The Legacy of Feudalism in America

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An Overview

Between the American Revolution and the end of the American Civil War, roughly the period between the Constitutional Act of Upper Canada (1791) and Canadian Confederation (1867), feudalism ended in America, and its legacy became an historical given. Its legacy was variety in the pattern of land holdings, in the social institutions, and in the economic character of the continent. The shape and size of land holdings was not an effect of different land tenure arrangements as such, but changes in the shape and size of land holdings paralleled in space and over time those phenomena which were. The pattern of land holdings provides visual evidence that the legacy of feudalism has been a variety of distinctive regional economies in America as a whole and in Canada in particular. This has constituted a very long run factor in Canada's economic development.

The War of Independence in the British colonies was important in the demise of feudalism, and in the nature of its legacy in America, particularly with respect to Canadian experience. The Seven Years War, 1754--1763, was the only one of the numerous seventeenth and eighteenth century wars between England and France to focus on conditions in America. The War of Independence was a continuation of the Seven Years War insofar as it was a further step in the conflict between the old order of land holding that characterized the vestigially feudal empires of Europe, and an emerging, increasingly independent, North American capitalistic order. From the time of the Revolution, new departures in the formation of institutions of land tenure in America were a product of conditions in America. That is to say, the institutions of land tenure that shaped the beginning of English-speaking Canada were shaped by events in what became the United States.

The character of institutions of land alienation and tenure transferred from New England to Nova Scotia was dictated by the circumstances surrounding land grants to soldiers who had opposed the Continental Army of the disloyal colonies. These grants were made with quit-rents explicitly forgiven for a stated number of years. Their size in relation to one another was determined by the ranking system of the army. They were surveyed prior to alienation. The same could be said of land grants in Upper Canada, though the historical detail of the land grant systems in Nova Scotia and Upper Canada was far more complicated than this. For example, there were numerous grants to Loyalists who were not soldiers, and these were not handled in the same way as soldiers' grants; and different colonial administrations behaved differently. In general, however, in both colonies further attenuation of feudalism was evident in the predominance of small, quit-rent free holdings. In both cases the system used had matured in the older colonies and was modified by the circumstances of the Revolutionary War, and of the colony into which the transfer was made.

A century after the transplanting of the Loyalists, the land alienation and tenure system adopted by Canada for settlement of its Northwest Territory was, in every respect, the system matured in the United States under formally capitalistic institutions in the post Revolutionary period. Railway, school, and Hudson Bay grants excepted, all grants were of equal size, all went to individuals, and all were unencumbered by quit-rents, fees, or even a sale price.

If Newfoundland and British Columbia also had different experiences in the matter of land tenure institutions, and, certainly Newfoundland had, then there was laid down across Canada a mosaic of land holding institutions that varied from a propertyless state of nature in Newfoundland, through unreformed French feudalism, and attenuated British feudalism, to unalloyed United States capitalism. Insofar as civil law, customs, and attitudes have been affected by these different systems, their nationally disintegrating force has been accentuated.

Steps in the Replacement of Feudalism

Replacement of feudal with capitalistic institutions was evident in the first attempts to find sources of public revenue to replace feudal dues. The capitalistic nation state required financial support every bit as much as had the feudal state, and taxes on commerce that existed in both were never enough. Before the Revolution, and precipitating it, frontier interests of the old colonies objected to quit-rents. Before the Civil War, frontier interests in the Midwest objected to land prices that replaced quit-rents as a source of public revenue, and, incidentally, enriched the settled eastern states. Following the Civil War, when land sales were replaced by free grants, frontier interests objected to the tariffs that replaced land sales as a source of public revenue, and, incidentally, enriched the industrializing northeastern states.

In Canada, in some ways, the pattern of regional differences with respect to sources of revenue replacing feudal dues was more complex than in the United States. With the exception of Prince Edward Island, quit-rents were not a serious issue north of the United States border. Fracophone feudalism never evolved to the stage at which monetary quit-rents replaced dues in kind; and the seigneurial system was abolished primarily because it was a less efficient system, not because there was objection to the dues, as such. The extremely attenuated feudalism of Upper Canada, at first, relied on reserves of land as a source of public revenue. Upper Canadians, outside of the privileged colonial elite, found this as objectionable as quit-rents had been to frontiersmen in the disloyal colonies. The problem of reserves was not shared by the Maritimes and Quebec, whose problems, in turn, were different from one another. Activities of land companies excepted, land sales as a means of initial alienation did not come into effect in the Canadas until most of the land had already been alienated. Still, land was sold to settlers by original grantees, by those who controlled the clergy reserves, and by the land companies. High land prices were among the grievances of Upper Canadian rebels, in 1837. The Prairie region of Canada came under settlement only after the free homestead system had been adopted. The Prairies, like the United States West, objected to the tariff, the fiscal instrument that replaced land sales. They saw it as an arrangement favouring Montreal-Ontario manufacturing interests. In any case the replacement of feudal exactions took a different form in different parts of British North America.

