Trade and Commerce



Even if the Naylor hypothesis exaggerated the dominant position of trade and commercial activities by early British North American entrepreneurs relative to their willingness to engage in more substantial industrial development, there is no denying the prominent role played by those engaged in such types of business in the colonial economies. Any directory of "leading citizens" or "prominent businessmen" (most were male given the culture of the time) in any one of the British North American colonies would leave little doubt on this score. Indeed, local oligarchies made up of merchants, bankers, and other business people combined  with colonial office-holders and clerical leaders to dominate the political and social life as well as the local economies of each of the colonies. Even if the best known of such groupings were the "Family Compact" of  Upper Canada or the "Chateau Clique" of Quebec -- Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland had there own equivalents. Before larger-scale manufacturing and the coming of the railroads brought significant labour organization into the picture, the only political opposition of consequence to these entrenched and typically conservative interest groups was provided by farmers, and as the abortive uprisings of the 1830's demonstrated, they were not well-enough organized to make their opposition very effective prior to the refinement of party political processes.

In his classic study of the commercial life of the St. Lawrence, Creighton notes that the first arrivals in "Canada" following the British Conquest were not agricultural settlers, but mercants: "The first British Canadians were merchants drawn northward by the promises of the river; and they came with the single, simple objective of making money by trade." [The Empire of the St. Lawrence, 1956, p.22.] The subsequent development of the region was both as a staple producing hinterland and as an artery of commerce. Often these functions were complementary, for example, both local farmers and local merchants and traders stood to benefit from improvements which reduced transportation costs on the St. Lawrence - Great Lakes waterway. But with the reduction and eventual abolition of British preferences for colonial exports in the 1830s and 1840s, the efforts of commercial interests to capture the trade of the American mid-west were not always consistent with the objectives of local producers, exacerbating tensions which led to the disturbances of 1837-38. Both farmers and local manufacturers in the British North American colonies had an interest in restricting the import of competing food and manufactured goods from the US and consequently favoured the imposition of tariffs to restrict such imports. On the other hand merchants and others engaged in trade, and often in the handling of commodities produced in the US, had good reason to resist such measures. Of course, the ability of either side to control tariff and other policies affecting trade was limited by colonial status so long as Britain was interested in maintaining an imperial trading system designed along the lines laid down by mercantilist principles to benefit the mother country. With the breakdown of that system in the 1840s and the development of responsible government in the colonies, designing commercial policy became a key function of the local political process.

RETURN to previous page  OR  GO AHEAD to Investment in Social Overhead Capital.