Canadian government Jthe repeal of. this 
act. It also urged the repeal of the imperial act imposing 
a duty of 2s. per barrel on American flour entering Canada. 
To this Gladstone simply replied that as regards the duties 
on goods entering Canada, the home government would 
follow the lead of the provincial government and accept its 
decision in the matter. 

Finding that there was no chance of escaping the inevit- 
able, the provincial legislatures of the British North American 
colonies devoted their attention to discovering in what other 
directions they might obtain some compensation for the 
preference they were about to lose. By common consent, 
they seized upon the remaining is. per quarter duty and 
petitioned to have it abolished, in order that they might 
have at least that much preference on their produce. Glad- 
stone replied that this could not be abolished in one case and 
not in another, because it was not a fiscal but a registration 
duty. 

The Quebec Board of Trade, in a petition to the home 
government early in 1846, after expressing the usual alarm 
at the proposed changes, declared that the United States, 
in addition to the Drawback Law passed in 1845, was now 
contemplating the free admission of Canadian produce to be 
shipped via their Atlantic ports. This was apparently a sound 
and legitimate policy when advocated by the Quebec and 
Montreal Boards of Trade with the object of diverting 
Western American grain and flour to the St Lawrence route, 
but when a similar proposal was made by the Americans 






220 ECONOMIC HISTORY, 1840-1867 

with reference to Canadian produce, it became very objec- 
tionable and certain to make of Canada a mere adjunct to 
the United States, ending in political absorption. A little 
later we shall find other Canadian representative bodies 
complaining, in equal alarm, that the Americans were not 
likely to permit the transit of Canadian grain through their 
territory and ports. 

In the meantime, however, the Quebec Board of Trade 
continued its complaint that the imperial duties on imports 
by way of the St Lawrence, and the difference in tolls between 
the American and Canadian canals, were partly responsible 
for diverting Canadian trade to the United States, especially 
the import trade in tea, wine, fruit, sugar, coffee, molasses, 
etc. They advocated, as an offset to the attempted capture 
i of Canadian exports, that all imports into Britain from and 
through Canada should be admitted free of any duty. The 
Montreal Board of Trade, in March 1846, adopted the same 
course, urging that the imperial duties on miscellaneous 
produce, such as salt meat, etc., entering Canada should be 
abolished, so that these articles could be shipped to Britain 
from the United States through Canada. At this time, 
although all duties collected on Canadian imports went into 
the provincial treasury, some of the duties were levied under 
imperial acts and some under Canadian acts. The former 
were imposed, not for revenue, but for the regulation of trade, 
in accordance with imperial policy, while the latter were for 
revenue mainly. In the latter part of 1846, Lord Cathcart 
urged the inconvenience of the double tariff on Canadian 
imports and stated that, if these could be combined into one 
tariff under the control of the Canadian legislature, it would 
simplify Canadian trade, and especially gratify the Canadian 
parliament. Somewhat later this proposal was carried out. 

In response to the petitions of the various Boards of Trade, 
the colonial secretary stated that the British government 
was quite willing to alter the duties on imports if agreeable 
' "to the Canadian legislature. Such a radical change of policy 
indicates how readily, in principle at least, the British govern- 
ment, in adopting the principle of free trade for the mother 
country, was willing that the self-governing colonies should 



BRITISH TARIFF REFORM AND CANADA 221 

be granted a similar measure of freedom. 1 1 is fair to say, how- 
ever, that British statesmen hardly realized at the time how 
far this was likely to lead them. Where, however, there 
were conflicting interests in Canada, the home government 
wisely refrained from taking sides between the parties or 
sections of the provinces. Thus the commercial and shipping 
interests of Quebec and Montreal undoubtedly endeavoured 
to have the trade policy of the country adjusted to meet 
their interests, while the agricultural sections in the western 
portions of the provinces were as keen to safeguard their 
interests, even though they could scarcely be said to have 
recognized them so clearly as the others. 

A practical compromise of the various interests was repre- 
sented in seven resolutions reported by the committee of the 
whole house in April 1846. In essence, these resolutions 
favoured the repeal of the existing duty of 33. per quarter 
on American wheat and the substitution of a 33. duty upon 
foreign wheat not either re-exported or ground in bond for 
export as flour. It was also resolved that the Indian corn 
imported for re-export should be freed from the duty of 
33. per quarter imposed on it at the time. It was recom- 
mended that the import duty on unrefined sugar be reduced 
from 93. 4d. per cwt. to 73. 6d. Other resolutions changed the 
duties on leather goods so as to favour British or colonial 
goods imported direct from the sea. 

All the petitions and memorials from Canada while the 
Corn Bill was still before parliament, were fairly respectful and 
seemed to recognize that the impending change was inevitable. 
The first note of a belligerent nature on the part of the colonial 
element found expression in an address to the queen from the 
Canadian assembly dated May 12, 1846. This address struck 
a very doleful note. It admitted, and even insisted upon, 
the essential inferiority of Canada as a productive country. 
The boasted superiority of its canals and water routes over 
their American rivals was entirely withdrawn, and we learn 
instead that, owing to the great disadvantages of transporta- 
tion in Canada, it could not compete with the United States ; 
hence, when the bounties from the British tax-payers were 
withdrawn, Canadian public works would be most adversely 



I 



C 



222 ECONOMIC HISTORY, 1840-1867 

affected and agricultural progress retarded. The lessened 
purchasing power of British goods was not forgotten. On 
the contrary, it was made quite plain that, unless the people 
of Britain furnished the Canadians with cash, they would be 
quite unable to buy their goods. Here a new note came in, 
the note of threatened desertion, for the assembly calmly 
told Her Majesty that, if Canada were to be deprived of her 
customary subsidies, it became a question whether it would 
be worth while for the province to remain a portion of the 
British Empire, although separation would be regretted as 
a great misfortune. Taking another tack, the address 
pointed out that the provincial government had repealed 
all duties on American produce coming through Canada for 
export, while the Americans still levied prohibitive duties on 
Canadian produce of all kinds. Here we have the opposite 
complaint to that made by the Quebec Board of Trade. 
The real object in view is revealed in the closing section of 
the address, in which the legislative assembly petitioned the 
British government to enter into negotiations with the United 
States to secure the admission of Canadian produce to 
American ports on the same terms as American produce was 
admitted to Canadian and British ports. 

In this address it will be observed that we have a prophecy 
of two alternative movements, which were before long to 
become burning questions in Canada, namely, the project 
of annexation and the agitation for a reciprocal trade with 
the United States. 

In his reply to this address, Gladstone rose somewhat 
above the customary reserve of official correspondence. He 
referred to the rapid growth of Australia, which was then 
getting nearly twice as many English and Scottish settlers as 
Canada, and which, although the most distant and the 
youngest of the colonies, was being developed without any 
commercial protection whatever. He took an interesting 
survey of recent conditions as showing that in the gradual 
removal of protection, one stage of which brought to Canada 
for a time preferential treatment, the periodic predictions 
of ruin had never been fulfilled either in Canada or elsewhere. 
He repudiated warmly the idea that food taxes and the pro- 



BRITISH TARIFF REFORM AND CANADA 223 

tective principle afforded any adequate basis for empire or for 
true commercial union, and protested strongly against the 
doctrine that the British Empire is built upon the principle 
that the mother country and the colonies must make them- 
selves mutual burdens to each other, upholding rather the 
principle that they might become of mutual assistance 
through the freest possible trade relations. As regarded aid- 
ing Canada towards getting better markets in the United 
States, he promised every assistance, and indicated that the 
British government would give instructions to its minister 
at Washington to take up this question with the American 
government, and to do all that he possibly could in the 
matter. Thus were the reciprocity negotiations set on foot. 
In the meantime the Free Trade Association of Canada, 
with John Young as chairman, instead of adopting the 
despairing tone of the assembly's address to the queen, boldly 
accepted the free trade point of view and proceeded to follow 
it out to its logical consequences as far as Canada was con- 
cerned. In a formal petition to Gladstone of July 17, 1846, 
the association pointed out that much Canadian capital 
invested in lines favoured by the British preference had 
received a heavy setback, but admitted freely the soundness 
of the British policy in the matter. The association held 
that since it had been necessary to take from Canada its 
preference in the British markets, it was only fair to relieve 
the province of the restrictions which it had to undergo in 
favour of Britain, and the preferences which it had hitherto 
been required to give the goods of the mother country in 
her markets. Coming at once to particulars, it set forth in 
a table the chief articles on which Britain enjoyed a preference 
in Canadian markets of from five to fifteen per cent. This 
included such essentials for a young country as all kinds of 
cotton, linen and woollen goods, ironware, machinery, glass 
and glassware, hats, manufactures of leather and paper, 
including books, together with sugar, coffee and fish-oil. 
When it is remembered that the normal rate of import duty 
on manufactured goods in the Canadian fiscal tariff was five 
per cent, an additional seven per cent on all such goods not 
obtained from Britain was a very heavy discrimination. 



I 



224 ECONOMIC HISTORY, 1840-1867 

In order to retain what it could of the American transport 
trade through Canada, and of the opportunity to grind 
American wheat into flour for the British market, the Free 
Trade Association pointed out that ' We must, in like manner, 
remove every obstacle in the way, and hold out every possible 
inducement to the inhabitants of the United States to pass 
their merchandise through our country.' To this end the 
tolls charged on the canals should be made as moderate as 
possible, certainly not higher than was required to meet the 
working expenses, repairs, the interest on the cost, and the 
charges of the Sinking Fund, amounting altogether, it was 
estimated, to 100,000 annually. From the modern point 
of view this was certainly no light charge, and meant a very 
heavy tax on the transportation of the time ; but it was very 
modest when compared with the expectations of a few years 
previously, when the canals were under construction, and were 
expected, when completed, not only to finance themselves, 
but to wipe out the provincial debt. The last point dealt 
with by the association was the absolute nature of the colonial 
preference enjoyed by Britain in the case of the Navigation 
Acts. Only British ships could carry Canadian produce to 
the mother country, yet, owing to the scarcity of British 
vessels suitable for the conveyance of wheat and flour to 
Britain, freights had been as much as fifty per cent higher 
than would have been necessary had the trade been open to 
foreign vessels. 



VIII 
THE NAVIGATION ACTS 

MANY memorials and petitions were sent over from 
Canada following more or less the lines of that 
of the Free Trade Association of Montreal. The 
Hamilton Board of Trade demonstrated that it cost one-third 
of the value of a barrel of flour in Liverpool, say i, 53., to 
transport it there from the head of Lake Ontario, and only 
one-half of the value went to the farmer in Canada. Under 
existing conditions freights were higher by the Canadian 



THE NAVIGATION ACTS 225 

than by the American route. The Montreal Board of Trade 
furnished a table of freights to show how much Canada 
suffered from the restrictions of the Navigation Acts, which 
thus severely militated against the St Lawrence route. 

In view of subsequent development in connection with 
the Reciprocity Treaty, an interesting statement was made 
by Lord Cathcart, the Canadian governor, in a dispatch to 
Earl Grey, who, owing to a change of ministry, had succeeded 
Gladstone as colonial secretary in the latter part of 1846. 
Referring to the numerous memorials which had been for- 
warded from Canada dealing with the situation created by 
the abolition of the colonial preference, he specially urged 
the necessity for a modification of the Navigation Acts, in 
order to permit of the maintenance of the St Lawrence 
route to Europe, upon which so much capital had been 
expended. It was essential to this result that a considerable 
share of the Western American traffic be secured, and he 
indicated that the Americans would take their produce down 
the St Lawrence in their own vessels, without .the expense 
of transhipment, if the navigation of the St Lawrence were 
open to them. What was thus referred to as a means of 
facilitating the transport of American produce through 
Canada for the benefit of the Canadian canals was afterwards, 
with a becoming show of reluctance, conceded to the 
Americans as a very valuable privilege in the reciprocity 
bargain. 

In connection with the necessity for modifying the 
Navigation Acts owing to the high freights charged by 
British vessels from the St Lawrence, it is an interesting fact 
that nearly two-thirds of the British tonnage which came 
to the St Lawrence for freights in 1845 and 1846 came out 
in ballast. Obviously, when these vessels could obtain 
double freights on other routes, they would not go to the 
St Lawrence, and when they did go, the homeward freights 
must bear the expense of the double trip. Hence the com- 
plaints of lack of vessels at certain seasons and of high freights 
at others, when only British ships were allowed to be 
employed. 

From 1847 on, certain proposals became intimately 
VOL. v p 



226 ECONOMIC HISTORY, 1840-1867 

associated with each other, such as the modification of the 
Navigation Acts, the employment of American vessels to 
carry Canadian grain to Europe, the attraction of American 
traffic to the St Lawrence route, the extension of the freedom 
to navigate the St Lawrence to American vessels engaged 
in this traffic, and the obtaining of access to the American 
markets for Canadian agricultural products and lumber. 

When the new St Lawrence canals were opened, partly 
in 1845 and fully in 1848, it was found that the expected 
control of the Western trade did not follow. It is true that 
the freight on a barrel of flour from Cleveland to Montreal 
was 2s. gd., while to New York it was 43. 6d., but the rates 
from Montreal to Liverpool between 1844 and 1847 ranged 
from 43. 6d. to 6s., while from New York to Liverpool they 
ranged from is. 8d. to 2s. 6d. The difference on the whole 
rate from Cleveland to Liverpool was, on the average, in 
favour of New York to the extent of is. 6d. per barrel. In 
the face of such facts, the argument against the maintenance 
of the Navigation Acts in the case of Canada, once the prefer- 
ence in the British market was withdrawn, was too con- 
vincing to be evaded. In 1847 the British government 
granted a partial suspension of the navigation law as regards 
the carrying trade of the St Lawrence, pending an exhaustive 
investigation of the whole subject, which was undertaken 
in 1847. Under this suspension foreign vessels going in 
ballast to the St Lawrence might take grain to any port 
in Britain on obtaining a licence from the customs officer 
at Quebec. At the same time the Maritime Provinces did 
not regard this development very favourably. On June 
26, 1848, a meeting was held at St John, New Brunswick, to 
protest against the proposed alteration in the navigation 
laws. Such alteration their resolutions declared to be 
destructive to shipowners, ruinous to shipbuilders, and detri- 
mental to the prosperity of the Empire. But if the measure 
was to be persisted in, then the home government must find 
them markets for their produce elsewhere. Fortunately 
the fears of the New Brunswick people proved to be ground- 
less ; nevertheless markets were also found elsewhere. As 
a result of the investigation of the navigation laws, several 



THE AGITATION FOR RECIPROCITY 227 

voluminous reports were presented to the British government 
in 1848. After much discussion and vigorous opposition, 
the historic British Navigation Acts, dating from Richard n, 
though first organized into a permanent system in the reign 
of Charles II, and upon which more than anything else the 
whole colonial and imperial system of Britain was supposed 
to have been built, were abolished in 1849. The bill for 
abolishing the existing shipping restrictions on the colonial 
trade was moved by the Right Hon. Henry Labouchere in 
a very able and interesting speech, in which he reviewed the 
whole history of the British Navigation Acts, and frankly 
confessed that the chief reasons for the proposed changes at 
that time were the abolition of the preferential treatment of 
the colonies in the British markets as regards their exports, 
and the consequent injustice of forcing them to continue a 
corresponding preference to the mother country on their own 
carrying trade. The colonies particularly affected were, of 
course, Canada and the West Indies. The coasting trade 
of Britain itself was still to be reserved for British vessels, 
as also the coasting trade of the colonies, but with permission 
to the colonies, with the approval of the home government, 
to alter this feature of the law as might be necessary or 
advantageous for themselves. As, far as Canada \vas con- 
cerned, the act abolishing the Navigation Acts came into 
full operation on January l, i^5'>- From that date Canada 
has regulated her own navigation system. 



IX 

THE AGITATION FOR RECIPROCITY 

/'"COUPLED with the desire of the Canadian executive 
council for the removal of the restrictions of the 
Navigation Acts, was the desire to secure for American 
vessels the free navigation of the St Lawrence, that .they 
might be induced to carry their grain from the head of the 
Lakes through to Montreal without transhipment. On the 
other hand, the Canadian farmers were anxious for access 
to the American markets. In 1848, however, they were shut 



228 ECONOMIC HISTORY, 1840-1867 

out of these markets by prohibitive duties, such as twenty- 
five cents per bushel on wheat. It was hoped, therefore, to 
obtain by negotiation an exchange of favours. The 
Americans might open their markets to Canada, while the 
Canadians undertook to secure for the Americans the free 
navigation of the St Lawrence. It was hoped that these 
arrangements might be speedily effected, because already, 
since the granting of the bonding privilege on Canadian 
exports and imports through the United States, an increasing 
amount of Western Canadian trade was being transacted by 
way of the American ports. The home government, with 
its customary indulgence of almost every Canadian demand 
at this period, agreed that the Americans should be granted 
the free navigation of the St Lawrence if the Canadian 
legislature so desired, but on the understanding that the 
privilege might be withdrawn at the pleasure of the British 
government. 

Francis Hincks, who, on the return to power of the Liberal 
government under Baldwin and La Fontaine, once more took 
charge of the provincial finances and was a strong advocate 
of reciprocal trade, urged upon Lord Elgin the necessity for 
promoting reciprocity negotiations with the United States 
government. 

The commercial element of Montreal, whose leaders had 
so eagerly taken up the free trade idea when the corn laws 
were abolished, on finding that the Western trade, both 
inward and outward, tended to pass through United States 
channels, and that the Western Canadian merchants pur- 
chased American goods, were inclined to revise their views, 
but could not quite determine what was the best course to 
pursue. They could at least abuse those who were respon- 
sible for the change in the British corn laws and all those 
who sympathized with them. Hence, as Lord Elgin stated 
in the summer of 1847, ' The Committee of the Board of 
Trade of Montreal were last year free traders. This year 
they have been replaced by protectionists, and their organ, 
the Canadian Economist, has been discontinued.' In their 
communications during 1848, the language of the Board of 
Trade in its petitions tended ever more in the direction of 



THE AGITATION FOR RECIPROCITY 229 

suggesting commercial, ending in political, annexation to the 
United States. Hence the authorities could not have been 
much surprised at the culminating declaration of 1*49. As 
a sort of ultimatum to the British government before taking 
their last and most drastic step, the issue of the celebrated 
Annexation Manifesto, the commercial element of Montreal, 
through the Board of Trade, on December 14, 1848, sub- 
mitted two proposals which combined both free trade and 
protectionist principles, and required the fiscal system of 
the Empire and the price of the food supply of the British 
people to be adjusted to meet the needs of the chief Canadian 
port. These proposals were, first, to repeal the navigation 
laws and throw open the St Lawrence to foreign vessels ; 
second, to reimpose a duty of 53. per quarter on all foreign 
wheat and Hour, hut to admit; free that fmm the colonies, 
which meant from Canada, and to accept as Canadian all 
wheat passing through Canada to the British market. This 
latter proposition is backed by the usual assertions that, 
while it would insure an immense revenue for the Canadian 
canals, and enable the government to repeal the duty on 
British goods, and also bring in a revenue of 1,000,000 to 
the British Treasury, not to mention what it would do for 
the Montreal merchants, it would really not take a cent out 
of the pockets of the British taxpayers or cost the British 
public any more for their food ; the foreigner would kindly 
pay it all. 

The Quebec Board of Trade lent a quaint touch to the 
discussion. Its members also desired the reimposition of a 
duty of 53. on all wheat entering Britain except through 
their doorway, but they desired more. They wanted the 
re-establishment of the preference on British American 
timber for their own special benefit. The council of the 
board, however, had petitioned for the repeal of the Naviga- 
tion Acts as well. Such an unblushing demand for the stakes, 
whether heads or tails turned up, evidently troubled the 
consciences of a number of the members of the board, for 
they called a special meeting, and, by a majority vote, repudi- 
ated the action of their council in praying for the repeal of 
the Navigation Acts. It was not considered consistent with 



230 ECONOMIC HISTORY, 1840-1867 

either modesty or good policy to urge the repeal of the prefer- 
ences in favour of Britain while they were petitioning for the 
restoration of two other preferences in favour of themselves. 
Realizing what the people of Britain had just escaped from in 
the way of import duties on their food, the British government 
were not moved by this appeal. They had therefore to take 
the consequences, for the Annexation Manifesto soon after- 
wards stalked forth. 

The people m the Maritime Provinces had not suffered 
from the repeal of the corn laws, as they did not send grain 
to Britain, but they were undergoing a very severe depres- 
sion, and had lost most of the preference on their timber in 
Britain, as also their monopoly of the West Indian market. 
In casting about for new lines of development they were 
looking to both Canada and the United States, hoping to 
develop closer trade relations with each. Early in the 
summer of 1848 large meetings were held at St John and 
Fredericton, in favour of free trade with the United States. 
Resolutions were passed which declared that, owing to the 
change of policy on the part of the home government, the 
Province of New Brunswick had suffered in its trade with 
Britain and lost its trade to the West Indies ; it must there- 
fore enlarge its markets elsewhere, and, as it is desirable 
that adjoining countries having a diversity of productions 
should trade with each other, a reciprocal free trade should 
be established between New Brunswick and the United States. 
Sir Edmund Head, lieutenant-governor of New Brunswick, in 
informing Earl Grey of the movements which were on foot, 
stated that it was understood that negotiations were taking 
place with a view to establishing reciprocal trade relations 
between Canada and the United States, and that his pro- 
vince was particularly anxious that it should not be over- 
looked in these negotiations, because if any good bargain was 
being made, it wished to share in it. 

As yet the trade between Canada and the Maritime 
Provinces was very limited. While Canada was sending her 
grain and flour to Britain under the preferential system, she 
cared little for the trade of the Maritime Provinces, although 
they were heavy importers of flour and other food products. 



THE AGITATION FOR RECIPROCITY 231 

Thus the amount of flour sent to Nova Scotia, New Bruns- 
wick and Newfoundland altogether for the three years from 
1844 to 1846 was as follows : 

1844 . . . 19,630 barrels 

1845 . . . 26,694 

1846 . . . 35.152 ,. 

But when in 1846 the abolition of the corn laws was decreed 
to take effect in 1849, with their reduced preference for 
Canada in the meantime, the Canadian merchants began to 
cultivate the Maritime Province markets, with the result 
that the exports increased considerably for the next three 
years, from 1847 to 1849. They amounted to about 66,000 
barrels for the first two years, and 79,500 barrels for the last 
year. For the first two years, however, after the complete 
abolition of the preference, the Canadian export to the Mari- 
time Provinces nearly doubled. These provinces, on the 
other hand, had been quite as indifferent to Canadian markets 
for their own produce. A characteristic attitude was that 
taken by a Nova Scotia paper with reference to the proposal 
of the Montreal Herald that the mines of Nova Scotia might 
better send their coal to Montreal than to the United States. 
The reply was that Nova Scotia certainly had abundance of 
coal to supply both Montreal and Quebec, but it was indi- 
cated that if these places desired the coal they would have to 
send for it, as apparently the Americans were doing. The 
idea of Nova Scotia undertaking to develop its own coal-fields 
and to send the product to these markets did not seem to 
have occurred to any one. Up to that time the people of the 
Maritime Provinces, even more than those of Canada, had 
relied upon external assistance, chiefly from the mother 
country. One is reminded of the criticism which their dis- 
tinguished son, Haliburton, under the guise of Sam Slick, 
had passed upon them when he declared to the people of 
Nova Scotia, some ten years before, that their backwardness 
was all their own fault. ' You have no spirit and no enter- 
prise, no industry and no economy.' Not so very different 
was the reply of George Moffatt of Montreal when some one 
was giving as the reason for the slow development of Canada 



232 ECONOMIC HISTORY, 1840-1867 

as compared with the United States that the people of Canada 
were not so fully developed as the Americans. His reply was 
that the Canadians were just as capable as the Americans if 
they would only exert themselves, become enterprising, and 
not depend so entirely upon artificial stimulus from the 
mother country. 

nThe years 1848 and 1849 were critical years, not only for 
Canada, but for the whole world. The revolutionary out- 
>reaks in Europe created much alarm and almost paralysed 
the trade of the continent, which in turn affected British 
trade, itself suffering from the collapse of the recent railway 
mania. But whatever affected British finance was immedi- 
ately reflected in the United States as well as in Canada, to 
whose suffering at the time was added the burden and semi- 
panic of a great influx of Irish immigrants in 1847-48, bring- 
ing with them a terrible plague of typhus fever. At the same 
time the throwing of Canada back upon herself had in some 
ways a beneficial effect, since it led to a realization that 
hitherto the prosperity of the country had been too completely 
at the mercy of outside markets and the existence of British 
preferential treatment. The more far-sighted realized that 
the British colonies must become in fact as well as in name, 
economically as well as politically, more independent and 
self-supporting. Hence a strong movement was set on foot 
I for the development of nj^nuigcturingindustries in Canada, 
F which, on the one hand, would leadto alnofce* extended home 
market for Canadian produce, much of which could not be 
profitably exported ; and, on the other hand, would give to 
the productive industry of the country a much broader and 
firmer basis. Associations for the encouragement of home 
manufactures sprang up, and, indeed, from this period dates 

a very strong protectionist sentiment, which made consider- 
able headway in Canada before Confederation. Already 
very successful local industries in the way of iron foundries, 
furniture factories, machine shops and woollen mills had been 
developed in a number of Western Canadian towns, such as 
Dundas, Gait, Paris and Brantford. Few of these manu- 
facturing industries were on a large scale, most of them being 
intended to supply comparatively local needs. When trans- 



THE AGITATION FOR RECIPROCITY 233 

portation, especially by rail, was much more fully developed, 
larger and more centrally located industries, with a higher 
type of organization and more perfect labour-saving devices, 
grew up and took the place of many smaller concerns. The 
development of these manufacturing industries in consider- 
able numbers brought with it the claim for fiscal protection, 
and fiscal protection when applied to British goods brought 
forth numerous protests from British manufacturers and led 
to several sharp passages between the Canadian government 
and the Colonial Office, which in turn led to a further defini- 
tion of the extent of the fiscal freedom secured by Canada 
as the result of the free trade movement in Britain. This 
growth of manufactures and of the effort to secure protection 
for them also led to difficulties with the United States over 
the practical working out of the Reciprocity Treaty. 

Meantime the Canadian tariff had been going steadily 
upwards since the Union in 1841. This was found necessary 
in order to meet the interest on the money borrowed to 
complete the public works, from which so much was expected. 
As yet the British capitalists, other than the limited number 
directly interested in Canadian trade, had not looked upon 
Canada and the other British provinces as attractive fields 
for investment. In 1849 Francis Hincks, minister of Finance, 
in preparing a statement for the information of the British 
public, found it necessary to voice the old complaint that 
' the British capitalists do not choose to place the same confi- 
dence in their honour that they did in that of the people of 
the United States, whose bonds are salable without difficulty.' 
Canadian securities were never quoted in the British stock 
lists, while those of each individual state in the Union were 
listed. The great handicap of Canada was that her public 
works, especially the canals, were very costly in proportion 
to the state of the country's development. Moreover, just 
at this juncture, when the large canals were nearing comple- 
tion, the rapid development of railroads in the adjoining 
states was changing the whole aspect of continental traffic, 
and required that Canada should enter upon another era o: 
extensive private and public expenditure before she had a 
all recovered from her previous outlay. Already surve 




234 ECONOMIC HISTORY, 1840-1867 

were being made for the Intercolonial Railway and for the 
Grand Trunk and Great Western Railways ; in fact, a regular 
railway programme was being laid out which was to be 
actively undertaken within the next decade. 

One source of British indifference to the North American 
provinces was the impression which had resulted from the 
dissolution of the old bonds which had bound Canadian trade 
and commercial policy so absolutely to national, rather than 
imperial British, interests. The old system of mutual prefer- 
ences and restrictions having been dissolved, it appeared for 
a time as though no further ties remained, and that more 
or less automatically the colonies and the mother country 
must drift apart. Where there was no actual rupture, the 
formal movement for separation must, of course, come from 
the colonies, but, apart from the Annexation Manifesto, 
which was a purely local affair, no such movement took 
place, because Canada was in constant need of British 
financial and political assistance, not merely in a commercial 
way, but in the form of specific imperial assistance from the 
British Treasury. 

The Annexation Manifesto of 1849 was simply a cry of 
despair on the part of the commercial interests of Montreal, 
which under the British preference had lived upon the traffic 
in American produce passing through Canada to qualify for 
the British market. Montreal was living in virtual com- 
mercial isolation in Lower Canada, and gradually losing its 
command over the commerce of Upper Canada, which, 
since the introduction of the bonding system in the United 
States, was admittedly drifting to that country. Experience 
was demonstrating that the improvement in navigation 
through the opening of the new canals would not immedi- 
ately at least restore to Montreal its control over the western 
traffic. Hence, after a final attempt to induce the British 
government to restore the preference on grain and flour sent 
from Canada, many of its leading merchants, and some of 
those in other parts of the country directly depending upon 
them, concluded that only by becoming an integral part of 
the United States and enlisting the commercial enterprise 
and resourcefulness so characteristic of the economic life of 



THE AGITATION FOR RECIPROCITY 235 

the adjoining states, could the interests of Montreal be 
restored. They passed in review all the possible remedies, 
rejecting each in turn. The first was the revival of agri- 
cultural protection in England against all but Canada, which 
was declared to be ' but a partial remedy,' and now impos- 
sible, as ' the millions of the mother country demand cheap 
food.' Next, the adoption of the American system of pro- 
tection to home industries : but this was regarded as too slow, 
and the free trade field within the protection wall too narrow 
to be an effective remedy. The federal union of the British 
North American provinces, either as part of the British 
Empire or as an independent republic, would doubtless en- 
large the free trade market, but it would be a long and tedious 
process and the results very uncertain, and in the case of a 
republic all kinds of national and international difficulties 
would be added. Reciprocal free trade with the United 
States as regards the products of the farm, the forest and the 
mine, would be good enough so far as it went, but even at 
best it would be but an instalment of what might be obtained 
by complete union. Each one of these alternatives was being 
actively advocated at the time of the annexation proposal, 
but the Annexation Association had concluded that the only 
remedy which remained was ' a friendly and passive separa- 
tion from British connection and a union upon equitable 
terms with the great North American Confederacy of 
Sovereign States.' The whole discussion showed that only 
the commercial aspect of the question had been at all con- 
sidered, and that from the point of view of Canada alone. 
The important political and international issues involved had 
not been seriously pondered, nor the other sections of the 
country consulted. It was a purely local and spasmodic 
movement, which was doomed to failure. 

Another organization, the British American League, 
furnished an antidote to the Annexation Association in 
Montreal. Its first meeting was held in Kingston in July 
1849, and the second one in Toronto in November. The 
league advocated a political union of all the provinces with 
extended powers of self-government, and, on the commer- 
cial side, either the restoration of the British preference on 



236 ECONOMIC HISTORY, 1840-1867 

Canadian produce or the securing of access to the American 
markets. 

These various movements were significant as indicating 
an awakening interest in the larger destiny of the country, 
and assisted at least in stimulating the movement for secur- 
ing new markets for Canadian goods. Not that the British 
markets had been in any way closed to Canadian products ; 
on the contrary, they were now open to a larger variety of 
Canadian wares than ever ; but, since Canada had lost her 
preference on wheat and flour sent to Britain, her attention 
was no longer riveted on that market alone, or her activities 
confined without question to the shipment of practically two 
lines of export wheat or flour, and timber. A market was 
desired for a larger variety of Canadian products, and there 
were only two directions in which such openings were to be 
found. One was in the Maritime Provinces, hitherto almost 
entirely neglected, and the other in the United States. The 
latter was, of course, much the larger and more varied market, 
and the one most immediately accessible from the agricul- 
tural regions of Western Canada. 

Since 1836 the Canadians had from time to time urged 
that the British authorities should take up with the United 
States government the question of reciprocal trade with 
Canada. Nothing serious, however, had been attempted 
until the repeal of the corn laws rendered the home govern- 
ment particularly anxious to find a market for Canadian 
produce in any other possible direction. Hence, as we have 
seen, Gladstone had promised, in 1846, to have the matter 
taken up by the British minister in Washington, and at this 
time some correspondence on the subject had taken place 
between the United States minister and the British govern- 
ment. It appears that the American executive government 
was not averse to further discussion on the subject. In 1846 
the United States Congress passed the act establishing the 
bonding privilege for Canadian exports and imports passing 
through American territory. It fell to the lot of the succeed- 
ing British government, however, to take up the question, 
and urge it upon the attention of the United States authorities. 

Lord Elgin, on arriving as governor-general in 1847, 



THE AGITATION FOR RECIPROCITY 237 

immediately took up the question, and was chiefly instru- 
mental in keeping it before the attention of the home author- 
ities. He proposed to combine the granting of the freedom 
of the St Lawrence navigation with the request for the free 
admission of Canadian produce to the American markets. 
He considered also that a special treaty, involving mutual 
concessions, rather than an act of Congress, specifically break- 
ing in upon the American protective system, would be more 
likely to find favour with the people of the United States, 
and give less ground for adverse criticism. 

In July 1847 William Hamilton Merritt introduced his 
reciprocity resolution in the provincial parliament. In the 
following year a delegation from Canada visited Washington 
to urge the claims of reciprocity. The Canadians met with 
a cordial reception. A bill in favour of reciprocity was 
introduced in the House of Representatives and passed. 
Before being sent to the Senate, however, I. D. Andrews, 
United States consul at St John, New Brunswick, and an 
enthusiastic advocate of freer trade relations with British 
America, was called to Washington in consultation with the 
executive. In his younger days Andrews had been con- 
nected in frontier trade with New Brunswick and, like most 
frontier merchants of that time, had indulged in much free 
trading in spite of the law. As consul, he had corresponded 
in 1845 and 1846 with James Buchanan, the American 
secretary of state, on the colonial trade, with special refer- 
ence to the coming changes in the British commercial policy, 
representing the desirability of establishing closer trade rela- 
tions with the British North American colonies. When 
summoned to Washington, he strongly advocated a wider 
measure of reciprocity than that which had passed the house 
and which referred only to Canada, urging that the fisheries 
of the Maritime Provinces should be included, and the free 
navigation of the St Lawrence and the St John. As a result 
of his representations the American bill did not go further. 

In 1849 Canada passed an act offering free reciprocal 
trade to the United States in certain specific articles, cover- 
ing the natural products of the farm, the mine and the forest. 
Merritt was again sent to Washington, and again the desired 



238 ECONOMIC HISTORY, 1840-1867 

reciprocity bill passed the House of Representatives, but 
was defeated in the Senate. In July 1849, Andrews was 
appointed by the new secretary of state, John M. Clayton, 
as a special agent to visit the different British American 
provinces ' to collect statistics, information relating to the 
history, condition, and future prospects of these colonies.' 
He spent most of the time, from September 1849 to April 
1850, in gathering information from original Canadian and 
American sources, the official returns not being very reliable. 
As the result of his report, the Committee on Commerce 
brought in a bill in 1850 which also provided for the free 
navigation of the St Lawrence. President Taylor also took 
the matter up in a favourable message to Congress, but a 
bitter agitation which arose over the slavery question, and 
the death of the president in July, prevented further action. 
Andrews's first report was published in February 1851, 
but he was again commissioned under a resolution of the 
Senate to make a further report on the trade and commerce 
of the British North American colonies, and upon the trade 
of the Great Lakes and Rivers. This very voluminous 
report, containing a mine of information on the subjects 
dealt with, was submitted to the secretary of the Treasury 
and was published in 1852. Two particularly well-informed 
Canadians, W. H. Merritt and T. C. Keefer, had devoted 
much time and research to the work of assisting in its pre- 
', paration. Incidentally the report of Keefer on the imperfect 
} condition of Canadian statistics led to considerable improve- 
ment in their collection and presentation from 1853 onwards. 
Little progress was made in 1851 and 1852 beyond attempts 
to enlarge the scope of the proposed reciprocal measure by 
including the fisheries of the Maritime Provinces and the 
free navigation of the St Lawrence. Francis Hincks, pro- 
vincial minister of Finance, went to Washington early^ m 
1851 in the hope of getting through the original proposal, 
which related to Canada only. While on this mission Hincks 
issued a more or less confidential letter, ' printed for con- 
venience of reading and not for circulation, addressed to 
the Hon. R. M. M c Lane, chairman of the Committee on 
Commerce of the House of Representatives. This com- 



THE AGITATION FOR RECIPROCITY 239 

munication throws some very interesting light both on the 
attitude of the Canadian government at the time and on the 
claims and criticisms of the American government just before 
the abrogation of the treaty. Hincks desired to state the 
grounds on which the reciprocity bill, which had been several 
times before Congress, was urged by Canada. He first 
passed in review the altered situation of Canada owing to 
the change in the colonial policy of Britain.- In 1846 the 
imperial parliament had formally abandoned control of the 
Canadian tariff. This change had given Canada at once 
political and commercial freedom, and the Canadians were 
anxious to establish better commercial relations with the 
United States. They had removed the provincial duties on 
American produce, and admitted American manufactures 
and foreign goods purchased in the United States on the 
same terms as British goods. Canada had not at the time 
stipulated for similar treatment for her goods in the American 
markets, but it would have been good policy on the part of 
the United States to grant reciprocal treatment. Since that 
time, American manufactured goods had been pouring into 
Canada. As an indication of the increase in this trade, the 
duties collected at Toronto had increased within a few years 
from $30,000 to $400,000. Other ports, such as Hamilton and 
Kingston, showed like results. In consequence of this import 
trade, the Canadians had found it convenient to export their 
produce by the same channels, to the advantage of American 
shippers as well as of their canals and railroads. Lately this 
trade had been checked by heavy duties levied by the Ameri- 
cans on Canadian imports, such as lumber and bread-stuffs. 
It was the standing American objection to reciprocity, 
that the United States would obtain no equivalent advantage 
for opening its extensive markets to Canadian produce. 
Ilincks met this by pointing out that to encourage the import 
of Canadian natural products would induce Canadians to pur- 
chase American manufactured goods, and to ship their produce 
by American routes. The extra population thus employed in 
the United States in manufacture and shipping would increase 
the American demand for food-stuffs quite as much as the 
Canadian marketcould supply. In thislineof argument Hincks 



240 ECONOMIC HISTORY, 1840-1867 

was undoubtedly holding out to the Americans the prospect of 
their taking the place of England to a large extent in the 
supply of manufactured goods. There was the natu ral seq uence 
also of the Erie Canal and the port of New York taking the 
place of the St Lawrence route and Montreal and Quebec. 

Taking another line of argument, Hincks pointed to the 
fact that Nova Scotia, New Brunswick, Prince Edward 
Island and Newfoundland had been for years among the 
best customers of the United States, especially for food pro- 
ducts. At the time there was a revenue tariff on flour in 
those provinces varying from twenty-five to seventy-five cents 
per barrel, but within the last year arrangements had been 
made for the free exchange of natural products between 
Canada and the other provinces, except Newfoundland. 
This arrangement, with a tariff against the United States, 
would tend to divert trade from New York to intercolonial 
channels. In any case it was impossible to assume that 
Canada would continue to take goods from the United States 
if reciprocity were denied her. He observed also that the 
advocates of retaliation in Canada were rapidly gaining 
ground. The reimposition of differential duties in favour 
of the St Lawrence was strongly advocated at Quebec and 
Montreal, and such duties would be welcomed in England 
by those who were hoping to reimpose the corn laws and 
the old protective system. Another policy which was advo- 
cated with considerable success in Canada was that of closing 
the Canadian canals to American vessels, which would be a 
very serious matter for the Western American trade. 

By his various arguments Hincks convinced a number 
of those at Washington who were inclined to take an interest 
in this matter, but the threatened crisis from the slavery ques- 
tion just then overshadowed all other issues and prevented 
the reciprocity question from obtaining any adequate hearing. 
Hincks returned to Canada disappointed, and, being a man 
of strong purposes and vigorous action, he immediately set 
himself to realize the alternative proposition with the veiled 
threats, which he had expounded to M c Lane. He took up 
the Intercolonial Railway project and set himself to develop 
closer trade relations with the Maritime Provinces. On 



THE AGITATION FOR RECIPROCITY 241 

the other hand, he advocated the closing of the Canadian 
canals to the Americans, the imposing of heavy duties on 
American imports, and the taking of active measures along 
the line of the British claims to protect the fisheries from 
American poachers. From this latter movement incidentally 
dates the nucleus of the Canadian navy. 