Pointing to the Vestiges of Feudalism

The institutional advance of the North American economy can be traced in either land tenure arrangements or government fiscal arrangements. Alternatively, the evolution of land tenure systems and instruments of national revenue can be traced in the evolution of patterns of land holdings.

A few main factors determined the size and shape of land holdings in North America: agricultural techniques and institutions carried to America from lands of emigration, topography, agricultural techniques and institutions emerging after settlement in America, and the extent to which public authority was established and in control at the time of settlement. Patterns of land holdings have not been solely a consequence of the decline of feudalism and the rise of capitalism in agriculture, but they paralleled evolution of the land tenure system, providing spatially differentiated patterns of land holdings, as vestiges of stages in the evolutionary process.

First, then, a discussion of the detail of the evolutionary process.

Alienation and Tenure in The Disloyal Colonies

When the United States came into existence, all of Florida, the Gulf of Mexico littoral, and everything west of the Mississippi was Spanish. What are now Georgia and Maine had population densities under six per square mile. Everything east of the Mississippi and west of the Atlantic drainage slope, was equally underpopulated, or had no settlement at all. The settlement frontier ran along the height of land in the Appalachian Mountains. By 1860, not a century later, the frontier ran along a line from the west end of Lake Superior to the western end of the gulf of Mexico, and the United States claimed all the territory between that line and the Pacific coast. After the Civil War, the frontier advanced to take in all of the great central plain, stopping short of the Canadian border to the north until 1890. In its first century, the United States was an agricultural frontier advancing behind a more rapidly advancing political frontier.

It was part of Alexander Hamilton's plan of finance for the new republic that land sales should support the costs of government. His plan was put into effect when individual states celebrated victory by abolishing quit-rents, primogeniture, and other formal vestiges of feudalism. So, monarchy gave way to republicanism, feudalism gave way to capitalism, and the financial basis of national government adjusted accordingly.

The Land Ordinance of 1785 provided for an auction of federal lands in the territories Northwest of the Ohio river. A survey was to delineate townships six miles square on north-south lines. Alternate townships were to be sold entire, presumably to companies organizing settlement, or to speculating capitalists. The rest were to be auctioned off in blocks of 640 acres, one square mile. The auction was to be held in New York city.

Some lands were so alienated, and there were periods in the first half century of the United States when revenues from land sales were quite adequate to its fiscal needs; but land sales as the basis of government revenue were to give way to tariff revenues long before the frontier closed. Conflict between individual settlers and those who attempted to exploit them by putting a charge on their acquisition or use of land did not stop with the War of Independence. It continued in an altered form, eventually becoming an important factor in the termination of land sales.

`Squatting' on unclaimed land, and `intruding' on the holdings of land companies and large-grant proprietors was widespread before 1700. In fact, it was part of the growth of democracy in the colonies that legislative assemblies supported the position of individual squatters and intruders against the interests of the great proprietors. Pennsylvania and Virginia legally established squatters' rights when the official line of granted land, `the front', caught up to them. They did not absolve squatters from paying the going price for the land. In 1726, Pennsylvania recognized squatters' ownership without payment, if a cabin had been erected and land cleared and worked.

Conflict between the unruly advance of the frontier and restraining authority had been an important factor in the Seven Years War. Following the Quebec Act, it was an important factor in the War of Independence. It continued to be a factor in the definition of national land policy, after 1785. In 1841, national law established the right of `pre-emption', whereby a squatter had title to his holding on payment of the price at which land not bid for in an auction was sold. In a sense, the free homestead plan of the 1860s simply removed this minimal price from pre-emption and stipulated a future time at which the requisite cabin and cleared land had to be in place.

As the conflict of interest between settlers and authority resurfaced after the Revolution, the consequences of the legacy of the demise of feudalism became evident. The finances of the Union were the subject of a four-way struggle between old and new states, and between manufacturing and agricultural interests. The older states hoped to meet their expenses by selling their own unsettled lands. They could hardly succeed when there was pre-emption of frontier lands at the low, fixed price of what could not be sold at auction. Frontier territories, like Wisconsin and Kansas, on the other hand, were dominated by squatters, and lobbied for easy pre-emption conditions. In the end the frontier attained its goal in the free homestead arrangement. But if there was to be no revenue from land, it would have to come from somewhere else. That other source was the tariff. So, between 1785 and 1860 there was an alternation between land sales and the tariff as a source of national revenue. After 1860 the task fell largely to the tariff, and agriculture in the newer states, having been relieved of the burden of government by the gift of land, had it reimposed upon them by the tariff, to which they objected because it favoured manufacturing in the older states.

Alienation and Tenure in the Loyal Colonies

In February of 1774, before the Quebec Act and before the Revolution, the Lords of Trade had decreed an end to free grants of the waste lands of the Empire. Henceforth land was to be surveyed for settlement, divided into lots of 100 to 1000 acres, and sold at public auction. The minimum price was set at 6 pence per acre, subject only to the usual fees of office and a quit-rent of 4 shillings per acre. This decree was was washed away in the consequences of the Revolution. The waste lands of the loyal colonies were used to provide a `free and happy asylum' to Loyalist refugees. Thereafter, until 1826, land in British North America was alienated from the Crown by grant, usually without a quit-rent.

