American party phraseology, "Clear Grits," who declared themselves to be the unadulterated political commodity.

Still, although the Reformers had quarrelled among themselves, ministers were sufficiently supported to enable them to hold the reins of power firmly in their hands during the session, which after much useful legislation terminated on the 10th of August. The remainder of the year was not distinguished by any important local events. The question of a Federal Union of all the British North American Provinces was revived by the Conservatives; and as January approached, the prospect of an approaching general election began to create some excitement. Among the candidates already in the field was William Lyon Mackenzie, whose residence in the United States had cured him of a great many republican notions, and fully reconciled him to the sway of Queen Victoria, touching which he was whilom so indignant, and to the lesser political evils of constitutional monarchy.

The earlier part of the ensuing year was chiefly distinguished by the efforts of the Roman Catholic population to procure separate common schools, under a recent statute, wherever 1851. their numbers were sufficiently large to warrant such a procedure. A very general movement was also taking place in favour of the construction of railways in various parts of the sister provinces. Hitherto, Canada had been too young a country to provide these costly modes of locomotion. Her noble canals and vast water frontage had also rendered them to a great extent unnecessary; but the great increase in the inland population within the preceding few years, and the difficulty of conveying farm produce and lumber to the navigable rivers and the lakes, now rendered railways necessary to develop the resources of the interior. The Post-office had at length been transferred to the Colonial Government, and great improvements had been made in that department. Letter rates had been reduced, and a single, or half-ounce, letter was now conveyed to any part of Canada for threepence currency. In the spring, prepayment letter stamps were issued, as in England and the United States. Thus, the country was steadily progressing, and from the numerous improvements observable in every direction, it was evident that the Canadas were rapidly recovering from the effects of partial rebellion and violent political agitation; and that a long vista of national prosperity was now indeed gradually opening on the view.

Parliament assembled on the 20th of May. The occurrences of the session showed that the "Clear Grit" agitation was beginning

to tell upon the House, and that, to satisfy it, more radical changes must be made. Mr Baldwin fell the first victim to this state of things. Outvoted on a measure connected with the Court of Chancery by the Reform members of the Upper Province, he resigned his seat in the Cabinet as Attorney-General for Canada West. The Clergy Reserves question still continued to be the cause of much discussion and ill-feeling. As the session progressed, the project of a Grand Trunk Railway was fully developed, by Mr Hincks, in a series of resolutions.

The fourth session of the third Parliament of United Canada terminated on the 30th of August. Lord Elgin's speech, when he prorogued the House, reflected the general condition of the country. He alluded to the grants which had been made for the erection of lighthouses, improvements in the navigation of the St Lawrence, reduction of the immigrant tax, and the favourable state of the revenue which had permitted the adoption of these and other measures of a kindred nature. He congratulated both branches of the Legislature on the steps they had taken for fostering railway enterprise, on the creditable appearance of Canadian industrial productions at the London Crystal Palace Exhibition, on the harmony which had characterised their own proceedings, and on the removal of prejudices and misgivings engendered by years of disquiet. At the same time, he declared his own determination to continue to administer the government in conformity with the wishes of the people, as expressed through their representatives.

The increased prosperity of Canada was now attracting a large measure of attention from other countries, and several of which evinced their desire to add to the volume of their commerce up the St Lawrence. With the United States a large international traffic had sprung up; and Canadian imports and exports, passing in bond over the New York and New England railways, formed an important item of their business. This close community of interests led to the interchange of mutual national civilities. In the month of September, Boston distinguished itself by giving a grand fête to many of the principal Canadian merchants and public men, at which Lord Elgin was present, and made a most happy speech tending to augment the mutual good feeling engendered by the occasion, as well as by the more enduring bond of identity of interests. But these occurrences, however satisfactory in themselves, did not diminish the dissensions within the Reform party. In October, the Clear Grit element in politics pressed so embarrassingly on the ministerial leaders of that party, that it led to the reconstruction of the Cabinet, into which

the whilom rebel refugee, Dr Rolph, and Malcolm Cameron, were now received as the leading exponents of the new political faith. Into the hands of Mr Hincks, as the most able member of the ministry, these changes threw a large amount of additional influence. He now became Premier, and speedily developed a financial policy, which subsequently shaped, in an eminent degree, the fiscal relations of this country. The reconstruction of the Cabinet was immediately followed by a general election, which introduced many new men into public life, while several of their old servants were rejected by the electors. Among the latter was Robert Baldwin, who was now most ungratefully discarded by the Fourth Riding of York, for a Mr Hartman. William Lyon Mackenzie, who had returned to Canada in the preceding year, again re-entered public life, and was elected for the county of Haldimand, although his principal opponent was Mr George Brown, of the Toronto Globe. The elections resulted in the return of a Reform majority in United Canada; but in the upper province parties were almost equally balanced.