Daniel Webster, as United States secretary of state, 
found it necessary to remonstrate with the British ambassador, 
Sir Henry Bulwer, with reference to the coercive measures 
adopted by Hincks. The whig ministry endeavoured to 
maintain a compromise, but they were defeated in 1852, and 
their successors adopted the coercive policy as regards the 
fisheries. The British fleet was sent to the fishing grounds, 
and the Americans replied by sending Commodore Perry to 
protect their fishing interests. The two naval commanders, 
being sensible men, avoided any rupture, while the politicians 
managed to agree on a resumption of negotiations, Webster 
being personally in favour of reciprocity. President Fillmore 
sent messages to Congress favouring a reciprocity conven- 
tion, including a settlement of the fisheries disputes, the free 
navigation of the St Lawrence, etc. 

On the death of Webster, Edward Everett became 
secretary of state and was willing to accept free of duty pro- 
vincial fish, provided the Americans were admitted to the 
inshore fisheries. Nova Scotia objected to granting the 
Americans any right to the inshore fisheries, notwithstanding 
that the people of the province were making little use of them. 

In March 1853, Franklin Pierce became president of the 
United States with William L. Marcy as secretary of state. 
Andrews was once more called in, and in August accom- 
panied the secretary of state and the British minister to 
Berkeley Springs, where an outline of the treaty was arranged. 
Andrews was entrusted by President Pierce, with a special 
mission to the various Canadian provinces. The president 
claimed that the proposed terms of the treaty had been sub- 
mitted by him to the British government ; at the same time 
both he and his secretary of state doubted whether the treaty 
could be carried in the Senate. On the other hand, the 
British provinces were not agreed or united among themselves 

VOL. v Q 



242 ECONOMIC HISTORY, 1840-1867 

as to the basis of reciprocal trade and the fisheries. The 
president professed himself anxious that the treaty should 
be acceptable to all the provinces, and that this first treaty 
with Britain entirely relating to the colonies should settle 
all outstanding questions between the colonies and the United 
States. The terms of the treaty were fully agreed upon in 
August 1853, but it was not finally sanctioned until June 5, 
1854, owing to the difficulty of securing the consent of the 
various provinces and of the United States Senate. 

Though New Brunswick had asked not to be left out if 
such a treaty were being made with the United States, there 
was a strong element in both Nova Scotia and New Brunswick 
opposed to the treaty, while the United States democratic 
Senate was more than doubtful. Andrews did much towards 
securing the assent of the Maritime Provinces, owing to his 
acquaintance with public men there and his intimate know- 
ledge of local conditions. In the United States special 
interests opposed the treaty. Pennsylvania objected to free 
coal, Maine to free lumber, while the middle and southern 
states claimed that sugar and tobacco, which were their 
natural products, should enter Canada free. Unwrought 
tobacco was afterwards included in the list. 

X 

THE RECIPROCITY TREATY 

A COMPLETE narrative of the putting through of the 
Reciprocity Treaty would involve many picturesque 
details. There was much journeying to and fro, care- 
fully planned interviews, elaborately organized press cam- 
paigns, dinners galore with unlimited champagne, serving 
as a meeting-ground for many important people who required 
to impart or to receive light on the subject. Lord Elgin, 
while on his special mission to Washington accompanied by 
Francis Hincks, then Canadian prime minister, was the 
central figure at many of the most notable of these dinners. 
His function was not to make the treaty, but to persuade the 
democratic majority in the Senate to pass it, a task which 
both President Pierce and Secretary of State Marcy did not 



THE RECIPROCITY TREATY 243 

think could be accomplished. Thanks, however, to Lord 
Elgin's diplomatic skill and charming personality, he was 
entirely successful, and the treaty was passed. The influence 
of the governor-general was also all-important in getting 
the measure ratified by the legislatures of the various pro- 
vinces, the greatest difficulty being experienced in Nova 
Scotia, which profited most from the treaty. The treaty went 
into effect in Canada on October 18, 1854, and in the United 
States by proclamation of the president on March 16, 1855. 

There were seven articles in the treaty : the first granted 
to the Americans the liberty of the inshore fisheries except 
for shell-fish in the waters of the British North American 
provinces ; the second granted similar privileges to British 
subjects in American waters ; the third gave a list of pro- 
ducts which were granted reciprocal free trade in each other's 
territories, chief of which were grain, flour and bread-stuffs 
of all kinds, smoked and salted meats, cotton, wool, seeds 
and vegetables, fruits, fish and their products, poultry and 
eggs, undressed hides, furs and skins, stone and marble 
unworked, salt, butter, cheese, tallow, lard, horses, manures, 
metallic ores of all kinds, coal, pitch, tar, turpentine, ashes, 
timber and lumber of all kinds, plants and trees, pelts and 
wool, rice, corn, brick, gypsum and grindstones, wrought 
and unwrought, dies, flax, hemp, tow, unwrought or wrought 
tobacco ; the fourth granted to the Americans the free 
navigation of the St Lawrence and the canals between the 
Great Lakes and the Atlantic, with the corresponding right 
to the British subjects on Lake Michigan, and the govern- 
ment of the United States further engaged to urge upon the 
state governments to secure to the subjects of Her Britannic 
Majesty the use of the several state canals on terms of 
equality with the inhabitants of the United States, the 
Americans to enjoy the liberty of floating their timber cut 
in Maine down the St John River. Under article five, the 
treaty was to continue in force for ten years, but might 
afterwards be abrogated by either party giving one year's 
notice. Article six provided for the extension of the terms 
of the treaty to Newfoundland, while the last article simply 
made arrangements for its mutual ratification. 



244 



ECONOMIC HISTORY, 1840-1867 



From the time the treaty went into operation, the trade 
between Canada and the United States greatly increased. 
This happened to coincide with the outbreak of the Crimean 
War and the shutting off of one large source of grain supply 
for the British markets. Not only was the volume of Canadian 
and American agricultural produce vastly increased, but 
prices were exceptionally good, and Canada entered upon a 
period of great jprosperity. The varied market furnished in 
the neighbouring states for the lumber, coal, and other 
minerals and fish of the Maritime Provinces, stimulated the 
trade of those colonies. The following tables will show the 
condition of Canadian and the Maritime Province trade 
from 1850 to Confederation, and indicates the extent to which 
the trade of these provinces was influenced by the introduc- 
tion of the Reciprocity Treaty and by its abrogation in 1866. 
As the greater part of the trade which was not conducted 
with the United States went to England, it enables us to see 
how the general trade of the provinces expanded or con- 
tracted apart from that directly affected by the Reciprocity 
Treaty. 

PROVINCE OF CANADA (NOW ONTARIO AND QUEBEC) 













Exports to 


Imports from 






Exports to all countries 


Total Im- 


Exports to 
United 


other 
countries 


other 

countries 


Years 


Total 




ports from 
United 


States of 


in bond 


in bond 












Home 


through 


through 






Home 


Total ' 


States 


Produce 


United 


United 






Produce 


Exports 






States 


States 




$ 


f 


$ 


$ 


1 


J 


$ 


1850 


16,982,068 


12,943,795 


12,943,795 


6,594,860 


4,951,159 


.... 


. 


1851 


21,434,790 


13,810,604 


13,810,604 


8,365,766 


4,071,545 




. 


1852 


20,286,493 


15,307,607 


15,307,607 


8,477,693 


6,284,522 


.... 


. 


1853 


31,981,436 


23,801,303 


23,801,303 


11,782,147 


8,936,382 


1,789,077 


. 


1854 


40,529,325 


23,019,190 


23,019,190 


15,533,098 


8,649,002 


I,868,8l7 


. 


1855 


36,086,169 


28,188,461 


28,188,461 


20,828,677 


16,737,277 


4,475,229 


4,463,773 


1856 


43,584,387 


32,047,017 


32,047,01? 


22,704,509 


17,979,754 


3,463,204 


4,926,922 


1857 


39,430,598 


27,006,624 


27,006,624 


20,224,651 


13,206,436 


1,426,846 


5,582,643 


1858 


29,078,527 


23,472,609 


23,472,609 


15,635,565 


11,930,094 


2,558,742 


2,057,024 


1859 


33,555,161 


24,766,981 


24,766,981 


17,592,916 


13,922,314 


2,023,005 


4,546,491 


i860 


34,447,935 


34,631,890 


34,631,890 


17,273,029 


18,427,968 2,915,787 


3,041,877 


1861 


43,054,836 


36,614,195 36,614,195 


21,069,388 


14,386,427 1,114,513 


5,688,952 


1862 


48,600,633 


33,596,125 


33,596,125 


25,173,157 


15,063,730 ; 2,189,993 


5,508,427 


1863 


45,964,493 


41,831,532 


41,831,532 


23,109,362 


20,050,432 


2,392,110 


6,172,483 


1864 


23,882,216 


13,883,508 


13,883,508 


10,426,572 


7,722,397 


1,923,471 


7,925,17? 


1865 


44,620,469 


42,481,151 


42,481,151 


19,589,055 


22,939,691 


3,837,639 


6,511,771 


1866 


53,802,319 


56,328,380 


56,328,380 


20,424,692 


34,770,261 


7,785,434 


12,751,548 


1867 


59,048,987 


48,486,143 


48,486,143 


20,272,907 


25,583,800 


7,082,766 


12,397,168 



THE RECIPROCITY TREATY 



245 



PROVINCE OF NEW BRUNSWICK 



YcArs 


Total 
Imports 


Exports to all countries 


ToUl Imports 
from United 
Slates 


Exports to 

United Stales 
ofHooM 
Produce 


Home 
Produce 


Total 
Exports 




* 


$ 


$ 


* 


* 


l8jO 


4.077,653 


3.290,090 


3,290,090 


1,310,740 


387,000 


1851 


4,901,500 


3,860,120 


3,860,120 i 1,654,175 


415,140 


1852 


5,333,003 


3,981,675 


3.981,673 


1,966,050 


418,960 


1853 


8,380,540 


5,362,495 


5,362,495 


2,870,350 


609,290 


1854 


10,343,865 


5,521,073 


5,521,075 


3,556,170 


489,650 


l8S5 


7.156,650 


4,131,905 


4,131.905 


3,913,810 


615,635 


1836 


7,605,890 


5,366,755 


5,366,755 


3.572,570 


867,425 


1857 


7,094,713 


4,588,875 


4,588,873 


3,142,550 


793,485 


1838 


5,813,853 


4,053.895 


4,053.893 


2,821,225 


818,510 


1859 


7,080,170 


5,367,110 


5,367,110 


3.375,473 


1,180,070 


1860 


7,*33.700 


4,581,860 


4,581,860 


3,441.085 


1,241,890 


1861 


5.943.039 


4,546,039 


4,546,039 


3,014,736 


843,141 


1862 


6,199,701 


3.856,538 


3,856,53 


2,960,703 


889,416 


1863 


7,658,462 


4,940,781 


4,940,781 


3,550,383 


1,244,915 


1864 


8,943,353 


5,053,879 


5.053.879 


3,316,824 


1,266,148 


1863 


7,086,595 


5,534.726 


5.534,726 


3,056,362 


1,737.208 


1866 


10,000,794 


6,373,705 


6,373.705 


3.743,869 


1,855.944 


1867 


3,820,167 


2,407,889 


2,407,889 


1,117,602 


743,538 


1 











PROVINCE OF NOVA SCOTIA 



Years 


Total 
Imports 


Exports to all countries 


Total Imports 
from United 
States 


Export* to 
United Slates 
of Home 
Produce 


Home 
Produce 


Total 
Exports 




$ 


$ 


$ 


* 


$ 


1850 


3,600,000 


1,550,000 


1,550,000 


1,028,000 


428,000 


1851 


3,741,933 


1,599,245 


1,599,245 


1.033,873 


430,150 


1852 


7.085,431 


3.033,590 


3.033.590 


2,079,545 


589,650 


1853 


5,970,878 


4,853,903 


4,853.903 


1.739,219 


1,289,248 


1854 


8,955,4>o 


6,238,340 


6,238,340 


2,876,440 


1,593.380 


1855 


9.413,515 


7.832,855 


7,832,855 . 


3,692,400 


2,407,205 


1856 


9,349,160 


6,864,790 


6,864,790 


3,392,950 


2,068,580 


1857 


9,680,880 


6,967,830 


6,967,830 


3,485,116 


2,090,349 


1858 


8,075,590 


6,321,490 


6,321,490 


2,918.373 


2,053,225 


1859 


8,100,955 


6,889,130 


6,889,130 


2,884,990 


2,283,825 


1860 


8,5",549 


6,619,534 


6,619,534 


3.238.952 


2,231,629 


1 86 1 


7,613,227 


5,774.334 


5,774,334 - 


2,893,026 


1,924,778 


1862 


8,445,042 


5,646,961 


5,646,961 


3,027,015 


1,811,137 


1863 


10,201,391 


6.546.488 


6,546,488 


3,857,765 


1,869,772 


1864 


12,604,642 


7,i72,8i6 


7,172,816 


4,303,016 


2,446,770 


1865 


14,381,662 


8,830,693 


8,830,693 


4.323.857 


3.619,797 


1866 


14,381,008 


8,043,095 


8,043.095 


4,041,844 


3,288,550 


1867 


9.345,490 


5.474,328 


5.474,328 


1,986,642 


1,614.653 



246 ECONOMIC HISTORY, 1840-1867 

It is to be observed that Canadian prosperity in particular 
was, in a large measure, due to the construction of railways, 
and that these had given a very considerable impetus to 
Canadian trade before the Reciprocity Treaty was adopted. 
" In 1849 there were only about fifty miles of railway in Canada. 
In 1854 there were thirteen railways under construction with 
a prospect of a mileage of 1980, of which 790 miles had been 
constructed at an expenditure of $50,150,000. The expendi- 
ture of so large an amount of capital in the country within 
a short time naturally stimulated all forms of industry, gave 
employment to thousands of workmen, and thus promoted 
immigration and led to the building up of new towns, the 
rapid rise in real estate values, and consequent speculation 
at once in town and farm lands. In fact, for several years 
both before and after the passing of the Reciprocity Treaty, 
in proportion to the settlement of the country at the time, 
there was just such a movement going on as characterized 
the north-west provinces of Canada in the years 1908 to 
' 1912. New towns were springing up on the line of the Great 
I Western Railway between Niagara and Windsor, and the 
older towns on the Grand Trunk Railway between Montreal 
and Toronto were growing rapidly. To a lesser extent the 
same results were observed on the minor lines of railways, 
such as that between Buffalo and Goderich. Public build- 
ings, mills, factories, stores and dwelling-houses were being 
constructed in every direction, and municipalities were 
encouraged by the facilities offered by the Municipal Loan 
Fund Act to construct new civic buildings, introduce water- 
works and drainage systems, improve the streets and bonus 
railways, and otherwise augment the capital expenditure of 

I the country. Thus, quite apart from the Reciprocity Treaty, 
Canada had all the essentials for a very prosperous period, 
but, with the additional markets for both the sale and 
purchase of goods which it afforded, the effect was, of course, 
enhanced. In after years it became the custom to attribute 
the greater part of the exceptional prosperity of this period 
to the effect of the Reciprocity Treaty alone, when it is quite 
obvious that it was but one of several important factors 
contributing to a common result. All these factors acted 



THE RECIPROCITY TREATY 247 

and reacted on each other to the mutual increase of trade 
and speculation, and their combination was much more 
effective than the individual contributions. 

As the high price of wheat in Europe coincided with the 
exceptional demand for labour in Canada, owing to railroad 
construction and town-building, farm help became both dear 
and scarce ; hence many of the farmers, confining their 
/ attention to wheat alone, neglected stock-raising, the making 
of butter and cheese, the rearing of poultry and the growing 
of vegetables and fruits. The result was that these articles 
in the face of the exceptional demand of the time, became 
relatively scarce in the leading commercial centres, prices 
advanced, and imports from the adjoining states became 
common. Between 1851 and 1857 the prices of most articles 
of food, such as grain, meat, dairy produce, vegetables and 
sugar, had increased at least fifty per cent, while such articles 
as wool, tallow and leather had increased one hundred per 
cent. The situation is very tersely put in an article in the 
Canadian Merchants' Magazine of June 1857 : 

The rapid increase of population has created a demand 
for houses and for many of the necessaries of life which 
this country is unable to supply ; and Hamilton, Toronto, 
and other Canadian cities have lately become large 
importers of butter, cheese and vegetables from the 
United States. The high price of wheat has doubtless 
given an undue preference to its cultivation, as farmers 
who once brought to market large quantities of butter, 
cheese, eggs and vegetables, now raise little else but the 
wheat ; and at the present time there is an excellent 
opening for a large number of market gardeners in the 
neighbourhood of most Canadian cities. 

Doubtless most of these articles might have been obtained 
from the more remote sections of Canada, but there were as 
. yet imperfect means of transport, and the business of collect- 
ing and shipping such articles was but slightly developed in 
Canada, whereas it was more fully organized in the United 
States. Moreover, the means of communication between the 
United States and the Canadian cities mentioned were com- 
paratively efficient. 



248 ECONOMIC HISTORY, 1840-1867 

In going over the leading imports to Canada during the 
first five years of the Reciprocity Treaty, it is interesting to 
observe what were the chief articles procured from the United 
States. First, in point of value, came grain of various kinds ; 
second, meat ; third, flour ; fourth, live stock ; fifth, coal ; 
sixth, fish and fish-oil ; seventh, tallow. Other important 
imports were : fruit, butter, cheese, firewood, blocks, furs, 
hides, lard, plants and seeds, rice, timber (including lumber) 
and tobacco. Thus most of the leading articles of Canadian 
imports from the United States were just the articles which 
Canada herself was chiefly exporting to the United States. 
The explanation is indicative of the normal movement of 
exchange both within and between countries where there 
are no artificial restrictions on trade. It simply meant that, 
owing to the natural geographical distribution of produc- 
tion and the corresponding difficulties in the way of com- 
munication between parts of the same country, with facilities 
for local communication between adjoining parts of the two 
countries, it was more convenient for certain portions of 
Canada to get supplies from the adjoining states than from 
itself, and more convenient for parts of the United States to 

iget supplies from Canada than from their own territory. 
It also emphasizes the fact that trade is not national but 
individual and sectional. Similar facts are presented and 
similar conclusions reached when we survey the whole of the 
reciprocity area, including the Maritime Provinces as well 
as Canada. There we find that Nova Scotia and New 
Brunswick were importing flour from the states, while Canada 
was exporting it, and Canada was importing fish and coal, 
which the Maritime Provinces were exporting. As a matter 
of fact, most of the flour with which the Americans supplied 
the fisheries of the Maritime Provinces was of Canadian 
origin, shipped through the ports of Boston and Portland, 
while a great part of the fish and fish-oil obtained by Canada 
from the United States was originally from the Maritime 
Provinces. In the lines of import not affected by the 
Reciprocity Treaty, the British provinces obtained large 
quantities of goods either from or through the United States. 
Thus such articles as sugar, coffee, tea, tobacco, molasses, 



THE RECIPROCITY TREATY 249 

groceries, boots and shoes and other articles of leather, 
furniture and house fittings, and several lines of hardware 
came either wholly or in great measure from the United 
States. Nearly all articles of clothing, cottons, woollens and 
silks, most fancy goods, earthenware, glassware, iron and 
staple lines of hardware, came almost entirely from Great 
Britain. During the period of exceptional prosperity from 
1851 to 1856, Canada imported from Britain nearly twice 
the value of what she exported to it. 

Although much of the trade with Britain was conducted 
through the United States, the greater part of the exports 
to the United States in the lines of grain and flour, though 
merged in the general American supply, contributed to the 
large export from the United States to Britain in these lines. 
In other words, the United States did not consume much 
Canadian grain or flour, but simply purchased it and sent it 
on to the British and other markets as American produce. 

V It was during the reciprocity period, when the wholesale 
and retail business of the country was increasing so rapidly, 
that there was generally introduced in the larger towns and 
cities that specialization of business in individual lines which 
afterwards prevailed until the recent development of the 
departmental stores. In the smaller towns and villages, 
however, the Noah's Ark of the universal purveyor, where 
barter constituted a large factor in exchange, still continued. 

The public expenditure involved in the construction of 
the canal .system had left Canada with a 



and immediately on the heels of this came the still heavier 
railroad expenditure, partly supplied by private capital, but 
also heavily subsidized by the province and the municipalities. 
The government expenditure alone on canals and railways 
amounted to $20,000,000 each, while another $4,500,000 was ' 
expended on roadways and other public works. As usual, 
the period of prosperity in Canada, with which we are dealing, 
was quite at the mercy of conditions beyond her own borders. 
Her capital came entirely from abroad, and so far the very 
interest was in most cases paid out of the capital itself. The I 
reaction from the extravagance of the Crimean War period 
produced a financial crisis in Britain in 1857. Then it passed 



250 ECONOMIC HISTORY, 1840-1867 

to the United States and Canada, very specially affecting the 
latter by calling a halt to the heavy capital investment, 
which revealed the fact that much of the Canadian prosperity 
was built upon capital expenditure and its prospective 
returns. Moreover, it indicated that these returns were 
most uncertain, and in several important cases there was 
little chance of recovering the capital, while profits were out 
\ of the question. The railroad companies were unable to 
complete their lines, municipalities could not find the interest 
on the money borrowed, and there was no longer the capital 
coming in from which to pay it and thus disguise the real 
situation from the ratepayers. In other words, the crisis of 
1857, which was merely temporary in England, being followed 
in Canada by the poor harvest of 1858, resulted most seri- 
ously, and would have meant wholesale bankruptcy had not 
the government shouldered much of the burden, advancing 
$1,000,000 to the railroads and $500,000 to the munici- 
palities to meet their interest calls. 

This situation naturally had an important effect upon the 
finances of the country, and thus upon the tariff. In virtue 
of the great increase in expenditure, the government found 
it necessary to augment the revenue from time to time by 
increasing the customs tariff. Moreover, when the eastern 
railroads were approaching completion and the capital 
expenditure was drawing to a close, the Montreal interests 
once more took up their parable as to the artificial compelling 
of the inward and outward traffic of the western and more 
prosperous districts to pass by their doors, and, as far as 
possible, through their warehouses and financial institutions. 
Thus they began an agitation for differential duties in favour 
of goods imported direct from the sea either by rail or boat. 
This was, of course, confessedly an effort to divert traffic from 
the American channels and to favour British as against 
American lines of goods. 

(Every increase in the tariff brought renewed protests from 
the United States, while the introduction of differential 
duties threatened to bring matters to an acute crisis. The 
Americans argued that these changes constituted a virtual 
violation of the terms of the treaty, pointing out how com- 



THE RECIPROCITY TREATY 251 

pletcly they were at variance with the promises and induce- 
ments held out by the provincial treasurer, Francis Hincks, 
while negotiating for the Reciprocity Treaty. But Hincks 
was no longer Finance minister. In 1859 A. T. Gait, who was 
personally interested in the Montreal and Shcrbrooke dis- 
tricts, was Finance minister, and was both politically and 
commercially opposed to the interests represented by Hincks. 
Matters became worse after 1860 and were quite acute in 
1862. In 1861 the amount of dutiable goods entering Canada 
from the United States greatly diminished. Thus they fell 
from $8,346,633 in 1861 to $6,128,783 in 1862, and to 
$3.974.396 in 1863, and did not materially recover before the 
abrogation of the treaty in 1866. 

During the early part of the reciprocity period, Canada 
had imported more from the United States than she had i 
exported to them, though the difference was not so great as 
before the introduction of reciprocity. During the last four 
years of the reciprocity period Canada exported to the 
United States more than double what she imported from 
them. Even during the war period a large part of the trade 
between the two countries continued to be one of local con- 
venience rather than of a strictly international character. 
In 1863 Canadians imported, chiefly at Kingston, for export 
via the St Lawrence, nearly three times as much wheat as 
they exported. On the other hand, the Canadian exports of 
flour to the United States greatly exceeded the imports. The 
exports of barley, oats and wool had greatly increased, while 
little or nothing was imported in these lines. In the matter 
of Indian corn the imports were considerable. The export 
trade in live animals was steadily on the increase, while 
Canada imported much American meat. The free naviga- 
tion of the St Lawrence, which was expected to attract much 
American trade, especially from the upper lakes, failed 
almost entirely of its purpose. The Welland Canal con- 
tinued to be almost the only one used by the Americans. 
In 1863 the Canadian tonnage on the Welland Canal was 
521,808 ; the American, 808,289. On the St Lawrence 
canals the Canadian tonnage was 1,018,163, while the Ameri- 
can was only 18,146. As part of the Montreal policy of 



252 ECONOMIC HISTORY, 1840-1867 

forcing trade down the St Lawrence, an act of 1860 provided 
that, if American vessels which passed through the Welland 
Canal continued down the St Lawrence with their cargoes, 
ninety per cent of the tolls levied would be returned, while 
Canadian vessels passing through the canal paid only one- 
tenth of the regular toll. 

Hincks had pointed out, in commending reciprocity to 
the American government, that it would prevent the develop- 
ment of interprovincial trade by making trade with the 
United States more attractive to both the Maritime Provinces 
and Canada than trade with one another. His prophecy was 
fulfilled, because the temporary development of interpro- 
vincial trade after the abrogation of the British preference in 
1846 lapsed during the reciprocity period, and only revived 
again in a respectable volume after the treaty was abolished. 
Thus in 1866 281,284 barrels of flour were imported by the 
Maritime Provinces from the United States, and 69,164 
barrels from Canada, while in 1867 only 47,466 barrels were 
taken from the United States, and 161,266 came from Canada. 
Similar changes took place in beef, pork, butter, lard and 
cheese, yet the greater part of the trade with the Maritime 
Provinces passed from Montreal to Portland, and then by 
boat to the northern ports. But, while the Americans during 
the Reciprocity Treaty took from Nova Scotia and New 
Brunswick practically all they had to sell, including potatoes, 
poultry and eggs, fish, coal, cordwood, etc., the Canadians 
took practically none of these except a certain amount of 
fish, requiring to be paid in bills on Montreal, which were at 
a considerable premium. The returns showed that the 
quantity sent to the Maritime Provinces was over three times 
the value of what she took from them. It is not difficult, 
therefore, to understand the discontent of Nova Scotia in 
particular, owing to the abrogation of the treaty, and its 
unwillingness to enter Confederation. 

In order to appreciate fully the inevitable fate of the 
Reciprocity Treaty, it is necessary to recall a few fundamental 
features. From the first the professed object of the British 
provinces had been to obtain access to the large and con- 
veniently located markets of the United States, in which 



THE RECIPROCITY TREATY 253 

they could sell not only those products which might be sent 
to Europe or elsewhere, but a large quantity of special pro- 
ducts which commanded better prices in the American 
markets than elsewhere, and which could not bear the cost 
of a long voyage. There was no equivalent advantage to be 
offered the Americans in the limited markets of the British 
provinces, but what rendered reciprocity acceptable, if not 
attractive, to them were such features as obtaining the carry- 
ing trade of Western Canada and retaining that of the 
western states, finding an enlarged market for their manu- 
factured goods, and obtaining unmolested access to the 
Atlantic fisheries. The free navigation of the St Lawrence 
had been made to appear attractive to the western states 
as an alternative outlet to the sea, but it had not realized 
expectations. 

During the negotiation of the treaty the features most 
attractive to the Americans were, of course, strongly pre- 
sented in the communication from Hincks, but it was obvious 
that these attractions would be detrimental to certain sections 
of Canada, and that the result would postpone indefinitely 
the national development of the country or the possible 
union of the North American provinces. The local interests 
of Montreal and the St Lawrence obviously suffered as the 
result of reciprocity. It was hoped that the construction of 
the Grand Trunk Railway would secure what the improve- 
ment of the St Lawrence had failed to obtain, but here too 
the results fell far short of expectations. 

A. T. Gait, still Finance minister in 1862, and associated 
with the interests centring at Montreal, adopted a new line 
of policy, which, however desirable from the point of view of 
an independent commercial and national future for Canada, 
was at least largely inconsistent with the conditions upon 
which the Reciprocity Treaty had been advocated and pro- 
cured. If this policy were persisted in, there could be little 
doubt of the consequences. There were three essential 
features in Gait's programme, which was that of the Canadian 
ministry of the day : first, the diversion of Western Canadian 
traffic and business in exports and imports from American to 
Canadian channels alike by water and rail ; second, and as 



254 ECONOMIC HISTORY, 1840-1867 

essential to this, the encouragement of sea-borne trade from 
the Atlantic rather than land-borne trade from the United 
States (this meant the encouragement of direct trade with 
Britain rather than with the United States, or even with 
Britain through American territory) ; third, the develop- 
ment of Canadian manufacturing industry, with a view to 
enabling Canada to supply herself with many lines of goods 
at the time imported mainly from the United States. This 
latter purpose was to be accomplished by a readjustment and 
material increase in the Canadian tariff, this increase also 
coinciding with the need for provincial revenue. This 
policy was entirely Canadian, having little or no regard for 
the Maritime Provinces beyond the desire to sell them more 
goods. While it might be claimed that in the long run it 
would be in the interest of Western Canada, yet at the time 
at least, as militating against the reciprocity arrangement 
with the United States, it was decidedly against the interests 
of Western Canada, and in its leading organs, the press and 
Boards of Trade, this was made perfectly plain. 

In order, therefore, to avoid as far as possible arousing 
the antagonism of the Maritime Provinces and Western 
Canada, and of the United States, it was sought to forward 
the policy while keeping within the letter at least of the 
treaty. In reply to the accusation of the New York State 
legislature and the representatives of that state in Congress 
that the Canadian government was not living up to the spirit 
of the treaty, Gait simply declared that the object of the 
Canadian government was to foster the commerce and pro- 
mote the welfare of Canada, and if, in consequence, trade 
should be diverted to Canadian channels, it simply indicated 
the success of the methods employed. It was true that the 
government had increased the duties on manufactured goods 
and had changed the method of levying duties so as to favour 
direct imports by sea, and abolished tolls on the St Lawrence 
canals to attract trade to that route, but Gait claimed that 
the treaty did not specifically deal with manufactured goods 
or the duties levied on them, and that in following the line 
of policy adopted, Canada was not necessarily infringing on 
its terms. Moreover, during the same period, the Americans 



THE RECIPROCITY TREATY 255 

had greatly increased their tariff on dutiable goods. All this 
was perfectly true, but nevertheless the change in Canadian 
policy had greatly affected what the Americans regarded as 
their advantage under the treaty, while the American duties 
had not affected the basis of the Canadian advantage from 
the treaty which lay in the lines of free goods. Gait also 
declared in round terms that the general increase in the 
Canadian tariff applied equally to British and American 
manufactures. This, however, was scarcely correct, because 
the changes introduced were the substitution of ad valorem 
for specific duties and the taking of the values in the markets 
where last bought, and this, Gait claimed, would encourage 
purchasing direct from Britain, and thus ' so far benefit the 
shipping interests of Great Britain.' Again, the completion 
of the Grand Trunk Railway connection with Portland, and 
the improvements in the navigation of the lower St Lawrence, 
together with the subsidizing of special ocean vessels using 
that route, ' justified the belief that the supply of Canadian 
wants might be once more met by sea, and the benefits 
of this commerce obtained by our own merchants and 
forwarders.' 

As regards his protective policy, Gait had definitely 
stated that ' the policy of the present government in readjust- 
ing the tariff has been, in the first place, to obtain sufficient 
revenue for the public needs, and secondly, to do so in such 
a manner as would most fairly distribute the additional 
burdens upon the different classes of the community ; and 
it will undoubtedly be a subject of gratification to the govern- 
ment if they find that the duties, absolutely required to 
meet their engagements, should incidentally benefit and 
encourage the production in the country of many of those 
articles which we now import.' 

These various announcements of the minister of Finance 
doubtless expressed a very admirable national sentiment, 
but when taken in connection with the actual history of the 
Reciprocity Treaty and its negotiations, and in the face 
of the steadily declining imports from the United States 
and the greatly increasing exports to the United States, 
plainly indicated that it would scarcely be necessary for 



256 ECONOMIC HISTORY, 1840-1867 

Gait to take the initiative in getting rid of the Reciprocity 
Treaty. 

Undoubtedly the treaty might have continued indefinitely 
on the basis upon which it had been framed and had operated 
until 1860, but in 1862 it had become quite evident that it 
could not continue on the basis of the new Canadian policy. 
The Hon. I. T. Hatch of New York State and J. W. Taylor 
of Minnesota were appointed by the American government 
to inquire into the operation of the treaty. In their report, 
after pointing out the many advantages of reciprocity for 
both countries, and stating that so far as the Maritime 
Provinces and Western Canada were concerned the Americans 
had no criticism of the British American attitude, yet in the 
face of the policy of the dominant element in the Canadian 
government, it was impossible to continue reciprocity on the 
basis of the Canadian laws and regulations lately adopted 
and supported by the majority of the Canadian legislature. 
They advocated a complete zollverein, or commercial union, 
as the best solution of the situation. This would give the 
Americans free access to Canada for their manufactured 
wares, and the Canadians free access to the United States 
for all their wares, most of which for the time being were 
unmanufactured. 

There were many interests in the Maritime Provinces 
and in Western Canada which were prepared to accept these 
conditions, but they were, of course, quite contrary to the 
policy of those controlling the Canadian government. It 
became evident, therefore, that when the term of ten years, 
for which the treaty was signed, was fulfilled, the United 
States government would undoubtedly give the requisite 
year's notice of the abrogation of the treaty. The Maritime 
Provinces and the greater part of Western Canada, and the 
western states bordering on the lakes, did all they could to 
prevent a rupture, but they failed. Due notice was accord- 
ingly given, and in April 1866 the Reciprocity Treaty came 
to an end. During the few months preceding the expiration 
of the treaty, immense quantities of Canadian produce were 
rushed into the U/iited States. The consequence was that 
for fully a year after the abrogation of the treaty, prices were 



THE RECIPROCITY TREATY 257 

fairly well sustained in the Canadian markets. Later, of 
course, it particularly affected a number of localities in 
Western Canada which had been accustomed to produce 
large quantities of wool, barley, and other such agricultural 
lines for the American markets. The Maritime Provinces 
were, however, the chief sufferers. Although they resented 
the callous indifference of the Canadian authorities towards 
their interests, yet the subsequent action of the United 
States pleased them even less, and, as it was necessary for 
all the British North American provinces to readjust their 
trade relations and commercial intercourse, the scheme of 
Confederation seemed the only alternative to individual 
annexation ; hence it may be said that the abrogation of 
the Reciprocity Treaty very materially contributed towards 
the union of the British North American provinces and the 
beginning of a truly national life. 






VOI- V 



CURRENCY AND BANKING 

1840-1867 



CURRENCY AND BANKING, 1840-1867 

I 

LORD SYDENHAM AND CANADIAN BANKING 

WITH the union of the two Canadian provinces and 
the establishment of an administrative govern- 
ment responsible to a majority of the House of 
Assembly, the banking system of Canada called for some 
definite government policy. Lord Sydenham, who had taken 
a prominent part in the discussion of banking problems in 
England, devoted special attention to the banking and 
currency system in Canada. In connection with the promo- 
tion of a comprehensive system of internal transportation, 
he proposed the establishment of a provincial bank of issue, 
which would give the government entire control of the pro- 
vincial paper currency. Hitherto the privilege of issuing 
paper money had been enjoyed by the banks, most of which 
had recently passed through a period of suspended specie 
payment. By transferring to the government the sole right 
to issue paper money it was estimated that the provincial 
Treasury would be benefited to the extent of about 35,000, 
or $140,000, per annum. 

The proposed provincial bank under the management of 
a special commission would be authorized to issue notes 
of one dollar and upwards, to the aggregate amount of 
1,000,000 currency. As security for its issues the bank 
would hold one quarter of the amount in circulation in legal 
tender coin or bullion, and three-quarters in government 
securities. After two years the existing chartered banks 
were to relinquish their right to issue notes, but were to 
receive in lieu of this privilege for ten years, or the unexpired 
terms of their charters, an allowance of two and a half per 

Ml 



262 CURRENCY AND BANKING. 1840-1867 

cent on their average note circulation. On depositing with 
the bank of issue, coin or bullion, or government securities 
approved by the commission, the existing chartered banks 
might receive for circulation an equivalent amount in notes 
of the bank of issue. 

Holding in coin or bullion twenty-five per cent of its pro- 
posed note issue, the provincial bank would be able to place 
the remainder at the disposal of the government for public 
works. This would represent a saving of interest of from 
30,000 to 35,000. It was expected that the provincial 
bank note issue would ensure stability and would prevent the 
customary fluctuations between a plethora and a scarcity of 
circulating medium. 

Approaching the Canadian currency problem with a back- 
ground of British rather than Canadian experience, it was 
natural that Lord Sydenham should over-estimate the possi- 
bility of establishing a comparatively stable currency medium 
alike as to quantity and quality. The natural circum- 
stances of Canada, however, both as to seasonal variations 
and the fluctuating values of the staple Canadian exports 
of grain and lumber, required that the Canadian medium of 
exchange should be capable of expanding and contracting 
with trade, without too great a capital outlay on the part 
of the banks in order to increase their circulating medium, 
or too heavy a sacrifice of income through having their capital 
tied up in low-interest-bearing securities when the circulating 
medium was not in demand. Under the usual conditions of 
Canadian trade, the chartered banks would be apt to find 
the notes of the proposed bank of issue at once expensive 
to procure and unprofitable to hold in idleness. Under such 
circumstances the banks would endeavour to operate with as 
little circulating medium as possible, while they would also 
more or less promptly convert their notes into bullion when 
trade conditions did not call for them, the bullion being of 
service in international exchange. It appeared to be certain 
that the bank of issue would find its circulation more limited 
than anticipated, while the amount of bullion required to 
be kept on hand to meet the note redemption would be 
considerably larger than anticipated. In consequence, the 



LORD SYDENHAM AND CANADIAN BANKING 263 

expected profit to the government would be much less than 
the scheme promised. 

Apart from certain difficulties likely to be met with in its 
practical operation, the general policy of the government 
bank of issue commended itself to a young man of exceptional 
ability in matters of finance, who was destined to have a 
greater influence upon the development of Canadian banking 
than any other individual of his generation. This was Francis 
Hincks, who was returned to parliament in 1841, and under 
Lord Sydenham's influence was appointed chairman of the 
joint committee on currency and banking. This committee 
reported a bill for the establishment of a provincial bank of 
issue on the general lines suggested by Lord Sydenham, but 
with considerable modifications in order to render it easier 
for the banks to employ their resources in procuring the 
notes of the bank of issue and to facilitate the retirement of 
the notes during periods of reduced circulation. On the 
other hand the provincial bank was to have the power to 
issue notes, if required, in excess of 1,000,000, but only in 
exchange for specie. 

As the banks of that period relied for their profits more 
upon their note issue than upon their discounts, they naturally 
opposed the measure very strongly, predicting ruin to them- 
selves and disaster to the business interests of the country. 
The opposition aroused was sufficient to defeat the bill for 
the time, but the principles embodied in it were to reappear 
in subsequent measures until Lord Sydenham's proposal 
became the basis of the present issue of Dominion notes, and 
of their employment by the banks as legal tender in domestic 
exchange and in the settlement of clearing-house balances. 
Although the banks escaped the loss of their privilege of 
issuing notes, yet they were required to contribute to the 
provincial revenue through a tax of one per cent on their 
note issues. 

The proposed bank of issue being disposed of, the question 
as to the renewal of the charters with increase of capital for 
the existing banks, and the granting of charters to new 
banks, was taken up by the banking committee. Here, again, 
under the influence of Lord Sydenham, assisted by Hincks, 



264 CURRENCY AND BANKING, 1840-1867 

a successful effort was made towards the introduction in all 
new or amended bank charters of uniform principles of 
banking. These changes embodied most of the principles 
contended for by the British Treasury, with the exception of 
the limitation of the note issue to denominations of ,1 and 
upwards. The banking committee drew up a series of 
clauses which were henceforth to be embodied in all bank 
charters, and which afterwards furnished the basis for the 
first general bank act, passed in 1871 under the direction of 
Sir Francis Hincks, who in 1841 had shaped the measures of 
the banking committee. Chief of the new features were : 
a fixed capital for each bank, to be subscribed within eighteen 
months of the granting of the charter, one-half to be paid 
up before the bank began business and the remainder within 
two years ; the debts of a bank, including its note issue, 
were not to exceed three times the paid-up capital of the 
bank ; the note issue alone not to exceed the paid-up capital ; 
suspension of specie payment for sixty days to result in 
forfeiting the charter ; a bank might not advance money 
on the security of real estate or goods, or engage in trade, 
it must confine its business to discounting commercial paper 
and negotiable securities, or to dealing in bullion and 
exchange ; each bank must publish yearly or half-yearly 
statements of its assets and liabilities under a given form, 
which embodied the chief features of the present monthly 
reports of the chartered banks. Although the committee 
recommended the prohibition of all note issues except by 
chartered banks, yet this was not accepted by the house, 
as certain joint stock companies then enjoying the privilege 
of issuing notes were sufficiently influential to defeat it. 