The Quebec Act of 1774, had returned the colony to la Coutume de Paris, and it remained under that system until the Constitutional Act of 1791 declared all grants outside the old seigneuries in Lower Canada, and all grants in the new colony of Upper Canada to be held in fee simple. Clauses 43 and 44 of the Constitutional Act, dealing with grants, made no mention of quit-rents.

In general, settlement grants in Upper Canada were relatively small, scattered, and given to individuals. The large number of disbanded soldiers' grants was one factor determining the pattern. There were exceptions. The first Governor, John Graves Simcoe, in something of a contradiction, wanted to have both a landed aristocracy, and to have Upper Canada settled by the non-aristocratic method of New England township development. In 1792 and 1793, 32 townships were granted as units to speculators, many from the United States. Objections came from two quarters. Loyalists who had received smaller grants were loath to see others receive larger. The speculators who hoped to gain large grants were disappointed to learn that they could keep only 1200 acres of their ten or twelve by twenty mile townships, the rest having to be granted to other settlers. These large grants were terminated in mid 1793, and little actual settlement resulted. Exceptions to the small holdings pattern obtained when merchants, such as Richard Cartwright and Robert Hamilton, accumulated land by buying up small grants, accepting them in payment, or possessing them on default of payment. These remained exceptions. A pattern of small, scattered, individual holdings was generated by the grant system, and reinforced by the scattered pattern of Crown and clergy reserves.

There were problems. Exceptions with respect to the size of grants were made in the case of some groups of disbanded soldiers. The exceptions were subsequently extended to others, with consequent administrative confusion. Who was a Loyalist, and so eligible for grants and compensation payments, was never completely clear. Who was to receive `Dorchester's Bounty', an extra 200 acres given to those selected as `good settlers', was not clear. In 1797, grants were suspended in favour of sales at auction. The sales were suspended almost immediately, because there was no land to sell until further purchases were made from the Indians, who turned out to be slow and hard bargainers.

Unhappy experience with large grants was not confined to grants to United States speculators. Selkirk's settlement in Glengarry County, and McNab's settlement in Carleton County, were not such as to encourage further similar grants.

When Sheriff Alexander McDonnell inspected Selkirk's settlement in Dover Township in 1805 he

... found everything in the greatest disorder, "nothing to be heard but discontent, nothing seen but distress." The affairs of the settlement were in chaos owing to the intemperance and death of the temporary agent; with the exception of four or five settlers, every one was sick with fever, and a doctor's bill amounting to 106 pounds [was owing]. The stores were reduced to a few barrels of flour, a barrel of pork, fifty pounds of beef, and two out of ten barrels of whisky. Conditions in 1806 were even worse; the settlers were virtually in rags; a whirlwind carried off the roof of Selkirk's property; what the summer heat had failed to parch of the crop, the autumn deluges had destroyed. Fever and dysentery had raised the list of deaths to forty-two. The humane superintendent informed Lord Selkirk that a permanent settlement could not be made, ... and without waiting for instructions, moved them all to Sandwich. (Macdonald, p. 158).

In all fairness it should be recorded that part of the problem in this case was the preoccupation of the `humane' superintendent with his duties as Speaker of the House of Assembly in York. And the reader should note that a doctor was available, as was a thriving settlement to which the failed settlers could be removed. Not all settlements were like Dover.

`The McNab', whose grant was located on the south shore of the Ottawa River between Arnprior and Fitzroy Harbour,

... was in the habit of granting licences to cut timber on lands which he [did not own], and of locating lots apparently for no other purpose than to obtain timber. His income from this source was immense. He was even known to cut timber on other townships. He collected rents from all settlers from whom he could obtain them; contrary to the agreement he sold land a high prices and gave land to people who had already received free grants of land elsewhere. He harassed certain settlers by lawsuits or impending legal proceedings, ruining many he disliked. He conducted the affairs of the township in the worst possible manner for the interests of the settlers. There was no grist-mill in the township, in spite of McNab's claim to have built both saw and grist-mills; settlers had to travel fourteen to sixteen miles over most disgraceful roads, while `the system of rent and mortgage, added to an arbitrary, overbearing and persecuting spirit, seems to have checked all enterprise and paralysed the industry of the settlers. In short, had McNab studied it he could not have followed a course more calculated to produce discontent and disaffection among the settlers.' (Macdonald, p. 200).

There were good and bad elements in the land alienation system of Upper Canada, quite apart from the system of reserves. On the one hand, grants were scattered and there was squatting. On the other, there were no manors or plantations to stand in the way of the rise of a strong, independent, market oriented agricultural class. Simcoe had thought of Upper Canada as a staple exporting, aristocratic part of the Empire, something like colonial Virginia; but the land was too far from ocean transport, and there was no immediately exploitable (uncultivated by Europeans) staple to export. Besides, the Loyalists themselves had largely chosen Upper Canada over Nova Scotia because they wanted to be independent farmers, not harvesters and exporters of a fish staple or any other staple. So there was much in the system that could have been praised or blamed for whatever deserved praise or blame in the advance of the colony. It was clergy and crown reserves, however, the instruments of public revenue, that became the focus of attention.

