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ONE:Though the Duke of Wellington defended him-self against the persevering attacks of the financial reformers, he was busy making retrenchments in every department of the Public Service. So effectually did he employ the pruning-hook, that although the income of the previous year had fallen short of the estimate of the Chancellor of the Exchequer by ��560,000, he was able to present to the House this year a surplus of ��3,400,000 available for the reduction of taxation, still leaving an excess of income over expenditure of ��2,667,000 applicable to the reduction of debt. There was, consequently, a large remission of taxation, the principal item of which was the beer duty, estimated[310] at ��3,000,000. At the same time, in order to enable the Chancellor of the Exchequer to meet these reductions, an addition of one shilling a gallon was made to the duty on English spirits and of twopence on Irish and Scottish spirits. This Budget helped to clear the political atmosphere and brought a brief gleam of popularity to the Government. The Duke got full credit for an earnest desire to economise, and it was acknowledged by the Liberal party that he had given the most important financial relief that the nation had experienced since the establishment of peace. Notwithstanding, however, the general satisfaction, and the loud popular applause, the pressure of distress was not sensibly alleviated. The burden indeed was somewhat lightened, but what the nation wanted was greater strength to bear financial burdens, a revival of its industrial energies, and facilities for putting them forth with profit to themselves and to the country. Remissions of taxation were but the weight of a feather, compared to the losses sustained by the action of the currency. For while the reductions only relieved the nation to the extent of three or four millions, it was estimated that the monetary laws, by cutting off at least fifty per cent. from the remuneration of all branches of industry, commercial and agricultural, had reduced the incomes of the industrial classes to the extent of a hundred and fifty millions yearly. TWO:[See larger version]Lower Canada was inhabited chiefly by French Canadians, speaking the French language, retaining their ancient laws, manners, and religion, wedded to old customs in agriculture, and stationary in their habits. Of its population, amounting to 890,000 in 1852, nearly three-fourths were of French origin, the remainder being composed of emigrants from Great Britain and Ireland and other countries, while in Upper Canada the number of French was under 27,000. Lower Canada, however, might have been expected to make much more rapid progress from its natural advantages in being much nearer to the seaboard of the Gulf of St. Lawrence, and being enabled to monopolise much of the ocean navigation, which terminated at Montreal. Thus, the cities of Quebec and Montreal rose quickly into importance when the Upper Province began to be settled. In 1827 the cities had each a population of above 27,000; but by the census of 1852 it was found that Quebec had a population of 42,000, and Montreal 57,000. The growth of the towns of Upper Canada was still more rapid. In 1817 Toronto, then called Little York, had only 1,200 inhabitants; in 1826 it had scarcely 1,700; but in 1836 it had risen to 10,000. Among the other principal towns of Upper Canada were Hamilton, Kingston, London, and Bytown (now called Ottawa), which grew rapidly. Situated so near Europe, and offering inexhaustible supplies of fertile and cheap land, with light taxes and a liberal government, it was natural to expect in Upper Canada a mixed population, and an analysis of the census of 1852 showed that its inhabitants were composed of people from most of the countries of Europe. The largest single element was composed of Canadians, not of French origin, upwards of half a million; the next of Irish, 176,267; then English, 82,699; Scottish, 75,811; from the United States, 43,732; Germany and Holland, 10,000. Many of those settlers emigrated from the old countries to avoid the pressure of distress. They consisted, to a large extent, of the worst paid classes of workmen, such as hand-loom weavers, that had lost employment by the introduction of machinery. Those persons were now found to be in the enjoyment of independence, as the proprietors of well-cleared and well-cultivated farms, having all the necessaries of life in abundance.THREE:PRESS-GANG AT WORK.Defeated in this object, the Patriots united all their force to embroil us with Spain. There were many causes in our commercial relations with Spain which led to violent discontent amongst our merchants. They found the trade with the Spanish settlements in America exceedingly profitable, but they had no right, beyond a very limited extent, to trade there. The Spaniards, though they winked at many encroachments, repressed others which exceeded these with considerable vigour. Their Coastguard insisted on boarding and searching our vessels which intruded into their waters, to discover whether they were bringing merchandise or were prepared to carry away colonial produce. By the treaty of 1670 Spain had recognised the British colonies in North America, and England had agreed that her ships should not enter the ports of the Spanish colonies except from stress of weather, or with an especial licence from the Spanish Government to trade. By the treaty of 1729 we had agreed to the old regulations regarding trading to the Spanish Main, namely, that we should have the Assiento, or right of supplying these colonies with slaves, and that, besides this, we should only send one ship annually to the Spanish West Indies and South America. As fast as that authorised ship discharged its cargo in a Spanish port, she received fresh supplies of goods over her larboard side from other vessels which had followed in her wake, and thus poured unlimited quantities of English goods into the place. Other English traders did not approach too near the Spanish coasts, but were met in certain latitudes by South American smugglers, who there received their goods and carried them into port. In short, such a system of contraband trade was carried on in these waters by our merchants, that English goods in abundance found their way all over the Spanish American regions, and the great annual fair for goods imported from or by Spain dwindled into insignificance.