II 
CURRENCY STANDARDS 

' I ^HE problem of the metallic currency, which had given 

rise to so much trouble during the previous five years, 

was also grappled with during the first session of the 

united parliament. In 1839 the Special Council for Lower 

Canada and the provincial parliament of Upper Canada 



CURRENCY STANDARDS 265 

passed certain measures dealing with the metallic currency, 
but they had been disallowed by the home government. No 
real progress had been made, and the situation was continu- 
ally growing worse. Before the Union the ratings of the 
various coins varied as between the two provinces, and had 
given rise to much inconvenience in exchanges between 
Montreal and the province of Upper Canada, with which 
so much of its business was transacted. 

The rating of the American dollar was the same in both 
provinces, namely five shillings. But there were other coins, 
relatively more highly rated, which shared with it the privi- 
lege of legal tender. Naturally, bullion payments were made 
and the exchanges were fixed on the cheapest legal tender 
basis. The British shilling was rated at is. 3d. in Upper 
Canada, but only at is. id. in Lower Canada. British 
shillings were therefore extensively used in meeting demands 
for bullion in the exchanges between Upper and Lower 
Canada. The interprovincial balance of trade was usually 
against Upper Canada, and there was a premium in the upper 
province on Lower Canadian exchange and bank notes, with 
corresponding discounts in Montreal on Upper Canadian 
exchange and bank notes. In fact, the banks, having 
agencies in both provinces, would not redeem even at their 
chief offices in Lower Canada their own notes issued in Upper 
Canada. Nevertheless, the employment of bank notes as 
a means of securing bullion for exchange frequently led to 
the severe curtailment of discounts. This, in turn, gave rise 
to much criticism of the banks on the part of merchants 
and others. The merchants and banks of Upper Canada 
attempted to justify the overrating of the British shilling, 
on the ground that at any lower rating the metallic currency 
of the province would be drained away. This was a suffi- 
ciently sound reason for overrating the shilling as fractional 
currency, but it should not at the same time have been 
unlimited legal tender. One reason for rating the British 
shilling at is. 3d. was that it answered as the equivalent of 
the American quarter-dollar. The American dollar and the 
British half-crown were passed at the same rates in both 
provinces ; the dollar being rated at 53. and the British 



266 CURRENCY AND BANKING, 1840-1867 

half-crown at 33. They thus answered as a basis of exchange 
as between the two provinces. 

Under the existing relations of the currency standards 
and the exchanges of the two provinces the problem of 
establishing a uniform standard for United Canada presented 
no little difficulty. The situation was further complicated 
by the fact that just at that time the American currency 
system involved the overrating of gold, resulting in a famine 
of silver, which had passed to a premium. It would be 
embarrassing, therefore, to adopt the American silver dollar 
as the Canadian standard. In Montreal, where the greater 
part of the British gold brought in by the immigrants found 
a resting-place, the adoption of the sterling standard was 
favoured by some. But the opinions of the leading bankers 
and business men throughout the country having been 
officially invited, it was found that a majority favoured the 
adoption of the American decimal system. The chief reasons 
given were the close commercial and exchange relations 
between the two countries, and the great difficulty of obtain- 
ing a prompt supply of specie from any other source. Even 
those who favoured the sterling standard for imperial reasons 
admitted that, owing to the necessities of exchange, the 
American dollar must continue as an unlimited legal tender. 
Few were in favour of retaining the conventional Halifax 

t currency standard with no coinage to represent it. Francis 

Hincks, chairman of the committee on currency and banking, 
after a careful analysis of the situation, declared in favour 
of the American decimal system and standard. The Cana- 
dian bankers had already had a sufficient demonstration of 
Gresham's law that the cheapest or highest rated coinage 
drives all others out of circulation. At the same time they 
realized that the overrating of a legal tender could not keep 
money in the country. This latter fact was somewhat 
obscured from the ordinary citizen, owing to the banks 
employing one currency for their international exchange, 
and another for the local redemption of notes. The 
banks employed British and American gold and American 
silver dollars in the exchanges ; while for domestic cir- 
culation they used British silver in Upper Canada and 



CURRENCY STANDARDS 267 

French silver in Lower Canada, both of them consider- 
ably overrated. 

The difficulty of framing a currency act which would 
pass both houses of the Canadian legislature and also receive 
the sanction of the home government was obvious enough, 
and the natural result was a compromise measure. It left 
unsettled the question of the ultimate standard. While 
limiting the number of coins admitted as legal tender, it 
yet accepted not only British and American gold, but the 
standard American and French silver coins. The following 
is the table of values fixed by the act : 

GOLD COINS 

*. d. 
British sovereign ...... 144 

American eagle, coined before 1834, 12 dwts. 

6grs ........ 2 13 4 

American eagle, coined after 1834, IO dwts. 

18 grs ........ 2 10 o 

SILVER COINS 

The dollar of the United States, Spain, Peru, 

Chili, Central and South America, and *. d. 

Mexico, of 17 dwts. 4 grs. weight . . 51 

The half-dollar ~T~ ..... 2 6J 

The quarter-dollar ..... 13 

The one-eighth dollar ..... 7 

The one-sixteenth dollar .... 3 

The five-franc piece of France, of 16 dwts. . 4 8 

The British crown . . . . . . 6.1 

The British half-crown ..... 3 oj 

The British shilling ..... 12} 

The British sixpence ..... 



Of these the gold coins, the American dollar and half-dollar 
and the French five-franc piece were accepted as unlimited legal 
tender. The British silver was not accepted as legal tender, 
because it was only token coinage in Britain itself. The 
dropping of the British shilling and the old French half- 
crown from the legal tender list caused considerable excite- 
ment in business circles, and particularly among the banks, 
where many thousands of pounds' worth were held as reserves, 



268 CURRENCY AND BANKING, 1840-1867 

all of which now dropped to bullion rates. Fortunately for 
the banks, owing to the overrating of gold in the United 
States, silver bullion was in special demand, but the coins in 
circulation in Canada, especially the French half-crowns, 
were much worn as well as overrated. 

When the transition difficulties were adjusted, the bene- 
ficial effects of the new act in introducing a uniform currency 
rating throughout United Canada and in equalizing exchange 
were duly appreciated. In attempting to establish a more 
uniform rating of the various coins in terms of the Halifax 
standard, various odd numbers and fractions had to be intro- 
duced, which rendered accounting on the Halifax basis a very 
inconvenient and laborious process. This naturally led to a 
still further acceptance of the simple decimal system of the 
United States as the practical basis of Canadian currency 
and accounting. 

During the session of 1841 still another currency measure 
was passed, regulating the issue and circulation of spurious 
copper coins, an evil which had been growing for years past, 
and which had greatly increased during the period of political 
chaos preceding the Union. The measure of 1841 was sound 
enough in itself, but as the government would not provide 
a suitable substitute for the mass of nondescript copper and 
brass disks and tokens passing for coin, the primary needs 
for retail trade rendered the law futile and continued most of 
the spurious coin in circulation. The banks which had pre- 
viously issued the special copper coins apparently found it 
not profitable to extend their issues. The British govern- 
ment offered to have a special copper coinage struck for 
Canada, but the offer was not accepted, although this solution 
of the difficulty was afterwards adopted. 

During the years 1840 and 1841 exchange rates were 
almost constantly against Canada, and to a still greater 
extent against the Maritime Provinces, where the situation 
culminated in a crisis disastrous to several Halifax merchants. 
Throughout the British American provinces, in consequence of 
the adverse conditions of exchange, the banks severely restricted 
their discounts. In 1842 the situation was relieved and ex- 
change was fairly normal until the international crisis of 1848. 



NOTE-ISSUING PRIVILEGES 269 

III 

NOTE-ISSUING PRIVILEGES 

ALTHOUGH, as we have seen, the recommendations of 
J~\_ the British government, in dealing with the charters 
of the Canadian banks, had been very largely adopted, 
there was one feature to which the British authorities attached 
great importance which the Canadian government, at the 
instance of the Canadian banks and business interests, could 
not be induced to accept, namely, the abolition of bank 
notes under i currency. The object of this limitation was, 
of course, as in Britain, to increase the volume of metallic 
currency in circulation and in the vaults of the banks, with 
a view to steadying the exchanges of the country and render- 
ing the colonial bank issues more secure. Pressure had been 
put upon the Canadian government through the disallowance 
of several amended bank charters, notably those of the 
Commercial Bank and of the Bank of Upper Canada. While 
the principle contended for by the British Treasury was sound 
enough in the case of countries conducting a large financial 
business, yet the situation in Canada differed greatly from 
that in Britain. Here as yet there were very few purely 
financial operations of a domestic nature. Practically all 
the local and the greater part of the foreign exchange was 
directly connected with trade and commerce, calling only 
for the most convenient medium of domestic exchange. This 
was undoubtedly furnished by the bank notes. To have 
forced the substitution of an extensive metallic currency, 
which must have been obtained from abroad in exchange 
for a corresponding amount of Canadian exports, would have 
involved quite unnecessary expense. The special interest in 
Canadian currency which was manifested by the home govern- 
ment in the forties was chiefly due to the fact that a very 
vigorous and prolonged discussion of the whole currency and 
banking question had been absorbing the attention of the 
British authorities for some years, and had culminated in 
Peel's Bank Act of 1844. The principles of this act, it was 



270 CURRENCY AND BANKING, 1840-1867 

felt, were of universal application and must be enforced in 
all parts of the British Empire, regardless of their special 
local conditions. This proposition was frankly declared in 
the dispatch of 1846 instructing Lord Cathcart to have the 
principles of the British measure introduced into all future 
Canadian bank charters. Most of the essential features of 
the new British act, with the exception of the high minimum 
denomination for notes, had been accepted by the Canadian 
legislation of 1841. The practical question was discussed 
over the charters of two new banks in Eastern Canada, La 
Banque des Marchands, of Montreal, and the Quebec District 
Bank. The Canadian government insisted upon the retention 
of the privilege to issue one-dollar notes, and in the end the 
home government gave way. These two institutions received 
their charters in 1848, but owing to the commercial crisis of 
1848-49 they never came into actual operation. 

From time to time, before the Union of the Canadas, 
deposits and savings associations had been established at 
different Canadian centres. But the movement took a 
wider scope after the Union, and it was considered desirable 
that these savings banks should, on the one hand, receive 
legal recognition and protection, and, on the other, be regu- 
lated in the interests of the depositors. These proposals 
were accomplished by an act of 1841, introduced by Benjamin 
Holmes of the Bank of Montreal. The new measure adopted 
the chief features of a recent British act of the same nature. 

The period of crisis, 1848-49, forced the Canadian govern- 
ment to adopt a financial policy which led in the end to the 
withdrawal from the chartered banks of the right to issue 
notes for lower denominations than five dollars. Hincks 
was once more in control of the provincial finances, in the 
La Fontaine-Baldwin ministry which succeeded to power 
in 1848. He framed a new policy with an eye to the prin- 
ciples which had been embodied in the plan for a provincial 
bank of issue. The initial movement of the government 
took place in March 1848, in the shape of a message from the 
governor to the assembly, recommending the issue of small 
provincial debentures to the extent of 125,000 to meet the 
urgent needs of the Treasury. An act was duly passed 



NOTE-ISSUING PRIVILEGES 271 

authorizing the proposed issue, and leaving in the hands of 
the executive all details as to the form and denominations 
of the debentures, the period and place of redemption, and 
the rate of interest to be allowed, not, however, to exceed 
six per cent. The debentures as ultimately issued were in 
the form of ordinary bank notes payable one year after date 
with interest at six per cent. They were receivable in all 
payments due to the government, but when received in this 
way the government assumed the questionable right to re- 
issue them. 

As the issue of these notes did not depend upon the 
exchange needs of the country, but on the financial needs 
of the government, this departure met with much criticism, 
not only on the part of the banks, but on the part of many 
sound financiers, who recognized the danger alike to the 
monetary system of the country and to the principles of sound 
public finance. In the hands of a less conservative financier 
than Hincks the experiment might have proved a dangerous 
one, and, indeed, in future years the Canadian government, 
in common with many another government, found it difficult 
enough to escape the temptation which presented itself to 
ignorant politicians to meet increasing public expenditures 
with the aid of a paper currency printing-press. At any 
rate, the new experiment familiarized the Canadian people 
with the sight and use of government notes, and prepared 
the way for future developments in the line of provincial, 
and finally of Dominion notes. 

During the session of 1848-49 Hincks introduced and the 
assembly passed, in spite of the protests of the banks, a series 
of ten resolutions dealing with the whole subject of the pro- 
vincial finances. Two of the resolutions authorized the issue 
of provincial debentures to the extent of 250,000 currency, 
or $1,000,000. Of this 50,000 might be in denominations 
less than 10 or $40. Such debentures were to be payable 
cither on demand or at some future date, and either with 
or without interest. These debentures or notes were to be 
receivable in all payments due to the government, and when 
so received might be either re-issued or cancelled, and others 
issued instead. Thus was laid the foundation for a per- 



272 CURRENCY AND BANKING, 1840-1867 

manent element of government paper in the currency of the 

country. But, although the principle had been established, 

the returning prosperity of 1850 enabled the government to 

forgo its privilege, and provincial paper ceased for a time 

to be a concrete factor in Canadian currency. 

~^ The severe financial crisis through which the whole country 

| had passed from 1847 to 1850 had led to many bankruptcies 

\ and the loss of much capital on the part of the banks, although 

; no banks had failed. In consequence discounts were greatly 

; curtailed, and the banks were blamed for aggravating the 

; distress of the country. 

One outcome of the situation and of the success of the 
brief experiment with a provincial paper money was a revival 
of interest in the project for a government bank of issue. 
The system of free banking which had been developing with 
considerable success in New York State for the past ten 
years began to attract attention in Canada. Its central 
principles are now embodied in the national bank note system 
of the United States. This system was closely akin, in 
principle at least, to the provincial bank of issue advocated 
by Lord Sydenham and supported by Hincks and William 
Hamilton Merritt. This latter gentleman vigorously sup- 
ported the proposal to introduce the free banking system 
into Canada, as it promised, on the one hand, a sound basis 
for the issue of bank notes, and, on the other, a demand for 
government securities. In June 1850 Merritt introduced a 
government measure for the establishment of free banking 
in Canada. To prepare the ground for this system, it was 
necessary to prohibit the issue of anything in the way of 
promissory notes intended to act as currency by other than 
the chartered banks, or those supplied under the terms of 
the proposed Free Banking Act. 

All parties, whether individuals or corporations, com- 
plying with the requirements of the act as to capital, etc., 
who delivered to the receiver-general approved public securi- 
ties to the amount of 25,000 currency, or $100,000, bearing 
interest at six per cent, would receive a like amount in 
notes for circulation ; these notes to be printed from plates 
furnished at the expense of the banks receiving them, but to 



NOTE-ISSUING PRIVILEGES 273 

be kept by the receiver-general, as is required at present in 
the United States. So long as these notes were in general 
circulation and redeemed on demand by the bank issuing 
them, they might be received in all payments due to the 
government. Should any bank fail to redeem its notes, the 
government on being duly notified would prepare to do so. 
Each bank established under the act was required to send 
in detailed half-yearly reports of its capital and business, 
in much the same form as that prescribed for the chartered 
banks. 

Most of the current criticisms of the measure anticipated I 
the driving out of the chartered banks by the free banking j 
system. The contrary, however, was the tendency ; inas- 
much as the new form of banking not only involved the 
locking up in comparatively low-interest-bearing securities 
of the total amount of the authorized note issue, not all of 
which could be in circulation at once, but the keeping on 
hand of an additional amount of idle specie to redeem such 
current notes as might be presented. 

It is quite true, from the point of view of the note-holding 
public, that the free banking system was much the safer ; 
but where there was little accumulated capital in the country 
willing to accept a low rate of interest, the elastic system of 
note issue already established in Canada was much more 
suited to the existing needs of the country. 

The Free Banking Act having become law, the only exist- 
ing bank to avail itself of the new system was the Bank of 
British North America, which adopted it merely to enable 
it to issue notes down to the one dollar limit. Its charter 
had restricted its issue to ^i currency or four dollars. Three 
new banks, however, took advantage of the act to come into 
existence namely, the Molsons Bank, the Zimmerman 
Bank, and the Niagara District Bank. The last had pre- 
viously obtained a charter, but was unable to secure the 
necessary funds to enable it to start business. 

Perceiving that the chartered banks would not adopt the 
free banking system, the inspector-general introduced further 
legislation with a view to inducing them to place part, at 
least, of their circulation on the basis of provincial securities. 

K 



VOL. V 



274 CURRENCY AND BANKING, 1840-1867 

The chief inducement was that they would thereby escape 
taxation on their note issue. The banks, however, still 
declined to respond. 



I 



IV 

DECIMAL CURRENCY 

N 1850 the United States reduced by twenty per cent 
the currency value of certain Spanish and Mexican 
coins which had been flowing into the country ; these 
were the quarter, eighth, and sixteenth dollar pieces. In 
future these were to pass for twenty cents, ten cents, and 
five cents respectively. As these coins were accepted in 
Canada as legal tender to the extent of ten dollars, it was 
necessary that a similar rating to that adopted in the United 
States should also be established in Canada. Accordingly 
an act was passed making the necessary change in the ratings 
of these coins. By another currency amendment act the 
ratings of the dollar and its half were changed from 53. id. 
and 2s. 6|d. to 55. and 2s. 6d. respectively. This act also 
authorized the issue, under the authority of the governor 
in council, of silver coins of the value of $i, 5oc., 25c., 
2oc., loc. and 5c. Under the corresponding currency 
denominations these were 53., 2s. 6d., is. 3d., is., 6d., 3d. 
A supply of gold coins was also authorized corresponding 
to the $5 and $4 or l currency values. 

In a memorandum accompanying these acts on their 
reference to the home government, Hincks enlarged upon 
the advantage of adopting a uniform currency throughout 
British North America and of having it assimilated to that 
of the United States. During this period of 1850-51 there 
was much desire throughout Canada for reciprocal trade 
relations with the United States. The passing of this 
currency act led to further interesting and instructive contro- 
versy between the British Lords of the Treasury and Hincks 
over the respective rights of the home and colonial govern- 
ments to deal with currency standards and establish coinages. 
Hincks argued the colonial side of the question with great 



DECIMAL CURRENCY 275 

ability and clearness, and was supported by both parties in 
the Canadian assembly. Thus, although his measure was 
disallowed on technical grounds, the principle of colonial 
authority to deal with currency matters was never afterwards 
seriously questioned. While, therefore, no Canadian pro- 
vincial coinage was established at this time, the way was 
prepared for it. The home government was at last convinced 
that it would be impossible to force upon Canada the British 
sterling standard, since the whole business of the country, 
including its banking, was being done on the basis of the 
decimal system of dollars and cents. 

Immediately after the disallowance of the currency act 
of 1850 Hincks set about introducing a new and more com- 
prehensive measure, with the object, also, of securing a 
uniform system throughout British North America. He 
entered into communication with the executive governments 
of Nova Scotia and New Brunswick, and found that they 
were prepared to recommend the necessary measures in their 
respective provinces. The most important of the resolutions 
which Hincks introduced in 1851 was that declaring the 
expediency of adopting the decimal system of dollars and 
cents as the basis of the provincial currency with a corre- 
sponding coinage. An act based on these resolutions was duly 
passed, establishing a decimal system of coinage in both gold 
and silver, although gold was made the standard, the silver 
coins being legal tender only to ten dollars. It was provided 
that as soon as convenient the provincial accounts should be 
kept in dollars, cents and mills. At the same time the 
British gold sovereign was accepted as the bullion standard, 
being rated at $4.86!, or i, 43. 4d., currency. A clerical 
oversight in drafting this act led to its being returned from 
Britain, and the British Treasury took advantage of the oppor- 
tunity offered to present still another memorandum in the 
hope that even at the eleventh hour they might be able to 
persuade Canada not to adopt the American monetary system. 
They no longer objected to the decimal system, but wished 
it to be based on the pound currency and not on the dollar 
as a unit. This unit it was proposed to name a ' Royal,' 
to be henceforth represented by a gold coin with subsidiary 



276 CURRENCY AND BANKING, 1840-1867 

decimal silver and copper coins to be named shillings and 
marks. Hincks was at first inclined to meet his critics of the 
British Treasury half-way, but the general opinion of the 
legislature and of the business interests of the country was 
so strongly in favour of the system of dollars and cents that 
he gave way, and on that basis the new measure ultimately 
became law in 1853, embodying the chief features of the 
previous act. The British sovereign and American dollar 
were made unlimited legal tender, the former at $4.86$ 
and the latter at $i. Halifax currency was not abolished 
as a conventional money of account, but the decimal system 
of dollars and cents was formally legalized as the basis of 
official and business accounting. 

Hincks went out of power in 1854 just after the formal 
approval of his currency act by the home government. 
Under the new government there was some delay in bringing 
the act into operation. No coins were struck on the new 
basis as authorized. In 1857, however, a new act was passed 
requiring all government accounts to be kept, and all accounts 
rendered to the government to be stated, in dollars and cents 
without the option of using Halifax currency. This act 
came into force on January I, 1858, and from that time 
dates the formal adoption of the decimal system of currency 
in Canada. As this system had been followed for years by 
the banks and the majority of the business houses, little 
change was experienced outside some of the government 
offices. 

About midsummer 1858 the first instalment of new 
Canadian silver and copper coins was received from the 
Royal Mint. This shipment consisted of $100,000 in twenty- 
cent pieces, $75,000 in ten-cent pieces, $75,000 in five-cent 
pieces, and $50,000 in one-cent pieces. The British shilling, 
then only a token coin in Canada as in England, being 
conventionally used as twenty-five cents, will account for 
there being no twenty-five-cent pieces sent in this first ship- 
ment. No further changes in the Canadian currency took 
place until after Confederation. 



THE BANKS AND SPECULATION 277 



THE BANKS AND SPECULATION 

DURING the remarkable economic expansion of Canada 
from 1850 to 1857 the banks found it necessary to 
face many new situations. They had constant 
temptations to overstep the bounds of legitimate banking 
with every prospect of securing large gains at little risk. 
From these profits they hoped to recoup the losses they 
sustained during the panic of 1847-48. The two chief lines 
of speculative enterprise at the time were 



stocks, and the banks began to be involved in both. When 
HieTtoom collapsed injSST. the banks of Western Canada 
in particular found themselves in a most embarrassed position. 
Concealing their real condition for a number of years, they 
made strenuous efforts to liquidate their holdings in wild 
lands and railway stocks. The revival of temporary pro- 
sperity as the result of the American Civil War served to 
postpone for a few years the inevitable collapse in a number 
of cases. 

When the Hincks administration went out of power in 
1854, the new government, with William Cayley as inspector- 
general, was inclined to favour the older system of chartered 
banks. At the same time, with a view to maintaining a 
domestic market for public securities, Cayley undertook to 
require from all new banks to be established, and from the 
existing banks in the case of increases of capital stock, that 
they should hold at least one-tenth of their capital in pro- 
vincial or municipal debentures. While this new measure 
did not ensure the solvency of a bank, or protect the note- 
holders, it led to the creation of a number of new banks willing 
to accept these terms, but otherwise of questionable advantage 
to the country. No further banks were established under 
the Free Banking Act, and the three already established 
under it obtained charters on the easier terms of the new 
government. The Bank of British North America alone 
continued under the Free Banking Act in order to preserve 



278 CURRENCY AND BANKING, 1840-1867 

its privilege of issuing notes of lower denominations than 
;l currency. 

(The bank expansion of the fifties began with an increase 
in the capital stocks of the Bank of Montreal and the Quebec 
Bank in 1853. At the time Hincks refused to sanction the 
chartering of any new banks not coming under the conditions 
of the Free Banking Act. With the change of government 
and the relaxing of the requirements, quite a boom in bank 
charters ensued. In 1855 the Bank of Montreal obtained a 
further extension of capital, increasing its authorized stock 
from $4,000,000 to $6,000,000 ; one-tenth of this was required 
to be invested in provincial or municipal debentures ; monthly 
instead of half-yearly returns were henceforth required, and 
the term of the charter was extended to 1870 ; minor changes 
as to the transferring of shares, etc., were introduced. The 
new features of the Bank of Montreal charter were em- 
bodied in practically all the charters and amendments passed 
during this period. The capital of the Bank of Upper 
Canada and of the Commercial Bank was extended in each 
case to $4,000,000, with the new clauses added. The charters 
of the City Bank and the Banque du Peuple were also 
amended and their authorized capital increased. The Mol- 
sons, Zimmerman, and Niagara District Banks obtained new 
charters transferring them from the Free Banking Act to all 
the privileges of the ordinary banks, while their authorized 
capital stock was greatly increased. In fact, under the new 
system only one-tenth of the capital formerly required to 
be held in government securities was now required. Hence, 
on the basis of the securities previously held, the authorized 
capital of these three banks was increased fivefold. Among 
the other banks established during this period were the Bank 
of Toronto, promoted by the milling interests of Western 
Canada, the St Francis Bank, and the Eastern Townships 
Bank with its head office at Sherbrooke. One of the pro- 
moters of this latter institution was A. T. Gait, who after- 
wards, in 1858, succeeded Cayley as inspector-general. 1 
These banks were chartered during the session of 1854-55, 

1 By act of parliament in 1859 this office was designated ' minister of Finance.' 
See ' The Federal Government ' in section iv. 



THE BANKS AND SPECULATION 279 

the first session of the new coalition government. The Bank 
of Brantford petitioned for a charter during this session, 
but did not obtain it until 1857. 

During the session of 1856 two new banks were chartered : 
the Union Bank, with headquarters at Hamilton, and the 
Colonial Bank, established in Toronto and destined to have 
a brief and not very reputable career. Two other banks 
solicited charters in 1856, but only at a later date was their 
importunity rewarded. These were the Bank of Western 
Canada and the Bank of the County of Elgin. 

During the Crimean War period of high prices the fanners 
of Canada were acquiring large sums of money for their wheat 
and other agricultural produce. This money was chiefly in 
the form of bank notes. Few farmers were as yet accus- 
tomed to make deposits with the banks. They simply kept 
their money in their homes, with the result that very large 
quantities of bank notes were hoarded throughout the 
country. As these were practically withdrawn from circula- 
tion, although the note issue of the banks was exceptionally 
large, there was a certain stringency in the currency supply. 
With so large an amount of notes outstanding, the banks 
were inclined to be more cautious in their discounting. An 
epidemic of burglaries throughout the rural districts caused 
the farmers to open deposit accounts with the banks, and 
materially changed agricultural business methods for the 
future. 

In 1855 an unsuccessful effort was made to compel the 
banks by law to accept their own notes at par at any of their 
branches throughout the country. Hitherto they had been 
accepted only at the offices at which they were issued, being 
subject at other branches to the discount prevailing in the 
district. The influence of the banks was sufficient to prevent 
the passage of the proposed measure for some years. 

The speculative features which had crept into the business \ 
of the banks in Canada during the boom period from 1850 ' 
to 1856, and which had developed all the more extensively \ 
on account of the previous good reputation of the leading 
banks, were first revealed to the public in the crisis of 1857- 
1858. This crisis, it is true, did not originate in Canada, but 



28o CURRENCY AND BANKING, 1840-1867 

(in Britain, from whence it passed to the United States, and 
from both to Canada. The complete dependence of Canada 
upon Britain for the greater part of its capital, and the ex- 
tensive provincial, municipal and corporate undertakings 
which were then under way, caused any disturbance in the 
British financial market to be immediately reflected with 
more or less serious consequences in Canada. 

One of the last warnings issued by the British Treasury 
in approving the extended charters of the older Canadian 
banks was to the effect that, while in general terms the 
Canadian banks were restricted to the legitimate business 
of banking and were prohibited from dealing in real estate 
or merchandise, they were permitted to accept such property 
as collateral security and to hold it indefinitely when forfeited. 
Cayley, so late as March 1857, assured the Lords of the 
Treasury that the prohibitive clauses in the Canadian bank 
charters were absolutely effective. Yet at the very time 
of giving this assurance the leading Canadian banks were 
deeply involved in real estate and railway speculations, as 
was soon afterwards to be revealed. 

With every new bank charter granted, Cayley and his 
associates in the government were more careless as to the 
bona fides of the promoters. The Ontario Bank, which was 
chartered in 1857, was in its origin and for years afterwards 
an eminently respectable institution. Of a very different 
character was the International Bank, with headquarters in 
the village of Cayuga. The latter had an authorized capital 
of $1,000,000, but only $100,000 was to be paid in before the 
bank began business. At the following session of parliament 
both the International and the Colonial Banks obtained alter- 
native locations for their head offices ; the former having 
Toronto as well as Cayuga, and the latter Montreal as well 
as Toronto. Under the existing law as to the redemption of 
note issues, the subsequent developments of these institutions 
lent colour to the suspicion that they were simply practising 
ja common American device to secure the maximum of note 
V issue with the minimum of note redemption. However, the 
government of the day carelessly lent itself extensively to the 
designs of such institutions. 



I: 



THE BANKS AND SPECULATION 281 

During the same session of 1857 the Bank of Brantford, 
an institution of much the same nature as those above referred 
to, was also chartered. During 1858, while the country was 
still suffering from the crisis, another new bank, under the 
title of the Bank of Canada, was chartered. Cayley, the 
inspector-general, and some of his colleagues and friends 
were among its promoters. The Eastern Townships Bank 
secured a reduction of its paid-up capital to $100,000, in 
order to enable it to begin business. 

The functions served by the banks during the prosperous 
period of the fifties, the nature of the resources on which 
they granted their discounts, and the consequent funds upon 
which they had to draw when called upon to meet a crisis, 
are well illustrated in the following returns giving the relative 
positions of the chartered banks in 1850 and 1856 : 

1850 1856 

Capital paid in . . $2,775,880 $4,804,768 

Coin and bullion . . 384,111 886,410 

Notes in circulation . 1,309,932 4,199,211 

Deposits .... 1,524,267 2,803,238 

Loans . . . 4.374.898 9.6"i3*5 

One-tenth of the bank capital being invested in government 
securities and available only in the event of bankruptcy, 
and only part of the small amount of coin and bullion on hand 
being unlimited legal tender, it is obvious that the remainder 
of the capital and the notes and deposits were loaned to the 
public to the extent of eight-ninths in 1850 and twelve- 
thirteenths in 1856. The banks had therefore to depend 
almost entirely upon the withdrawal of their accommodation 
to the public when it was necessary to meet a demand for 
the redemption of their notes ; but it was just at such times 
that the customers of the banks were most in need of accom- 
modation to tide them over their difficulties. The financial 
condition of the banks, therefore, once a crisis had begun, 
compelled them more or less to aggravate the very distress 
from which they were endeavouring to protect themselves. 
It may be observed, also, that the note circulation played 
a large part in the discounting power of a bank. Hence, in 



282 CURRENCY AND BANKING, 1840-1867 

times of crisis, note redemption was a primary factor in re- 
ducing the facilities for bank accommodation. 

During the prosperous period from 1850 to 1857 there 
was no real occasion for continuing the long credits formerly 
extended to the farmers by the retail merchants. They 
insisted, however, upon the customary extension of credit, 
more particularly as they were using their large profits in 
acquiring more land with a view to still further profits. 
When the collapse in land values took place, the farmers were 
unable to meet their obligations to the storekeepers, and 
they in turn required renewals alike from the banks and the 
wholesalers, and the latter applied to the banks for assistance. 
But when the banks themselves were found to be involved 
n unsaleable real estate and depreciated railroad securities, 
:hey too were forced to contract their operations to protect 
heir note issues. Hence once more we find the crisis aggra- 
'vated instead of allayed by the banks. 

In seeking for a remedy for such recurring situations, 
attention was naturally directed to the question of paper 
money and its functions. Plainly it should not be liable to 
shrinkage in volume just when it was most needed, as in 
times of crisis. But bank notes, being redeemable on demand, 
were plainly only fair-weather craft ; hence something must 
be sought which would weather the storm. Only an irre- 
| deemable paper currency issued by the government seemed 
to meet the requirements. At this time, therefore, and at 
intervals for years afterwards, there was a strong and often 
active party in Canada urging upon the government the 
necessity for establishing an irredeemable paper currency. 
This would be legal tender in all payments as between 
individuals and be accepted for all government dues. One 
of the chief advocates of such a policy at this time was 
Isaac Buchanan, afterwards president of the council in the 
Tach6-Macdonald ministry. In subsequent years this was 
known as the ' rag baby ' policy. Its chief practical influence 
was in promoting 'the "extension from time to time of the 
issue of Dominion notes, especially of the amounts not 
secured by gold deposits. 



GALT AND CANADIAN BANKING 283 

VI 
GALT AND CANADIAN BANKING 

FiSsS, while the financial crisis was still felt, A. T. 
Gait succeeded Cayley as inspector-general. Impressed 
by the shrinkage of one-third in the bank circulation 
during 1857, he began to lay plans once more for the establish- 
ment of a provincial bank of issue on the lines laid down by 
Lord Sydenham. As usual, the embarrassment of the pro- 
vincial finances was a factor in the plans. Early in 1859 
a special committee of the legislature was appointed to con- 
sider the whole subject of banking and currency. 

Meanwhile, with the gradual commercial recovery towards 
the close of 1858, charters were sought for the following new 
banks : the Bank of Western Canada, La Banque Nationale, 
the Chartered Bank of Canada and the Provincial Bank of 
British America. The first three ultimately received charters, 
the name of the third being changed to that of the Royal 
Bank. The Provincial Bank would have received a charter 
but for the timely exposure of the career of its chief promoter, 
whose purpose evidently was to provide Canadian bank 
notes for circulation in the Western States. 

The laxity of the government in the granting of bank 
charters, and the suspicious use which was being made of 
some of them, gave rise to a growing uneasiness in financial 
circles. As was pointed out by the manager of the Bank of 
Montreal in his evidence before the banking committee, it 
was possible, by investing $10,000 in municipal debentures 
and the merely nominal payment of $100,000, to establish 
a bank with the right to issue to the extent of $110,000. 
Gait suggested that any new bank before starting business 
should pay into one of the established banks the minimum 
of $100,000, which was supposed to be paid in cash before a 
new bank could begin business. 

The criticism of the government for its laxity in granting 
bank charters was enforced with unpleasant vigour before 
the close of 1859. On October 27 the International Bank 
politely intimated to the public that it would be necessary 



284 CURRENCY AND BANKING, 1840-1867 

to suspend business for a few days. As the obligations of 
the bank were chiefly in note issues, public excitement was 
at once aroused, and a run upon the Colonial Bank ensued. 
The latter held out bravely for nearly two hours before 
collapsing. Neither institution made any attempt to resume 
business. Their note issues amounted to between $200,000 
and $300,000, chiefly circulating in the United States. 
Although there was a temporary run on several other institu- 
tions, no further bank failures took place at this time. 

To meet the criticism of the government's bank policy, 
Gait brought forward his new scheme for a provincial bank. 
In its essential features it was simply a revival of Lord 
Sydenham's bank of issue. Early in the session of 1860 
Gait introduced a series of resolutions on the subject of a 
provincial Treasury department. The central points were 
that the redemption in specie of all paper money issued in 
the province should be guaranteed by the government. To 
ensure this there was to be established a provincial Treasury 
department with the sole right to issue paper money. This 
paper currency would be redeemable in specie on demand, 
and would be legal tender. At least one-fifth the amount 
of the authorized issue should be held in specie, and another 
fifth in government securities. Any further issue beyond 
the amounts specified which might become necessary should 
be wholly covered by specie or government securities. The 
Free Banking Act was to be repealed, and no banks there- 
after to be chartered should have the right to issue notes. 

Until the expiration of their charters the existing banks 
could continue the issue of notes under the terms of their 
charters. Provision was made, however, for the surrender 
of the note issue and the obtaining by the banks of a supply 
of provincial notes to the extent of the average note circula- 
tion. For such notes the banks would pay interest at the 
rate of three per cent on three-fifths and four per cent on the 
remainder. The banks, however, must deposit with the 
Treasury specie and provincial securities to the extent of 
two-fifths of their annual circulation, the Treasury also to 
have a first claim on the assets of the banks. The banks 
might keep deposits with the Treasury department, but 



GALT AND CANADIAN BANKING 285 

cheques against these could be drawn only in favour of other 
chartered banks, and thus serve to liquidate balances as 
between the banks. The net effect of Gait's plan would 
have been equivalent to the extension of the present Dominion 
note issue to cover the whole of the paper currency of the 
country. 

It is obvious that the inducements offered to the existing 
banks to give up their note issue were very slight, and none 
of them responded to the invitation. The scheme also 
developed a strong political distrust of the powers to be con- 
ferred upon the party in office. The bankers objected to it 
as destroying the elasticity of the currency. As they pointed 
out, the difference between the autumn and spring circula- 
tion amounted as a rule to about one-quarter of the total 
note issue. Under the proposed plan the banks would 
require to furnish specie or securities for the extra autumn 
circulation, and a shortage of currency would be severely 
felt by the agricultural and commercial interests. The 
criticism of his measure proved so effective that Gait aban- 
doned it for a time. The business of the country revived 
during the American Civil War on account of the large demand 
in the United States for Canadian produce, but the revenue 
of the government suffered on account of the diminished 
imports from the United States. Hence Gait was forced 
to turn his immediate attention to financial rather than to 
currency questions. 

During the period of the Civil War the Canadian banks 
to a large extent took the place of the Eastern American 
banks in moving the crops from the North-Western States. 
In 1 86 1 the Bank of Montreal established an agency in 
Chicago which greatly facilitated the circulation of its notes 
and its exchange business with New York. In that year it 
was estimated that upwards of $3,000,000 in Canadian bank 
notes were put in circulation in the North-Western States. 
In 1862, when the American banks were forced to suspend 
specie payments, the greater part of the Canadian notes 
were returned for redemption in specie. As a result the 
leading Canadian banks suffered temporary embarrassment, 
and as usual were forced to curtail discounts. This in turn 



286 CURRENCY AND BANKING, 1840-1867 

led to a renewed criticism of the banks and the revival of 
the agitation, still led by Buchanan, for the issue of an 
irredeemable paper currency. 

Owing to the development of a balance of trade against 
the United States during the Civil War, large quantities of 
American silver, once more cheaper than gold, passed into 
Canada in payment for supplies. About the middle of 1862 
the Canadian banks began to refuse this silver at par. They 
afterwards refused it on any terms, a rather short-sighted 
policy, for it simply forced the silver to remain in circulation 
to the displacement of an equivalent amount of bank notes. 
Efforts were made, through some of the city boards of trade, 
to enforce a trade discount of five per cent on the American 
silver, but this arrangement was very irregularly observed. 
Notwithstanding many propositions and endless discussion 
the difficulty continued even after the close of the Civil 
War, and was effectively dealt with only when Sir Francis 
Hincks returned to the Finance department in 1870. 

From 1862 to 1864 the liberal party was in power, and 
owing to the increasing financial difficulties of the Bank of 
Upper Canada the government account was transferred, 
early in 1864, to the Bank of Montreal, then under the manage- 
ment of that noted financier, E. H. King, who exercised a 
remarkable influence upon both the provincial and corporate 
finances of the country. The bank rendered very material 
assistance to the government at a rather critical period. 

When the conservative party returned to power in 1865, 
Gait once more took charge of the Finance department. 
Owing to the inability of the government to withdraw its 
funds from the Bank of Upper Canada the provincial Treasury 
was in a very embarrassing condition. Gait had recourse 
once more to his plan of the government monopoly of the 
note issue. He now proposed that the banks on surrendering 
their note issue should receive five per cent interest upon 
their average circulation. To replace the bank circulation, 
government notes to the extent of $5,000,000 were to be 
authorized, redeemable in specie at sub-treasury offices in 
Montreal and Toronto. As usual, the notes were to be 
secured partly by specie and partly by provincial debentures, 



GALT AND CANADIAN BANKING 287 

in the proportion of twenty per cent of specie and eighty 
per cent of debentures. 