From Quit-rents to Reserves

Whether in England or America, it was part of the attenuation of feudalism that quit-rents were replaced by sales, but the replacement was not immediate in Canada. Early attempts to generate revenue by fees and sales in Nova Scotia produced poor results, and, in all of British North America immediately after the War of Independence, sales were ruled out by the need to assist Loyalist migrants. So a solution was sought in reserved lands, dedicated to the support of public enterprise.
The idea was not a new one in colonial experience, and has been ascribed to William Penn's method of settling Pennsylvania. By reserving a certain portion of land in the midst of the lots granted to the settlers, he secured, without expense to himself, a property which increased in value with the increase of the Colony itself. The proprietors of the townships of Augusta and Farmington in Maine made similar reservations for similar purposes. In 1745, Lieutenant Amherst recommended that, in lieu of quit-rents, the sixteenth part of every township in Nova Scotia be reserved for the Crown, which in time would form a valuable estate "without one penny out of anyone's pocket." (Macdonald p. 221).

In September, 1791, Henry Dundas, Secretary of State in Britain, instructed Lord Dorchester to make reservations for the Crown and Clergy in British North America. Two sevenths of the quantity of land granted to settlers was set apart for such purposes in the Canadas.

There were several serious problems with the reserve system as an instrument of public revenue in Upper Canada. It was not until 1823 that there was sufficient demand to generate significant revenues from leases of the reserves. Use of public lands to establish a church was galling to settlers, mostly Scots, who were not included in the establishment. That reserves were set aside to permit the government to carry on without taxes, and therefore without consent of the colonial Assembly, was also galling to the majority of settlers, who protested the arbitrary, self serving rule of the Executive Council. Finally, because in Upper Canada they were scattered evenly through the settlers' grants, the reserves prevented even and concentrated settlement.

In opposition to the system of grants and reserves, Robert Gourlay, a precursor of the Reform Party, and his disciple, Edward Gibbon Wakefield, a celebrated exponent of the New South Wales System of land settlement, successfully campaigned for the 1841 adoption of land sales and abolition of reserves. Actually, the sell-off of Crown reserves began in 1820, about the time that clergy reserves were handed over to the Church of England, which also sold its reserves, but the reserve system remained at the center of political controversy into the 1850s.

From Reserves to Sales

The purpose of the land sale system was to use unsettled waste lands to generate a surplus that could be invested in national (colonial) economic growth and development. The idea was to have the colony take out a loan to pay for increased immigration and settlement, then to pay off the loan by taking back, through land sales, increased land values consequent upon the increased settlement. Settlers without sufficient capital to buy land could be employed on public works, such as the building of roads, bridges and canals, until they had sufficient to purchase land. The crux of the scheme was to charge a sufficient price to repay the debt, and to keep a number of immigrants landless and in need of wages, thereby ensuring labourers for public works, and to allow for the benefits of a division of labour in the towns. Everything, according to Wakefield, depended on getting a concentration of labour and a consequent division of tasks, because, as Adam Smith had pointed out, that would generate a surplus to be creamed off in the price of land.

While the scheme faced problems because there was inexpensive or preemption land available in the United States and a scarcity of ungranted land in Canada, its long run significance with respect to economic development was of a high order. Feudalism and imperialism had given way to capitalism and nationalism (provincialism) in economic development policy. This coincided with the liberal political reforms recommended by Lord Durham at the time of the union of Upper and Lower Canada. Wakefield wrote portions of the Durham Report, in which union and responsible government were recommended, and he was special advisor on land policy to Canada's first Governor, Lord Sydenham.

Creating one Canada in 1841 involved much more than bringing Upper and Lower Canada under one colonial government. It entailed a number of changes characteristic of the passage from a feudalist-mercantilist monarchical state to a capitalist democratic state.

Despite Wakefield's influence, the system of land sales was not comprehensively adopted. For example, there were still to be `free' grants in return for work on colonization roads. This not only adulterated the system but opened the door to the kind of speculation in land script that marked most other phases of settlement throughout the history of English-speaking North America.

Capitalistic Land Companies

By 1840 settlement was well under way in Upper Canada. By 1866, at the end of the American Civil War, the frontier in Canada West was up against the non-arable lands of the Laurentian Plateau. Agricultural settlement in Canada West had been a success. In no small part this was a consequence of enterprise in two particular settlements: Colonel Talbot's settlement along the shore of Lake Erie in southwestern Upper Canada, and the Canada Company's settlement in the Huron Tract, northwest of Talbot's settlement. The Canada Company was one of several capitalistic land companies that organized settlement in Upper Canada, the Eastern Townships of Lower Canada, and the Maritimes.

