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Indiana University 
1860 the British government ceased to make any open attempt 
to control the Canadian tariffs.^^ The demand for the treaty 
in Canada had arisen from a desire to develop the resources 
of the provinces ; but the development of canals and railways 
by which to secure the carrying trade of the Mississippi and 
the lakes produced debts which were partly met by the in- 
creased tariff.^® Altho western commerce was deflected from || 
the Mississippi to the lakes, Canada was disappointed to find |i 
that shippers, instead of being attracted by the St. Lawrence ' 
route to the sea, continued to use the Erie Canal to New York, 
where freight rates to Europe were lower than at Quebec ii 
and Montreal.^^ 
In the meantime new conditions in the Pacific and west 
of Lake Superior threatened to complicate American rela- | 
tions with Canada. Vancouver’s Island and New Caledonia 
(later British Columbia) to which the United States had | 
given up its claims by the Oregon Treaty of 1846, were in- i 
creasing in importance. The discovery of gold along the 
Fraser River in 1857 caused an excited rush of people from 
California and Oregon, in the spring of 1858, to seek wealth j 
in new fields. It was estimated that 23,000 sailed from San | 
Francisco and 8,000 went overland from points farther north. 1 
This rapid settlement of the gold regions led to conflict with ' 
the British authorities, who feared seizure of the colonies. ’ 
John Nugent was sent, on August 8, 1858, as special agent of j 
the United States to urge subordination to the British colonial 
authorities, to endeavor to secure from Governor Douglas 
of Vancouver the abrogation of the rigorous system of exac- 
tions, and to get information in regard to the mines. Tho he 
reported that the Americans had entered the colonies with 
no marauding propensities, he said that the ultimate accession 
of both Vancouver and British Columbia to the American 
possessions was scarcely problematical. Tho Malmesbury 
had assured Dallas of a desire to abate the rigor of exactions. 
Report of Committee on Commerce, February 5, 1862 (in State Department 
Ramphlets) ; House Reports, No. 39, 38-1, Vol. I, April 1, 1864. 
House Executive Documents, No. 96, 36-1, Vol. XIII, July 16, 1860 (I. T. Hatch 
Report ) . 
F. E. Haynes, “Reciprocity Treaty with Canada”, in American Economic Associa- 
tion Publications, November, 1892 ; House Executive Documents, No. 78, 39-2, Vol. XI, 
February 6, 1867. (Mr. Hatch in this report suggested that the Erie Canal should be- 
come national with no tolls except for repair and enlargement.) 
20 Fraser’s Magazine, October, 1858, 
21 Senate Exec^itive Documents, No. 29, 35-2, January 29, 1859. 