Gait's modified scheme, though more favourable to the 
banks than his former one, again met with much criticism, 
more particularly on the part of the western banks, which had 
the benefit of a larger and more flexible note issue. The 
minister of Finance found it necessary to make a compromise 
with the opponents of his measure. The policy of establishing 
a government monopoly of paper currency was abandoned. 
The government promised that if the necessary $5,000,000 
could be procured as an ordinary loan, it would not make 
use of the note-issue powers to be conferred by the proposed 
measure. On these terms the bill was permitted to become 
law. It conferred upon the government the power to issue 
provincial notes payable in specie on demand to the extent 
of $5,000,000. It made provision, also, for the surrender 
of their note issue by the banks on condition of their receiving 
five per cent interest on the circulation surrendered, and 
enabled the banks to exchange their public debentures for 
provincial notes. After Confederation this act was revised 
somewhat, and its application extended to the whole 
Dominion. 

Meantime the government, failing to secure the whole 
of the $5,000,000 loan, made arrangements with the Bank 
of Montreal in August 1866 to surrender gradually its note 
issue, to be replaced by provincial notes under the terms of 
the act. As part of the bargain the bank became the finan- 
cial agent of the government for the issue and redemption 
of the provincial notes, and received a commission of one 
per cent on the average amount of provincial notes in circula- 
tion. The bargain proved to be a very profitable one for 
the Bank of Montreal. It already held such a large amount 
of government securities that their exchange for provincial 
notes would not reduce its banking funds, nor would it on 
its own account require to hold specie for the redemption of 
these notes ; while it received a commission of one per cent 
on the total amount in circulation, whether held by itself 
or other banks. 

Under cover of assisting the government the Bank of 



288 CURRENCY AND BANKING, 1840-1867 

Montreal prevailed on most of the other banks to take large 
blocks of the provincial notes, which as legal tender could be 
substituted for their specie reserves. The convenience of this 
arrangement being gradually recognized by the banks, the 
net result of the change has been the substitution of govern- 
ment paper for the specie reserves formerly held by the 
banks, the responsibility for maintaining the national specie 
reserve being thus transferred from the banks to the govern- 
ment. The full effect of this important change in Canadian 
currency was realized only after Confederation. 

Once the temporary embarrassment of the government, 
which had led to the arrangement with the Bank of Montreal, 
was relieved, the exceptionally strong position in which it 
placed the Bank of Montreal was fully realized. In conse- 
quence of its power and prestige the bank was paid the 
usual compliments of respect, fear, jealousy and abuse. 



r 



VII 
NOTABLE BANK FAILURES 

only remains to say a word as to the two notable 
bank failures just before Confederation. Up to 1866 
no Canadian bank of any importance had failed, a 
matter of considerable pride and some excusable boasting 
when comparisons were made with banking conditions in 
the United States. The very criticism of the larger banks 
as exceptionally prosperous institutions, whose wealth and 
power were almost dangerous to the lesser interests of the 
country, only strengthened the popular confidence in their 
stability and financial soundness. 

In 1850 the Bank of Upper Canada once more became 
the sole agent of the government, and continued so until 
1864. During the early fifties it held large balances on 
government account, ranging from half a million to nearly 
two millions. Both the Bank of Upper Canada and the 
Commercial Bank, its chief rival in Upper Canada, were 
connected with the leading railroad enterprises which flour- 
ished in the fifties. The Bank of Upper Canada naturally 



NOTABLE BANK FAILURES 289 

employed the heavy government balances on deposit with 
it to extend its discounts. Unfortunately, many of these 
were connected with land speculations and inflated milling 
enterprises. When the crisis of 1857-58 developed, the bank 
found many of its largest customers unable to meet their 
obligations, and liquidation could not be forced without 
disastrous consequences alike to many large industries and 
to the bank itself. Owing to the intimate relations between 
the government, the Grand Trunk Railway, and the bank, 
disputes arose as to whether the bank or the government 
was liable for certain large sums advanced to the railroad, 
which it was unable to repay. Hincks, Cayley and Gait 
were all more or less involved in these transactions, although 
the difficulties of the bank occurred during the administra- 
tions of the two latter. In the hope of saving the situation 
the government agreed that its balance at the bank should 
not be reduced below a certain minimum. In 1861 this was 
$1,200,000. These arrangements remained for the time 
among the state secrets. 

As time passed, many of the doubtful debts due to the 
bank became bad debts, and bad debts became hopeless 
losses. But, bravely classifying these overdue accounts 
among the assets of the bank, and representing the exten- 
sive, though involuntary, government deposits as spon- 
taneous evidence of confidence in the bank, the institution 
was made to present at successive annual meetings a fairly 
respectable appearance on paper. So firmly rooted was 
the popular confidence in the financial resources of the 
Bank of Upper Canada that, contrary to all precedent, 
the notes of the bank were the last instead of the first of 
its obligations to suffer from the numerous reflections on 
its stability which began to find public expression. The 
first fairly frank statement as to the bank's affairs was 
made in 1861, when Robert Cassels became general manager, 
replacing Thomas Ridout. The admitted losses at this time 
amounted to $1,500,000, or nearly half the capital of the 
bank, but nothing was said as to the extent to which the 
government was carrying the bank. When the coalition 
government went out of power in 1862, the real situation 

VOL. V T 



290 CURRENCY AND BANKING, 1840-1867 

was revealed, and from that time the fate of the bank was 
sealed. 

On January i, 1864, the government account was trans- 
ferred to the Bank of Montreal, but little cash went with it, 
although the Bank of Upper Canada was indebted to the 
government to the extent of nearly $1,500,000. Of this 
amount not more than $200,000 was ultimately realized. 
After living on sufferance for a couple of years longer, this 
once powerful and respected institution passed into history 
in September 1866. 

The decline and fall of the other great bank of Western 
Canada, the Commercial Bank, presents a somewhat different 
and simpler story. It was less involved in real estate specula- 
tion than the Bank of Upper Canada, but it was equally 
concerned, in its later years, in railroad financing and in com- 
mercial speculations. Not having a large government deposit 
to draw upon, the Commercial Bank lacked the opportunity 
to make so extensive and ruinous a failure as its favoured 
rival. The fall of the bank was due to two chief causes: 
railway speculation, and the undermining of public confidence 
due to the failure of the Bank of Upper Canada. 

Through its connection with the Great Western Railway 
the Commercial Bank became involved in the finances of the 
Detroit and Milwaukee Railroad, an affiliated institution 
for which, however, the Great Western Railway manage- 
ment declined to be financially responsible. A lawsuit 
between the bank and the Great Western Railway ensued, 
which revealed to the public the awkward situation of the 
bank, with nearly half its capital involved in this account. 
After a ruinous and inconclusive lawsuit an unsatisfactory 
settlement was reached in 1866. This coincided with the 
final collapse of the Bank of Upper Canada and destroyed 
public confidence in the older banks. Extensive withdrawals 
of accounts from the Commercial Bank exhausted its readily 
available funds, and the financial stringency of the time 
prevented the rapid liquidation of its general assets. Apart 
from the losses on its railroad securities, the Commercial 
Bank had lost about $1,100,000 in ordinary trade, which 
was not more, however, than the Bank of Montreal was 



NOTABLE BANK FAILURES 291 

forced to write off to meet corresponding losses, chiefly in 
Western Canada, where the epidemic of prosperity during 
the fifties had been most severely felt. The refusal of assist- 
ance from the government through the Bank of Montreal 
forced the suspension of the bank in October 1867. An 
investigation of its affairs proved the bank to be practically 
solvent, but simply drained of its liquid assets. The note- 
holders and depositors were safe enough, but the stock- 
holders were heavy losers. After various proposals as to 
the revival of the bank, or its amalgamation with another 
institution, arrangements were made whereby the Merchants 
Bank of Montreal took over its assets at one-third of their 
par value, making a very profitable bargain. 

Before Confederation Canada had passed through its 
first great boom period, and in the subsequent reaction had 
lost two of its three largest and oldest banking institutions. 
These experiences caused, for a generation at least, a notable 
change in the popular attitude towards the banking institu- 
tions of the country. 





WESTERN EXPLORATION 

1840-1867 



WESTERN EXPLORATION, 1840-1867 

I 

THE NORTH-WEST PASSAGE 

SIR JOHN FRANKLIN'S LAST VOYAGE 

THE course of north-western exploration after 1840 
lies largely in the vast region north of 60, and 
from Hudson Bay to Alaska. Between 1840 and 
1867 tne few gaps left in the exploration of the northern coast 
of the continent were filled ; much additional information 
obtained as to the character and extent of the great Arctic 
islands, and new discoveries made in the interior of the main- 
land, particularly in what now forms the Yukon district. 
With these may be considered several important surveys 
of the country west of Lake Superior, expeditions into the 
Rocky Mountains, and transcontinental journeys. 

Starting in the extreme north, interest centres naturally 
in that most tragic incident in the whole history of Arctic 
exploration, the fate of Sir John Franklin and his crew. 
Not content with the notable results of his two land expedi- 
tions to the northern coast of America, Franklin, after 
several years' quiet service as governor of Tasmania, accepted 
the command of another expedition, by sea, to search for the 
North- West Passage. 

He sailed in the Erebus with her consort the Terror, in 
May 1845, provisioned for three years. Towards the end of 
July the ships were seen in Baffin Bay by a whaling captain 
named Dannett. The remainder of the voyage and its ter- 
rible conclusion are known only by means of scraps of evidence 
picked up here and there in the Arctic years afterwards, by 
one or other of the Franklin search parties. Franklin, his men 
and his ships were never again seen except by a few Eskimos. 



M6 



296 WESTERN EXPLORATION, 1840-1867 

The Erebus and Terror apparently sailed through Lancaster 
Sound and up Wellington Channel to 77 N. Returning to 
Beechey Island, Franklin wintered there. The following 
summer he sailed down between Prince of Wales Island and 
North Somerset, through Franklin Strait, and to Victoria 
Strait between Victoria Land and King William Land, 
where his ships were frozen in. Here he wintered, 1846-47, 
and on June n, 1847, he died on board the Erebus. 

The command of the expedition devolved upon Captain 
Francis Rawdon Moira Crozier, and when the summer of 
1847 passed without any sign of the ice breaking up, it was 
decided to abandon the ships and attempt to reach one of the 
trading posts of the Hudson's Bay Company. Provisions 
were running low, some of the officers and men had already 
succumbed to disease, and others were suffering. Taking 
with them all the provisions they could carry on sleds, 
Crozier and his men set out for the mouth of Backs River. 
Landing at Point Victory, King William Land, the following 
record was deposited in a cairn, and found there by Lieutenant 
William Robert Hobson in 1859 : 

April 25th, 1848. H.M. Ships Terror and Erebus were 
deserted on the 22nd of April, 5 leagues N.N.w. of this, 
having been beset since I2th September 1846. The 
officers and crews, consisting of 105 souls, under the 
command of Capt. F. R. M. Crozier, landed in latitude 
69 37' 42* N., longitude 98 41' w. This paper 1 was 
found by Lt. Irving, under the cairn supposed to have 
been built by Sir James Ross in 1831, 4 miles to the 
northward, where it had been deposited by the late 
Commander Gore, in June 1847. Sir James Ross' pillar 
has not, however, been found ; and the paper has been 
transferred to this position, which is that in which 
Sir James Ross' pillar was erected. Sir John Franklin 
died on the nth June 1847, and the total loss by death in 
the Expedition has been to this date 9 officers and 15 men. 
F. R. M. CROZIER, Captain and Senior Officer. 
JAMES FITZJAMES, Captain H.M.S. Erebus. 

And start on to-morrow, 26th, for Back's Fish River. 

1 Crozier's record was written on the margin of another deposited in Ross's 
cairn by Lieutenant Graham Gore, in June 1847. 



THE NORTH-WEST PASSAGE 297 

From Point Victory the retreat becomes a terrible record 
of suffering from disease and starvation. With such a large 
party, the scanty supply of provisions was soon exhausted, 
and that barren wilderness offered nothing to replenish it. 
Day after day they struggled forward, crawling around the 
west and south coasts of King William Land, their numbers 
diminishing daily. Some reached Point Ogle, and others 
Montreal Island, but none survived the desperate journey. 
Years afterwards, when the search parties made their way 
to Point Victory, they had no difficulty in tracing the path 
of the doomed men by graves and skeletons found everywhere 
along the route they had followed. As an old Eskimo woman 
said to Captain Francis Leopold M c Clintock, ' They fell 
down and died as they walked." And the irony of it all was 
that they were within less than one hundred miles of prov- 
ing the North-West Passage. Had the ice conditions been 
more favourable, the expedition would have completed the 
gap between the known waters east and west, and perhaps 
sailed successfully west along the coast to Bering Strait. 
But that was not to be. 

FRANKLIN SEARCH EXPEDITIONS 

Franklin had been provisioned to July 1848. When that 
year arrived with no sign of the missing explorer or his 
men, three search expeditions were sent out, one to follow his 
own supposed course through Lancaster Sound, the second 
to proceed through Bering Strait from the Pacific side, and 
the third to travel overland to the mouth of the Mackenzie 
River, and thence along the coast eastward. Sir James 
Clark Ross was appointed to the command of the first 
expedition, Captain T. E. L. Moore and Captain Henry 
Kellett to the second, and Sir John Richardson to the third. 
Incidentally, all three expeditions were to carry out such 
explorations of the Arctic coasts as might prove feasible. 

Sailing from England with the Investigator and Enterprise, 
Ross crossed Baffin Bay, traversed Lancaster Sound, and went 
into winter quarters at Port Leopold, on North Somerset. 
In the spring of 1849 he, with Lieutenant M c Clintock, 



298 WESTERN EXPLORATION, 1840-1867 

explored Prince Regent Inlet on the ice. Finding it impos- 
sible to get his vessels out of the ice until late in September, 
he returned to England, having accomplished nothing so far 
as the principal object of his voyage was concerned. 

Meantime Kellett and Moore were approaching the scene 
of their search from the opposite direction, by way of Bering 
Strait. The latter, in the Plover, was late in leaving England, 
and failed to get through Bering Strait in 1848. Kellett, in 
the Herald, was more fortunate, spending a month in Kotzebue 
Sound before returning to winter in South America. In the 
following year, 1849, both vessels passed Bering Strait and 
sailed eastward along the coast, but without accomplishing 
anything of importance in the way of geographical discovery, 
or anything whatever so far as the Franklin search was con- 
cerned. The Plover passed the winter of 1849-50 in Kotzebue 
Sound, and spent the next three or four years on the Arctic 
coast of the continent, with the same unsatisfactory result. 

Before describing Richardson's overland expedition, it 
may be convenient here to say a few words about that of 
Dr John Rae in 1846-47. Dr Rae, an officer in the service 
of the Hudson's Bay Company, left Fort Churchill in the 
spring of 1846, with the object of completing the survey of 
Regent's Inlet. He reached Repulse Bay in August, crossed 
what has since been known as Rae Isthmus to Committee 
Bay, and explored a portion of the coast. Finding the 
season too far advanced to complete his work, he boldly 
determined to winter on the barren shores of Repulse Bay. 
With the resourcefulness of a true pioneer, he built a house 
of stone and earth, and, failing driftwood, gathered quantities 
of the withered stems of a small plant that grew on the rocks 
to use as fuel. Deer furnished an abundant supply of venison 
for the winter's supply. Altogether, Rae and his party of 
fifteen men spent a fairly comfortable winter in a locality 
and under conditions which would probably have driven 
the majority of Arctic explorers to despair. In the spring 
he completed his survey of Regent's Inlet on foot, and 
returned in safety to Fort Churchill. 

When, therefore, Sir John Richardson was appointed to 
take command of the overland expedition in 1848, he thought 




JOHN RAE . 
From an engraving ' lilt Dominion Artkhts 



THE NORTH-WEST PASSAGE 299 

himself lucky in securing the co-operation of such an experi- 
enced and capable northern traveller as Dr Rae. They left 
England in March, sailed for New York, travelled thence to 
Montreal, and up the Lakes to Fort William. Following 
the fur-traders' route by way of Lake Winnipeg and the 
Saskatchewan, they reached Cumberland House on June 
13. Pushing forward on the following day to Frog Portage, 
and thence up the Churchill to Methye Portage, they 
descended the beautiful valley of the Clearwater to the 
Athabaska River, and arrived at Fort Chipewyan on July 1 1. 
As he was most anxious to reach the coast and survey it as 
far as possible eastward that season, Richardson lost no 
time at Chipewyan, but as soon as some necessary repairs 
had been made to the boats, set forth again on his long journey 
to the north. The Mackenzie was entered on July 20, and 
on the 3rd of the following month the expedition reached 
its mouth, and turned eastward along the coast. 

Parties of Eskimos were met with from time to time, but 
the firmness of the leaders prevented any trouble. Richard- 
son had hoped to cross Dolphin and Union Strait, and examine 
the south shore of Wollaston Land for traces of the Franklin 
expedition, but close-packed drift-ice made his plan imprac- 
ticable. The same discouraging condition brought the boat 
voyage to a termination soon after they reached Cape Hearne ; 
the boats had to be abandoned on the coast, and provisions 
and other necessary articles made up into sixty- or seventy- 
pound packs for the long and tiresome journey to the Copper- 
mine, and thence to winter quarters at Fort Confidence, 
which they reached without misadventure on September 15. 

During the winter Rae explored the country between 
the fort and the Coppermine, in order to select the best route 
for dragging a boat overland in the spring. Richardson 
busied himself with astronomical and other observations ; 
and the other members of the party found useful employ- 
ment in fishing, hunting, procuring firewood, and keeping 
the buildings in repair. Parties of Dogrib and Hare Indians 
visited the fort from time to time, especially when their pro- 
visions ran low. Richardson describes them as indolent and 
untruthful, but strictly honest in regard to property, and 



300 WESTERN EXPLORATION, 1840-1867 

inoffensive. No precautions were taken to guard knives 
and other small articles, and nothing was ever missed. New- 
comers would frequently enter the officers' quarters, and, 
1 crouching down against the wall, remain in perfect quiet- 
ness for an hour together, gazing at the books and other 
things exposed to view.' 

Early in June 1849 Rae set forth for the coast, with 
half a dozen men to form a boat's crew. Richardson had 
intended to continue the search himself, but as only one boat 
was available for the service, he had to choose between 
himself and Rae, and unselfishly surrendered the honour to 
his colleague, whose ' ability and zeal were unquestionable ; 
who was in the prime of life ; and whose personal activity 
and skill as a hunter fitted him peculiarly for such an enter- 
prise.' As the coast-line between the mouth of the Mackenzie 
and the Coppermine had been examined the previous season, 
Rae's work now was to examine the adjoining shores of 
Wollaston and Victoria Lands. 

He reached the banks of the Coppermine on June 22, and 
found it covered with solid ice. Five days later the party 
found it possible to embark. Again and again the explorers 
were held back by ice blockades, and fourteen days were lost 
in getting to Bloody Fall, a single day's journey under ordin- 
ary conditions. The sea was reached on July 14, and Rae 
turned west along the coast to where the boats had been left 
the previous autumn. The Eskimos had found and broken 
them up for the sake of the ironwork. The tents, oil-cloths 
and some of the sails, however, remained uninjured. A 
cache of pemmican and ammunition had also escaped the 
sharp eyes of the Eskimos. On the 3Oth Rae reached Cape 
Krusenstern, and as this was the most convenient point from 
which to make the traverse to Wollaston Land, he deter- 
mined to attempt the passage as soon as the ice conditions 
were favourable. Day after day, however, he waited in 
vain for a passage. A gale of wind would open a mile or 
two of clear water, but by the time hasty preparations had 
been made for embarking, the ice was again packed in a 
solid, impenetrable mass. Finally, to his deep mortifica- 
tion, Rae was compelled to abandon the attempt and turn 



THE NORTH-WEST PASSAGE 301 

back to the mouth of the Coppermine, which he reached on 
August 24. Eight days later he and his men were back once 
more at Fort Confidence. 

Meanwhile Richardson had left Fort Confidence, and 
after a somewhat difficult journey down Bear River, had 
reached Fort Norman on the Mackenzie. From here he 
ascended the Mackenzie to Fort Simpson, and was again 
at Fort Chipewyan on July 19. He arrived at Fort William 
on September 14, and about the end of the month was once 
more in Montreal. A quick passage from Boston brought 
him to Liverpool on November 6, after an absence of nineteen 
months. 

The return of Ross from his bootless voyage of 1848-49, 
instead of discouraging the government and people of England, 
seems to have stimulated them to renewed activity in the 
search for the Franklin expedition. The Admiralty sent one 
squadron to Bering Strait, under Captains Richard Collinson 
and Robert John Le Mesurier M c Clure, and two separate 
expeditions on the eastern side, by way of Lancaster Sound, 
under Captains Horatio Thomas Austin and William Penny. 
To Lancaster Sound also sailed, in this notable year 1850, 
the Felix, under the command of Sir John Ross, and equipped 
by private benevolence, the Prince Albert, equipped by Lady 
Franklin, and commanded by Captain Charles Codrington 
Forsyth, and the Advance and Rescue, commanded by 
Lieutenant Edwin J. de Haven, and sent out by American 
sympathizers. 

Collinson in the Enterprise, and M c Clure in the Investi- 
gator, sailed from England in January 1850. M c Clure out- 
sailed Collinson, and reaching Bering Strait first, pushed 
through it, rounded Point Barrow about the beginning of 
August, and sailed along the coast to Cape Bathurst. From 
here he sailed north, discovered and landed on Banks Land, 
and following Prince of Wales Strait eastward, was forced to 
winter in the midst of dangerous pack-ice. During the 
winter M c Clure explored the coast of Banks Land to its 
north-east extremity, and in 1851 sailed round to the 
extreme north-west point, and wintered in Mercy Bay. 
From his winter quarters he visited Melville Island, and sent 



302 WESTERN EXPLORATION, 1840-1867 

his lieutenants to explore Banks Land, Wollaston Land and 
Prince Albert Land. 

The summer of 1852 found the Investigator still fast in 
the ice ; and when the spring of 1853 brought no change in 
the situation, the rapidly-diminishing stock of food com- 
pelled M c Clure to abandon his ship, and cross Barrow Strait 
on the ice to one of the ships of the eastern squadron. The 
crew of the Investigator therefore completed the North- West 
Passage, 1 though their ship did not. 

Sailing through Bering Strait in 1851, Collinson in the 
Enterprise traversed Prince of Wales Strait and reached the 
western entrance. of Barrow Strait. Following M c Clure 
round Banks Land without meeting him, he went into 
winter quarters in Walker Bay, Prince Albert Land. The 
winter was spent in sledge journeys around Prince Albert 
Land and Melville Island searching for traces of the Franklin 
expedition, and also to find the whereabouts of the Investi- 
gator. Nothing was learned of either party. 

In 1852 Collinson sailed south and east through Dolphin 
Strait and Coronation Gulf to the eastern end of Dease 
Strait, where he again went into winter quarters. During 
the winter he explored the south-east coast of Victoria Land, 
but found it impossible to cross over to King William Land 
where he would have discovered the Franklin relics. Sailing 
west in 1853, he was unable to make Bering Strait and had to 
winter at Flaxman Island. He got out of the ice in July 
1854, and reached England in May of the following year, 
after an absence of over five years. 

' The voyage of Collinson,' says General Greely, 2 ' is one 
of the most remarkable and successful on record. With a 
sailing ship he navigated not only the Arctic Sea forward 
and back through 128 (64 one way) degrees of longitude, a 
feat only excelled by the steamer Vega, but he also sailed 
the Enterprise more than ten degrees of longitude through 

1 The first and only captain to sail his ship through the North-West Passage 
was Captain Roald Amundsen, the discoverer of the South Pole, in the gallant 
little Gjoa, 1903-5. 

1 General Adolphus W. Greely, who commanded an expedition to Lady 
Franklin Bay, Ellesmere Island, 1881-84. On this expedition out of twenty-five 
officers and men only six survived. 



THE NORTH-WEST PASSAGE 303 

the narrow straits along the northern shores of continental 
America, which never before had been navigated save by 
small boats and with excessive difficulty.' 

Of the various expeditions sent out to Lancaster Sound 
to follow the supposed course of Franklin, practically the 
whole squadron of ten vessels forgathered in Barrow Strait 
on August 1850. Here they separated, the Prince Albert 
returning to England with a report as to the discovery of 
graves and other signs of the sailing of the Erebus and Terror 
through Lancaster Sound and Barrow Strait ; the American 
expedition proceeding up Wellington Channel, discovering 
Murdaugh Island and Grinnell Land, and returning home in 
1851, after eight months' drifting with the floes. Wellington 
Channel and Cornwallis Land were examined by Penny's 
expedition, and by Sir John Ross in the Felix ; while the 
principal government party, under Captain Austin, spent the 
year 1851 in exploring Prince of Wales Land. Captain William 
Kennedy, who had come out in the Prince Albert in 1851, 
wintered at Batty Bay, and in a sledge journey of eleven 
hundred miles, discovered Bellot Strait * and travelled com- 
pletely round North Somerset. 

In 1852, after the return of Captain Austin, a further 
expedition was sent out by the Admiralty under Sir Edward 
Belcher, with instructions to examine the upper portion of 
Wellington Channel. While no trace was, of course, found 
of the Franklin expedition in this direction, the expedition 
made a thorough exploration of Bathurst, Cornwallis and 
Melville islands, and achieved other important geographical 
discoveries north and west of Wellington Channel. This 
was the last of the official expeditions in search of Franklin. 

Two years after his disappointing expedition of 1849, 
Dr Rae again descended the Coppermine, this time under in- 
structions from the Hudson's Bay Company, and early in May 
succeeded in crossing Dolphin Strait. He explored the coast 
of Wollaston Land to Cape Bering, and recrossed the strait 
to Cape Krusenstern and Kendall River, after a journey on 
foot, with only two companions, of eleven hundred miles. 

1 Named after Joseph Rene Bellot, a French naval officer, who as a. volunteer 
accompanied the Kennedy expedition. 



304 WESTERN EXPLORATION, 1840-1867 

Not content with this notable piece of work, Rae returned 
to the mouth of the Coppermine, followed the coast round 
to Cape Colburn, and explored Victoria Land to within fifty 
miles of the spot where the Erebus and Terror had been 
abandoned three years before. Heavy ice prevented him from 
crossing to King William Land, as he had hoped to do, and he 
was compelled to return without finding any trace of the 
Franklin parties beyond the butt of a flagstaff at Parker Bay. 

In 1853 Dr Rae again returned to the Arctic, reaching 
Repulse Bay by boat from Chesterfield Inlet. Game was 
abundant, and he and his men were able to winter in this 
most uninviting region with comparative comfort. In the 
spring of 1854 he explored a large part of the west coast of 
Boothia. From a young Eskimo whom he met in the course 
of this journey, he learned that in the spring of 1850 about 
forty white men had been seen dragging a boat southward 
along the west coast of King William Land ; that they had 
told the Eskimos of the loss of their ship, and that they were 
on their way to the mainland, where they hoped to find 
reindeer ; and that later in the spring, the bodies of some 
thirty of the white men had been found on the mainland, and 
five on an island near the coast. The Eskimos showed Rae 
pieces of silver with the Franklin crest, and other articles 
that proved conclusively the tragic end of the expedition. 
These and other relics secured from the Eskimos, Rae carried 
back to York Factory in August 1854 and sent to England. 
The following year James Anderson, also of the Hudson's 
Bay Company, descended Backs River to the sea, and from 
the Eskimos there secured many additional relics of the 
Franklin expedition. Satisfied by this confirmatory evidence 
of the death of Franklin and his men, the Admiralty awarded 
to Rae and his companions the ; 10,000 reward offered for 
positive information as to the fate of the expedition. 

Although, with the return of Belcher, the Admiralty had 
declined to equip any further expeditions, Lady Franklin 
was determined to ascertain exact particulars of the death 
of her husband and his men. She secured in M c Clin- 
tock an officer of wide experience in Arctic exploration, and 
one also of excellent judgment and tireless determination. 




ADMIRAL SIR JOHN ROSS 
From Ike faint ing by B. K. I-'aulkntr in iht Scottish Xalional Portrait Calltry 



THE NORTH-WEST PASSAGE 305 

M c Clintock sailed in the Fox in 1857, drifted eight months 
in the ice south of Melville Bay, refitted in Greenland ports 
and returned to Beechey Island in 1858. From here he 
sailed down Peel Sound, but, meeting solid ice, returned to 
Port Leopold and coasted the east side of North Somerset 
to Bellot Strait. Failing to drive his vessel through the 
strait, he wintered there, and in 1859 with Lieutenant 
Hobson made a series of important sledge journeys ; to the 
north magnetic pole, where a party of Eskimos was found 
with relics of the Franklin party ; and to Victoria Land and 
King William Land. This second journey resulted in the 
complete exploration of King William Land, and the dis- 
covery of many relics of the Franklin expedition, including 
the record found by Hobson at Point Victoria, on the north- 
west coast of King William Land. Meantime another 
officer, Captain Allen W. Young, had crossed Franklin Strait 
to Prince of Wales Land, which he explored to its southern 
extremity at Cape Swinburne, and returned to the Fox after 
an unsuccessful attempt to cross MClintock Channel to 
Victoria Land. The Fox returned to England in September 
1859, with the first definite information as to the fate of the 
Franklin expedition. 

In 1865 an American explorer, Charles Francis Hall, 
followed Rae to Repulse Bay, wintered at Fort Hope, Rae's 
old winter quarters, and in the spring of 1866, with Eskimo 
guides, got as far as Cape Weynton, Simpson Peninsula. 
Here he encountered a party of Eskimos, who told him that 
they had seen Franklin and visited his ships, and from whom 
he obtained silver bearing the crest of Franklin. The follow- 
ing year he visited Igloolik, Parry's winter quarters in 1822, 
and in 1868 explored the west coast of Melville Peninsula, 
connecting Parry's farthest, at the western entrance to Fury 
Strait, with Rae's, on the eastern side of Committee Bay 
the last gap in the exploration of the northern coast of 
America. After again wintering at Fort Hope, this inde- 
fatigable explorer, who had determined to find some definite 
record of the Franklin expedition, if such existed, started 
overland from Repulse Bay in the spring of 1869, crossed 
Rae Isthmus and Boothia, and found one or two skeletons 

VOL. v u 



306 WESTERN EXPLORATION, 1840-1867 

on the mainland south of King William Land. Here he also 
learned from the natives that the remnant of the Franklin 
party under Crozier had been seen by the Eskimos off the 
west coast of King William Land in July 1848, and that subse- 
quently they had all died of starvation. So ended the long 
search for the lost Franklin expedition, a search which so far 
as its immediate object was concerned, brought only the most 
meagre returns, but which did result in most important addi- 
tions to the geography of the Arctic Archipelago and the 
northern coast of America. 

II 
THE FAR NORTH AND THE YUKON 

THE HUDSON'S BAY COMPANY 

TURNING to the interior of the continent, we find 
that before the year 1840 the Hudson's Bay Com- 
pany had established a chain of trading posts down 
the Mackenzie River, from Fort Providence, a little below 
Great Slave Lake, to Fort Good Hope, below the Ramparts. 
In 1840 Fort M c Pherson, which still remains the most 
northerly post of the company, was built near the mouth of 
Peel River, the lowest tributary of the Mackenzie, by John 
Bell, a chief trader in the company's service, who had been 
engaged the previous year in exploring Peel River. 

In 1842 Bell, who had been urged by some of the western 
Indians to visit their country, crossed the mountains and 
reached the banks of a river which he called Rat River, but 
which was afterwards named in his own honour. Descend- 
ing this stream, he found that it emptied into a larger river 
the Porcupine which he explored to a point near the present 
international boundary, three days' journey down-stream. 
Two years later he completed his exploration of the Porcu- 
pine, and stood on the banks of a great river which the 
Indians told him was called the Youcon, or Yukon. This river, 
as will presently be shown, had already been explored from 
the upper waters of the Pelly to the junction of the Pelly and 
Lewes, and therefore to the beginning of the Yukon proper. 



THE FAR NORTH AND THE YUKON 307 

Its lower waters were explored by the Russian, Glazunof, in 
1836 or 1837, up to Nulato ; and by Zagoskin, in 1843, as 
far as the mouth of the Nowikakat. It was not until many 
years after Bell's journey that any of the Russian explorers 
or traders reached the mouth of the Porcupine. 

As a result of Bell's discovery, Alexander Hunter Murray 
was sent to build a post for the Hudson's Bay Company at 
the mouth of the Porcupine. This he did in 1847, and has 
left a most interesting journal of his first year at Fort Yukon, 
including an account of the building of the fort ; the relations 
of the fur traders with the natives of the Yukon valley ; the 
habits, customs, appearance and language of the different 
tribes ; the fauna, flora, etc., of the country. It is a rather 
odd commentary on the methods and principles of the fur 
trade that Murray frankly admits that he was building Fort 
Yukon on Russian territory. Curiously enough, the Russians 
never made any attempt to dislodge him, or even to warn 
him out of the country, except by vague threats sent through 
visiting Indians ; and in fact it was not until after Alaska 
had been acquired by the United States, in 1869, that the 
traders were ejected from the territory. The Hudson's Bay 
Company thereupon retreated up the Porcupine, and built 
Rampart House at or near the international boundary. 

ROBERT CAMPBELL 

In the spring of 1840 Robert Campbell, of the Hudson's 
Bay Company, under instructions from Sir George Simpson, 
at that time governor of the company, set forth from Fort 
Halkett, on the Liard River, to explore its upper waters, and 
search on the other side of the height of land for a great river 
flowing towards the west or north-west, rumours of which had 
been brought down to the company's trading posts by parties 
of Indians. It was thought that this river might prove to 
be the Colville, the mouth of which, in the Arctic Ocean, had 
been discovered recently by Peter Warren Dease and Thomas 
Simpson. After ascending the Liard some hundreds of miles, 
far into the mountains, Campbell, with seven men, including 
his trusty Indian guides, Lapie and Kitza, with the inter- 



308 WESTERN EXPLORATION, 1840-1867 

preter Hoole, all of whom had been with him on the Stikine, 
entered a beautiful lake, which he named Frances Lake in 
honour of Lady Simpson. Paddling up to the south-west 
extremity of the lake, he left the canoe in charge of some of 
his men, and, shouldering blankets and gun, ascended the 
valley of a river which he traced to its source in another lake 
so near the watershed that in high floods its waters flow both 
ways, reaching eventually the Arctic on one side and the 
Pacific on the other. This lake he named Finlayson, after 
Duncan Finlayson, chief factor of the company. 

From this lake Campbell and his men descended the west 
slope, and two days later stood upon the banks of a noble 
river which he named the Pelly, after Sir John Henry Pelly, 
the home governor of the company. Here they built a raft, 
and drifted down a few miles with the current. It was too 
late, however, to follow the discovery up that season. Camp- 
bell therefore, after throwing into the river a sealed tin can con- 
taining a memorandum of his discovery, returned to Frances 
Lake, where in the meantime his men had built a post which 
he called Glenlyon House, after his birthplace in Perthshire. 

The following year was spent in building up the fur 
trade at Frances Lake, and making it a base for future dis- 
coveries west of the mountains. In 1842 birch bark for the 
construction of a large canoe to be used in exploring the 
Pelly was brought up from Fort? Halkett and sent over the 
mountains by dog-sleighs to Pelly Banks, where buildings 
were erected and the canoe built in the spring of 1843. 

Early in June of that year Campbell left Glenlyon House 
for Pelly Banks, and immediately started down the stream 
in the canoe with Hoole and several other voyageurs. As 
they advanced the river increased in size, and its banks 
offered a succession of beautiful landscapes, with ranges of 
mountains in the background on either side. Moose and 
bear were frequently seen, and where the banks of the river 
rose sheer from the water's edge, they had passing glimpses 
of the bighorn, fleeting up from crag to crag, and finally dis- 
appearing over the summit. 

Several days' easy travel brought them to the junction 
of the Pelly with another river which Campbell named the 



THE FAR NORTH AND THE YUKON 309 

Lewes, after John Lee Lewes, then chief factor at Fort 
Simpson. Here a party of ' Wood ' Indians was found 
encamped. Campbell says : 

We took them by no ordinary surprise, as they had 
never seen a white man before, and looked upon us and 
everything about us with some awe as well as curiosity. 
Two of their chiefs, father and son, were very tall, stout, 
handsome men. We smoked the pipe of peace together, 
and I distributed some presents. They spoke in loud 
tones, as do all Indians in their natural state, but seemed 
kind and peaceable. When we explained to them as 
best we could that we were going down-stream, they all 
raised their voices against it. Among other dangers, 
they indicated that inhabiting the lower river were many 
tribes of ' Bad Indians, numerous as the sand,' who 
would not only kill us but eat us ; we should never get 
back alive, and friends coming to look after us would 
unjustly blame them for our death. 

This species of native eloquence did not of course impose 
on Campbell, who had heard it before. It had in fact been 
tried on all North American explorers from Jacques Carrier 
to Mackenzie. Campbell's men, however, took it all at face 
value, and were frightened to such a degree that the explorer 
reluctantly agreed to return, the more willingly because he 
was very ill equipped for an extensive exploration of the 
river. It was nevertheless a serious disappointment to be 
compelled to turn back on the threshold of what might prove 
to be a momentous discovery. 

On the third day he noticed on both sides of the river 
fires burning on the hill-tops far and near. He says : 

This awoke me to a sense of our situation. I con- 
jectured that, as in Scotland in the olden time, these 
were signal fires, and that they summoned the Indians 
to surround and intercept us. Thus aroused, we made 
the best use of paddle and tracking line to get up- 
stream and ahead of the Indian signals. On the fourth 
morning we came to a party of Indians on the further 
bank of the river. They made signs to us to cross over, 
which we did. They were very hostile, watching us 
with bows bent and arrows in hand, and would not come 



3io WESTERN EXPLORATION, 1840-1867 

down from the top of the high bank to the water's edge 
to meet us. I sent up a man with some tobacco the 
emblem of peace to reassure them ; but at first they 
would hardly remove their hands from their bows to 
receive it. We ascended the bank to them, and had a 
most friendly interview, carried on by words and signs. 
It required some finesse and adroitness to get away 
from them. Once in the canoe, we quickly pushed out 
and struck obliquely for the opposite bank, so as to be 
out of range of their arrows, and I faced about gun in 
hand to observe their actions. The river was there too 
broad either for ball or arrow. We worked hard during 
the rest of the day and until late. The men were tired 
out, and I made them all sleep in my tent while I kept 
watch. At that season the night is so clear that one 
can read, write, or work throughout. Our camp lay on 
the bank of the river at the base of a steep declivity 
which had large trees here and there up its grassy slope. 
In the branches of one of these trees I passed the greater 
part of this anxious night, reading Hervey's Meditations 
and keeping a vigilant look-out. Occasionally I descended 
and walked to the river bank, but all was still. Two 
years afterwards, when friendly relations had been estab- 
lished with the Indians in this district, I learned to my 
no small astonishment that the hostile tribe encountered 
down the river had dogged us all day, and when we 
halted for the night, had encamped behind the crest of 
the hill, and from this retreat had watched my every 
movement. With the exactitude of detail characteristic 
of Indians, they described me sitting in the tree, holding 
1 something white ' (the book) in my hand, and often 
raising my eyes to make a survey of the neighbourhood ; 
then, descending to the river bank, taking my horn cup 
from my belt, and even while I drank glancing up and 
down the river and towards the hill. They confessed 
that, had I knelt down to drink they would have rushed 
upon me and drowned me in the swift current, and 
after thus despatching me, would have massacred the 
sleeping inmates of my tent. 

Next morning Campbell and his men were early in motion, 
believing that they had outwitted the Indians and outstripped 
their signal fires. The Frances Lake post was reached with- 
out further adventure. 



THE FAR NORTH AND THE YUKON 311 

In the winter of 1847-48 boats were built at Pelly Banks, 
and in June 1848 Campbell with a party of men started 
down the river to build, at the forks of the Pelly and Lewes, 
a post which was named Fort Selkirk. The fort was built 
at the extremity of the point of land between the two rivers, 
but in 1852 was moved to a site a short distance below the 
forks, on the left bank of the Yukon. In this latter year 
some of the Coast Indians made a raid on the post, drove 
out the traders, pillaged the buildings, and burnt them to 
the ground. Nothing remained but the ruined chimneys to 
show where the fort had stood. 