Talbot's settlement was not formally capitalistic. It began as a 5,000 acre grant to a senior military officer. By 1831, through further grants on condition of establishing settlers, and with considerable help in the form of public subsidies, the Colonel had extended his energetic and benevolent supervision over a settlement of 40,000 souls, with roads and mills spread over 500,000 acres and 28 townships.

Following the model of the Ohio Company in the disloyal colonies, the Canada Company was chartered in 1825 and the British American Land Company was chartered in 1834 to settle the Eastern Townships of Lower Canada. Both were capitalistic insofar as they were ventures in which land was purchased from the Crown on certain terms with respect to settlement. A profit was earned by aiding settlers who eventually purchased or leased their land from the Company.

The Canada Company was assisted by a massive migration from Britain in the 1830s, for which no initiative or any new condition in the colonies was responsible. Settlement in British North America was very much the other side of the coin industrialization and urbanization in Britain. Perceived excess population in Britain, excess land in Canada, and the possibility of exchange of manufactures for agricultural produce between the two was part of the information environment of the early nineteenth century. The Company was as much a consequence as a cause of settlement.

By 1840 the Company had paid approximately two hundred and fifty thousand of the three hundred and twenty thousand pounds owed for the land it received, and had been forgiven the rest to allow it to finance the deflection of migrants towards its tract.

By January 29, 1838, the Company had received patents for 1,403,787 acres. valued at 226,660 pounds, of which 770,584 acres were surveyed in the Huron tract, the balance being Crown Reserves. Thus two-thirds of the contract having expired, the Company had taken out patents for two-thirds of the purchases, and had placed one settler per 200 acres on one-third of the land paid for, as per its agreement. One-third of the patented land remained unsold, and the remaining third represented the unexpired term of the contract (Macdonald pp.~278).

In a report of 1840, Commissioner Thomas Mercer
Jones gave a glowing account of the Huron tract with its prosperous, contented body of settlers who a few years previously began operations with scarcely any other capital than health, industry and perseverance. The Tract had been divided into townships--Goderich, Stephen, Williams, Osborne, Biddulph, North and South Easthope, Tuckersmith, Ellice, Fullerton, Logan, Stanley, Hay, Colborne, McGillivray, Bosanquet, Hullett, MacKillop, Downie, Hibbert, and the town of Goderich. It had a population of 5,905, eight grist-mills, eighteen sawmills, two tanneries, one brewery and seven distilleries. The development of agriculture was reflected in the number of domestic animals possessed by the settlers. They had 842 yoke of oxen, 2,606 cows, 690 horses, 4,772 young cattle, 4,251 sheep, 8,959 pigs; they had cleared and cultivated 22,909 acres; their stock was valued at 56,080 pounds, and the land and improvements at 186,206 pounds.

According to the the agreement of 1826, the Company was allowed to spend, with the approval of the Executive Council, one-third of the purchase money, amounting to 43,380 pounds, on public works and improvements within the Huron Tract. These included canals, wharves, roads, bridges, schools and churches, and any other works intended for the public as distinct from those intended for the use and accommodation of private persons. It was in connection with these improvements that the Company's most enduring contribution to the economic life of Canada was performed. It spent the sum of 60,000 pounds on improved means of communication, loans to indigent settlers and steamboat services--the latter, however, according to the Seventh Report on Grievances, was sometimes used for pleasure trips on Lake Huron, to the neglect of transportation. By the 1st of February, 1838, one hundred and twenty-four miles of road had been constructed and bridges built at a total cost of 22,393/12/10 pounds (Macdonald pp.278--279).

Foreshadowing National Policy

The point with respect to land tenure and settlement arrangements after the 1860s in North America, is not just that they were capitalistic and generated an augmented surplus, but that land alienation and settlement had become the subject of national economic policy in industrializing democratic nation states.

The problem to be solved in national development policy can be simply put. How can a surplus be acquired to invest in new and more productive economic ventures? Is it to be extracted directly from the economy, as it was in the Soviet Union under Stalin's five year plans? Is it to be borrowed from an external source and repaid out of the expected even greater surplus generated by the consequent development? H.A. Innis put the question succinctly with respect to the National Policy of the Canadian government after 1890.

How can we guarantee that we shall get a reasonable share of the abnormal profits which accompany the exploitation of natural resources so that we can at least pay the interest on the capital we have borrowed to construct our railways and perhaps pay off some of the mortgage? (Neill, p.~148.)

The first approach to a national policy in Canada seems to have been Governor Simcoe's `five year plan' for Upper Canada.

Simcoe's plan of buying flour in small quantities direct from the settlers was a prelude to a much grander scheme he had in mind for making flour the staple of Upper Canada as tobacco had been the staple of Virginia. For every barrel of flour received into the storehouses, he proposed to issue notes redeemable in specie and made legal tender for the payment of taxes. The capital for their redemption was initially to be provided by Great Britain and repaid from the gradual sale of the lands bordering on Lake Erie, a district which he had withheld from settlement (Bates p.~30.).

