26 THE ROYAL SOCIETY OF CANADA 



Duties ; the second the revenue derived from the casual and territorial 

 revenues of the Crown, and the third the revenue from license-fees 

 and the like. The customs duties were determined by the British 

 Parliament and the revenue from them was divisible in proportions 

 arranged between the two provincial governments. ^^ The control 

 of the casual and territorial revenues was retained by the Imperial 

 authorities for expenditure in connection with the administration 

 of the provinces. The only revenues whose collection and control 

 resided in the hands of the provincial legislatures were those derived 

 from licenses and fees. Division of the customs revenues was the 

 occasion of continuous disputes and adjustment between the pro- 

 vinces, and the control of the casual and territorial revenues was a 

 source of continual friction between the Colonial Office and the 

 Provincial Assemblies. The patronage in the hands of the Crown, 

 which involved certain economical aspects, was also provocative of 

 much friction. The difference in the economical structure of the 

 two provinces resulted in the chief demand for imported goods 

 being from the Upper Province, although the preponderance of 

 population resided in the Lower Province and the greater part of the 

 revenue was collected there. The effect of the division of the customs 

 revenue between the provinces on any terms upon which they could 

 mutually agree was that the Lower Province had more than it could 

 utilize, and the Upper Province, almost destitute of means of com- 

 munication as it was, less' than it could have utilized. 



In 1822 a Bill was introduced in the House of Commons, having 

 for its object the union of the provinces; but both provinces objected 

 to its provisions, and it was withdrawn. ^^ The causes of friction 

 mentioned, together with other influences some of which will preseritly 

 occupy our attention, brought about the situation which led to the 

 armed rebellion in both provinces in 1837, and eventually to the union 

 of the two provinces in 1840.^^ 



In 1792, immediately after the passing of the Constitutional Act, 

 an attempt was made to establish a bank; but the character of the 

 project is not known, the scheme ne ver having matured.^" Nothing 



"Under 37 Geo. Ill, c. 12 (1797) (Provincial Statute of Upper Canada) and 

 subsequent statutes. 



28Cf. evidence of the Right Hon. J. W. Horton, M.P., in Minutes of Evid. before 

 Select Committee on the Civil Government of Canada (London), 1828, 569, pp. 299 et 

 seq. See also on the Financial Difficulties of Lower Canada, Quebec Gazette, December, 

 1824. In this article there is a long discussion of the friction between the two 

 provinces in respect to the division of the Customs Revenues. 



29Under 34 Vict., c. 35, 1840 (British Statute). 



^"Cf. Shortt, Adam, The Early History of Canadian Banking Origin of the Cana- 

 dian Banking System, Toronto, 1896, p. 8. 