Meantime, however, Campbell had become convinced 
that the river he had explored down to the forks was not the 
Colville but the Yukon. He therefore, in 1850, obtained per- 
mission from Sir George Simpson to continue his exploration 
down to the mouth of the Porcupine, to finally settle the 
identity of the river. Leaving Fort Selkirk, he descended 
the river to Fort Yukon, a distance, as he makes it, of about 
twelve hundred miles. There he found Murray, and accom- 
panied him up the Porcupine and over the mountains to 
Fort M c Pherson with the season's furs. From there he 
ascended the Mackenzie to Fort Simpson, at the mouth of 
the Liard, thus completing a circuit of several thousand 
miles. Of his reception at the fort he remarks : 

Great astonishment was felt by all my friends and 
acquaintances when they saw me reach Fort Simpson 
by coming up the Mackenzie River, instead of descend- 
ing the Liard, for not one of them entertained a suspicion 
that the Pelly River had any connection with the Youcon, 
or that the Pelly was linked with the Porcupine, Peel 
and Mackenzie Rivers. Thenceforward this new route, 
so unexpectedly found, was made the highway for the 
transport of outfits to, and results of trade from, the 
Pelly and all intermediate points. 

In 1852, being anxious to obtain the authority of the 
company for the rebuilding of Fort Selkirk, Campbell made a 
remarkable journey from thence to Crow Wing on the Missis- 
sippi. Leaving Fort Selkirk about the beginning of Sep- 
tember, he ascended the Pelly to its upper waters, crossed 



312 WESTERN EXPLORATION, 1840-1867 

over the Frances Lake, and descended the Liard to Fort 
Simpson, arriving late in October amid thick drifting ice. 
Here he remained until November 30, when he left on snow- 
shoes for one of the longest tramps on record. He reached 
Great Slave Lake on December 8, crossed the lake in a 
piercing wind to Fort Resolution, and after a day's rest 
there, set out for Fort Chipewyan on Lake Athabaska, where 
he arrived on Christmas Day. Continuing his journey on 
January 4, he reached He a la Crosse on the i8th, and Carlton 
House, on the Saskatchewan, eleven days later. From 
Carlton House he had heavy going across the plains, only 
reaching Fort Pelly on February 1 1. He arrived at Fort 
Ellice five days later, and reached the Red River Settlement 
on the 23rd. Here he remained for several days ' enjoying 
the luxuries of civilized life and society, including a sermon,' 
the first he had heard in twenty years. On March I he was 
off again up the Red River, and reached Crow Wing on the 
1 3th, having tramped on snow-shoes a distance of about 
three thousand miles. From Crow Wing the prosaic mail 
stage took him to St Paul and Prairie du Chien ; a steamer 
brought him to Galena, and a stage again to Rockford, then 
the terminal of the railway. By way of Chicago and Buffalo 
he reached Montreal, and after settling his business there, 
left for New York, where he took steamer for Liverpool, 
completing at London a journey performed by every species 
of conveyance, from canoes and snow-shoes to express trains 
and ocean steamers, of nearly ten thousand miles. 

With regard to these explorations of the Great North- 
West Dr George M. Dawson wrote : 

The utmost credit must be accorded to the pioneers 
of the Hudson's Bay Company for the enterprise dis- 
played by them in carrying their trade into the Yukon 
basin in the face of difficulties so great, and at such an 
immense distance from their base of supplies. To 
explorations of this kind, performed in the service of 
commerce, unostentatiously and as matters of simple 
duty, by such men as Mackenzie, Fraser, Thompson 
and Campbell, we owe the discovery of our great north- 



FROM LAKE SUPERIOR TO THE PACIFIC 313 

west country. Their journeys were not marked by 
incidents of conflict and bloodshed, but were accom- 
plished on the contrary with the friendly assistance and 
co-operation of the natives. Less resolute men would 
scarcely have entertained the idea of utilizing as an 
avenue of trade a river so perilous of navigation as the 
Liard had proved to be when explored. So long, how- 
ever, as this appeared to be the most practicable route 
to the country beyond the mountains, its abandonment 
was not even contemplated. Neither distance nor 
danger appear to have been taken into account, and in 
spite of every obstacle a way was opened and a series 
of posts established extending from Fort Simpson on the 
Mackenzie to Fort Yukon. Fort Simpson may itself 
be regarded, even at the present day, as a post very far 
removed from the borders of civilization, but this further 
route stretched out beyond it for over a thousand miles. 
At the time of the establishment of Forts Yukon and 
Selkirk, and for many years afterwards, the returns from 
these furthest stations reached the market only after 
seven years, the course of trade being as follows : the 
first year the goods reached York Factory from England ; 
the second year they were carried inland to Norway 
House ; the third year they reached Peel River in the 
far north, and were hauled during the winter across 
the mountains to La Pierre House ; the fourth year 
they arrived at their destination, Fort Yukon ; the fifth 
year the returns were carried up the Porcupine River 
to La Pierre House and hauled across the Peel River ; 
the sixth year they reached the depot at Fort Simpson ; 
the seventh year they finally reached the market. 



Ill 

FROM LAKE SUPERIOR TO THE PACIFIC 
DAWSON, HIND AND PALLISER 

~"*HE story of Western exploration from 1840 to Con- 
federation may fittingly end with a brief account of 
several surveys of the country between Lake Superior 
and the Rocky Mountains, and of some notable transconti- 
nental journeys. 



314 WESTERN EXPLORATION, 1840-1867 

In the year 1857-58 Samuel J. Dawson carried out, under 
the instructions of the government of Canada, a series of 
surveys of the country between Lake Superior and the Red 
River Settlement, with the view of ascertaining the best 
route for a line of communication. He reported the old 
Grand Portage route as impracticable except for very small 
and light canoes, but found that by way of the Kaministik- 
wia more favourable. Hia transportation scheme involved 
a wagon road from Thunder Bay to Dog Lake ; the improve- 
ment by dams of the navigation of Dog Lake and River ; a 
portage road round Prairie and Savanne Rapids to Savanne 
River ; the water route again to Little Falls ; Little Falls 
to Rainy Lake by water, with a land road round the twelve 
portages near Rainy Lake ; the long stretch of over two 
hundred miles of water communication, with only one break, 
from the River Seine to Lac Plat ; and a land road from Lac 
Plat to Fort Garry. Dawson recommended carts or wagons 
for the land stretches, connecting with small steamers on the 
water communications. Hia report was submitted to parlia- 
ment, but nothing tangible came of it, and it was eventually 
swamped in the much more important scheme of the Canadian 
Pacific Railway. 

In the years 1858-59, under instructions from the Canadian 
government, Henry Youle Hind carried out a series of im- 
portant explorations of the country west of Lake Winnipeg 
and lying between the Saskatchewan and the Assiniboine. 
He found some difficulty in the Red River Settlement in 
procuring men for the expedition, because of the wholesome 
dread of the Sioux on the part of the native and half-breed 
hunters. Finally, however, eight men were secured, and 
with these and provisions for a three months' journey, Hind 
left for the interior. 

From Fort Garry he made a careful examination of the 
Assiniboine as far as the mouth of the Souris, and followed 
that stream to the international boundary, thence crossing 
the prairie to Fort Ellice. Here he divided his party into 
three, one surveying the Qu'Appelle River, the second cover- 
ing the country between Long Lake and Fort Pelly, and the 
third ascending the Qu'Appelle to its source and thence to 



FROM LAKE SUPERIOR TO THE PACIFIC 315 

the south branch of the Saskatchewan. Hind himself, who 
had taken charge of the third section, on reaching the 
Saskatchewan, surveyed the south branch for two hundred 
and fifty miles to the Forks. At Fort la Come, a few miles 
below the Forks, he again made a division, sending one of his 
officers down the main Saskatchewan, and by the west shore 
of Lake Winnipeg to the Red River, while he himself pro- 
ceeded across country to the Touchwood Hills and Fort 
Ellice. Surveys were also made of the country about Lake 
Winnipegosis and the Riding Mountains, and east and west 
of the Red River. 

While the Canadian explorers, Dawson and Hind, were 
surveying the country between Lake Superior and the south 
branch of the Saskatchewan, Captain John Palliser, in 
command of a strong party of explorers sent out by the 
British government, was making an elaborate series of 
surveys of the country between Fort Garry and Fort Colville 
on the Columbia. These explorations, which covered the 
years 1857-60, included an examination of the Red River 
to Fort Garry and Pembina ; from Pembina along the 
boundary to Turtle Mountain and north-west to Fort Ellice ; 
from Fort Garry to Fort Ellice by two separate routes ; 
from Fort Ellice south-west to the boundary, north to Fort 
Pelly, west to the elbow of the South Saskatchewan, and 
north-west to the Touchwood Hills and Fort Carl ton on 
the North Saskatchewan. From Fort Carlton a thorough 
examination was made of the North Saskatchewan and the 
Battle River, which was connected with a similarly careful 
survey from Chesterfield House of the South Saskatchewan 
with its tributaries, the Red Deer, Bow and Belly Rivers. 
In the north the country was examined in every direction 
from Fort Edmonton, and the Athabaska River surveyed 
to its source. Both branches of the Saskatchewan were 
followed up into the mountains, and the following passes 
discovered and laid down : the Kananaski and Vermilion 
Passes, from the South Saskatchewan to the Kootenay ; the 
Lake Pass, Beaver Foot Pass, from Kootenay River to the 
Columbia ; Little Fork Pass, from the South Saskatchewan 
to the North Saskatchewan ; and the Kicking Horse Pass, 



316 WESTERN EXPLORATION, 1840-1867 

from the South Saskatchewan to the Columbia. In addition, 
Kootenay Pass was examined and found to be entirely within 
British territory. West of the mountains, the Columbia was 
examined from below the mouth of Blaeberry River to its 
source, and the Kootenay from its source to its junction with 
the Columbia. 

SIR GEORGE SIMPSON 

Between the years 1841 and 1864 three transcontinental 
journeys were made north of the forty-ninth parallel, or at 
any rate for the most part north of it. The first was by Sir 
George Simpson, governor of the Hudson's Bay Company ; 
the second by Paul Kane, the Canadian artist and traveller ; 
and the third by Viscount Milton and Dr Cheadle. The 
narratives of all three have been preserved in book form. 

Sir George Simpson, following the usual fur traders' route 
from Montreal, up the Ottawa to Lake Nipissing and through 
the Upper Lakes to Fort William, reached Fort Garry early 
in June 1841. Here he abandoned his canoes, and continued 
his journey to Fort Edmonton by horse, travelling rapidly 
across the prairie, the scene resembling ' the moving of an 
eastern caravan in the boundless sands of Arabia, a medley of 
pots and pans and kettles in our single vehicle, the unruly 
pack-horses prancing under their loads, and every cavalier, 
armed to the teeth, assisting his steed to neigh and caper 
with bit and spur.' As they were to travel through the 
country of the Blackfeet, a tribe which enjoyed a rather 
unsavoury reputation among the fur traders at the time, 
special precautions were taken to ensure the safety of the 
expedition. 

Travelling by way of Fort Ellice, and following the track 
of a large body of emigrants who had left the Red River 
Settlement for the Columbia a few days before, Simpson 
arrived at Fort Carlton on the Saskatchewan, having covered 
about six hundred miles in thirteen days with heavily laden 
horses. Ascending the north bank of the Saskatchewan to 
Fort Pitt, he reached Edmonton on July 24, without having 
encountered any of the troublesome Blackfeet. At the fort, 



FROM LAKE SUPERIOR TO THE PACIFIC 317 

however, he met several chiefs of the tribe, with a large 
number of followers, and although the interview was most 
friendly, he thought it wise to continue his journey without 
the knowledge of the Indians. 

Crossing the river in the early morning with his men, he 
managed to give the Blackfeet the slip, and pushed on for 
the mountains with fresh horses. A rapid journey through 
swamp, forest, and rock-encumbered ground, and some hours' 
hard climbing, brought him to the summit of the pass. ' We 
breakfasted,' says Simpson, ' on the level isthmus, which 
did not exceed fourteen paces in width, filling our kettles 
for this our lonely meal at once from the crystal sources of 
the Columbia and the Saskatchewan, while these feeders of 
two opposite oceans, murmuring over their beds of mossy 
stones as if to bid each other a long farewell, could hardly 
fail to attune our minds to the sublimity of the scene.' The 
descent on the western side proved exceedingly trying. 
Twenty-three times Simpson and his men were compelled 
to ford the ever-winding mountain torrent whose valley they 
were following, and although the next day's march brought 
them to more level ground, it was only from one series of 
obstacles to another. The ground was now rugged and 
boggy ; ' the forests were thick and tangled ; and prostrate 
trees of large dimensions, piled and interlaced together, 
barricaded our track. Leading our horses, we forced our 
way along by winding about in every direction, by hewing or 
removing fallen trunks, and by making the animals, according 
to circumstances, leap, or scamble, or crouch. At the end of 
four hours we had not accomplished more than two miles.' 

Emerging from this labyrinth, the travellers found them- 
selves on the precipitous banks of the Kootenay, and 
descended this river, encountering camps of the Kootenay 
Indians as they went. A few days later they arrived at 
Fort Colville on the Columbia, having completed a journey 
of nearly two thousand miles on horseback, across plains, 
mountains, rivers and forests. 

One of the valuable features of Sir George Simpson's 
narrative is the light it throws on the relations of the fur 
traders to the Indians, and particularly the policy of the 



318 WESTERN EXPLORATION, 1840-1867 

Hudson's Bay Company in that regard. The journey of the 
governor across the continent was an event of importance 
in the fur trader's country, and at every important point he 
was met by deputations of Indians Chippewas and Crees 
and Assiniboines, Blackfeet, Kootenays and Flatheads. At 
Fort William a large band of Chippewas was in attendance. 
These Indians, more or less in disgrace, had deserted the 
company's territory, and felt uncertain as to the governor's 
reception. Simpson thus graphically describes this meeting 
with the savages : 

The ceremony of shaking hands having been punctili- 
ously performed with every person, the Indians squatted 
themselves on the boards, excepting that their chief, 
known as L'Espagnol, stood forward in the centre of the 
room. The orator, a tall and handsome man, somewhat 
advanced in years, was arrayed in a scarlet coat with 
gold epaulettes, the whole being apparently spick and 
span new, for the bright buttons were still enveloped in 
s their original papers ; and whether from the want of 
inexpressibles, or from a Highland taste, the tail of his 
shirt answered the purpose of a kilt. 

Having again shaken hands with the air of a prince, 
L'Espagnol delivered himself very fluently to the effect 
that he and his followers, after passing from the British 
to the Americans, had soon found reason to reflect that 
they had always been well treated by the Hudson's 
Bay Company ; that, with our leave, they would now 
settle near the fort, so that the smoke of their homes 
might thenceforward rise among Canadian forests ; and 
that, being all Catholics, they should like to have a 
priest among them. This speech at its conclusion 
elicited a unanimous grunt of approbation from L'Espa- 
gnol's people. In reply, I briefly reminded them that, 
in defiance of one promise already given, they had kept 
wandering from place to place ; offering them at the 
same time protection if they should decide henceforward 
to remain here, but declining to interfere in the matter 
of religion. With the help of a present, this answer 
appeared to satisfy them, and the high contracting parties 
separated. 

At Fort Frances another large band of Indians awaited 



FROM LAKE SUPERIOR TO THE PACIFIC 319 

the governor's pleasure. Here the most serious problem 
confronting the white trader in his relations with the Indians 
came to the surface, as it did persistently throughout the 
whole period of the fur trade. The craving for fire-water, 
first introduced among the western tribes by French traders, 
became universal when their British successors spread the 
infection wherever their trading ventures might lead them. 
The fierce rivalries between the Canadian fur traders and the 
Hudson's Bay Company made matters infinitely worse, as 
rum became an always convenient bribe to tempt the Indian 
from one trading post to the rival establishment. With the 
union of the Hudson's Bay and North-West Companies, 
those in control of the traffic, recognizing the demoralizing 
effect of liquor upon the Indians, and the fact that in the 
long run its introduction into the West would react upon the 
fur trade, determined to banish it from their territories. It 
was found, however, that the process must necessarily be 
gradual, as the craving for liquor was too deep-seated to be 
rooted up instantaneously. Consequently in 1841 an Indian 
harangue, at a formal conference with the leaders of the fur 
trade, still rarely came to a conclusion without a demand 
for rum. At Fort Frances the native spokesman, after 
displaying a valuable present of furs, opened his speech with 
a long prelude on the origin of the two races, ' the object 
being to show how and when and why the Great Spirit had 
made one race red and another white.' He then, says 
Simpson, ' plunged at once from this transcendental height 
into the practical vulgarities of rum, complaining that we 
had stopped their liquor, though we, or at least our pre- 
decessors, had promised to furnish it " as long as the waters 
flowed down the rapids." In reply I explained that spirits 
had been withdrawn, not to save expense to us but to benefit 
them. I then pointed out the advantages of temperance, 
promising them, however, a small gift of rum every autumn, 
not as a luxury, but as a medicine.' 

The far-sightedness of the company's policy, and their 
keen insight into Indian character, are well illustrated in Sir 
George Simpson's shrewd response to the presents of furs 
that formed an essential part of every conference. Not 



320 WESTERN EXPLORATION, 1840-1867 

content with giving generous presents in return, he delighted 
each deputation with the promise that they would be paid 
full price for every skin they had brought as a present. In 
this and other similar ways the officers of the Hudson's Bay 
Company found it possible not only to hold their own, but 
to smother all opposition, even at their most remote trading 
posts in the extreme north-west and the extreme south- 
west, where they were able to meet the Russian traders in 
one case, and the Americans in the other, and beat them both 
in their own territory. 

PAUL KANE 

Paul Kane, the Canadian artist, made a journey across 
the continent in the years 1846-47, his principal object being 
to secure a number of sketches illustrating the appearance, 
manners and customs of the western Indians, and the char- 
acteristic scenery of their country. Through the interest of 
Sir George Simpson he obtained passage to the interior with 
the spring brigade of canoes of the Hudson's Bay Company. 
He travelled from Toronto to Sault Ste Marie with Simpson, 
but found that the brigade had left two days before. Taking 
passage in the company's lake vessel, he arrived at Fort William 
still a day behind the brigade, which, however, he overtook 
at the Mountain Portage, forty miles west of Fort William. 

Fort Garry was reached on June 13, Paul Kane having 
parted with the brigade at Fort Alexander, near the mouth 
of the Winnipeg River. The brigade turned north up the 
lake to Norway House, while the artist engaged several 
Indians to take him up Red River to the Red River Settle- 
ment. Here he remained for some days, and during his 
visit found opportunity to take part in the great spring 
buffalo hunt the principal event of the year in the settle- 
ment, and one that throws an interesting light on the char- 
acter and mode of life of that singular product of the white 
and red races, the half-breed. In place of Kane's own 
account of the hunt, the more spirited narrative of Alexander 
Ross is substituted. Ross, through his long connection with 
the Hudson's Bay Company, was intimately acquainted 
with every phase of the fur trade, and the relations between 




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FROM LAKE SUPERIOR TO THE PACIFIC 321 

traders and Indians. He was also thoroughly familiar with 
the elements that made up the motley population of the Red 
River Colony, and with none more than with the erratic and 
somewhat troublesome class known as plain-hunters. 

The spring hunt not only affected more or less the entire 
settlement, but actually engaged a considerable proportion 
of the population. In the hunt described by Ross no less 
than 620 men were engaged, and with them went into camp 
650 women, with some 360 boys and girls. Their provisions 
and camp equipage filled over 1200 carts, and they took 
with them 400 horses trained to buffalo- running, besides 650 
cart horses. The camp occupied as much room as a modern 
city ; it was under the government of a number of captains 
with soldiers to carry out their orders ; and strict regulations 
were made and enforced for its guidance, particularly when 
the buffalo country was reached. Ross says : 

On the third day of July, our nineteenth day from the 
settlement, and at a distance of little more than two 
hundred and fifty miles, we came in sight of our destined 
hunting-ground ; and on the day following we had our 
first buffalo race. Our array in the field must have been 
a grand and imposing one to those who had never seen 
the like before. No less than four hundred huntsmen, 
all mounted and anxiously waiting for the word Start t 
took up their position in a line at one end of the camp, 
while Captain Wilkie, with his spy-glass at his eye, 
surveyed the buffalo, examined the ground, and issued 
his orders. At 8 o'clock the whole cavalcade broke 
ground and made for the buffalo ; first at a slow trot, 
then at a gallop, and lastly at full speed. Their advance 
was over a dead level, the plain having no hollow or 
shelter of any kind to conceal their approach. When 
the horsemen started, the cattle might have been a mile 
and a half ahead ; but they had approached to within 
four or five hundred yards before the bulls curved their 
tails or pawed the ground. In a moment more the herd 
took flight, and horse and rider are presently seen 
bursting in among them ; shots are heard, and all is 
smoke, dust and hurry. The fattest are first singled 
out for slaughter ; and in less time than we have occupied 
with the description, a thousand carcases strew the plain. 

VOL. V X 



322 WESTERN EXPLORATION, 1840-1867 

Those who have seen a squadron of horse dash into 
battle may imagine the scene. The earth seemed to 
tremble when the horses started ; but when the animals 
fled, it was like the shock of an earthquake. The air 
was darkened ; the rapid firing at first soon became more 
and more faint, and at last died away in the distance. 
Two hours, and all was over ; but several hours more 
elapsed before the result was known, or the hunters 
reassembled ; and who is he so devoid of feeling and 
curiosity that could not listen with interest to a detail 
of the perilous adventure ? 

The moment the animals take to flight, the best runners 
dart forward in advance. At this moment a good horse 
is invaluable to his owner ; for out of the four hundred 
on this occasion, not above fifty got the first chance of 
the fat cows. A good horse and experienced rider will 
select and kill from ten to twelve animals at one heat, 
while inferior horses are contented with two or three ; 
but much depends on the nature of the ground. On 
this occasion the surface was rocky and full of badger- 
holes. Twenty-three horses and riders were at one 
moment all sprawling on the ground ; one horse, gored 
by a bull, was killed on the spot ; two more disabled 
by the fall. One rider broke his shoulder-blade ; another 
burst his gun, and lost three of his fingers by the accident ; 
and a third was struck on the knee by an exhausted ball. 
These accidents will not be thought over numerous 
considering the result, for in the evening no less than 
1375 tongues were brought into camp. 

The rider of a good horse seldom fires till within three 
or four yards of his object, and never misses ; and, what 
is admirable in point of training, the moment the shot 
is fired his steed springs on one side to avoid stumbling 
over the animal ; whereas an awkward and shy horse 
will not approach within ten or fifteen yards, conse- 
quently the rider has often to fire at random, and not 
infrequently misses ; many of them, however, will fire 
at double that distance, and make sure of every shot. 
The mouth is always full of balls ; they load and fire at 
the gallop, and but seldom drop a mark, although some 
do, to designate the animal. 

From Fort Garry, Kane took one of the Hudson's Bay 
Company's sloops to Norway House, where he joined the 



FROM LAKE SUPERIOR TO THE PACIFIC 323 

brigade from York Factory to the interior. The brigade 
consisted of a number of York boats, twenty-eight feet long 
and very strongly built, carrying eighty or ninety packs 
of ninety pounds each, and worked by a crew of seven men, 
a steersman and six rowers. Their way lay through the 
upper end of Lake Winnipeg to Grand Rapids, thence through 
Cedar Lake and up the Saskatchewan to Fort Carlton, 
described by Kane as being at that period in constant danger 
from the Blackfeet, being feebly manned and fortified only 
with a number of blunderbusses on swivels mounted in the 
bastion. So helpless were the traders here that the Black- 
feet frequently drove off their horses from the very walls 
of the fort without molestation. 

From Fort Carlton, Kane continued his journey west- 
ward, travelling to Edmonton on horseback, stopping from 
time to time to take sketches of chiefs and warriors in all 
their finery, Indian camps, buffalo pounds, and the charac- 
teristic scenery of the Saskatchewan. Shortly after leaving 
Fort Pitt, he fell in with immense numbers of buffalo, and 
during the whole of three days' steady travelling, saw nothing 
but buffalo ' covering the plains as far as the eye could reach, 
and so numerous that at times they impeded his progress, 
filling the air with dust almost to suffocation.' 

After a few days' rest at Edmonton, on October 6 Kane 
left for the mountains with a party of traders bound for the 
west side. They reached Jasper House, near the sources of 
the Athabaska, on November 3, and two days later started 
over the pass to Boat Encampment on the Columbia. They 
took a number of horses with them as far as the summit of the 
pass, and then, finding the snow too deep, sent them back and 
continued their journey on snow-shoes. From Boat Encamp- 
ment, Kane descended the Columbia to Fort Vancouver, 
making the journey, a distance of twelve hundred miles, in 
fifteen days, and passing on the way the Dalles, Kettle 
Falls, Fort Colville, Grand Rapids and Fort Walla-Walla. 
He reached Fort Vancouver on December 8, where he was 
welcomed by the chief factor, James Douglas, afterwards 
governor of British Columbia. 

Kane spent the winter and spring on the Pacific coast, 



324 WESTERN EXPLORATION, 1840-1867 

visiting trading posts and Indian villages on the Columbia 
and along the coast, and obtaining a large number of sketches 
of members of the different tribes, scenes of Indian life, and 
pictures illustrative of the fur trade. On July I, 1847, he 
started on his long return journey to the east, travelling 
with the fur brigade. He reached Fort Edmonton early 
in December, and remained there for the winter, continuing 
his journey to the east in the following summer. 



MILTON AND CHEADLE 

In the years 1862-63, two members of the Royal Geo- 
graphical Society, Viscount Milton and Dr Cheadle, made 
an overland journey from Quebec to British Columbia, with 
the object of discovering the most practicable route for a 
highway from the Atlantic to the Pacific through British 
territory. Landing at Quebec about the beginning of July, 
they travelled west by railway, steamboat and stage, by way 
of Chicago and St Paul, to Fort Garry. Here they engaged 
several half-breeds, completed their equipment, and set out 
across the prairie on August 23. A few days' easy travel, 
with nothing more exciting than a little duck-shooting, 
brought them to Fort Ellice on the Assiniboine ; and on 
September 26 they reached Carlton House on the Saskat- 
chewan. 

Here they learned that buffalo were within a day or two's 
journey of the fort, and a few days were spent in the exciting 
sport of buffalo-running. One of the men got lost, and was 
brought back to camp by a party of friendly Crees, whose 
chief, however, took advantage of the occasion to protest 
in the following words against the invasion of their hunting- 
grounds : 

I and my brother have been much troubled by the 
reports we have heard from the company's men, who 
tell us that numbers of white men will shortly visit this 
country, and that we must beware of them. Tell me 
why you come here ? In your own land you are, I know, 
great chiefs. You have abundance of blankets, tea and 
salt, tobacco and rum. You have splendid guns, and 



FROM LAKE SUPERIOR TO THE PACIFIC 325 

powder and shot as much as you desire. But there is 
one thing that you lack you have no buffalo, and you 
come here to seek them. I am a great chief also. But 
the Great Spirit has not dealt with us alike. You he 
has endowed with various riches, while to me he has 
given the buffalo alone. Why should you visit this 
country to destroy the only good thing I possess, simply 
for your own pleasure ? 

Milton and Cheadle felt that the Indians had so much 
the best of the argument that the wisest plan was to put 
their reply in the shape of a handsome present of knives, 
ammunition, tea, salt and tobacco ; and they parted in 
good humour, although the Crees expressed some doubt as 
to the actual greatness of white men who had no rum. 

As it was too late in the season to continue their journey 
through the mountains, the travellers had decided to winter 
at La Belle Prairie, among the Wood Crees, about seventy 
miles north-west of Carl ton. Here they built a log house, 
and settled down to wait patiently for the advent of spring, 
the monotony of the experience being broken by hunting 
excursions into the surrounding country, with an occasional 
visit from the Wood Crees, to whose honesty and general 
good disposition the travellers pay a warm tribute. One 
of them had visited the house during the absence of Milton 
and Cheadle. He had tasted no food for two days. Light- 
ing a fire, he melted some snow in the kettle, and waited for 
a long time in the hope that the white men might return. 
Finally he went away, without touching the pemmican that 
lay upon the table ready to his hand. It is doubtful if even 
the most conscientious white man would have been proof 
against such a temptation. 

Early in April 1863 Milton and Cheadle left their winter 
quarters and set out for the mountains. Their first stopping- 
place was Fort Pitt, on the north bank of the North Saskat- 
chewan, which they reached on the 2Oth of the month. 
Here they found a large party of Crees encamped, and 
another of Blackfeet, these two tribes having patched up a 
temporary peace. Continuing their way up the Saskat- 
chewan, on May 14 they arrived at Fort Edmonton, where 



326 WESTERN EXPLORATION, 1840-1867 

they had the pleasure of meeting Pere Lacombe, the missionary 
to the Crees, and several officers of the Hudson's Bay Company. 

After a few days' rest at Edmonton, they set out for the 
Yellowhead Pass, having determined to take this route 
through the mountains, in spite of the warning of the Hudson's 
Bay men that it would be found exceedingly difficult travel- 
ling, especially for such a small party, most of whom had 
no experience in mountain work. The journey indeed proved 
eventful enough, a very chapter of accidents, in which 
dangerous rapids and grizzly bears rubbed shoulders with 
bush fires and starvation. In the end, however, Milton and 
Cheadle with their men managed to force their way through 
the pass and the scarcely less difficult country on the western 
side of the mountains. 

A fortnight or so after leaving Edmonton they reached 
the banks of the Athabaska, flowing in a deep channel between 
banks two hundred feet in height, thickly clothed with pine, 
spruce and poplar. Here they had their first view of the 
mountains, a glorious and exhilarating prospect. 

Ranges of pine-clad hills, running nearly north and 
south, rise in higher and higher succession towards the 
west, and in the further distance we could see parallel 
to them a range of rugged, rocky peaks, backed by the 
snow-clad summits of some giants which towered up 
beyond. The snow which crowned the loftier peaks, 
and still lingered in the hollows of the lower hills, glittered 
in the brilliant sunlight through the soft blue haze which 
mellowed the scene, and brought the far-distant moun- 
tains seemingly close before us. A cleft in the ridges, 
cut clean as if with a knife, showed us what we supposed 
to be the opening of the gorge through which we were 
to pass. The singular rock on the left or eastern side of 
this gateway, somewhat like the half of a sponge-cake 
cut vertically, we knew must be one of which we had 
heard as La Roche a Myette, close to Jasper House. 

Following the river valley, sometimes through heavy 
timber, sometimes through marshes and boggy ground, some- 
times through beautiful park-like oases, they reached Jasper 
House about the end of June. Jasper House, situated at 
the very foot of the Rocky Mountains, consisted of ' a neat 



FROM LAKE SUPERIOR TO THE PACIFIC 327 

white building, surrounded by a low palisade, standing in a 
perfect garden of wild flowers, which form a rich sheet of 
varied and brilliant colours, backed by dark green pines 
which clustered thickly round the bases of the hills.' A few 
days' heavy travel up the valley of the Athabaska brought 
them to ' a beautiful little prairie, surrounded by pine hills 
green almost to their summits, and overtopped by lofty 
snow-clad peaks.' One of these peaks was known as the 
Priest's Rock. On the prairie, almost hidden under the 
carpet of wild flowers, was all that remained of old Rocky 
Mountain House. 

Ascending the Myette to the height of land, which they 
reached five days after leaving Jasper House, they began the 
descent on the Pacific side of the pass, and on July 10 reached 
the banks of the Fraser River. From here a journey full of 
vicissitudes brought them finally to Kamloops and civiliza- 
tion once more. 

From what they had seen of the Yellowhead Pass, Milton 
and Cheadle had no hesitation in recommending it as the 
most practicable for the purpose of a line of communication 
through the mountains from east to west. The grade they 
described as remarkably easy, and presenting no serious 
engineering problems ; the pass had the advantage of being 
more remote from the international boundary than any of 
those farther south ; and the approaches on either side were 
more favourable. To these arguments, which are still applic- 
able, Milton and Cheadle added others that may now be 
regarded as obsolete ; that is, that the route to the Yellow- 
head Pass would be through the country of peaceable and 
friendly Indians, while those farther south would be through 
the territory of the implacable Blackfeet ; and that the 
Yellowhead Pass would afford the most direct road to the 
Cariboo gold-fields. They submitted the interesting testi- 
mony of Dr Rae, who went out in the spring of 1864 to dis- 
cover the most suitable route for a telegraph line. The 
Hudson's Bay Company proposed to carry the line across 
the continent, and decided in favour of the Yellowhead, 
which Rae surveyed as far as Tete Jaune Cache. 

The history of north-western exploration has now been 



328 WESTERN EXPLORATION, 1840-1867 

traced down to the opening of the Confederation period. 
The work accomplished during the quarter-century between 
1840 and 1867 covered an enormous field, ranging from the 
Great Lakes to the Pacific, and from the international 
boundary to the Arctic islands. As already stated, this 
period saw the completion of the exploration of the northern 
coast of the continent, the obtaining of much valuable infor- 
mation as to the character and extent of the Arctic islands, 
and the filling up of many vacant spaces on the map of the 
interior. From Confederation onward the work of explora- 
tion in North-Western Canada was to be almost entirely 
accomplished by the capable, untiring and modest officers 
of the Canadian Geological Survey, whose labours have left 
very few blank spaces throughout the huge territories of the 
Dominion to tempt the ambition of independent explorers. 




INDIAN AFFAIRS 
1840-1867 



INDIAN AFFAIRS, 1840-1867 

THE first division of this subject dealt with the military 
administration of the Indian department. In this 
section are traced the efforts which were made to 
civilize, educate and christianize the Indians, the trend of 
government policy and the activity and development of the 
Indian department during the period of United Canada. 
It was in this province, and principally in Upper Canada, 
that the greatest interest in Indian affairs was manifested 
and the greatest advancement made ; but Indian affairs 
in the Maritime Provinces of the crown have also to be 
dealt with, and it is deemed best to make provincial 
divisions. The subject will therefore be treated under the 
general headings of the Province of Canada, Nova Scotia, 
Prince Edward Island and New Brunswick. 

I 

THE PROVINCE OF CANADA 
ORGANIZED EFFORT 

T~) EFERENCE will be made to correspondence which 
JY occurred some years before the Province of Canada 
was formed, for all mention of the advanced policy 
of the government was reserved for this section, although 
Sir John Colborne, who advised the government to change the 
aim of the Indian department from laisser-faire to organized 
effort, was appointed lieutenant-governor of Upper Canada 
in 1828. As is frequently the case, the interest of the author- 
ities was attracted and stimulated by the success of private 
undertakings. It was undoubtedly the results which had 
followed the endeavour of Peter Jones and his brother, 

SSI 



332 INDIAN AFFAIRS, 1840-1867 

humble adherents of the Wesleyan Methodist connection, 
to raise the Mississagas from their condition of wretched- 
ness, which led to the adoption by the government of a 
progressive policy for all the Indians under its charge. 
Since Sir John Colborne drew the attention of Sir James 
Kempt to the success of this private endeavour, there has 
never been a lapse in the paternal care and oversight of the 
Indians. He said in his letter of May 7, 1829 : 

A very beneficial change has been produced among 
the Indians along the River Credit. If the order and 
regularity which has been established among them can 
be extended to the other tribes in this Province and a 
fund created for their future support, by authorizing 
their lands to be leased, and in some cases to be sold, 
the system which has involved H.M. Government in an 
enormous expense may be discontinued. 

The Indians of Lower Canada were not in such a desperate 
state as to require the special attention of the government. 
They had been for a long time in contact with civilization ; 
the period of exhaustion which every native race must endure 
at some time in its history had been passed, and they had 
rallied. In 1842 there were about 3727 known to the govern- 
ment, which number did not, of course, include the hunting 
Indians of the northern interior. This population was 
scattered between the seven permanent settlements, minis- 
tered to by priests of the Roman Catholic Church, culti- 
vating small farms and gardens, and living in houses in a 
certain degree of comfort. The contrast is great between 
the description of the untilled domain of the western Indians 
and the state of squalor and debauchery in which they 
lived, and that of the condition of the Caughnawaga Indians, 
with their two thousand acres of cultivated lands, their stone 
houses and barns. Although members of the reserves had 
been educated, no general effort to establish schools had been 
made, and the instruction of their spiritual advisers tended 
altogether towards their moral welfare. In some respects, 
at least, Upper Canada might have taken heart from the 
results obtained in the lower province. But an effort nearer 
home led to the emulation of its success. 



THE PROVINCE OF CANADA 333 

The village upon which the future settlements in Upper 
Canada were to be modelled was situated on the Credit 
River. In about four years the Mississaga Indians are said 
to have changed from a wandering and dissolute band to a 
contented and progressive community. Two hundred people 
were in residence ; twenty-seven houses had been built, with 
a church and a house for the missionary ; cattle and horses 
had been acquired. The expenditure had been made from 
their own funds, for the land surrendered by the Mississagas 
had been sold at an early date, and the proceeds had been 
wisely invested by the government in these improvements. 
Under the influence of this colonizing experiment, and urged 
by the strong recommendation of Sir John Colborne, Governor 
Kempt reported that the most effectual means of ameliorating 
the condition of the Indians, of promoting their religious 
improvement and education, and of eventually relieving His 
Majesty's government from the expenditure of the Indian 
department were : 

ist. To collect the Indians in considerable numbers, 
and settle them in villages with a due portion of land 
for their cultivation and support. 

and. To make such provision for their religious im- 
provement, education, and instruction in husbandry as 
circumstances may from time to time require. 

3rd. To afford them such assistance in building their 
houses ; rations ; and in procuring such seed and agri- 
cultural implements as may be necessary, commuting 
when practicable a portion of their presents for the 
latter. 

These suggestions were approved by the Lords of the 
Treasury and the secretary of state, but the whole expense of 
the Indian department was not to exceed 20,000. As this 
sum was to include the cost of the presents and the pay of 
the officials, very little was left for the contemplated inno- 
vations in management. Sir John Colborne, however, con- 
tinued his agitation for a progressive policy, and obtained 
leave to apply a portion of the annuities to the erection of 
houses, the purchase of agricultural implements and stock. 
Settlements were speedily formed at Coldwater and the 



334 INDIAN AFFAIRS, 1840-1867 

Narrows of Lake Simcoe, on the River Thames, and on Lake 
St Clair. Houses were built, schools established, and com- 
petent farmers appointed as instructors, the whole cost being 
defrayed from the surplus of the imperial grant and the 
annuities of the Indians. The results, as reported a few years 
later by the superintendents, were gratifying ; wigwams had 
been exchanged for log-houses, and cultivated fields sur- 
rounded them. The dress, demeanour and habits of many of 
the Indians showed how successful had been the efforts to 
raise them from their state of squalor, dejectedness and 
intemperance. 

The success of these establishments led Sir John Colborne 
to undertake the settlement on Manitoulin Island of the more 
uncivilized Indians who roved in the Lake Huron district, 
and others who were without a fixed habitat. In July 1829 
he had sent a verbal message, by Lieutenant-Colonel Mackay, 
to the tribes who had assembled to receive their present at 
the Island of St Joseph : 

Children, 

I thank the Great Master of Life for having 
permitted you to meet, after the dreary cold season, and 
to hear what your Great Father proposes for your future 
happiness. 

Children, 

It is the wish of your Great Father that all his 
red children should become civilized ; and for this pur- 
pose he has named a place near Penetanguishene, to 
settle all those who wish for the change. He will furnish 
a few of each tribe with cattle, farming implements, and 
materials to assist in building them houses ; and for the 
young he will provide a school, with teachers, and a 
minister ; and also mechanics, to instruct them in habits 
of industry. 

Children, 

I am aware that you cannot all change your 
present mode of life immediately, but some of you have 
it in your power, and others will, in a short time, find 
it to their interest to join the settlement. You are all, 
without exception, invited. The Ottawas have a large 
island (the Great Maniyon), near Penetanguishene, on 
which the land is good, and where there is abundance 



THE PROVINCE OF CANADA 335 

of fish. Should they wish to join the new settlement, 
their Father would be happy to hear of their occupying 
and settling themselves on it. 