The Gourlay-Wakefield plan to borrow from the mother country to settle the country, and to pay off the debt with land sales at a sufficient price was another such scheme. Sydenham's proposed provincial bank of issue, the capital of the bank to be used in public works, was yet another [See chapter 16.]. And there were the First and Third National Policies of 1876 and 1944. The national policy associated with the alienation of Prairie lands was the Second National Policy, the main lines of which seemed clear to Harold Innis.

The alternative is of course the tariff on machinery and equipment used for exploitation. A carefully adjusted tariff may make it possible to skim off a substantial portion of the cream by taxing equipment, raising costs of production and thereby reducing profits which would otherwise flow off into the hands of foreign investors.

The Second National Policy in Canada had no exact parallel in the United States, where, after 1862, the tariff was consistently a protective or developmental tariff, primarily related to manufacturing. The tariff of the Second National Policy in Canada was a product of an imperialism that the United States had cast off. Still, it was influenced at every stage by what was happening in the United States.

The Free-Homestead System

After 1862 in the United States, and after 1871 in Canada, identical systems of free-homestead grants characterized land alienation policy on their frontiers of settlement. There had been free grants in the Canadas between 1782 and 1842, but those were vestigially feudal grants, made without quit-rents in consequence of the conditions of the United Empire Loyalists. Between 1842 and 1860, both the United States and British North America experimented with land sales, banking, and tariffs as sources of revenue. In the United States, land sales was the rule after 1785. Soft money banking had been tried sporadically since colonial times, and continued in state legislation, in the first half of the nineteenth century. In the second half of the nineteenth century both nations moved heavily towards reliance on the tariff. By then industrialization was underway in both countries, so the tariff came in as a developmental, as well as a fiscal device. The immediate occasion for abandoning land sales, however, seems to have had nothing to do with broad considerations of economic development and fiscal policy. The forces of history invariably confound simple explanations.

In the United States the free homestead system was a product of the evolution of legal provisions for squatters, and so had roots deep in the early settlement of the continent. When it was introduced in 1862, however, it was seen to be immediately useful in preempting territory otherwise likely to fall to the secessionist slave states. During the Civil War the law of capture determined the allegiance of the frontier.

Squatting and preemption had not been the important issues in Canada that they had been in the United States. The case of the Oregon Territory, however, was instructive to Canadians. Oregon was held jointly by Britain and the United States until the weight of settlers favouring the United States connection tipped the scale, and a settlement between the two countries, in 1846, set the boundary at the 49th parallel. The same thing had happened in Texas, ending in war and the annexation of that territory. So, it seemed evident that the national allegiance of any part of the frontier would be determined by the loyalties of its settlers. When the United States opted for free land and the law of capture in 1862, Canada could either do the same, or face probable loss of the interior of the continent.

Chester Martin, historian of Dominion lands policy in late nineteenth century western Canada, has put the matter succinctly with respect to the situation in the United States,

The Homestead Act of 1862 was based naturally upon preemption, a practice with scarcely any counterpart at that stage in Canadian settlement: free entry was permitted to any quarter section which was `subject to pre-emption at one dollar and 25 cents per acre' upon payment of a nominal fee of ten dollars. Where the double minimum price of $2.50 prevailed as in the sections alternating with railway land grants, entry was restricted to 80 acres -- a restriction which remained in force until 1879. Patents were to be issued only after five years of residence and cultivation, and no homestead could be seized for `any debt or debts contracted prior to the issuing of the patent therefor'. No settler could `acquire title to more than one quarter section under the provisions of this act'. `Existing pre-emption rights' were to continue as before. The final clauses (section 8) of the statute [of 1862] authorized the settler at any time to commute his free-homestead rights to purchase by paying `the minimum price, or the price to which the same may have graduated' -- a provision ... which opened wide the door to fraudulent entry and speculation (Martin, p. 124).

With respect to Canada, Martin wrote,

At every stage the influence, direct or indirect, of the United States is unmistakable. McDougall himself [Minister of Public Works in the first federal cabinet of the Dominion of Canada, and the first Governor of Manitoba, eventually discredited and rejected in public life for his alleged mismanagement of the Riel Rebellion] conceded that he had `adopted with modification, the American Homestead law'. Dennis, who had confirmed McDougall's system in the field, had consulted the Commissioner-General of the Land Office and the Surveyor-General of Minnesota. Lieut.-Governor Archibald, whose report from the new Province of Manitoba (December, 1870) was the basis of subsequent Orders-in-Council (March 1 and April 24, 1871), urged the 160 acre quarter-section homestead because the American practice was already `known all over the world'. Cartier stated in the House of Commons that the 160 acre quarter-section homestead `had been adopted after mature consideration of the American system'. The Hon. J.C. Aikins who introduced the first Dominion Lands Bill in the Senate, acknowledged his indebtedness to the `principles of a Bill which has just passed its second reading in Congress.' Alexander Morris, the only member of the House of Commons to attempt even an exposition of the bill, referred to `the original Act of Congress, after which the Canadian Act was framed'. `All along the line from the Lake of the Woods to the Rocky Mountains', wrote Archibald, `the two systems would be coterminous.' It will be unnecessary to elaborate the fact. The free homestead like the 640 acre section, the decimal currency, and a score of less significant conventions, was to be an American product adjusted to the solidarity of the North American continent (Martin, p.~141).

