[mayor] a chapter of CANADIAN ECONOMIC HISTORY 25 



ments of business" as President Van Buren described the situation 

 in his message to Congress in September, 1837, was the panic of that 

 year. 



The Struggle of the Commercial Interests 



The period between 1820 and 1840 was most critical in an 

 economic as well as in a political sense, for the Upper and Lower 

 Provinces. The political difficulties were due partly to causes racial, 

 social, and even personal, and partly to causes definitively economical. 

 The latter only need concern us in this place. The French population 

 were habituated to a life predominantly self-contained. They did not 

 produce for the market and their consumption of commodities other 

 than those produced by them was very slender. Capitalist organiza- 

 tion was, therefore, unnecessary for them,-^ and their leaders even 

 protested against it. The earliest British emigrants — -the United 

 Empire Loyalists— had been accustomed in New England and Virginia 

 to a rapidly developing commerce in which capital was largely em- 

 ployed. They were deprived of what means they had during the 

 seven years of Revolutionary warfare, and although they were com- 

 pensated by grants of land, they were helpless without the supplies 

 of capital to which they had been accustomed. Their standard of 

 living was reduced, and they presented slender effective demand for 

 general commodities. They had plenty of land, but they could 

 neither borrow upon that nor sell it, and they suffered for years from 

 the distresses of a population whose only fund is in land. In the 

 early part of the nineteenth century, capital in Europe was much 

 in demand both for war and for industry. It was, therefore, relatively 

 scarce and dear. Even if it had been otherwise, the credit, both 

 public and private, of a remote and little known colony was in- 

 sufficient to attract the supplies of capital which would have permitted 

 the extensive borrowing necessary for speedy development. In view 

 of the relatively slow increase of population, embarkation by public 

 or private enterprise in works of public utility formed the only means 

 at once of prom.oting economical development and of organizing 

 supplies of capital. The successful promotion of such enterprises, 

 however, depended upon the coincidence of credit and a favourable 

 external money market; but neither of these conditions existed. 



The public revenues of the provinces at this time may be divided 

 into three fractions. The first was the revenue derived from Customs 



^^It is alleged that the habitants hoarded coin both before and after the conquest. 

 CJ. Shortt, Adam, Early History of Canadian Banking Currency and Exchange, 

 Toronto, 1897, p. 3. 