This was one of the last occasions on which intoxicants 
were issued to Indians by a government officer. An old 
Minominie chief made the request in the following words : 
4 I have only one word more to say ; it is to request that you 
will give a suit to an old woman, and a little of your milk ' 
[rum] ' to do away with the parching of our throats.' Colonel 
Mackay replied : 

Children, 

I will do all in my power to supply your different 
demands for guns, kettles [etc. etc.] ; and although your 
Great Father does not wish to give you anything that is 
injurious to you still, because you so earnestly desire 
it, I will give to those who ask for it a few drops [gallons] 
of milk. 

In 1830, and for several following years, the presents were 
given to the western tribes at Penetanguishene, and thus 
annually they came into contact with the new settlers at 
Coldwater and the Narrows. It was not until 1836 that the 
establishment at Manitowaning, on Manitoulin Island, was 
begun ; but Sir John Colborne only directed the prelimin- 
aries, for the superintendent did not take up his headquarters 
on the island till 1838, and it was only in the following years 
that the two villages of Wikwemikong and Manitowaning 
were developed and supported by the government. 

While these proposed arrangements were being carried 
out, Lord Glenelg was inditing his dispatch of January 14, 
1836, which was addressed to the Earl of Gosford and to Sir 
Francis Bond Head, who had succeeded Sir John Colborne 
in Upper Canada. It was based upon a resolution of a parlia- 
mentary committee on military expenditure adopted during 
the previous session, which expressed the opinion that the 
presents to Indians could be abolished and commuted, and 
the expenses of the department greatly reduced. The dis- 
patch called for information and advice upon these points, 
and witnesses to the humane consideration which the imperial 
government always gave to matters affecting the aborigines. 



336 INDIAN AFFAIRS, 1840-1867 

The governors were advised to direct their inquiry to the 
' practicability of effecting a commutation of the Presents for 
some object of permanent Benefit and Utility to the Parties 
now receiving them.' It was stated : 

From the Reports in this Department it appears, that 
not only among the more civilized and settled Tribes, 
but even among those inhabiting the remote Districts 
of Canada, a strong Desire for Knowledge has recently 
been evinced. In Upper Canada Schools have been 
established by Societies and by private Individuals, and 
are said to be well attended. These circumstances, 
combined with the general Docility of the Indian Tribes, 
lead me to hope that a Scheme of a more general Nature 
would not fail of ultimate Success. I cannot, of course, 
pretend to enter into the Details of such a Scheme ; it 
is sufficient for me to impress upon you the Readiness 
and the Anxiety of His Majesty's Government to co- 
operate to the utmost of their Power in its Promotion. 

The government was prepared to sanction the expendi- 
ture upon education of at least a portion of the funds appro- 
priated for presents. Head took the earliest opportunity of 
making himself personally acquainted with the conditions 
under which the Indians were living, and the summer of 1836 
was occupied in an inspectorial tour of the province. He 
attended the annual distribution of presents at Amherstburg 
and the first distribution at Manitoulin Island. To use his 
own words, he ' visited with one or two trifling exceptions the 
whole of the Indian settlement in Upper Canada, and in 
doing so made it my Duty to enter every Shanty or Cottage, 
being desirous to judge with my own Eyes the actual Situa- 
tion of that Portion of the Indian Population which is under- 
going the Operation of being civilized.' His visit to Mani- 
toulin Island was an important one. He endeavoured at 
this, his first opportunity, to put in practice the opinions he 
had formed during the earlier part of his tour, but which he 
had not yet communicated to Lord Glenelg. His policy, as 
will appear later, was to remove the Indians from contact 
with civilization ; and, to prepare a home for them, he 
obtained from the Chippewas and the Ottawas a surrender of 



THE PROVINCE OF CANADA 337 

Manitoulin Island and the twenty-three thousand islands in 
Georgian Bay, and from the Chippewas of Saugeen a sur- 
render to the crown of a million and a half acres adjoining 
the land of the Canada Company, without one penny of 
compensation ! This hasty injustice was afterwards repaired 
by granting by order-in-council a perpetual annuity to the 
Saugeen Indians of 2, IDS. per capita. Perhaps the result 
achieved by Head was obtained through the peculiar gifts of 
the Indian chief who spoke for his fellows on this occasion. 
He was Sigonah (the blackbird), ' celebrated among them for 
having on many public occasions spoken without once stop- 
ping from Sunrise to Sunset.' 

In his reply to Lord Glenelg's dispatch of January 14, 
1836, Head fully explained his views on the Indian question. 
He found it necessary to refute the idea that the efforts to 
christianize and civilize the Indians had been successful. He 
reduced his opinions to three propositions : 

1. That an Attempt to make Farmers of the Red Men 
had been, generally speaking, a complete Failure ; 

2. That congregating them for the Purpose of Civiliza- 
tion has implanted many more Vices than it has eradi- 
cated ; and, consequently, 

3. That the greatest Kindness we can perform toward 
these intelligent, simple-minded People, is to remove and 
fortify them as much as possible from all communication 
with the Whites. 

In flamboyant language he drew a picture of the relations 
between the two races, which must be quoted in his own 
words: 

The Fate of the Red Inhabitants of America, the real 
Proprietors of its Soil, is, without any Exception, the 
most sinful Story recorded in the History of the Human 
Race ; and when one reflects upon the Anguish they 
have suffered from our Hands, and the Cruelties and 
Injustice they have endured, the Mind, accustomed to 
its own Vices, is lost in utter Astonishment at finding, 
that in the Red Man's Heart there exists no Sentiment 
of Animosity against us, no Feeling of Revenge ; on the 
contrary, that our Appearance at the Humble Portal 
of his Wigwam is to this Hour a subject of unusual 
VOL. v y 



338 INDIAN AFFAIRS, 1840-1867 

Joy ; if the White Man be lost in the Forest, his cry of 
Distress will call the most eager Hunter from his Game : 
and among the Tribe there is not only Pleasure but Pride 
in contending with each other who shall be the first to 
render Assistance and Food. 

So long as we were obtaining Possession of their 
Country by open Violence, the fatal Result of the 
unequal Contest was but too easily understood ; but 
now that we have succeeded in exterminating their 
Race from vast Regions of Land, where nothing in the 
present Day remains of the poor Indian but the unnoticed 
Bones of his Ancestors, it seems inexplicable how it 
should happen, that even where the Race barely lingers 
in existence, it should still continue to wither, droop, 
and vanish before us like Grass in the Progress of the 
Forest in Flames. ' The Red Men,' lately exclaimed 
a celebrated Miami Cacique, ' are melting like Snow 
before the Sun.' 

Whenever and Wherever the Two Races come into 
contact with each other it is sure to prove fatal to the 
Red Man. However bravely for a short Time he may 
resist our Bayonets and our Firearms, sooner or later he 
is called upon by Death to submit to his Decree ; if we 
stretch forth the Hand of Friendship, the liquid Fire 
it offers him to drink proves still more destructive than 
our Wrath ; and lastly, if we attempt to christianize 
the Indians, and for that sacred Object congregate them 
in Villages of substantial Log-houses, lovely and beautiful 
as such a Theory appears, it is an undeniable Fact, to 
which unhesitatingly I add my humble Testimony, that as 
soon as the Hunting Season commences, the Men (from 
warm Clothes and warm housing having lost their 
Hardihood) perish, or rather rot, in Numbers, by Con- 
sumption ; while as regards their Women, it is impos- 
sible for any accurate Observer to refrain from remarking 
that Civilization, in spite of the pure, honest, and un- 
remitting Zeal of our Missionaries, by some accursed 
Process has blanched their Babies Faces. In short, our 
Philanthropy, like our Friendship, has failed in its 
Professions ; producing Deaths by Consumption, it has 
more than decimated its Followers ; and under the 
pretence of eradicating from the Female Heart the 
Errors of a Pagan's Creed, it has implanted in their 
Stead the Germs of Christian Guilt. 



THE PROVINCE OF CANADA 339 

This high-flown strain is contradicted when, in a further 
sentence, we are informed that ' there can be no Doubt that 
to the present page in the History of the British Empire we 
have acted well toward the Indian.' But the phrasing of 
the memorandum, the reasoning upon which it was based 
and the action which was proposed to be taken, are highly 
characteristic of the man. He reported surrenders of land 
obtained from the Hurons of Amherstburg and the Moravian 
Indians, and stated his opinion that the government ' should 
continue to advise the few remaining Indians who are linger- 
ing in Upper Canada to retire upon the Manitoulin and 
other islands in Lake Huron or elsewhere towards the north- 
west.' His conclusions were reluctantly adopted by I .on I 
Glenelg and the government. The former had enlightened 
views on the Indian question ; he was humane and philan- 
thropic ; but on this occasion his lack of firmness, which was 
often evident in dealing with colonial affairs, led him into 
error. Influenced by showy rhetoric alone, he approved a 
scheme which was contrary to his convictions. 

If Sir Francis Bond Head had remained in Upper Canada, 
the effort, foredoomed to failure by the nature of the Indians, 
whose attachment to ancestral localities is strong and con- 
stant, might have been prosecuted. Fortunately the 
attempt to uproot them from their own haunts was aban- 
doned. The civil condition of the province diverted the 
lieutenant-governor's attention from the less important 
concerns of the Indians, and, after the Rebellion, he left the 
country in the spring of 1838. Meanwhile the true friends 
of the Indians had not failed to protest against his hasty 
policy and inconclusive arrangements. The Aborigines 
Protection Society, the Wesleyan Missionary Society, the 
Church of the United Brethren approached the govern- 
ment with powerful arguments. A memorial was presented 
signed by nearly two hundred persons of influence ; among 
the names, those of Daniel O'Connell and of three other 
members of parliament are prominent. These representa- 
tions, acting upon the sympathies of Lord Glenelg, who had 
never cordially adopted Head's advice, were efficacious. 
On August 22, 1838, he indited two dispatches, one to Lord 



340 INDIAN AFFAIRS, 1840-1867 

Durham, the other to Sir George Arthur, who had succeeded 
Head in Upper Canada. There are some general remarks 
scattered through the communications to Lord Durham that 
are worthy of comment : ' Among the various matters which 
demand your attention, although there are some of more 
immediate exigency as to our Political Relations in North 
America, yet there is not one of graver importance in itself 
or involving Obligations of a deeper or more enduring Char- 
acter.' Again contrasting the real condition of the Indians 
with the ultimate aim of their well-wishers, he writes : ' The 
Interval is wide, indeed, between this Condition and one of 
Comfort, of moral and religious Improvement, of prosperous 
Independence, and of the Capacity to enjoy and appreciate 
the Rights of free British Subjects. Yet it is to this latter 
Condition that it is our Duty and ought to be our Endeavour 
to conduct this unhappy Race ; and I cannot but hope that 
you may be enabled to set in progress a System which may 
finally produce such a Result.' 

In the communication to Sir George Arthur, also, Lord 
Glenelg finds himself back on his old safe ground after the 
temporary deviation produced by Head, and he advocates 
anew the policy of education and advancement. The dis- 
patch lays emphasis upon the lack of detailed information 
regarding the Indians of Upper Canada, and requests the 
governor to supply this defect. Out of this instruction came 
the succession of reports upon the Indians of Upper Canada 
prepared by commissioners appointed to investigate their 
condition and prospects. Sir George Arthur at once entrusted 
the work to R. G. Tucker, the provincial secretary, but the 
report was completed by Chief Justice Macaulay. The 
investigation committee, appointed in October 1839 to in- 
vestigate the business of the departments of government, 
adopted, on February I, 1840, the report of committee No. 4 
relating to the Indian department. Closely following this, 
after the Union, the royal commission was issued appoint- 
ing Messrs Rawson, Davidson and Hepburn on October 10, 
1842, and eight years later, on September 5, 1850, Sir Edmund 
Head signed the commission appointing A. T. Pennefather, 
superintendent-general of Indian Affairs, Froome Talfourd 



THE PROVINCE OF CANADA 341 

and Thomas Worthington. In the reports of these two 
important commissions are to be found records of progress 
and suggestions which either became law afterwards or were 
incorporated in the practice of the Indian department. 

A question of prime importance to the government and 
the Indians, and one under constant debate from the close of 
the War of 1812, was that of presents. The government was 
desirous of curtailing an issue which was the source of great 
expense. The Indians and many of their friends were clamor- 
ous for its retention as a vested right. 

The English found that the issue of presents had been 
established in Canada by the French, so that no new policy 
could have been inaugurated in that colony, even if the burden 
had not already existed in New England and the West. It 
was firmly fixed, and the one ever-present labour of the 
superintendent-general was to convince the home government 
that the large levy for gifts was really in the interest of 
the crown. To quote from an old report, ' the presents 
furnished the Indians and every member of his family with 
a complete suit of clothing. His food consisted of the game 
which he killed with the gun and ammunition supplied to 
him by the Government ; of the fish which abound in the 
lakes and rivers, caught with the net and hooks supplied from 
the same service.' The earlier issues consisted of ornaments 
such as arm-bands, brooches, ear-bobs, gorgets ; of articles 
such as kettles, clasp-knives, looking-glasses and thimbles ; 
in addition to the more useful merchandise, cloths now un- 
known, molton, ratteen and caddies ; blankets and Irish 
linen ; shoes and ivory box combs ; tobacco, ball and gun 
flints. 

The cost of the presents during the Revolutionary War 
and during the first decade of the nineteenth century must 
have been enormous. The annual expenditure for the three 
years between January 1813 and June 1816, was 150,000 
sterling. After the liberality of the issue had been somewhat 
restrained and its abuses abated, the average annual cost 
between 1836 and 1843 was $45,348 to an average popula- 
tion of about thirteen thousand. In 1830 the total expense 
of the Indian department was fixed at 20,000, 15,850 



342 INDIAN AFFAIRS, 1840-1867 

being appropriated for the presents and 4150 for the pay 
and pensions of the officers. While criticism of the cost was 
always used in urging the abolition of these presents, the 
chief objection to their continuance lay in their effect upon 
the Indians. They encouraged their natural indolence and 
improvidence ; kept them a distinct people ; fostered their 
natural pride and consequent aversion to labour ; and created 
an undue feeling of dependence upon the crown. The 
formalities or festivities which accompanied the distribution 
tended also to degrade the nations and to keep alive their old 
customs. The chief superintendent was usually accompanied 
by a party of visitors, and on these occasions the pride and 
superstition of the Indians was fostered in direct opposition 
to the policy of the government. Transportation was fur- 
nished these guests, and from thirty to forty Indians were 
required to man the canoes, sometimes six in number. More- 
over, many of the articles issued fell into the hands of un- 
scrupulous traders, who obtained them by payment in rum 
and other intoxicating liquors. These facts led the govern- 
ment to resolve upon a gradual diminution of the presents 
until the issue should entirely cease. 

Numbers of Indians who were resident in the United 
States came long distances to share in the distribution, which 
they had enjoyed from the days before the boundary was 
settled, and in 1841 the superintendents were advised that 
after 1843 the issue to the Indians not actually resident in 
Canada should cease. 

The commissioners of 1842, before whom the question 
came, made valuable suggestions, which were for the most 
part carried into effect. A gradual reduction in the 
quantities of the supplies, a less varied list of articles issued, 
and an effort to commute the presents for useful implements 
and tools, were some of their recommendations. They also 
advised that an accurate census should be taken of all Indians 
resident in the province, and that no child born after the 
census should have a claim for presents that all half-breeds 
should be excluded from the bounty as well as children 
educated in the industrial schools and elsewhere. These 
measures were to go hand in hand with the general scheme 



THE PROVINCE OF CANADA 343 

for the education of the Indians and the amelioration of their 
condition. The government carried out these needed re- 
forms. Guns and ammunition were withheld in 1845 and 
1846, and no Indian born after the latter date was allowed 
to share in presents of any kind. 

In 1852 the issue in Upper Canada ceased entirely, and 
was commuted to a money payment beginning with three- 
fourths the value of the several equipments and diminishing 
one-fourth until final extinction. The commutation was 
not to be carried out in Lower Canada until 1854. This 
action on the part of the imperial government did not pass 
without protest from the government of Canada, which 
presented strong arguments in favour of the old custom as a 
right to which the crown stood pledged. But the plea was 
without avail ; the home government considered the issue to 
be based upon grounds of policy alone, and only ceded the 
purchase of blankets for the aged and infirm and provisions 
of gunpowder for the tribes that lived by the chase. The 
latter grants were continued until 1867, when the Dominion 
of Canada took over the duty of supplying the issue. 

Later we shall find the issue of presents reappearing in 
an altered but more beneficent form in the treaties which 
were made with the Indians of the western provinces of 
Canada, where the gifts of powder, shot and twine to the 
hunting Indians were supplemented by agricultural imple- 
ments, seed and cattle to those who would till the soil. 

Another subject of grave importance to the Indians was 
the question of their reserved lands. In 1842 the com- 
missioners found that, although certain tracts of land were 
generally accepted by the government and the people as 
Indian reserves, they were not registered in the land office 
as such, and that no title in reality existed, an uncertainty 
which caused unrest among the Indians and made it difficult 
to induce them to cultivate their lands or reside permanently 
upon them. The recommendations of the commissioners led 
to a general registry of all Indian reserves, and to the grant 
of location tickets of occupancy to individual Indians within 
the reserves. The latter system is still in vogue, and gives 
the holder a sense of proprietorship which is as real as a tide 



344 INDIAN AFFAIRS, 1840-1867 

in fee-simple, with the one prohibition of sale to other than 
a member of the band. 

Defects in the management of the Indian estate were 
found by the commissioners of 1842 to be serious and repre- 
hensible. The lands were sold by the commissioner of Crown 
Lands, and the proceeds, less expenses, were handed over to 
the chief superintendent of Indian Affairs. But neither of 
these officers kept any account of the sales which would show 
the amount accruing to each tribe. The Six Nations alone 
had a separate account. It was with extreme difficulty, and 
not with complete success, that the commissioners succeeded 
in drawing up accounts for the different tribes. 

The cost of management had been excessive, and the 
method employed to levy it upon the tribes had been unfair. 
The whole cost of the Crown Lands department was charged : 
fifty per cent to the crown lands, forty per cent to the 
clergy reserves, and ten per cent to the Indian lands. Five 
per cent was also allowed to the agents, and the full cost of the 
surveys and inspections debited to the Indians. These abuses, 
coupled with the general absence of business methods, caused 
the land management to be charged with general inefficiency. 

The actual investment of the capital accruing from the 
sale of Indian lands was in the hands of the receiver-general, 
who purchased provincial debentures usually bearing interest 
at six per cent. It is a matter for congratulation that so 
little loss occurred from improvident investments. During 
a time when the path of a trustee was not so straightly cut 
out as it now is, and when the governor was a law unto him- 
self, the only funds which became involved and were finally- 
lost were those invested for the Six Nations in the Grand 
River Navigation Company's enterprise and in the Cayuga 
Bridge stock. 

Acting on the chief superintendent's advice, the com- 
missioners did not recommend that the Indian department 
should manage the land sales, and become responsible for 
all the Indian business. In the end the Crown Lands 
department took over the Indians as a branch of their main 
business, but the practical suggestions made by the com- 
missioners were adopted, and removed the blame which the 



THE PROVINCE OF CANADA 345 

former management had occasioned. Reforms were also 
needed in the protection of the unsold lands, which were 
open to constant peril from the unscrupulous whites, who 
plundered the timber and squatted upon the richest of them. 
A vigorous inspection of the actual conditions existing was 
undertaken, and the reserves were gradually policed and 
cleared of objectionable intruders. 

The government continued to pursue the well-established 
policy for the cession of Indian lands, and the forms and 
ceremonies by which surrenders were made became more 
imposing as the lands to be surrendered were of greater 
extent, and the number of Indians to be influenced larger. 
The later surrenders were dignified by the name of treaties ; 
the stipulations became more elaborate ; the entourage of 
the representatives of the government became more im- 
pressive ; and the number of attendant chiefs with their 
followers more numerous. 

The earliest treaty which fixed the type, as distinguished 
from a mere surrender, was that made on July 18, 1817, be- 
tween the Earl of Selkirk and the Indians of the Red River. 
This secured the peaceable possession of the country pur- 
chased from the Hudson's Bay Company by Selkirk in 1811. 
Although not permanent, it is interesting as the first treaty 
made with any of the western tribes. The land ceded was a 
large portion of what is now the Province of Manitoba. With 
the disappearance of Lord Selkirk's interest in the territory, 
the consideration, which was two hundred pounds of ' good 
and merchantable tobacco,' ceased to be paid. The cession 
was to the king, but in 1871 a more binding treaty, made by 
the crown with the Indians, conveyed to the crown title to the 
same region. 

The most important treaty negotiation by the Province 
of Canada was that by which the Indians ceded to the crown 
the large area between the northern shores of Lakes Huron 
and Superior and the watershed of Hudson Bay. Minerals 
had been discovered in this district, and the Indians had 
molested certain mining property and had shown hostility 
to prospectors. The government therefore deemed it ad- 
visable to placate the Indians, and commissioned the Hon. 



346 INDIAN AFFAIRS, 1840-1867 

William B. Robinson to arrange for the cession. The Indians 
assembled at Sault Ste Marie in large numbers with their 
chiefs and councillors, and after deliberation consented to the 
terms offered by the government. The treaty with the 
Ojibwas of Lake Superior was signed on September 7, 1850, 
and that with the Ojibwas of Lake Huron two days later. 
The sum of 200 was paid down to each division, and a per- 
petual annuity provided of 500 to the Indians of Lake 
Superior and 600 to the Indians of Lake Huron. Each 
treaty contained the unusual provision that ' in case the terri- 
tory hereby ceded by the parties of the second part shall at 
any future period produce an amount which will enable the 
Government of this Province without incurring loss to 
increase the annuity hereby secured to them, then, and in 
that case, the same shall be augmented from time to time, 
provided that the amount paid to each individual shall not 
exceed the sum of one pound provincial currency in any one 
year, or such further sum as Her Majesty may be graciously 
pleased to order.' In 1873 the Dominion government under 
this stipulation increased the annuity to four dollars per head, 
and the annuity now stands at that amount ; afterwards, as 
the result of arbitration, the Dominion Treasury was recouped, 
in part, by payment from the province. 

Land was specially described and set apart as reserves 
for the Indians, not, as in future treaties, by a per capita 
allotment, but in irregular blocks to suit the needs of the 
separate bands under their local conditions. 

The only other important agreement with Indians during 
this period was the treaty negotiated by the Hon. William 
MDougall for the sale of that portion of Manitoulin Island 
west of Heywood Sound and the Manitoulin Gulf. This 
land was to be sold and the interest on the purchase paid 
annually to the Indians ; seven hundred dollars was also 
distributed at the time of the treaty, which was agreed to 
on October 6, 1862. 

EDUCATION 

As the education of Indian youth was esteemed the most 
potent force in the civilization of the race, it is interesting to 



THE PROVINCE OF CANADA 347 

glance at the early attempts to establish schools and the 
results that followed. In Lower Canada in 1829 there was one 
schoolmaster at Lorette, and five missionaries were established 
in the principal villages throughout the province. In 1844 
the numbers were the same, although, in the interval, three 
or four schools had been opened and afterwards closed. In 
1829, at Chateauguay, the Protestants became interested in 
the education of the Indians, and perhaps in their conversion 
also. Twelve boys brought from different villages were 
there educated by Charles Forest and given manual training. 
This experiment appeared so successful that Lord Gosford 
sanctioned the establishment of an agricultural school and 
experimental farm at Christieville, near St Johns, for the 
education of Indian youth, and the children were transferred 
there from Chateauguay. Major Plenderleath Christie, 
who suggested the arrangement, made considerable gifts to 
promote the institution, which was the first of its kind ever 
recognized and supported by the government. It remained 
open for but a few years, as it had to contend with opposition, 
and no similar institution has been established or now exists 
in the province. The children, orphans and others, who now 
need the protection of a boarding-school, are either sent to 
Wikwemikong Industrial School or placed in convents. 
Major Christie was earnest in his advocacy of agricultural 
schools, and in 1842 offered the government a farm near 
Cornwall worth 700 for the establishment of an institution 
in Upper Canada. The priests in charge of the seminary 
at the Lake of Two Mountains conducted a model farm, and 
stimulated active interest in agriculture on the part of the 
Indian youth. 

In Upper Canada the earliest missionaries and the first 
schools were under the supervision of the Society for the 
Propagation of the Gospel in Foreign Parts. They had 
catechists and schoolmasters appointed very early in the Bay 
of Quinte district and at the Grand River, but they yielded 
the field to the well-directed efforts of the New England 
Company. This company was created by an act or ordin- 
ance of the Long Parliament passed in 1649 and entitled ' A 
Corporation for the promoting and propagating the Gospel 



348 INDIAN AFFAIRS, 1840-1867 

of Jesus Christ in New England.' The ordinance enacted 
that it be a corporation consisting of sixteen persons pre- 
sident, treasurer and fourteen assistants to have the power 
to purchase or acquire lands not to exceed the yearly value 
of 2000, ' and any goods and sums of money whatsoever.' 

The corporation was conducted for some time under this 
ordinance of the Long Parliament, but after the Restoration, 
certain difficulties having been met with in the administra- 
tion of properties previously acquired, a charter of incorpora- 
tion was granted by Charles II on February 7, 1662. The 
company still conducts its operations under this charter, and 
the distribution of its invested funds has assisted materially 
in the education and development of the Six Nations Indians. 
Up to the year 1834 the whole of the clear rents and profits 
of the company's trust estates and funds were regularly and 
faithfully applied for the benefit of several hundred of the 
natives and their children in Upper Canada and New Bruns- 
wick. The general scheme followed in New Brunswick was 
the maintenance of thirty-five Indian children in English 
families. General supervision was exercised by General 
Coffin with the assistance of religious instructors and school- 
masters. This plan, however, was found not to be feasible 
and was gradually abandoned. 

Assistance by way of grant was also given to education 
in the district of Rupert's Land and in British Columbia at 
Cowichan, Vancouver Island, and at Lytton, where there is 
still an industrial school under the supervision of the company ; 
but the most productive work was performed in Upper 
Canada at Rice and Mud Lakes and at the Six Nations 
Reserve, the latter place absorbing most of the funds and 
attention of the company. Day schools, missionaries, and 
an institution for the instruction of pupils in residence, 
which is still in a flourishing condition, were the factors 
which have contributed very largely to the present advanced 
position of the Six Nations Indians. 

The missionary efforts of the Wesleyan Methodists were 
also of importance, and were the subject of generous praise 
from the Anglican Bishop of Quebec, who wrote to Sir James 
Kempt in 1829 : 



THE PROVINCE OF CANADA 349 

The Methodist Society support several schools among 
the Indians of U. C. and their preachers minister to them 
in several parts of the country. They have been suc- 
cessful in converting a great portion of the Mississaga 
tribe from Heathen ignorance and immoral habits to 
Christian faith and practice, and their improvement has 
been so great and rapid within these few years that the 
hand of God seems to be visible in it, and it must be 
acknowledged that they have done much in the work 
of civilization. 

The following day-schools, conducted by the Wesleyan 
Methodists, were in operation in 1829, with 251 scholars 
in attendance : Grand River, Davisville ; Grand River, 
Salt Springs ; River Credit ; Girls' and Boys' School, Grape 
Island ; Rice Lake Lake Simcoe, Island ; Lake Simcoe, 
Holland Landing ; Muncey Town ; and Maiden, River 
Canard. 

The missionaries who were interested in them came from 
the State of New York, and as their loyalty was somewhat 
doubtful, particularly their loyalty to the Established Church, 
Sir James Kempt advocated sending ' Wesleyan Mission- 
aries from England for the purpose of counteracting the 
antipathy to the Established Church and other objectionable 
principles which the Methodist Missionaries from the United 
States are supposed to instil into the minds of their Indian 
converts.' 

The Rev. William Case kept a school on Grape Island, 
six miles from Belleville, for ten years, and after 1838 at 
Alnwick, where twelve children were educated, clothed and 
boarded at the expense of the British Wesleyan Conference. 
This school developed into the industrial school at Alderville, 
and the Mount Elgin Institute was founded by the same society. 
To establish and maintain these schools, the Indians consented 
to set apart one quarter of the amount received in commuta- 
tion of their annual distribution of ammunition. This con- 
tribution began in 1848 and ended on June 30, 1862. At 
that time the annual payment of $6879.75 had served to 
meet the expenses of conducting the schools, and there 
remained $36,208.74. This is evidence of the liberality of 



350 INDIAN AFFAIRS, 1840-1867 

the Indians of Upper Canada in the cause of education. 
Whenever the funds of a band have been adequate, a fair 
proportion has always been set apart for the support of 
schools. The school at Alderville, in the county of Northum- 
berland, was erected in 1848, and the Mount Elgin Institute 
in 1851. The Alderville buildings were destroyed by fire 
in 1861 and were not rebuilt, but the Mount Elgin Institute 
still survives, after a useful career of sixty years. Both insti- 
tutions were supported by an annual per capita grant for 
each pupil in attendance, a method of finance which was 
later extended to the western schools. The actual cost of 
maintaining the school at Christieville in 1842 was 18 for each 
child, and at the Mount Elgin Institute 20 for each child. 

The scheme for civilizing the Chippewas and Ottawas 
of Lake Huron at Manitowaning, to which reference has been 
previously made when dealing with the recommendation of 
Sir John Colborne, had proved a failure. It was the first 
governmental attempt to improve the condition of the 
Indians by direct instruction given to the whole community. 
In 1844 the staff of instructors consisted of a carpenter, a black- 
smith, a mason, a cooper, a charcoal burner, a shoemaker and 
five labourers. The settlement was seemingly in a flourish- 
ing condition ; houses and workshops had been built, and a 
church and schools. In 1856 all signs of progress had vanished. 
The commissioners of that year found the workshops in a 
state of decay, destitute of tools, and deserted by the in- 
structors and the Indians. The school-house was in ruins, 
and a few scholars were gathered in the teacher's house. 
Various reasons were assigned by apologists for the 
failure when contrasting it with the gratifying success at 
the settlement at Wikwemikong, but no one reason is alone 
sufficient. The formal village, with its automatic subsi- 
dized labour and its regular and monotonous tasks, had been 
repellent to the Indian, who was invited to freedom by the 
open lake. The experiment was not repeated until the 
modern policy of instruction in farming was instituted by 
the government of the Dominion, and spread to the western 
tribes in 1879. 

The various inquiries by government into the subject of 



THE PROVINCE OF CANADA 351 

Indian education during the existence of the Province of 
Canada, have preserved an interesting body of contemporary 
opinion on the subject. The system at present in vogue is 
founded upon these early attempts and has not departed 
very far from the first model. The present condition and 
life habits of the Indians in the older parts of Ontario and 
Quebec, which are far in advance of the position in 1841, are 
to be attributed largely to educational and missionary effort 
throughout the province. 



THE LEGAL STATUS OF THE INDIANS 

During the existence of the Province of Canada the legal 
position of the Indian became clearer, and the legislation, 
which was evolved principally for his protection, served also 
to define his standing as an individual in the state. Before 
there had been any legislative enactments bearing upon the 
legal status of the Indians, two eminent lawyers gave opinions 
on the subject. In 1839 Chief Justice Macaulay stated that 
the Indian had no claims to separate nationality such as 
would exempt him from being amenable to the laws of the 
land and entitled to their protection, and after citing cases 
in which Indians had been arraigned criminally and convicted, 
proceeded to say : 

So as respects civil matters, I believe our courts are 
considered open to enforce their contracts, or to afford 
redress for injuries to their persons or property, not only 
as between them and the white people, but in relation 
to each other, unless mental incapacity to contract, fraud, 
or some other valid defence could be established, or 
some special ground be relied upon in particular cases. 
It is true civil suits in which Indians were parties have 
been very rare, but I am not aware that the jurisdiction 
of our civil tribunes, any more than the criminal, could 
be withheld if required to be exercised. Then, as to 
political rights, the same principles seem to apply, and 
if possessed of sufficient property to qualify them, their 
competency to vote at elections or fill municipal offices, 
if duly appointed thereto, could not be denied. 



352 INDIAN AFFAIRS, 1840-1867 

In 1840 the attorney-general gave it as his opinion : 

1st. That Indians under the age of '21 years are 
minors in the eye of the law, beyond that age they have 
the rights of other subjects.' 

2nd. That they ' are not incapable of making civil 
contracts.' 

3rd. That they ' have legal capacity, either as plain- 
tiffs or defendants.' 

After the Union the legislation applicable to Indians in 
the two provinces was separate ; not until 1857 did an act 
appear upon the statute-book which treated the Indians of 
the provinces as one class. The legal definition of the term 
' Indian ' was always more inclusive in the lower province, 
admitting all persons intermarried with Indians, all persons 
of Indian blood residing among Indians, and all persons 
adopted in infancy and residing among Indians. For Upper 
Canada the principle that an Indian woman who married 
a white man did not confer upon him the status of an Indian, 
but lost her own position as a member of her band and took 
that of her husband, was adopted, and was later carried into 
the statutes affecting the Indians of the Dominion. 

The legislation for the control of the liquor traffic was also 
more advanced in Upper Canada than in Lower Canada. 
The early enactments were all by the way of regulation and 
licence of the trade, and remained so in Lower Canada. Pro- 
hibition of the sale of intoxicants to Indians in Upper Canada 
was passed in 1835, with a penalty not to exceed 5. This 
act was to remain in force for four years, and thence to the 
end of the next ensuing session of parliament. It was amended 
and made permanent on February 10, 1840. The provisions 
of the statute have since been elaborated by the Dominion 
parliament. 

The Upper Canadian Indian was also granted certain 
privileges designed for his protection against unscrupulous 
traders. Indians were exempt from taxes and assessments, 
confession of judgment could not be taken from them, nor 
could any debt be recovered from an individual Indian 
unless he held land in fee-simple of the assessed value of 25 



THE PROVINCE OF CANADA 353 

or upwards. The reserve lands, with their timber and 
minerals, were also protected from trespass by white men. 

The first act applicable to both sections of the province 
was passed at the session of 1857 ; it dealt for the first time 
with the enfranchisement of Indians. When commissioners 
appointed for that purpose found, after examination, that 
an Indian was competent to manage his own affairs, he might 
receive a portion of the tribal lands in his own name as well 
as his share of the capital funds of the band. He then ceased 
to be an Indian and took on the responsibilities and privi- 
leges of an ordinary citizen. Enfranchisement under the 
present Indian Act is, by comparison, a tedious and dis- 
heartening process. The act of 1857 also empowered munici- 
palities to attach any Indian reserve to a neighbouring school 
section, ' thereby enabling the aborigines to benefit by the 
excellent and cheap education afforded by the common 
school system of Canada.' 

It will be perceived from the examination of the statute- 
book that the legal position of the Indians had developed 
from the indeterminate to the definite. In 1795 Governor 
Simcoe had braced himself to bring to justice an Indian 
murderer, and had intended to support his authority with 
all the military force of the country. In 1860 the Indian 
knew that he was subject to the criminal law, and that special 
laws defined his position in society, protected his property 
from encroachment, and gave him great privileges and 
immunities. 

THE INDIAN DEPARTMENT 

The establishment of the Indian department continued 
on the basis previously outlined until several years after the 
Union. It had been divided between Upper and Lower 
Canada in 1830 and placed under the governor and lieutenant- 
governor, and so continued until 1844. One of the duties 
of the royal commission appointed by Sir Charles Bagot 
in 1842 was to report on Indian matters generally, and to 
recommend any changes that should be made in the manner 
of conducting the business of the Indian department. Their 

VOL, v z 



354 INDIAN AFFAIRS, 1840-1867 

report of January 22, 1844, recommended, among other 
things : 

ist. That the management of the Indians be placed 
under the Civil Secretary with the view of its being 
brought more immediately under the notice of the 
Governor-General . 

2nd. That the two branches of the Department be 
united and the record kept in one office. That the 
correspondence and central business be conducted at 
the Seat of Government, under the superintendence of 
a Chief Clerk at an annual salary of 300 pounds. 

* 

4th. That the office of the Chief Superintendent in 
Upper Canada, and the present establishment of local 
officers, be reduced, and that in lieu thereof three Indian 
Visitors be appointed at a salary of 300 pounds a year, 
with an allowance to be fixed for travelling expenses. 

5th. That the Province be divided into three Districts 
according to the locality of the Settlements, and that 
each Visitor be charged with the superintendence of a 
separate District Lower Canada may form one, the 
Tribes now under the separate charge of the Chief 
Superintendent in Upper Canada may be united with 
the second, and the remainder, now under charge of five 
Resident Superintendents, into a third. 

These recommendations were partially carried into effect. 
On May 15, 1844, the chief superintendent was informed by 
letter of April 25 that, as May 15 had been fixed for closing the 
public offices at Kingston preparatory to removal to Montreal, 
the governor-general had directed that from that date the 
following changes would take place in the management of 
the Indian department : 

The correspondence and central business of the 
Department will be conducted at the Seat of Govern- 
ment, under the orders of the Civil Secretary assisted 
by Mr Geo. Varden, the present Clerk in the Indian 
Office, who will be attached for this purpose to the 
Indian Branch of the Secretary's Office. The Chief 
Superintendent will deliver over to Mr Varden the 
records of the Department, as he will be charged with 
the preparation of the various accounts, estimates, 



THE PROVINCE OF CANADA 355 

requisitions, money warrants, etc., which will relieve 
the Superintendent from that onerous portion of his 
duties, and admit of his devoting more time to the 
moral, intellectual and physical improvement of the 
Indians under his superintendence. 

The chief superintendent was further informed that the 
resident superintendents would be instructed to correspond 
direct with the civil secretary upon all matters connected 
with their districts, and when it was thought necessary, the 
civil secretary could refer the matter to the chief superin- 
tendent for the benefit of his opinion. 

The tribes under the charge of the chief superintendent 
would continue under his immediate superintendence ; and 
he would be directed by the governor-general, when circum- 
stances required it, to visit the other settlements, and to 
report upon any points on which particular information 
might be wanted. 

Further changes were carried into effect on July I, 1845. 
Samuel P. Jarvis, who had succeeded Colonel Givins as chief 
superintendent for Upper Canada, was informed by the 
civil secretary, on April 16, 1845, that Her Majesty's secretary 
of state, acting on the recommendation of Messrs Rawson, 
Davidson and Hepburn, had decided to abolish the office of 
chief superintendent, and that his duties would cease from 
June 30 following. 

The services of three resident superintendents in Upper 
Canada, James Winniett, William Jones and J. W. Keating, 
and two in Lower Canada, James Hughes and S. Y. Chesley, 
were at the same time dispensed with. 

The following is a list of the civil secretaries who were 
also superintendents-general of Indian Affairs : 

J. M. Higginson, May 15, 1844 to May 31,1846. 

Geo. Varden (Acting), June 1 2, 1 846 to March 30,1847. 

Major T. E. Campbell, March 31, 1847 to November 30, 1849. 

Col. R. Bruce, December 1,1849 to May 31, 1854. 

L. Oliphant, June 19, 1 854 to December 18, 1854. 

Viscount Bury, December 19, 185410 January 31,1856. 

S. Y. Chesley (Acting), January 25, 185610 February 27, 1856. 

R. T. Penncfather, February 27, 1856 to June 30,1860. 



356 INDIAN AFFAIRS, 1840-1867 

The most difficult task which confronted the commis- 
sioners of 1856, was to form a financial scheme for the support 
of the Indian department, after the withdrawal of the imperial 
grant. The home government considered that the sole need 
for an Indian department arose out of the imperial govern- 
ment undertaking to distribute presents ; as soon as the 
gifts were withdrawn the function ceased. But at the same 
time the imperial government recognized that the provincial 
government must continue to supervise the estate, and the 
commissioners of 1856 were required to indicate how the 
expenses could be met. The problem had already received 
consideration from the heads of the department, but no 
scheme which had a sound financial basis had been suggested. 
Laurence Oliphant, Lord Elgin's secretary, who was superin- 
tendent-general for six months in 1854, was the first to 
attempt the solution. It is strange to find the author of 
Altiora Peto, Piccadilly, and the rest connected with this hard 
official knot. That he did not altogether succeed in his 
task is not surprising. His attempt to solve the problem 
was based upon unrealized assets : he left out several important 
factors, and proposed to use a parliamentary appropriation 
for purposes other than those for which it was voted. He 
shared with others the idea, if he did not originate it, that 
the Indian estate should bear the charges for the support 
of the department. Viscount Bury, who succeeded him in 
office, did not favour this plan, but suggested that the imperial 
government should vote 80,000 sterling, which should be 
invested in provincial debentures, and consequently produce 
revenue with which to conduct the department. The 
secretary of state, Henry Labouchere, would not adopt this 
view. He held it to be ' no more than consistent with equity 
and common usage that where an Agency is employed for 
the management of large pecuniary interests, its officers 
should be paid with the funds which they administer.' The 
commissioners of 1856 were thrown back upon the resources 
of the Indian estate and of the province, if the latter could 
be drawn upon, and proposed to levy a contribution of 
ten per cent upon all funds of the Indians then on hand, 
and to continue it upon all future collections. The amount 



THE PROVINCE OF CANADA 357 

then invested in debentures and like securities bearing 
interest at six per cent was $1,019,699.25. 