Even with the Homestead Acts, land alienation for purposes of settlement was not a simple and problem free process. In the United States there was railway land grant script, Civil War veterans, and school lands script on the market, and available for speculation. Schemes were organized to have homesteads minimally proven up and then purchased by agencies wishing to hold larger units. On the Prairies, in western Canada, there were railway grants and Hudson Bay Company reserves, as well a school reserves, all of which were available for sale to anyone at reasonable prices. Because adjacent sections of land could vary in fertility, one being capable of supporting a family in comfort for generations, the other being useless from day one, insider information on the quality of specific sections complicated the process of settlement. The ability of railway companies and the Hudson Bay Company to select their grants from anywhere in the territory was a further complication. Still, a great step had been taken in the evolution of land alienation and tenure institutions in Canada. The older provinces soon adopted similar homestead laws so that, from then on, the conditions of opening up remaining arable lands were uniformly capitalistic from coast to coast.

The Pattern of Land Holdings

The pattern of land holdings, that is, of the shape, size, and directional orientation of individual `farms' was not a consequence of the stage of attenuation of feudal tenure when the land was alienated from the `state'. Nonetheless, the pattern changed as the attenuation of feudalism advanced. Two factors seem to have been at work in this outcome. First, as time passed, the institutions and practices of Europe gave way to institutions and practices in America. No doubt the attenuation of feudalism was part of this shift of institutions, but distinctive farming techniques and the emergence of the democratic nation state was part of this process. Second, as time passed, alienation fell more and more under the pre-planned administration of governments. But this last point needs qualification, and, as usual, the factors in patterning combined in different ways in different places and times.

Farming techniques were important in determining the size of holdings. Given the similarity of crops and equipment, the size of the holdings of individual settlers was roughly the same under all systems of tenure until the nineteenth century, generally between one hundred and three hundred acres. That was what a family could manage. Seigneurial holdings were larger, but not the holdings of habitants. Tobacco and rice plantations in the south, with their indentured labour, were larger, as were middle colony Manors which were worked by numerous settlers paying quit-rents. >p> The first holdings in the southern colonies were regular in shape. They were straight line rectangles. They were planned under quasi feudal tenure. As individual free holders and squatters multiplied, the regular pattern of holdings gave way to lines marked out by the contours of the land and the shapes of arable surfaces. Puritan settlements in the north were compact, and holdings were well defined, but they grew like Topsy, without prior survey. Holdings were irregular in shape and size.

The Puritans, as a matter of principle, rejected feudal institutions of land tenure. The individual settlers of the South held to individual property rights as a matter of practice, rather than principle. So, the breakdown of feudal tenure was contemporary with the emergence of irregular holdings. External authority had been removed and overall order disappeared. In New France the good order of supervised settlement was evident in the relatively uniform, straight line design of the habitants holdings. Their long narrow shape was determined by custom and the technical characteristics of the charrue. In Upper Canada the prior establishment of authority was again evident in the straight lines of the survey and the relatively uniform design of townships. Their rectangular shape, overlaid with concession roads one and one quarter miles apart, was a product of the system of allotting land to soldiers. In both New France and Upper Canada there was some minimal acceptance of the natural barriers and contours of the land. For example, Talbot's road west, having preceded the survey, determined the direction of concession lines across the middle of Essex County.

In the United States, uniform straight line surveys of square townships, six miles by six miles, came with the decision to sell land to finance government after the Revolutionary war. As in other cases, where public revenue was at stake surveys were reasonably well ordered and registered. Shortly thereafter the frontier passed beyond the mountains onto the central plain. Natural barriers were few, and modification of the straight, continuous lines of the survey disappeared. When the frontier moved into western Canada in the late nineteenth century, the unaltering six mile square pattern moved with it.

From Quebec to the Prairies, the pattern of land holdings varied with the institutions of tenure: from French feudalism, through attenuated English feudalism, to American capitalism. The variation was not a direct consequence of the evolution of land tenure institutions, still the one matched the other, and the variation in pattern indicated the entrenching of important very long run economic factors in the disintegration of Canada.

Factors of Disintegration in Canada

The proposition that both leads into and emerges from consideration of feudalism in America is twofold. First, agricultural development leading to balanced growth was the foundation of the substance of economic development in the most populous regions of Canada. Second, the institutional foundation of agricultural development was different in different regions of Canada. Together these conclusions lead to the further conclusion that Canadian economic development has been the development of several distinct economies with different roots in agriculture and agricultural institutions. These different economies having different initial conditions and different institutional arrangements have followed different growth paths. The variety of institutions of land alienation and tenure has been a very long run factor in the disintegration of Canada.