The lapse of time had gradually assuaged the bitter asperities engendered by events which arose out of the rebellion, and 1852. the public mind now exhibited a desire to turn aside from exciting political topics, and apply itself instead to questions of social and physical progress. Hitherto, Canada had lagged far behind the United States in many respects; and English and other tourists not infrequently made most unfavourable comments on the backward condition of public improvements in this country. But a visible change for the better was now rapidly taking place. An act favourable to the formation of joint-stock companies had already given a great impetus to the construction of plank and macadamised roads, and in many other ways the industrial resources of the country were now being developed. The cause of education, as regarded the masses, had also been materially advanced by improvements in the common-school law, and the introduction of a uniform system of text-books; while an excellent normal school at Toronto afforded the requisite facilities for the training of competent teachers for Upper Canada. The public mind of the country was evidently becoming eminently utilitarian, and readily applied itself to the development of railway projects of various kinds, as well as to the consideration of the best methods to promote more intimate reciprocal commercial relations with the United States. In the earlier part of the year, Mr Hincks had gone to England to push forward the scheme of a Grand Trunk Railway, and the precise location of which continued to be a source of the most fruitful

contention, owing to conflicting interests. From the discussion of these matters, the public, in the month of July, turned aside to regard the catastrophe of a terrible fire in Montreal, which laid a large part of that city waste, and rendered ten thousand people homeless. Great exertions were made to relieve the sufferers.

The seat of government had now been removed to Quebec; and there, accordingly, the new Parliament assembled on the 16th of August, and chose Mr John Sandfield Macdonald as Speaker of the Lower House. The Governor-General's opening speech alluded to the necessity of a change in the seignorial tenure system, the expediency of having a line of steamers to sail from Canada to England, the advisability of an alteration in the currency, so as to permit of accounts being kept in dollars and cents, and the propriety of increasing the parliamentary representation,—measures which were all subsequently adopted.

During the session, Mr Hincks introduced a series of resolutions relative to the settlement of the Clergy Reserves question, which passed; and declared, at the same time, that he felt confident the Home Government would shortly bring a bill into the Imperial Parliament, permitting the Canadian Legislature to dispose finally of a matter which had been such a source of prolonged agitation. The House, also, unanimously agreed to an address, requesting the imperial authorities to make no concession to the American Government in the matter of the fishery dispute, unless in connexion with the concession of reciprocity. Mr Hincks exhibited a desire to retaliate on the United States for not conceding more intimate commercial relations, by adopting differential duties in favour of British commerce, and by shutting the Canadian canals to American shipping. The public voice, however, was at once raised against a narrow and suicidal policy of this kind, and the ministry had to abandon it altogether. But the great feature of this session was its large amount of railway legislation, and which placed no less than fifteen bills on the statute-book. Among these, the act relating to the incorporation of the Grand Trunk Railway was the most important. By its twenty-eighth section, the bonds of this company received the provincial guarantee to the extent of £3000 sterling per mile. The same section further set forth, that for every £100,000 actually expended on this railway by the company, £40,000 should be guaranteed by the province. By this act, a sum exceeding $16,000,000 was in a few years added to the permanent liabilities of the country; and in 1866, the total debt of the Grand Trunk Railway to the Government, principal and interest,

had swelled to the enormous sum of $23,000,000, of which there is no likelihood that any portion will ever be repaid.

But the inception of the Grand Trunk and other railway projects was not sufficient to satisfy the speculative mind of Mr Hincks. In this session, also, was passed an act to establish a Consolidated Municipal Loan Fund for Upper Canada. This fund was to be under the management of the Provincial Government, and designed to enable municipalities to borrow money on the credit of the province for the construction of railways, macadamised roads, bridges, and other public works. Availing themselves of the provisions of this act, several municipalities rashly incurred liabilities which they were utterly unable to meet, and much unwise speculation was indulged in. Subsequently, in 1854, it was found necessary to amend this act, to extend its provisions to Lower Canada, and to limit the "fund" to £1,500,000 sterling for each province. The full amount of the loan was soon absorbed by Upper Canada, but the lower province acted much more prudently. Yet the entire public debt contracted in this way speedily reached the sum of about $9,500,000; and as most of the borrowing municipalities were utterly unable to pay the interest, the greater portion of it had to be met from the public exchequer, while Parliament was subsequently obliged to pass measures for their relief. Most of the works constructed were, however, of great benefit to the community, and aided in no small degree to develop its resources.

It will thus be seen that the legislation of the session of 1852 laid the foundation of a large addition to the liabilities of this country, and paved the way for the annual deficit which subsequently existed in the provincial revenue for so many years. At the close of 1852 the whole debt of Canada, direct and indirect, was $22,355,413; the nett revenue for the year amounted to $3,976,706; while the expenditure was only $3,059,081. This prosperous state of the finances placed the credit of the country on the soundest basis; and Canadian Government securities, bearing six per cent. interest, were now quoted at a premium of sixteen per cent. in the English money market.

This satisfactory condition of financial affairs very naturally led, at this juncture, to much unwise speculation, and to a rage for railway improvements beyond the immediate necessities or monetary ability of the country. Nor was the ample railway legislation of the Parliamentary Session of 1852 deemed sufficient to meet the wants of the public in that direction. On the 10th of November, after a session of nearly three months' duration, the Legislature adjourned