The province was asked to meet, during a period of ten 
years, any deficit which might arise in the proposed fund. 
It was to be understood that the patronage of the depart- 
ment should fall to the colonial government. This scheme 
was adopted, but the province only made an assisting grant 
for a year or two. It continued until March 31, 1912, when 
a parliamentary appropriation became available to meet the 
expenses. From July 1, 1 860, all control of Indian Affairs by 
the imperial government ceased. From the Union until that 
date the governor of the province held the Indian administra- 
tion in his hands ; responsible government had been granted, 
but neither the ministers nor the executive council inter- 
fered in the management of the Indians. They were scrupu- 
lous to differentiate between their duties as advisers merely 
and as responsible administrators. In 1845, during Lord 
Metcalfe's term of office, the executive council, reporting 
on a question of Indian Affairs, made this position plain : 

The withdrawal from the consideration of the Com- 
mittee of Council, of all papers connected with Indian 
Affairs, led them to believe that Your Excellency agreed 
with them in their view, that the Indian Department 
was not one under the Superintendence and management 
of the local authorities, but rather, one especially en- 
trusted to Your Excellency by Her Majesty, as a matter, 
the direct control of which belongs to Imperial Authority. 
As Executive Councillors appointed to advise Your 
Excellency, under Her Majesty's Royal Commission, 
they would feel it their duty not to withhold the humble 
expression of their opinion on any subject on which 
Your Excellency might desire to consult them. But in 
such a case they would suggest that some distinction 
should be drawn between a reference for their advice, 
on which they are responsible to Parliament, and one 
like the present. 

The administration of Indian Affairs was given to the 
Crown Lands department, and all funds invested in 
commercial securities were assumed and capitalized. The 
commissioner of the Crown Lands became the chief 



358 INDIAN AFFAIRS, 1840-1867 

superintendent of Indian Affairs. This arrangement con- 
tinued until Confederation. 

The commissioners of the Crown Lands who administered 
the Indian department were : 

Hon. P. M. Vankoughnet, July i, 1860 to March 1 8, 1862. 
Hon. Geo. Sherwood, March 27, 1862 to May 23, 1862. 

Hon. William M c Dougall, May 24, 1862 to March 29, 1864. 
Hon. A. Campbell, March 30, 1864 to June 30, 1867. 



II 

THE MARITIME PROVINCES 
NOVA SCOTIA 

THE dispatch of Lord Glenelg from the Colonial Office 
of August 22, 1838, was also addressed to the governor 
of Nova Scotia, Lord Falkland. The requirements 
of Lord Glenelg set on foot an examination into the state of 
the Indians of the colony, and the results which were con- 
veyed to the secretary of state on July 15, 1841, present a 
gloomy record of neglect and failure. The inquiry was 
made by a series of questions addressed to persons of influence, 
who either had been interested in the Indians or who had 
opportunity of becoming acquainted with their condition. 
The facts and opinions presented by these individuals were 
reduced to a memorandum, which was conveyed to the home 
government by Lord Falkland, and afterwards presented to 
the legislative assembly of the province during the session 
of 1848. It was stated that ' most Colonies had done some- 
thing for the relief of this class of their people ; but the 
Records of Nova Scotia hardly show any intention of the 
kind. Lands were indeed many years since reserved for 
the Indians in various parts of the Province, but no encour- 
agement, until very recently, was held out to them to settle 
and cultivate the soil : and the Legislature have annually 
granted a small sum to purchase Blankets for the old and 
helpless ; but beyond this little has been attempted for the 
relief or civilization of this unfortunate race.' 



THE MARITIME PROVINCES 359 

In that year Judge Wisswall, who was described as the 
best friend the Indians ever had in the province, superintended 
the settlement of about twenty families in the county of 
Annapolis, and during his lifetime they made considerable 
progress. As the efforts to ameliorate the Indians at that 
time seem to have been confined altogether to private efforts, 
the names must not be forgotten of Judge Wisswall and of 
Abbe Sigoyne, a Roman Catholic priest, who had the spiritual 
charge of the Indians throughout the whole of the western 
part of the province. It is not likely that this latter witness 
would exaggerate in his description of their condition. He 
wrote with regard to the Indians : 

In general they are so much in distress, their depravity 
and ignorance are such, the bodily infirmities of many 
so great, that, in my opinion, there is but faint hope 
of success in the trying to bring them to a civilized life. 
Their habits for the most part are irregular and licen- 
tious. Drunkenness is too common, especially among 
the young the female sex even is not free from that vice, 
which is one of the principal causes of their infirmity 
and poverty. 

Beyond the provision of lands already mentioned and 
the small grant for blankets, there was but one provincial 
enactment, to prohibit the sale of liquor, by which any 
attempt was made to improve their wretched state. The 
provincial government had not, as a matter of policy, given 
consideration to any general measures for their improvement. 
The burden of the memorandum was that the Indians of 
Nova Scotia must embrace some of the habits of civilization 
or perish. The direct effect of the representations of Lord 
Falkland was that the secretary of state for the Colonies 
instructed him to recommend the care of these Indians to 
the justice and liberality of the local legislature. This appeal 
met with sympathetic treatment, and when the Province of 
Nova Scotia came into Confederation, the statute-book 
showed that the legislature had endeavoured, so far as its 
power went, to provide for the civilization of the Indians. 
Commissioners were appointed in different sections of the 
province, whose duties were to lease and sell both timber 



36o INDIAN AFFAIRS, 1840-1867 

and lands for their benefit. The proceeds were to be applied 
to prevent destitution, and to other purposes for the direct 
benefit of the Indians ; but little was done towards educa- 
tion, apart from the beneficent influence of the Roman 
Catholic clergy, who had established missions amongst them, 
and whose influence had always been exerted to prevent the 
spread of debauchery and licentiousness. In 1841 the number 
of Indians in the province was given as 1400 souls, or about 
350 families, and the general decrease in population was 
made plain by citing the conditions in the county of Pictou, 
where it was stated there were probably 800 Indians in the 
year 1798, which number had decreased towards the middle 
of the next century to 100. Since that time, however, the 
population has remained stable, and the latest census returns 
show that there are now over 2000 Indians in the province. 

NEW BRUNSWICK 

What has been said of the Indians of Nova Scotia applies 
generally to those of New Brunswick. The colonial govern- 
ment had done but little to advance the interests of the 
Indians, and in addition to the causes which had rendered 
them indigent, the great fire of 1825 had destroyed the 
game in the northern portion of the province. Sir John 
Harvey, the governor of New Brunswick, reported the con- 
ditions as he found them on May 14, 1839, and they corre- 
spond with those existing in Nova Scotia. The legislature 
of New Brunswick had already recognized more fully than 
the sister colony its responsibility to the Indians. Com- 
missioners had been appointed to attend to their affairs and 
to administer their lands, and when New Brunswick came 
into Confederation, the law respecting Indians was in some 
essential particulars designed for their protection and for a 
proper administration of their estate. But this fell far short 
of an enlightened policy for Indian education and advance- 
ment, and the contrast is strong between the anxiety which 
was ever present with the government of Upper Canada for 
the advancement of the Indians and the apathy which 
prevailed in the maritime colonies. 



THE MARITIME PROVINCES 361 

The population given by the commissioners of 1839 was 
found to be 753, but this can hardly have been the full 
Indian population. In the northern part of the province 
particularly, their nomadic habits rendered it impossible 
properly to enumerate them. The present population of 
over 1600 shows considerable increase upon the figures 
quoted by the commissioners. 

PRINCE EDWARD ISLAND 

The Indians of Prince Edward Island, in the early days of 
the settlement, seem to have been entirely neglected by those 
in authority. In a petition which they addressed to the crown 
in 1838, they state that the French taught them religion and 
the duties of a civilized life, but that since they became 
British subjects they had been deprived of their hunting 
grounds without any remuneration, and that by privation 
and want their once numerous tribe had been reduced to a 
1 skeleton of five hundred individuals ' ; that despite frequent 
applications to the House of Assembly, no land had been set 
apart for them ; and the petition closed with a prayer for a 
permanent reserve upon which they might reside without 
fear of molestation. 

The lieutenant-governor of the island, Sir C. A. Fitzroy, 
in reply to an inquiry from Lord Glenelg, said that he did 
not believe the number of Micmacs to be more than two 
hundred, and that ' from their habits of intemperance, and 
other causes, their number was rapidly decreasing ; and that, 
with few exceptions, they are sunk to the most abject and 
degraded state to which I should conceive it possible for 
human beings to arrive.' He recommended that Lennox 
Island, lying on the north-west coast of Prince Edward 
Island between Richmond and Goodwood Bays, be pur- 
chased for them. It was a spot where they had for some 
time been settled, where a church had been built for them, 
and where a number of their dead had been buried. This 
recommendation was not immediately acted upon, and when 
it was carried out, private philanthropy was the agent and 
not the colonial government. The Indians continued to 



362 INDIAN AFFAIRS, 1840-1867 

live upon the island without title until it was purchased for 
them by the Aborigines Protection Society in 1870. The 
reserve has been under the supervision of the Dominion 
government since Prince Edward Island entered the Dominion 
on July i, 1873. The title was transferred from the society 
to His Majesty the King in 1912. 



THE POST OFFICE 

1840-1867 



THE POST OFFICE, 1840-1867 
I 

NEW ERA IN POSTAL AFFAIRS 
A REVOLUTION THROUGH STEAM CARRIAGE 

THE period with which we are about to deal is one of 
great importance in the history of the Post Office. 
Indeed, it may with truth be said that from it 
date the Post Office and its auxiliary services, as they are 
known to-day. The transportation of mails across the 
Atlantic and through Canada underwent a revolution by the 
use of steamboats and railways. 

In April 1838 two steamers set out from ports in the 
United Kingdom for New York the Great Western from 
Bristol and the Sirius from Cork and reached their destina- 
tion seventeen days later. On her way home the Sirius 
overtook the Tyrian, the sailing-packet bound from Halifax 
to Liverpool with the mails, and, taking the mails on board, 
advanced their passage by some days. The attention of the 
Colonial Office was drawn to this event by the British consul 
in New York, and by Joseph Howe and William Crane, the 
latter a member of the House of Assembly of New Brunswick, 
as the former was of the Nova Scotia house. The British 
government needed little urging, however, and before the 
end of the year it had invited tenders for a steam service 
between Great Britain and Nova Scotia. These were not 
satisfactory, but Samuel Cunard of Halifax entered into 
negotiations with the British government, a contract was 
drawn up, and in July 1840 the steamship Britannia left 
Liverpool for Halifax with the mails, under a contract between 
the British government and Cunard. The trip was made 



366 THE POST OFFICE, 1840-1867 

in twelve and a half days, and by means of a steamer from 
Pictou the mails for Canada reached Quebec five days later. 
Until this trip, even when the weather was good, the average 
time of the packets from Liverpool to Halifax was thirty-five 
days, and to Quebec fifty days. 

Railroad construction was commenced in Canada at this 
time, but it was some years before the completion of the 
extensive schemes establishing communications between 
Eastern and Western Canada. In 1840 the mails passing 
between Montreal and New York were conveyed by the 
Champlain and St Lawrence Railway over the section be- 
tween Laprairie, opposite Montreal, and the town of St 
Johns, near the United States border. The extent of the 
increase in the speed of the mails after the railway came into 
use may be gathered from the fact noted by the postmaster- 
general that, whereas in stage-coach days it took ten and a 
half days to travel from Quebec to Windsor, Ontario, during 
the winter, the same journey was made by railway in two 
days and one hour. 

THE BURDEN OF HIGH RATES 

While these great improvements were talcing place in the 
conveyance of the mails by sea and by land, changes equally 
important were being made in the postal charges. The Lords 
of the Treasury considered that the high rates of postage on 
letters between Great Britain and her colonies in North 
America frequently as much as three shillings and even four 
shillings for a single letter must be a serious grievance to 
the poorer settlers, and must check emigration and tend to 
discourage friendly intercourse between the colonies and the 
mother country. On July 6, 1840, they therefore directed 
the postmaster-general to make a thorough-going lowering of 
the rates. Thereafter the charge on letters passing between 
the United Kingdom and any part of the colonies in North 
America was not to exceed one shilling and twopence sterling 
per half ounce. To Halifax, the rate was one shilling, as 
there was no land conveyance involved. If people were 
willing to have their letters carried by private ship instead 



NEW ERA IN POSTAL AFFAIRS 367 

of steam-packet, the charge was tenpence. However, the 
rates were still, according to modern notions, extremely 
high. While the charges exceeded a shilling a letter but 
little advantage could be taken of the communication between 
Canada and the mother country by the class specially in the 
mind of the government. 

An event of immense consequence in postal history, 
though without immediate result in Canada, was the estab- 
lishment of penny postage in Great Britain. On January 10, 
1840, the British government at a single stroke swept away 
the entire complex system of rates, based on the distance 
letters were carried and the number of their contents, and in 
its place set up the simple rate of one penny per half ounce, 
which carried letters to every part of the kingdom. By the 
world at large, and even in England itself, this great change 
was regarded as an experiment, the issue of which appeared 
to most people to be more than doubtful. As late aa 1844, 
the leading officials of the British Post Office, who had con- 
sistently opposed the scheme when it was under inquiry, 
declared that it had failed, and Rowland Hill, the illustrious 
expounder of the scheme, had grounds for fear that Sir Robert 
Peel would abandon it. 

SYDENHAM'S POSTAL COMMISSION 

It was in the early stages of the experiment that the 
commission appointed by the governor-general, Lord Syden- 
ham, began its inquiries into the state of the Canadian Post 
Office. The commissioners were fortunate in the fact that 
the governor-general, who was greatly interested in their 
work, had been a member of the committee of the House of 
Commons which had been entrusted with the examination of 
Hill's scheme. Sydenham did not live to see the completion 
of the commission's labours, the report being presented to his 
successor, Sir Charles Bagot, on the last day of the year 1841. 

The report began with a remarkably complete survey of 
the condition and working of the postal service. The atten- 
tion of the commissioners was drawn particularly to the 
faulty organization of the administration and the excessive 



368 THE POST OFFICE, 1840-1867 

rates of postage. The deputy postmaster-general, under the 
terms of his instructions, was responsible to the postmaster- 
general in England, and to him alone ; in theory, and in a 
large measure in practice as well, he was quite independent 
of the provincial government. Indeed, it will be remembered 
that Stayner repeatedly declined to give information sought 
by the legislature, because he did not conceive himself war- 
ranted in doing so without authority from the postmaster- 
general. The assertion of independence on the part of the 
deputy postmaster-general was naturally tempered by 
various considerations. Stayner, while indifferent to the 
opinions of the House of Assembly, always courted the good- 
will of the governor-general, and with unvarying success. 
In Nova Scotia the relations between the House of Assembly 
and the deputy postmaster-general were steadily cordial. 
But although good sense, prudence and an accommodating 
disposition did much to prevent the consequences which 
might have been expected to ensue from such a situation, 
the commission rightly regarded the situation as unsatis- 
factory. Nor could they find that the authority of the 
postmaster-general, which was absolute in theory, could be 
effectively exercised. The distance from the colonies made it 
necessary for the postmaster-general to rely on the local 
deputies for information, and left the latter virtually inde- 
pendent. Messrs Dowling and Davidson, the two outside 
commissioners, sought to show that Stayner had abused his 
position, but the instances they offered as proof were sus- 
ceptible of reasonable explanations, and rather weakened 
their case, which was logically unassailable. The remedy 
proposed by the commission was to place the deputy post- 
master-general under the control of the governor-general in 
all matters which did not conflict with the authority of the 
postmaster-general of England. By this means there would 
be conferred upon the governor-general a sort of concurrent 
jurisdiction, which would subject the deputy postmaster- 
general to a real, because no longer a distant, responsibility, 
and introduce some measure of popular control by making 
the local administrators answerable politically for abuses in 
the direction of the Post Office. 



NEW ERA IN POSTAL AFFAIRS 369 

In dealing with the postage rates, which were almost 
universally regarded as too high, the commissioners laid it 
down as a principle that the rates should be so fixed as always 
to yield income enough, and never much more than enough, 
to provide liberally for the expenses of the department. 
They assumed that by a careful calculation rates could be 
arrived at which would leave no fear of a deficit, while in- 
creased facilities or a further reduction of rates might be 
introduced as the income improved. In considering what 
these rates should be, the commission followed closely the 
line of reasoning adopted by Hill in his celebrated pamphlet 
Post Office Reform. 

By inquiries addressed to representative persons in all 
the colonies, the commissioners learned that there were many 
more letters carried by agencies outside the control of the 
Post Office than by the Post Office itself. Every teamster, 
stage driver, and even the passengers, were laid under contri- 
bution. Although all the steamboats on the lakes and rivers 
carried a Post Office mail, nearly all the letters carried by 
them were outside the Post Office. Several competent 
witnesses testified that by far the larger volume of letters 
exchanged between Montreal and Quebec was carried by 
illegal means. A member of the legislature, whose oppor- 
tunities for observation were unusual, estimated that during 
the summer not one-twentieth of the letters written in one 
of these leading cities and addressed to the other were con- 
veyed by the mails. The steamboats on the St John River 
did an equally thriving business. A gentleman in Frederic- 
ton, who expected a letter from St John, went down to the 
landing and, stepping on board the steamer, saw not fewer 
than sixty letters lying on the cabin table awaiting their 
owners. Not finding his letter, he went to the post office, 
reaching it in time to see the mail bag, which had been brought 
by the steamer, opened. There were but six letters shaken 
out. On the stage-coach between St John and Fredericton 
every passenger was expected to take a parcel of his friends' 
letters with him. These he either distributed personally or 
dropped in the post office at his destination, from which they 
were delivered for a penny each. On occasions when a 

VOL. v a A 



370 THE POST OFFICE, 1840-1867 

person wishing to have a letter carried by the coach could see 
no one to whom he cared to entrust it, he would make up a 
package of old papers and sticks, and place the letter in the 
centre. The freight on the bundle was less than the postage 
on the letter concealed in it. Nova Scotia and Prince Edward 
Island had the same stories of evasion to tell. Along the 
extensive coast-line, every boat and coasting vessel had its 
quota of letters. In the western counties and on the southern 
shore of Nova Scotia, it was estimated that the Post Office 
scarcely carried one-tenth of the letters exchanged. 

The correspondents of the commission were unanimous in 
the opinion that the excessive postage rate was the cause of 
these illegalities. But the commission, while not disposed to 
uphold the existing rates, inclined to the belief that due 
weight had not been given to other causes, such as the lack 
of post offices, the inconvenience of the office hours, or the 
infrequency or slowness of the mail. These various defects 
in the system were examined, but the attention of the com- 
missioners was given mainly to the rates. Many of their 
correspondents had been impressed with the attractiveness 
of the penny postage proposals, but it was easy for the 
commission to show the fundamental differences, from the 
standpoint of the Post Office, between a small and densely 
populated country, containing many great cities and the 
commercial centre of the world, on the one hand, and on the 
other a thinly settled colony, almost entirely devoted to the 
cultivation of the soil, and with its commerce in its infancy. 

Rowland Hill had been able to make out his case for 
penny postage on the existing circulation of letters in Great 
Britain, without calling into his calculation the enormous 
increase in the number of letters which was certain to follow 
upon the reduction of the rates to a penny a letter. Accord- 
ing to his calculations upon the circulation of letters as it 
stood at that time, the total cost for carrying letters from 
post office to post office was less than one farthing, and the 
difference in the cost of conveyance upon a single letter for 
the longest or the shortest distance was so small as to be 
negligible. Pursuing the same method of reasoning, the 
commissioners showed that the cost of handling a single 



NEW ERA IN POSTAL AFFAIRS 371 

letter was fivepence-half penny, of which threepence was for 
conveyance. They then proceeded to the inference that, if 
a revenue was to be produced which would meet the expendi- 
ture, the proposition of a low uniform rate must be dismissed 
as impracticable. 

The commission was wrong in basing its reasoning on the 
existing circulation. The average postage charged on a 
letter was ninepence, and to suppose that if it were reduced 
to threepence or fourpence a letter there would not be a great 
increase in the volume of the letters transmitted by post, was 
to disregard all previous experience. Indeed, when the 
threepenny rate was established in 1851, the number of letters 
more than doubled within a twelvemonth. However, having 
agreed to exclude from consideration the proposition of a 
uniform rate, the commission set about ascertaining a scheme 
of rates with the smallest possible number of variations. It 
finally settled on a schedule which contained five different 
rates, running from twopence for distances up to thirty miles, 
to one shilling for distances over two hundred miles, rates 
much lower than those in operation in the United States at 
that time. The commission decided also to recommend the 
adoption of the weight system in fixing the charges, in prefer- 
ence to the prevailing system by which the charges were 
determined by the number of enclosures in a letter. As 
regards newspaper postage, which had hitherto been the 
perquisite of the deputy postmaster-general, the commission 
recommended that it should go into the general revenue of 
the Post Office, and suggested a charge of one halfpenny a 
sheet. 

This report was dealt with piecemeal by the British 
government. On August 16, 1842, the first stroke was made 
at Stayner's practically absolute power by taking from him 
the right to appoint postmasters and vesting it in the governor- 
general. Stayner retained the power to dismiss any official 
for misconduct, but he was reminded that no person should 
be dismissed until he had opportunity of defending himself 
against the charges brought against him. In August 1843 
the colonial secretary announced to the governor-general 
that it had been decided to adopt the weight system instead 



372 THE POST OFFICE, 1840-1867 

of the number of enclosures in determining the postage on 
letters, to abolish the deputy postmaster-general's news- 
paper perquisite, and to fix a rate of one halfpenny per 
sheet for newspapers. In July 1844 Stayner was notified 
that thereafter his salary would be the handsome one of 
2500 sterling a year in lieu of all emoluments, but that his 
successor would have not more than ^1500 sterling a year. 

All the principal recommendations of the commission 
having been carried into effect except that relating to the 
postage rates, the course of events ran in a narrower channel, 
and though the ends towards which they tended were not 
less important than those already reached and overpassed, 
the movement thereafter was marked by less vehemence. 
The settlement of the newspaper question, and the wiping 
out of the deputy postmaster-general's perquisites, allayed 
the sense of personal irritation felt generally throughout the 
country. The main point towards which attention was 
directed for the next few years was the reduction of the rates, 
and their assimilation as far as the circumstances of the 
country would permit to the rate which was producing such 
a variety of beneficent results in Great Britain. 



II 

THE MARITIME PROVINCES 
EARLY POSTAL EFFORT 

AS the Maritime Provinces were pursuing substantially 
/~\. the same ends, it is proposed from this point until 
1851 to combine the movement in Canada and in 
Nova Scotia, New Brunswick and Prince Edward Island, 
into a single narrative. Before doing this, however, it is 
necessary to relate shortly the progress of events in the 
Maritime Provinces up to the point we have now reached. 

The first post office established in the Maritime Pro- 
vinces, and, indeed, in the present British colonies, was 
opened at Halifax in 1755, when, on the urgent appeal of the 
governors of the several colonies after Braddock's disaster 



THE MARITIME PROVINCES 373 

at Fort Duquesne, the packet service was put in operation 
between Falmouth, in Cornwall, and New York. Letters 
to and from Halifax were exchanged by way of New York, 
or Boston, by any war or merchant vessel that happened to 
be passing between the two places. No further post offices 
were opened until after the American Revolution, and, 
indeed, the few settlements on the Atlantic were not ill served 
by the coasting vessels running to and from Halifax. The 
little groups which were forming on the Bay of Fundy, both 
before and after the incoming of the loyalists, received their 
letters from Windsor, which was connected with Halifax by 
an Acadian road. At the close of the war, a movement was 
begun to have direct packet service between England and 
Halifax; and Lord North, foreseeing that Halifax would 
become a place of some importance as the rendezvous of the 
fleet, encouraged the colonies to believe that their desires 
would be met. But other views prevailed. In November 
1783 the postmaster-general re-established the service be- 
tween Falmouth and New York, and the Maritime Provinces, 
to their indignation, found that they had to depend on a 
foreign post for the maintenance of their communication with 
the mother country. Canada having joined hands with the 
provinces by the sea in their demand for a direct service to 
the British colonies, the imperial government in 1788 required 
the packets running between Falmouth and New York to 
call at Halifax en route. At the same time a monthly courier 
service between Quebec and Halifax brought the Canadian 
provinces into connection with the packets. On the estab- 
lishment of the monthly inland service, post offices were 
opened at Windsor, Horton, Annapolis and Digby in Nova 
Scotia, and at Fredericton in New Brunswick. A post office 
had been in operation at St John since 1784, and thus the 
inland service in the Maritime Provinces was begun. Matters 
remained unchanged until the outbreak of the War of 1812, 
when, owing to the dangers from American privateers in the 
Bay of Fundy, the deputy postmaster-general was compelled 
to abandon the route by way of the Annapolis Valley and 
the bay, and to take an inland line of travel to the St John 
River. This route passed through Truro and on to Fort 



374 THE POST OFFICE, 1840-1867 

Cumberland, thence along the old Westmorland road to a 
point near the present Norton Station, then called the 
Fingerboard. Here the courier turned on to a trail which 
led to Fredericton. 

Like the deputy postmaster-general in Quebec, the 
deputy in Halifax, John Howe, was subjected to constant 
pressure on the part of the governor and the legislature for 
an extension of postal accommodation to all parts of the 
province. The governor was anxious for a means of com- 
municating with the militia, which were organized in each 
county, and the legislature pointed to the fact that the 
census of 1817 showed the population of Nova Scotia to be 
82,373 as a reason why postal facilities should be distributed 
more freely throughout the province. The deputy was 
under the same restrictive orders from home as were embar- 
rassing his brother official in Quebec, but he met the diffi- 
culty with more tact. He laid before the legislature the 
injunction of the secretary of the Post Office that no route 
should be established which would not produce at least 
revenue enough to cover its expenses, and obtained from 
that body an assurance that it would make up any deficiency 
on a route. He, on his part, engaged, in disregard of his 
instructions, to allow all postages arising on unproductive 
routes to be applied as far as they would go to the payment 
of the postmasters and mail couriers on such routes. 

In 1817 Howe made a comprehensive report on the mail 
routes in the province. There were two principal lines of 
mail conveyance. The first in local importance was that 
from Halifax to Digby by courier, and thence by packet to 
St John. Beyond Digby to Yarmouth, and thence round 
the coast to Shelburne, there was a line of settlements, which 
were served by a courier who was paid partly by the legis- 
lature and partly from the postages collected on the route. 
The second leading route was that between Halifax and 
Fredericton by way of Truro. This route, which was estab- 
lished at the beginning of the War of 1812, was discontinued 
at its close, but was shortly afterwards restored and became 
the permanent road between Halifax and Quebec. From 
Truro a branch line ran through the eastern counties to 



THE MARITIME PROVINCES 375 

Pictou and Antigonish. Howe wrote of this district with 
much satisfaction. The large immigration from Scotland 
and other parts of Great Britain had increased the number 
of settlements to such an extent that he anticipated that 
the revenue from the eastern counties would soon exceed that 
from the western counties. In 1818 the third great line of 
communication was opened by the establishment of a service 
along the southern shore from Halifax to Liverpool. 

For some years Antigonish was the most easterly post 
office on the way to Cape Breton, and had a considerable 
importance on that account. In Cape Breton there was a 
post office at Sydney as early as 1803, but for a long period 
its only connection with the mainland of Nova Scotia was by 
such vessels as happened to be running to or from Halifax. 
In 1817 an overland communication was opened between 
Sydney and Halifax, an Indian being employed to make 
monthly trips during the winter. When Cape Breton was 
annexed to Nova Scotia in 1820, Sir James Kempt, the 
lieutenant-governor, established a regular weekly mail 
service over the same route. 

The postal service in New Brunswick remained as it had 
been fixed in 1788 until as late as 1820. The only regular 
post offices in the province at that date were St John and 
Fredericton. The names of Maugerville and Westmorland 
appear in certain lists as early as 1803, but they were not in 
operation in 1820. Fredericton lay on the main route 
between Halifax and Quebec, and there was a regular courier 
between the capital and St John. The first district off the 
established routes to manifest a desire for postal communi- 
cation with the remainder of the province was on the Mira- 
michi River. The two lumbering and fishing settlements of 
Chatham and Newcastle had had a private courier who 
travelled to and from Fredericton, and was paid for his 
services partly by the legislature and partly by private sub- 
scription. This did not give satisfaction, as the courier 
could not be depended upon to deliver the correspondence of 
those who did not subscribe to maintain him on his route. 
The service proposed to the Miramichi would have cost much 
more than any possible revenue to be derived from the 



376 THE POST OFFICE, 1840-1867 

district, and negotiations between the deputy postmaster- 
general of Nova Scotia and the lieutenant-governor dragged 
along until 1825. In that year several important offices 
were opened in New Brunswick, and Howe gives an interest- 
ing account of his tour through the province establishing 
them. He set out in a vessel from St John for Dorchester, 
where he opened a post office ; thence, by way of Baie Verte, 
to Miramichi and Richibucto ; returning to Dorchester, he 
travelled by land to Sussexvale, installing postmasters at all 
three places. On arriving in St John, at the urgent request 
of the lieutenant-governor, he established offices at St Stephen, 
at the western end of the province, and at Kingston and 
Gagetown. By co-operating with the legislature, Howe was 
able to make this very considerable expansion of the pro- 
vincial system without the loss of a penny to the Treasury, 
and he received the thanks of the postmaster-general, though 
the secretary cavilled because there was no immediate finan- 
cial gain from the arrangement. 

Prince Edward Island had postal communication with 
Nova Scotia as early as 1803, though for many years it was 
very irregular in character. In 1816 a packet route was 
established between Pictou, Nova Scotia, and Charlottetown. 
As the inland postage did not cover the expenses of the 
packet and the salary of the postmaster, a convenient arrange- 
ment was made by the deputy postmaster-general of Nova 
Scotia, under whose jurisdiction the whole Maritime Provinces 
lay, by which the whole postage was handed over to the 
legislature by the postmaster of Charlottetown, and the out- 
lay for the service was borne by the legislature. This plan 
left the island service entirely in the hands of the local govern- 
ment, which provided very satisfactorily for the postal 
requirements of the island. There was no inland service 
until 1827, when the lieutenant-governor established three 
main routes, viz. : the western, which ran as far as Prince- 
town ; the eastern, terminating at St Margarets ; and the 
Georgetown route. Ten post offices were opened at this 
time, and by 1840 the number of offices had increased to 
twenty-nine. Within the island there was a uniform charge 
of twopence for each letter and a halfpenny for each newspaper. 



THE MARITIME PROVINCES 377 

The postage from Charlottetown to the principal places in the 
colonies was : to Halifax, eightpence ; to St John, one shilling 
and threepence ; to Montreal, two shillings and ninepence. 

THE NEWSPAPER POSTAGE QUESTION 

Having outlined the steps which resulted in the estab- 
lishment of the main lines of communication in the Maritime 
Provinces, it is now necessary to pass in review the principal 
questions which arose affecting the Post Office down to 1841. 
As in the case of the Canadian provinces, the two questions 
which agitated the legislatures of the Maritime Provinces 
were those of newspaper postage and of the control of the 
provincial Post Office, in both of which there were marked 
differences between the attitude of the assemblies in the 
Maritime Provinces and in the Canadian provinces. In 
1830 a petition for free postage for his paper was laid before 
the legislature of Nova Scotia by a publisher. The legis- 
lature, having looked into the history of the newspaper rates, 
found that, since about 1770, it had been the practice of the 
deputy postmaster-general of Halifax to charge two shillings 
and sixpence a year for each copy of a newspaper carried by 
post from the publisher to the subscriber, and that, following 
the practice of the secretary of the General Post Office, the 
deputy postmaster-general appropriated the proceeds to his 
own use. The legislature took the opposite view to that 
expressed by the Canadian legislature, holding that the 
deputy postmaster-general was quite justified in the course 
he pursued ; but being anxious to have newspapers carried 
free in the interests of popular education, it was in favour of 
granting the deputy postmaster-general a sum in lieu of his 
receipts from this source. The deputy postmaster-general of 
Nova Scotia was always able to command the goodwill of the 
assembly, at a time when the deputy in Canada was incurring 
the lively animosity of the assemblies in Upper and Lower 
Canada. This was doubtless partly due to his relationships 
in the assembly. 1 

1 The deputy from 1804 to 1819 was the father of Joseph Howe, and his 
successor was his son, the brother of the famous orator and statesman. 



378 THE POST OFFICE, 1840-1867 

Another reason for the difference was that while Stayner 
was receiving a most exorbitant amount in the way of per- 
quisites, Howe's receipts from the same source were very 
moderate. As against Stayner's income in 1840 of $15,977, 
that of Howe in the same year was only $3320. But though 
Howe was on good terms with the legislature, he by no means 
escaped criticism. 

In 1834 the proprietors of the Acadian Recorder and Free 
Press complained that, owing to Howe's interest in the four 
other newspapers published in Halifax, they were being 
unfairly treated. It appeared that the Nova Scotian, the 
Royal Gazette, the Journal and the Acadian were all con- 
trolled by the Howe family, and were all distributed through 
the post office free of postage. The proprietors of the other 
two newspapers petitioned the king to have their postage 
remitted, so that they might stand on the same footing. The 
postmaster-general, to whom the petition was referred, 
treated it slightingly. Disregarding the discriminatory 
features of the case, he pointed out that the practice was not 
illegal. It had been in operation since newspapers were first 
published in the colony, and the complainants had ample 
notice of the charge to which their papers would be liable. 
The charge was less than that in force in the United States ; 
and in any case the contemplated legislation respecting the 
colonial post offices would place the newspaper postages on a 
satisfactory basis. 

THE COLONIAL POST OFFICE BILL 

The Colonial Post Office Bill of 1834, which was drafted 
by the postmaster-general for acceptance by the colonial 
legislatures, proved a veritable stumbling-block to all general 
reform for many years. It was rejected by the legislatures 
of Upper and Lower Canada as totally unsuited to the 
conditions in the North American colonies. The committee 
of the House of Assembly in Nova Scotia which was appointed 
to consider the draft reported that, with some modifications, 
the proposed bill appeared to be well suited to accomplish 
its object ; but the amendments they suggested would have 



THE MARITIME PROVINCES 379 

been fatal to the uniformity which the postmaster-general 
considered essential in the bills passed by the several colonies. 
The committee, observing that Canada and New Brunswick 
had declined to adopt the bill, could not recommend the 
Nova Scotia legislature to accept it, but they wished His 
Majesty's government to know their views on the proposition 
submitted to them. 

The legislature of Nova Scotia, like those in the Canadas, 
was desirous of securing control of the inland posts, and in 
1838 passed a bill to that effect. It was satisfied that there 
was a considerable surplus remitted to the British Post 
Office every year, and as the legislature contributed to the 
maintenance of the unproductive routes in the remoter parts 
of the province, the house was convinced that, if the inland 
posts were entirely in its hands, the profitable services in 
the well-settled parts would help to pay the expenses of the 
outlying services, and the province would be relieved of a 
large part, if not the whole, of the contribution it made 
annually to the Post Office. The British government 
promptly disallowed the provincial bill of 1838, on the 
ground that, by refusing to adopt the draft bill of 1834, 
the province had deprived itself of the benefits which Great 
Britain intended to bestow on it. The postmaster-general 
objected to all partial legislation in the colonies, and par- 
ticularly in Nova Scotia, as by leaving the expenditure of 
the various posts throughout that province, the key to 
British North America, under the provincial legislature, 
that body would obtain management and power over the 
whole postal communication with the interior, and it might 
then not only object to defray the expense, but might inter- 
dict such communications as it did not approve of or deem 
necessary. 

The legislature was not, however, disposed to yield the 
point without further discussion, and in the summer of 1839 
it sent delegates to England to lay its views before the home 
government. The delegates applied themselves to their 
task with great skill, and although they did not succeed in 
bringing the British authorities to agree to the proposition 
they had gone specially to present, they obtained substantial 



380 THE POST OFFICE, 1840-1867 

concessions which removed any sense of grievance they had 
entertained. 

It was agreed that, so long as the revenue from the inland 
post office was sufficient to meet the expenditure of the 
internal communication, no demand for this object should 
be made upon the provincial funds, but, should the legislature 
deem it advisable that the lines of communication should 
be increased, the legislature would be expected to defray 
any expense of such additional communication as might not 
be covered by increased postage. The Treasury also ex- 
pressed its readiness to place the packet postage collected 
in the colonies, and which belonged of right to the British 
government, as it maintained the packet service, at the dis- 
posal of the several local governments, whenever the requisite 
authority should have been obtained under the imperial act 
of 1834. As matters then stood, however, the Treasury could 
have no power in this direction until the draft act submitted 
to the legislatures in 1835 had been adopted. In view of the 
difficulties which all the legislatures found in the way of 
accepting the draft bill, the Treasury was prepared to recon- 
sider the draft and to amend it in all proper ways. It was 
some years, however, before the colonies could extricate 
themselves from the tangle brought about by that unfortunate 
draft bill. 

ESTABLISHMENT OF THE MAIL STEAMER 

The replacement of sailing by steam vessels in the colonial 
packet service was an event of great importance, as much 
on account of what was attempted unsuccessfully as for 
what was actually accomplished. Acting under an impulse 
due, it would seem, to the eloquent pleadings of Joseph 
Howe and William Crane, the British government deter- 
mined to utilize the new motive power to bring about a closer 
intimacy than had hitherto existed between the mother 
country and the transatlantic colonies. The service between 
Liverpool and Halifax was to be carried on by the swiftest 
vessels that naval science made possible, and Halifax was 
to be the point of assembly for the mails from all the North 



THE MARITIME PROVINCES 381 

American colonies. Auxiliary services to and from Halifax 
were to give the advantage of the fast Atlantic steamers to 
Canada, Newfoundland and Bermuda, and the Atlantic 
steamers themselves were to run from Halifax to Boston. 

The legislatures of Nova Scotia and New Brunswick were 
asked to assist in the accomplishment of the great design 
by improving the roads through to Canada. New Brunswick 
made a ready response to the appeal. That province had 
been giving generous attention to its roads for a number of 
years, and Howe had the satisfaction of reporting that he 
was able to require his contractors to travel eight miles an 
hour through that province. Nova Scotia did not rise to 
the occasion with the same alacrity. In the same report 
Howe stated that he found the roads in many parts of that 
province in very poor condition, and he could not call upon 
the contractors for more than five miles an hour between 
Halifax and the New Brunswick boundary. Stayner, the 
Canadian deputy postmaster-general, who was under similar 
injunctions, stated that he had been enabled, through means 
furnished by the government in Lower Canada, to put the 
Temiscouata Portage, which had been the great obstacle to 
rapid conveyance between Canada and the Maritime Pro- 
vinces, for the first time in passable condition. This land 
route was not used for the conveyance of British mails to 
and from Canada during the summer months after the 
Cunard service came into operation. While navigation was 
open on the St Lawrence, the British mails for Canada were 
hastened off to Pictou by a fast coach service in the hands 
of the Cunards, and placed on a steamer, also owned by that 
company, which delivered them in Quebec three days later. 

But this system of communication between Great Britain 
and the transatlantic colonies was doomed to failure. In 
the competition between Halifax and the United States ports 
for the conveyance of mails to the Canadian provinces, 
Halifax occupied the same position of inferiority as she had 
done in the days of the sailing-packets. In earlier times her 
disadvantage lay in the longer route and the bad roads to 
Canada. Now that the roads were being put in good con- 
dition for carriage travel, the competing roads in the United 



382 THE POST OFFICE, 1840-1867 

States were being replaced by railways. At the time the 
Cunard service began, railway trains were running between 
Boston and Albany, and two years later the railway system 
was extended to Buffalo. Canadians soon found that time 
was saved by having their British letters carried on by the 
steamer from Halifax to Boston and thence by railway. 
The Cunards also saw that their United States business far 
surpassed the business transacted through Halifax, and they 
began an agitation to be allowed to drop the auxiliary service 
on the St Lawrence and to carry the Canadian mails on to 
Boston. This was of course opposed by the Nova Scotia 
government ; but the British government put its remonstrances 
aside with the remark that Nova Scotia had done very little 
to assist Great Britain in its plans to make communication 
easy with Canada, and in February 1845 an agreement was 
made with the postmaster-general of the United States for 
the conveyance of the mails between Great Britain and 
Canada through United States territory. This agreement 
had an important consequence. In releasing Canada from 
its dependence on Nova Scotia for its communication with 
Great Britain, it cleared the way for the autonomous systems 
which were established in the several provinces in 1851. 