Qualifications, of course, are required. This conclusion implies a particular interpretation of Euro-American economic development over ten centuries. It needs to be adjusted to include the fact that some parts of Canada cannot be characterized by agricultural development and/or balanced growth. Specifically, Newfoundland, and to a lesser degree, British Columbia, and the Maritimes, have had non-agricultural staple exports as the substance of their development. Even with this adjustment there are yet other regional differences and similarities to be accommodated. Prince Edward Island, having grown on an agricultural staple base, has an industrial structure more like that of Saskatchewan than of any other province. British Columbia, with an industrial structure like Nova Scotia, has enjoyed a much higher average standard of living.

The disintegrating differences in the character and evolution of the different regional economies in Canada are subtly complex. The Prairie economy, the first Canadian economy to rise on an agricultural staple comparable to tobacco or cotton in southeastern United States, is the only Canadian economy to be unlike the tobacco and cotton economies, insofar as it has been characterized from the beginning by fully developed, capitalistic land alienation and tenure institutions. So, the difference between the Quebec and the Prairie economies is twofold. It is the difference between depending on agriculture for exports rather than for home consumption, and it is the difference between having capitalism rather than feudalism set the initial conditions and the institutions by which economic advance has been governed.

The different characteristics of the regional economies of Canada are disintegrating factors that have drawn the lines of cleavage as the Canadian economy has come under decentralizing pressures from continentalization and globalization in the late twentieth century. But there is more to this story than land tenure. The different characteristics of non-agricultural based economies have yet to be described. A case has yet to be made for the proposition that two thirds of the Canadian population has its economic base in balanced growth. The difference between the Ontario and Quebec economies, as two economies not relying on primary product exports, has yet to be detailed. In short, much of what may be called the Distinct Regional Economies Hypothesis of Canadian economic development has yet to be put in place. Further, it has to be shown that all the facts that support the alternative, Staple Theory of Canadian economic development can be fitted into and more satisfactorily interpreted in the context of the Distinct Regional Economies Hypothesis. The whole history of Canadian economic development has to be elaborated and shown, at the very least, to be not inconsistent with the Distinct Regional Economies Hypothesis.

What has to be shown is that in America, in Canada as well as in the United States, in the main, development of the countryside has been the basis of development of the towns; that Adam Smith was right, at least in substance. Harold Innis noted the importance of commerce, and, perhaps, a case can be made for saying that commercial development preceded agricultural development in the case of the Prairie wheat economy. In general, however, the development of the country has been the cause of the development of commerce and the towns. Because this is the case, differences between the institutions of land tenure in French and English Canada have been critical in the regionalization of the economy. Innis was correct in pointing out the relatively greater importance of exported natural resources in the Canadian case. He was correct in categorizing the kind of economic activity involved in these activities as being similar to commercial resource exploitation. Nonetheless, the substantial surplus emerging from non-export oriented agriculture in Canada as a whole, and the character of the institutions of land tenure governing development in different regions in Canada, indicate that Innis' Staple Theory was a specific answer to a very limiting question, and not an explanation of the development of the Canadian economy.

Conclusion: Roots of Disintegration

By 1841 the process that had attenuated feudalism in the disloyal colonies, and brought about its formal abolition in 1785, had terminated feudalism in agricultural settlement in the Loyalist colonies as well. There was no sudden break in English-speaking Canada, no formal change to which practice, custom and mentality had to adjust. Institutional arrangements tested in the old colonies were modified to suit the conditions of the loyal colonies after the Revolution. Deficiencies in administration notwithstanding, in the 1840s, English-speaking Canada was characterized by the most advanced forms of land alienation and tenure.

Until 1854, francophone Canadians lived under a feudal regime that had gone without substantial reform since 1640. Not only was the system unreformed with respect to the emergence of capitalism and market orientation in agriculture, but it was identified with things French to be defended against English incursions. It could not have been abolished in 1854 without the concurrence, perhaps even the initiative, of francophones in the government of united Canada, but there were many francophones who wanted it entrenched to protect the habitants from capitalistic exploitation. When it was abolished, abolition came at once, requiring major adjustments that took years. For example, the land was left in the possession of the seigneurs. In the United States, feudal manors had been expropriated and redistributed without charge to the former tenants. The habitants of Quebec were given only an opportunity to buy out the seigneurs. Not only was the adjustment a radical, time consuming shift to an entirely new system, but the burden of the shift was born by those who worked the land. Substantial change came with a penalty on the development of agriculture. Accordingly, the root conditions of economic growth were different in English-speaking and francophone Canada, and, in consequence, the rate and path of development were different in the two regional economies. All of these circumstances have been very long run economic factors in the disintegration of Canada.

The land alienation and tenure institutions of Upper and Lower Canada were one aspect of two complex sets of cultural elements. Different mind sets, customs, and habits of behavior corresponded to the respective sets of legal institutions. When the free homestead system of post Civil War United States was used, without modification, in the settlement of the Prairie region, after 1871, yet another set of land alienation and tenure institutions, and another complex of mind set, habits, and institutions was put in place. Populism was added to Conservatism and Patriotism as factor working towards the disintegration of Canada


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