INADEQUATE MAIL SERVICES 

In 1841 there were in Nova Scotia, including Cape Breton, 
seventeen post offices and fifty-one sub-offices. The mails 
were carried between Halifax and Pictou and St John, three 
times a week in summer and twice a week in winter. From 
Pictou eastward to Antigonish the courier travelled twice 
a week. The mails on the western route from Halifax to 
Annapolis were also carried twice a week. All the other 
routes in the province were served by weekly couriers. 
Illegal conveyance of letters was the rule here, as in the other 
provinces. On some of the main routes, notably those from 
Halifax to Pictou and Annapolis, there were fast four-horse 
stage-coaches. These carried the mails, but it never hap- 
pened that the mail-bags contained as many letters as could 
have been found in the pockets of the passengers. 



THE MARITIME PROVINCES 383 

In New Brunswick the same general conditions prevailed, 
though that province was even more scantily provided with 
post offices. The population had increased from 75,000 to 
nearly 160,000 between 1825 and 1842, and the increase had 
been distributed through every part of the province, yet 
the number of post offices had risen from nine in 1825 to 
only twenty-three in 1842. Between Fredericton and Wood- 
stock, through a well-settled district sixty-two miles in 
length, there was not a single post office." The line of settle- 
ments east of Fredericton to Sussexvale, sixty-eight miles 
distant, and the large farming population to the north of 
the provincial capital, stretching over a tract of one hundred 
and fifteen miles to Chatham, were equally unprovided with 
postal accommodation, though it would have cost nothing to 
place offices at convenient distances along any of these routes. 

The general postal system of the province may be de- 
scribed in a few words. The route from Halifax entered 
New Brunswick a short distance west of Amherst, and follow- 
ing in its general lines the present course of the Intercolonial 
Railway, passed the bend at Moncton, and pursued a south- 
westerly course to St John. From a point on this main 
route, near the present Norton Station, a road ran to Frederic- 
ton. Over these routes the mails were carried twice a week 
each way. From Fredericton north to Chatham there was 
a service of the same frequency. Chatham was connected 
by a semi-weekly courier service with Dorchester, and by a 
weekly courier with Bathurst, Dalhousie and Campbellton. 
Mails were carried daily between Woodstock and Frederic- 
ton, Fredericton and St John, and St John and St Andrews. 
At Woodstock and St Andrews connection was made with 
post offices in the United States. Finally, from Woodstock 
northward to the St Lawrence and on to Quebec, couriers 
travelled twice a week. 

The arrangements for the transmission of the British 
mails between Quebec and Halifax involved Canada and 
Nova Scotia in a disagreeable dispute, which gave point to 
the reasons urged by the home government for refusing to 
transfer the colonial Post Office to the control of the local 
governments. It will be remembered that during the period 



384 THE POST OFFICE, 1840-1867 

of open navigation on the St Lawrence each year, the British 
mails for Canada were conveyed to Pictou for dispatch to 
Quebec by steamer. There had been for many years a local 
service between Halifax and Pictou which cost ^285 a year. 
This was insufficient for the conveyance of the British mails 
to and from Canada, and Samuel Cunard, who was desirous 
of attracting the travel between Great Britain and Canada 
to his line, put a fast four-horse coach on the Halifax- Pictou 
route, principally for the accommodation of passengers, and 
induced the deputy postmaster-general at Halifax to give 
him ^1550 a year for the conveyance of the mails. This 
expenditure made a great addition to the cost of the postal 
service in Nova Scotia, and, as it had been incurred to 
expedite the conveyance of the British mails to and from 
Canada, it was proposed that Canada should pay a share 
of the expenses. This she declined to do, partly on the 
ground that the arrangement with Cunard was unnecessary 
and extravagant, but mainly because it held that the route 
between Pictou and Halifax was but a link between Great 
Britain and Canada, and that the necessary expenses in 
connection with it should be thrown upon the packet postages. 
This was undoubtedly the correct view, but the British 
Office refused to assent to it, and looked to Nova Scotia to 
take the expense on itself. The legislature of Nova Scotia 
was unwilling to assume the burden, and when it was shown 
that the total result of the operations of the post offices in 
that province was a deficit of some hundreds of pounds, the 
legislature for the first time declined to make up the amount. 
The postmaster-general responded by a direction to his 
deputy in Halifax to cut off all unremunerative services, 
and in that way bring the expenditure within the revenue. 
The legislature protested against this mode of settling the 
difficulty, but as the postmaster-general was firm, it at last 
consented to make good the deficit. 

This incident led the British government to consider a 
radical change in its scheme. An official was sent from the 
British Post Office to look over the arrangements of the 
Post Office in the Maritime Provinces, with a view to reducing 
the expenditure to within the limits of the revenue, and he 



THE MARITIME PROVINCES 385 

was instructed particularly to inquire as to the possibility of 
landing all the colonial mails at St John, or preferably Boston, 
from which point the mails could be carried overland to 
Canada, and by a smaller steamer to St John and Halifax. 
In 1845 so much of this proposal was carried into effect that 
the letter mails for Canada were landed at Boston. 

A DEMAND FOR REDUCED RATES 

The question of reducing the colonial postage rates 
engaged the attention of the public in the several provinces. 
The lead in this important movement was taken throughout 
by Nova Scotia. The Canadian legislature was singularly 
conservative, and even rather apathetic towards the question. 
In 1845 a number of public bodies presented petitions to the 
legislature for reduced postage, but the committee to which 
the petitions were remitted, after hearing the deputy post- 
master-general, and noting the fact that the Post Office 
surplus in the province was only 8000, decided that any 
radical reductions were premature. The Boards of Trade of 
Montreal, Quebec and Toronto petitioned the postmaster- 
general in England on the subject, those of Toronto and 
Montreal suggesting a threepenny rate regardless of distance, 
while that of Quebec, though favouring the threepenny rate, 
thought that the element of distance should not be put aside 
altogether, and was prepared for a higher rate for distances 
over three hundred miles. The postmaster-general gave little 
encouragement to the petitioners. While favourable to a 
uniform rate, he thought that threepence would be too low 
to meet the expenses of the service, particularly as the 
governor-general was proposing to reduce the charge on 
government documents to a merely nominal figure. 

In New Brunswick, though the affairs of the Post Office 
occupied the attention of the legislature, other features of 
the subject came into temporary prominence, and the question 
of reduced rates on letters sank into the second place. In 
July 1843 the supervision of the postal service in New Bruns- 
wick was withdrawn from the deputy postmaster-general at 
Halifax and placed in the hands of John Howe, postmaster 

VOL. V * 



386 THE POST OFFICE, 1840-1867 

of St John. The immediate consequence of this change was 
a large increase in the expense, owing to the maintenance of 
a deputy postmaster-general and staff at St John. Coupled 
with this disappointing fact was a reduction in the mail 
service throughout the province, made in pursuance of the 
postmaster-general's policy of keeping the expenditure within 
the revenue. 

The legislature was greatly dissatisfied with the position 
of matters. It could not allow the district which had been 
deprived of post office accommodation to remain unserved, 
and it re-established at its own expense the routes which had 
been abolished. It was convinced that the high postage 
rates impeded correspondence, and urged a reduction. In 
1843 the legislature recommended a uniform rate of three- 
pence throughout the province, but in 1845 it gave up the 
principle of uniformity, and asked for a series of rates ranging 
from twopence to sixpence according to distance. On one 
point New Brunswick was steadfast. It insisted that news- 
papers should be carried free, and to achieve this the legis- 
lature was prepared to take on itself the charge of conveying 
newspapers. The postmaster-general could not accede, as 
it would cause confusion among the other provinces, which 
were not in a position to do likewise. 

The Nova Scotia legislature kept steadily in view a general 
system for the reform of its Post Office. Nova Scotia was the 
first of the provinces to appreciate the importance of a single 
uniform rate, and it at no time deviated from its faith in the 
merits of the idea. In March 1842 the House of Assembly 
requested the lieutenant-governor to inquire as to the practic- 
ability of the single rate of fourpence the half ounce. Howe, 
who was consulted, advised against the proposal, on the 
ground that it would not produce sufficient revenue to cover 
the expenses. 

In 1844 the legislature came again to the attack with a 
resolution affirming that the experience of the parent country 
had shown that the penny postage had had a number of 
beneficial effects on the social and commercial life of the 
United Kingdom, and that it was persuaded that, if a uniform 
charge of fourpence for a single letter were introduced under 



POST OFFICE REFORM 387 

the same regulations as prevailed in England as to the use of 
postage stamps, it would promote the public interests, not 
add materially to the labour of management, and ultimately 
increase the public revenue. 

The legislature also at this time advanced a proposition 
which had dropped out of sight in the other provinces. It 
was of opinion that the control of the local post office could 
be far more efficiently managed if placed under the super- 
vision of the legislature, subject to the Post Office authorities 
to the extent necessary to guarantee that the transmission of 
the English mails from, to, and through the province should 
not be impeded. The postmaster-general set his face as 
firmly as ever against this view. He feared it would work 
badly in practice. It would break the existing organization 
into various conflicting systems framed according to the 
views and feelings of each province, to the great detriment of 
the general interests of the Empire. The desire for reduced 
postage rates found no more favour in his sight than the 
proposal for the transfer of the Post Office to local super- 
vision. It would, in his view, be extremely hazardous to 
make such an experiment at a time when there was already a 
large deficit in the Post Office revenues of both Nova Scotia 
and New Brunswick. 1 



Ill 

POST OFFICE REFORM 
CLANRICARDE'S POLICY 

defeat of Sir Robert Peel and the advent to power 
of the government of Lord John Russell in June 1846 
brought about a sharp change in the fortune of the 
colonial Post Offices. Lord Clanricarde, the new postmaster- 
general, had been less than two months in office when he 
came to the conclusion that the affairs of the Post Offices 
in the North American colonies could no longer be adminis- 

1 It is curious to note that the postmaster-general objected to extending the 
use of postage stamps to the colonies on account of danger of forgery. 



388 THE POST OFFICE, 1840-1867 

tered with advantage by the postmaster-general of Great 
Britain. He was convinced that the time had arrived when 
there should be a material reduction in the postage rates in 
the colonies ; this reduction would inevitably entail postal 
deficits in all the provinces, which the imperial Post Office 
would look to the provincial legislatures to make up ; the 
situation thus created could not fail to lead to disagreements 
and ill-feeling between the imperial Post Office and the 
legislatures, which would have to be avoided at all hazards. 
There was, therefore, but one course open to the imperial 
Post Office, to relinquish its control over the provincial Post 
Offices, and leave to the legislatures the management of their 
Post Offices. He regarded it as essential, however, that, in 
taking over the local post offices, the legislatures should agree 
to observe certain conditions, and that no bills from the 
colonial legislatures respecting the transfer, in which these 
conditions were not fully safeguarded, should receive the 
royal assent. The conditions were, first, that no charge 
should be made by any of the provincial Post Offices on 
letters coming into and passing through its territory to any 
of the other provinces ; second, that, while it should be 
optional for the sender of a letter to prepay the postage or 
leave it to be paid when the letter was delivered, each pro- 
vince should retain the postage it happened to collect. In 
this way complicated accounts between the provinces would 
be avoided. The third condition was, that on all letters 
passing between any part of the colonies and Great Britain, 
there should be a small fixed charge, which should be the same 
whether letters passed over ten or over a thousand miles in 
the territory of the British colonies. It was considered 
highly desirable, though scarcely to be expected, that the 
several colonies should agree upon a uniform system of rates 
throughout the colonies, such as was then in force in England. 
The first news of a change of attitude on the part of the 
postmaster-general towards the colonial Post Offices reached 
the colonies with the arrival of Lord Elgin, as governor- 
general, at the end of January 1847. Before his departure 
from England, Lord Elgin received particular instructions 
from the colonial secretary, Lord Grey, as to the course he 



POST OFFICE REFORM 389 

was to pursue in view of the great change which was taking 
place in the economic policy of the United Kingdom, in conse- 
quence of the adoption of free trade. The removal of the 
preferential tariff in favour of the colonies, and the abolition 
of the restrictions which then existed on trade with foreign 
countries, would be for the eventual advantage of colonies 
like those of British North America. In order that the 
colonies might reap the largest measure of benefit from the 
greater freedom of trade, it was desirable that they should 
be united for customs purposes ; and to the same end, it was 
necessary that some arrangement should be come to for 
settling the affairs of the Post Office in the several provinces. 
Lord Grey suggested that representatives of the colonies 
should meet in Montreal to discuss these important subjects, 
and to endeavour to arrive at some agreement as to the 
principles to be adopted in giving effect to united colonial 
action. 

THE NOVA SCOTIA POSTAL COMMITTEE 

But before Lord Elgin's arrival, a step in the same direc- 
tion had been taken in the colonies. On January 27 the 
legislature of Nova Scotia appointed a committee on the 
general subject of the Post Office. Its attention was directed 
particularly to a consideration of the practicability of a 
reduced and uniform rate of postage, to the advantage of 
one general system being adopted for the colonies, and to 
a consideration of the best means of accomplishing such an 
object. The committee entered upon its labours with a full 
sense of its responsibility. It was aware that its conclusions 
must be of a nature to commend themselves not only to the 
people of Nova Scotia, but to the governments of the sister 
colonies, and must not be repugnant to any principles held to 
be important by the British Post Office. The strong prefer- 
ence of its members was for a single uniform rate of postage, 
but as they conceived that such a view might not meet with 
favour in the Canadian legislature, they put it aside and 
proposed for adoption the scheme of rates recommended by 
the Canadian commissioners in 1841 as more likely to be 



390 THE POST OFFICE, 1840-1867 

acceptable to the other colonies. The committee also held 
it to be highly desirable that the several provinces should 
concur in the recognition of certain common principles, and 
in the establishment of an independent authority placed in 
one of the colonies for the purpose of the organization and 
centralization of the department within certain prescribed 
limits. 

The legislature concurred generally in the recommenda- 
tions of the committee, but on the question of postage rates 
they took a stand of their own. The recommendation in 
favour of a scale of rates graduated according to the distance 
the letters were carried was voted down, and in its place the 
legislature adopted a single uniform rate of threepence for 
all places within the province. If the financial results were 
at first unfavourable, the legislature would cheerfully make 
up any deficit for a few years. The legislature asked the 
lieutenant-governor to correspond with the other provinces, 
and to convey to them the earnest desire of the assembly 
that they would be pleased to consider these resolutions. 
This was in the spring of 1847. On August 27 of the same 
year Lord Elgin wrote to the lieutenant-governors of Nova 
Scotia, New Brunswick and Prince Edward Island, inviting 
one or two members of the executive council of each of these 
provinces to meet at Montreal for the purpose of maturing 
a plan regarding the Post Office establishment which might 
be submitted to the several legislatures at their next session. 

Representatives of Canada, Nova Scotia and New Bruns- 
wick met in Montreal in the autumn, and on November 19 
they agreed on a report to be submitted to their respective 
governments. The first point to which they addressed 
themselves was whether there should be one system com- 
prehending the postal service in all the provinces, or whether 
each province should have its own system, which would be 
entirely independent of the others, except so far as would 
be necessary to secure imperial and intercolonial interests. 
After weighing all that could be said for each plan, they 
thought the balance of advantage lay with the latter pro- 
position. In order to protect those interests which over- 
passed the limits of any one province, they agreed that there 



POST OFFICE REFORM 391 

should be an office of central audit in Canada, of which the 
postmaster-general of that province should be the head. 
Besides looking after the imperial and interprovincial postal 
finances, the postmaster-general of Canada should, in concert 
with the chief officer of the Post Office department in each 
province, enter into contracts and make all the necessary 
arrangements for the transmission of the mails along the 
chief or central route from Canada to Halifax, and between 
Nova Scotia and Prince Edward Island. On the question 
of postage rates, the representatives favoured the rate of 
threepence per half ounce, but fearing that some of the 
provinces might be unwilling to disregard the consideration 
of distance altogether, they agreed that, if any legislature 
would prefer to make a greater charge for longer distances, 
the threepenny rate should carry letters for any distance 
up to three hundred miles, and that the rate for any distance 
beyond three hundred miles should be sixpence per half ounce. 
When this report was laid before the postmaster-general 
of Great Britain, he approved generally of the recommenda- 
tions, and the Treasury informed the Colonial Office that, 
subject to some modifications of a minor nature, the several 
provincial authorities might be authorized to carry into effect 
the recommendations of the commissioners. When the 
arrangements were sufficiently matured for the purpose, the 
requisite steps would be taken for the transfer of the man- 
agement of the postal communications to the provincial 
authorities. 

In June of the following year the executive council of 
Nova Scotia took up the question again, and decided to 
recommend for the consideration of the other provinces that 
a single uniform rate of threepence per half ounce should 
carry letters not only within each of the provinces, but from 
any post office in one province to any post office in any other 
province. The proposal of a central office of audit was also 
dropped, and each provincial administration was to be quite 
independent of any of the others. The Nova Scotia legis- 
lature sent a representative to Canada with the amended 
propositions, which met with instant acceptance. 
Brunswick agreed to the scheme with equal readiness. The 



392 THE POST OFFICE, 1840-1867 

British Post Office was glad to be rid of a difficult subject 
on such satisfactory terms, and in 1849 an act was passed 
transferring the control of the Post Office in the North 
American colonies to the legislatures of the several provinces. 



IV 

PROVINCIAL CONTROL 

A PERIOD OF PROGRESS 

THE transfer took place in 1851, and until Confederation 
each provincial legislature had full jurisdiction over 
the postal services within its province. The adminis- 
trative officers in Canada and New Brunswick were members 
of the provincial ministry, in the former case from 1851, 
in the latter from 1855. For the first four years in New 
Brunswick, and during the whole period in Nova Scotia, 
the postmaster-general was a permanent official of the 
government, working in direct subordination to the provincial 
secretary. 

When the provincial governments took their respective 
postal systems into their own hands, they proceeded at once 
to develop and expand them, so as to place the means of 
communication at the service of their people, however remote 
might be their settlements. So far as the Maritime Provinces 
were concerned, the history of the sixteen years from 1851 
to 1867 is practically no more than a record of the uninter- 
rupted development of this policy. The number of post 
offices in Nova Scotia in 1851 was 143 ; at Confederation 
the number had risen to 630. An accurate idea of the increase 
in the accommodation can be conveyed by the mileage of 
the annual travel of the mail couriers, which is a compound 
of the length of the routes and the frequency of the couriers' 
trips over them. In 1851 the annual travel of the mail 
couriers was 352,000 miles ; in 1867 this mileage had increased 
rather more than threefold. The mails were carried, at the end 
of this period, daily between Halifax and Pictou, and between 
Halifax and St John. On the two other great trunk lines 



PROVINCIAL CONTROL 393 

in the province, from Halifax along the Annapolis Valley 
to Digby, and from Pictou eastward to the Strait of Canso, 
the couriers' trips had been increased to three times weekly 
in the former case, and to twice weekly in the latter. 

In New Brunswick the postal system was equally com- 
prehensive of all the settlements, remote as well as near. 
In 1851 there were 101 post offices distributed throughout 
the province. In 1867 the number had increased to 438. 
The annual mileage of couriers' travel did not increase to 
the same extent, but this was due to the fact that by 1851 
mails were carried over all the great routes with a frequency 
that would scarcely be considered inadequate to-day. The 
principal need of the settlements was for more post offices 
on or near the established routes, and, as we have seen, this 
requirement was satisfactorily met. In neither province had 
the Post Office much assistance from railways before Con- 
federation. In Nova Scotia the only lines on which the mails 
were carried by railway were those between Halifax and 
Truro, and between Halifax and Windsor. New Brunswick 
had but one line, that running from St John to Moncton, 
and thence on to Shediac on the Straits of Northumberland. 

The people in both provinces evinced by their patronage 
a hearty appreciation of the benefits of the increased accom- 
modation placed at their service. The reduction in the postal 
rates, consequent on the replacement of the obsolete system 
based on weight and the number of enclosures, by the simple 
rate of threepence per half ounce, was very great. It was 
estimated that the average postage on a letter under the 
former system was ninepence. So great, however, was the 
extension in the use of the post office by the public after 
1850, that in Nova Scotia the effect of the drop in the rates 
was overcome four years later, the revenue of 1854 surpassing 
that of 1850. The increase in the revenue was large and 
steady during the whole period from 1851 to 1867. In the 
year ended 1850 it was $28,000. In 1866 it had risen to 
$69,000. The evidences of appreciation of the lowered rates 
and enhanced accommodation on the part of the public in 
New Brunswick were equally marked. In 1850, the last 
year under the old system, the postal receipts were $26,600. 



394 THE POST OFFICE, 1840-1867 

Three years later the results of the great diminution in the 
charges were practically overcome, and in 1854 the receipts 
surpassed those of 1850 by $4000. As in Nova Scotia, the 
postal receipts in New Brunswick rose steadily until they 
reached over $50,000 in 1866. A feature common to the 
operations in both provinces was the regular recurrence of a 
large deficit each year. But, as the provincial governments 
made it part of their policy to carry newspapers free, the 
deficits were not to be wondered at. Indeed, the postmaster- 
general of New Brunswick, insisting on the educational 
benefits of the policy as regards newspapers, declared that 
the amount the legislature was called upon to pay annually 
to make up the deficit in Post Office operation should be put 
in the same class with the grants for the common schools, 
and the legislature did not dissent from this view. 

In Canada there was the same rapid and steady expansion 
as we have seen in the Maritime Provinces, and owing to the 
larger number of commercial communities to be served, the 
financial results were much better. When the legislature 
acquired the control of the postal system, there were 60 1 
post offices in Upper and Lower Canada. By 1855, four 
years later, this number was more than doubled. In 1862 
the figures of 1851 were more than trebled, and when the 
province entered Confederation in 1867, it had 2333 post 
offices. Canada had an advantage in the fact that its main 
lines of travel were covered by railways at a comparatively 
early date. During the year 1853 the Great Western Railway 
was being carried from Niagara Falls to Windsor, and as it 
advanced, the line was laid under contribution by the Post 
Office. By January 25, 1854, the railway was completed, 
and the time for the conveyance between the Niagara and the 
Detroit Rivers was reduced from four days to from eight to 
ten hours. Subsidiary railway lines were at the same time 
extending the advantages of rapid conveyance to other sec- 
tions of Western Ontario. The completion of the Grand 
Trunk Railway to Toronto, in October 1856, brought Quebec 
and Montreal into close communication with the towns 
which were opening up between Toronto and the western 
limits of the province. 



PROVINCIAL CONTROL 395 

The effect of these ameliorations in the conditions of 
travel, and of the reductions in the postage rates, which took 
place in 1851, was seen in the rapid recovery of the revenue 
from the consequences of the reduced charges, and in the 
steady increase which occurred after the revenue under 
the lowered rates reached the amount of the receipts under 
the old regime. In the last year in which the provincial 
Post Office was under the control of the postmaster-general 
of Great Britain, the revenue from the inland service was 
$335,ooo. The immediate consequence of the reduction in 
the postage rates from an average of ninepence a letter to 
threepence was a fall in the receipts, and at the end of the 
first year of provincial management the amount dropped 
from $335,000 to $240,000. But two years later the receipts 
had advanced to $332,000, and in 1855, the fourth year after 
the great reduction, the figures had increased to $368,000. 
In 1 86 1 the revenue of 1851 was more than doubled, and in 
1867 the year's revenue amounted to $915,000. For the 
first few years after 1851 there was a deficit, but by 1859 
there was a small surplus from the management amounting 
to $26,000. This favourable balance was maintained until 
1860, when the heavy charges for conveyance by railway 
began to be felt, and in the years 1863-66 there was a 
small annual deficit, amounting in 1866 to rather less 
than $10,000. 

In 1851 postage stamps were first used in the three pro- 
vinces. In spite of the obvious convenience of their use, 
the habit of leaving the postage to be paid by the recipient 
of the letter was so ingrained that stamps did not come imme- 
diately into favour with the public, but the advantages to the 
Post Office in the facility they offered for the collection of 
the postage were too great to be ignored, and after some 
tentative efforts, prepayment by postage stamps became 
compulsory. Money order systems were established in each 
of the provinces during this period in Canada on February 
I, 1855, at eighty-four principal offices. Three months later 
seventy-three other offices were added. In Nova Scotia the 
system was introduced in 1859, and in New Brunswick 
in 1863. 



396 THE POST OFFICE, 1840-1867 

RAILWAY MAIL SERVICE 

Though the principal feature in the postal history of 
Canada between 1851 and 1867 was the steady progress 
under the management of the provincial legislature, there 
were two questions of great importance dealt with and 
settled during this period the establishment of the relations 
between the Post Office and the railway companies for the 
conveyance of the mails, and the beginnings of the ocean 
mail service from the St Lawrence ports. The employment 
by the Post Office of the railways for the conveyance of the 
mails had reached considerable proportions by 1857. In 
that year the mails were carried regularly over 1418 miles 
of railway, and on 1145 miles there was an exchange of not 
less than two mails each way daily. Following the practice 
in England, the Post Office secured compartments on the 
trains, in which clerks performed the duties of receiving, 
assorting and distributing correspondence along the route. 

A problem which soon presented itself was the principle 
upon which the companies should be compensated for their 
services to the Post Office. While passengers and merchan- 
dise reaped the benefit of improved speed, with the other 
advantages of railway development, and at the same time 
enjoyed a reduction in the cost of service, the change from 
stages to railways threatened to burden the public with a 
vastly augmented charge for the mail service. The increased 
demand upon the Post Office arose chiefly from the special 
provision required to make railway conveyance practically 
available to the Post Office. When the mails were carried 
from post office to post office by stages, the driver was accus- 
tomed to wait at a post office until the postmaster assorted 
his mails and made up the correspondence for the offices 
beyond. This was, of course, impossible with the momentary 
stop a train makes at most stations, and consequently the 
Post Office was compelled to make use of a distinct class 
of clerks to travel with the trains and perform the duties of 
assorting correspondence while the train was in movement. 
The salaries of these railway mail clerks had by 1857 reached 
the considerable sum of 8000 a year, and yet it was the 



PROVINCIAL CONTROL 397 

necessity created by the nature of railway service, for the 
provision of a post office on the trains, which formed the 
principal ground on which a comparatively high rate of 
compensation was claimed by the railways. Further, the 
railways not being able, like the stages, to exchange mails 
directly with the post offices of the towns along the line, the 
Post Office was obliged to provide services of an expensive 
character to maintain communication between the post offices 
and the railway stations. The postmaster-general found to 
his dismay that the cost of these two items alone payment 
of clerks on the railways and the subsidiary services between 
the post offices and the railway stations was in most cases 
greater than the whole cost of the stage services which had 
been superseded, and that in addition such heavy compensa- 
tion to the railway companies had to be provided, that it 
was calculated that for the comparatively small area of 
country they covered, the companies' claims, if acceded to, 
would have absorbed more than one-half of the revenue of 
the department. 

In dealing with the railway companies, the government 
of Canada adopted a policy radically different from that of 
the mother country. In Great Britain the settlement of the 
amount of compensation which shall be paid to a railway for 
the conveyance of mails is a matter of bargain between the 
Post Office and the companies. If bargaining fails to bring 
the parties to terms, recourse is had to arbitration. In 
Canada the governor in council has assumed the power to 
fix the rates. In the exercise of its functions in this respect, 
the council acts in what Sir Oliver Mowat described as a 
quasi-judicial capacity, standing between and adjudicating 
upon the respective claims of the postmaster-general and 
the companies. In 1858, when the council fixed the first 
rates, neither the department nor the companies had the 
experience necessary to enable them to satisfy the council 
as to what would be fair, and the rates determined at that 
time were subject to constant criticism by the companies. In 
1863 another effort was made to settle the difficult question, 
but without avail, and it was not until the government, in 
1865, appointed a special commission to investigate the 



398 THE POST OFFICE, 1840-1867 

whole question, that the matter was finally adjusted. After 
exhaustive inquiries, the committee recommended that where 
the Post Office made use of a compartment on passenger 
trains as a distributing post office, there should be paid a 
general rate of eight cents per mile. To this general rate there 
were two exceptions ; namely, the rates paid to the Grand 
Trunk and the Great Western Railways. The former was 
held to have a special claim, on the ground of its bringing the 
extreme east and west of the province together, and of the 
unusual difficulties in its construction and operation, and it 
was therefore allowed ten cents per mile. The Great Western 
Railway was also considered to have made out a case for 
special treatment, on grounds to some extent resembling those 
recognized in the case of the Grand Trunk Railway, and it 
was allowed nine cents per mile. Shortly after the com- 
mission had given its report, contracts were made with both 
these lines, under which, for the rates of $160 and $124 per 
mile per annum respectively, they agreed to give the Post 
Office, for the conveyance of the mails, the use of any trains 
they might run, and in addition to attend to the conveying 
of the mails between the stations at which the trains stopped 
and the adjacent post offices. 

THE OCEAN MAIL SERVICE 

The Canadian Ocean Mail Service was established in 
1853 for the purpose of extending to Great Britain the trans- 
portation system which had been opened between the head of 
the Great Lakes and Quebec. Canada had contracted a 
debt of 7,000,000 in the construction of canals and in the 
subsidizing of railways, in order to place its natural advantages 
at the service, not only of Western Canada, but of the Western 
States as well. By this means it had reduced the charges of 
transportation to the seaboard very greatly, but it found its 
efforts to a great extent frustrated by the low ocean rates 
between New York and Great Britain, made possible by the 
large subsidies paid by the British government to the Cunard 
line, which thus attracted traffic from the Canadian route 
to the American port. In 1853 a contract was made 



PROVINCIAL CONTROL 399 

with a Liverpool firm for fortnightly trips during the summer 
between the ports of the St Lawrence and Liverpool, 
and for monthly trips during the winter between Portland, 
Maine, the terminus of the Grand Trunk Railway, and 
Liverpool. As the contractors failed to provide the services 
stipulated, the contract was terminated, and a similar one 
entered into with Hugh Allan, the founder of the Allan line. 
The service proving successful, the government in 1859 con- 
tracted with Allan for weekly trips throughout the year, the 
terminal ports on this side of the Atlantic being as before, 
Montreal in the summer and Portland in the winter. The 
speed of the vessels of the Allan line compared favourably 
with that of any of the other lines crossing the Atlantic. 
Indeed, in 1856 the fastest voyages from North America to 
Great Britain were made by its steamers, their average time 
being eleven days two hours, while the Cunard steamers, 
which came next, occupied on the average eleven days 
thirteen hours. The employment of the Canadian steamers 
for the conveyance of mails was regarded jealously by the 
British Post Office, and a series of vexatious misunderstand- 
ings arose between the two governments in consequence. 

The British Post Office in 1855 arranged for the prefer- 
ential rate on letters passing between the mother country and 
the colonies of sixpence per half ounce, and, in connection 
with the scheme, proposed to Australia and Canada that it 
should make the arrangements for the conveyance of the mails 
between Great Britain and those colonies, the expense to be 
divided in each case between the home and the colonial 
government concerned. Australia agreed at once to the 
proposition, as indeed it was greatly to her advantage that 
she should, but Canada demurred. Presuming that the 
proposition to Canada had reference to the Cunard line only, 
and that it was not contemplated to include the Canadian 
line in the scheme, the postmaster-general of Canada pointed 
out that as Great Britain had a special interest in the Cunard 
line, which was maintained principally for the purposes of 
communication with a foreign country, so Canada had a 
special interest in its own line, and was subsidizing it to a 
reasonable extent within the country's means. It therefore 



400 THE POST OFFICE, 1840-1867 

did not seem expedient to unite with Great Britain in assist- 
ing the Cunard line without obtaining comity of action from 
the imperial government as regards the Canadian line. 

This reply greatly displeased the postmaster-general of 
Great Britain. In a letter to the colonial secretary, Henry 
Labouchere, he declared that the service set on foot by 
Canada, so far from being of assistance to Great Britain, was 
actually a detriment, as it withdrew part of the revenues 
which would in ordinary course accrue to the British Post 
Office through the Cunard service. If, on the expiration of 
the existing Cunard contract, the Canadian government 
undertook to provide half the effective service, it might 
claim exemption from any share in maintaining the other 
half of the service, but it would be out of the question for the 
British government to assist the Canadian service, which was 
diminishing the revenues of the British Post Office. It was 
intimated to Labouchere that he should impress these views 
authoritatively on the Canadian government. This La- 
bouchere, with great good sense, declined to do. Canada, he 
suggested, had been in no sense a party to the contract with 
Cunard, and as the British government was without the 
means of enforcing its demands, it would be impossible to 
press them with any chance of success. His opinion was that 
it would be preferable to allow the arrangement then in force 
to stand until the existing Cunard contract expired, when the 
postmaster-general might come to terms with the Canadian 
government on an equitable scheme for sharing the expenses 
of the ocean mail service between the two governments. 
This correspondence he sent privately to the governor, Sir 
Edmund Head, for his advice. 

Sir Edmund in his reply stated the Canadian case with 
much clearness. The Canadians, he said, asked why Canada 
was obliged to pay a subsidy at all for a line of steamers 
running into the St Lawrence from a British port by a route 
which Canada held to be the most advantageous. The 
merits of the route itself might make the bounty unnecessary 
were it not that Her Majesty's government gave a large 
bounty to a line running into foreign ports. Canada had no 
desire to disturb existing arrangements, but she was surely 



PROVINCIAL CONTROL 401 

entitled to ask that no renewal should be made of the Cunard 
contract until she had had an opportunity of presenting the 
merits of the Canadian service. The Treasury, to which 
Head's reply was referred, consented to allow matters to 
stand until the time came for considering future arrangements. 

After two years of quiet development, further disagree- 
ments arose over the distribution of the ocean postage on the 
mails carried by the Canadian line between Great Britain 
and the United States. These were terminated by Great 
Britain withdrawing from what seems an untenable position. 
The Canadian government desired to assist in reducing the 
postage rates between Great Britain and the United States 
and Canada, and to that end offered to carry letters across 
the ocean at one-half the usual charge for ocean conveyance. 
Great Britain declined to accept the proposition for reduced 
postage rates, but determined to hold Canada to her offer of 
a low ocean charge. Canada protested that her offer was 
made simply in order to benefit the public on both sides of 
the Atlantic ; that, as it was deemed inadvisable by Great 
Britain to reduce the postage, the offer was cancelled ; and that 
she should be paid the same amount for ocean conveyance as 
was paid the Cunards. After a sharp interchange of corre- 
spondence, Canada's claim was allowed. 

But a real difficulty cropped up in connection with 
Canada's plans to turn her ocean service to the greatest 
advantage. The postmaster-general visited Washington, 
London, Paris, Berlin and Brussels, and induced all the 
governments to make use of the Canadian line for the exchange 
of mails between Europe and North America. Special trains 
were to run from Cork, where the Canadian steamers took 
on and put off their mails. As there was no Atlantic cable, 
a feature of the service was that messages for America could 
be telegraphed from the countries of Europe to Cork, and be 
re-telegraphed to their destination when the ship reached 
the nearest telegraph point in America. Prussia, France and 
Hi-Igium welcomed this service, and proposed to utilize it 
under their conventions with Great Britain. The post- 
master-general of Canada hastened over to London to 
arrange the formalities, when to his surprise he learned that 

VOL, v a c 



402 THE POST OFFICE, 1840-1867 

the British Post Office would not undertake to act as inter- 
mediary for the payments due to Canada, on the ground 
that the Canadian ocean service was not a British, but a 
United States packet service. Protests from the postmaster- 
general cf Canada were without avail, and so far did the 
British Post Office carry consistency that, when it finally 
consented to receive from the Post Offices of France, Prussia 
and Belgium the sums due to Canada, it would not pay these 
sums over direct, but insisted on paying them to the United 
States, which passed them on to Canada. 

A SETBACK THROUGH STEAMSHIP DISASTERS 

The Canadian service started with the fairest prospects. 
Mails were carried from Cork to Chicago in twelve days, 
thence to New Orleans by fast train. The line was largely 
patronized, and it seemed probable that Canada was to 
reap at once the advantages arising from her superior geo- 
graphical position, and from the inland transportation 
system which had been established at so great a cost. But 
a remarkable series of accidents to the fleet did much to 
destroy confidence in the Canadian route, and to retard the 
development of the service in comparison with the lines 
running to New York. Between June 1857 and February 
1864 no less than eight of the mail steamers were lost by 
shipwreck. On June I, 1857, the Canadian was, owing to 
the negligence of the pilot, run on the rocks near the Pillars 
lighthouse. The passengers and mails were all brought 
safely to Quebec, though the steamer was a total loss. In 
the winter of 1859-60, two vessels were lost off the coast of 
Nova Scotia on the way to Portland the Indian in November 
1859, and the Hungarian in February 1860. The latter was 
a remarkably fast steamer, having made three consecutive 
trips within a period of twenty-seven days and twenty-three 
hours. From the Indian some sixty persons were lost, 
while not one person was saved from the Hungarian. Defec- 
tive sounding-charts were held responsible for the ill-chance 
of the former. Nothing was learned as to the causes of the 
disaster to the Hungarian. The year 1861 was marked by 



PROVINCIAL CONTROL 403 

two more calamities. On June 4 the Canadian (the second 
of the name), on her way to England, struck an ice-floe 
shortly after leaving the Straits of Belle Isle, and sank 
within two hours. Twenty-nine of the passengers and crew 
were drowned, including the mail officer, James Panton, whose 
death was due to his determined efforts to save the mails. 
In November the North Briton lost her way among the 
Mingan Islands and struck a reef. The steamer was de- 
stroyed and the mails were nearly all lost, but fortunately 
no one was drowned. The Board of Inquiry concluded from 
these last cases that it was inadvisable to take the straits 
route except in the midsummer months. In 1863 there were 
two more wrecks. The Anglo-Saxon, which left Liverpool 
on April 16, ran on the rocks on the coast of Newfoundland 
near Cape Race, and 237 of the passengers and crew were 
drowned. Before the public recovered from the effects of 
this calamity, the Norwegian was wrecked on St Paul's Island, 
a few miles north of Cape Breton. There was no loss of life 
on this occasion, and the mails were all saved. Finally, the 
Bohemian ran on a rock near the en trance to Portland Harbour 
on February 22, 1864, and forty-three persons were drowned 
by the capsizing of one of the lifeboats. In the three last 
cases the wrecks were attributed to faulty seamanship, and 
the masters of the Norwegian and the Bohemian were deprived 
of their certificates. The master of the Anglo-Saxon went 
down with his ship. 

While the Canadian line was suffering from these repeated 
losses, the Cunards were making their trips with regularity 
and perfect safety. There was only one accident to the 
steamers on that line within the same period, and on that 
occasion, although the steamer ran on the rocks near the 
point where the Anglo-Saxon was wrecked, her injuries were 
quickly repaired, and there was no loss of life. 

With the occurrence of each successive disaster, public 
indignation was heightened against the company for alleged 
faults of management, and in 1863 it was notified of the 
cancellation of its contract. But the government thought 
it undesirable to relinquish altogether the effort to make 
the Canadian service a success, and, after consideration, a 



404 THE POST OFFICE, 1840-1867 

fresh contract was made with the Allans for a greatly reduced 
subsidy. On considering the wrecking of the several vessels, 
it is plain that with whatever delinquencies the company 
was fairly chargeable, its enterprise as the pioneer of the 
Canadian steamship service to England was carried on under 
exceptional difficulties. The route lay for a long distance 
adjacent to rocky shores, on which the lighting and soundings 
were imperfect. The company employed iron vessels, and 
the effect of these on the compass was very considerable and 
little understood. In several of the cases the masters sup- 
posed themselves to be many miles out at sea at the moment 
they struck. It is only now that the advances in the science 
of navigation and the supply of lights and buoys on the 
most liberal scale give Canada the assurance that she may 
with safety turn her natural advantages to account. 




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