Confederation, as has been shown, involved the assump-
tion of debts accumulated on the part of the provinces chiefly
as a result of the construction of railways and improvement
of navigation, and served in turn as a further basis for the
increase of debt on the part of the provinces and for continued
improvement of transportation. In 1867, the Province of
Canada was relieved by Confederation to the extent of
$62,500,000; Nova Scotia, $8,000,000; New Brunswick,
$7,000,000. In 1885 new provinces and additional payments ¹
brought the debt assumed by the dominion on the part of
the provinces to $106,311,392. In addition, new indebted-
ness to the extent of $90,260,393 was added from Confedera-
tion to 1885 and $57,000,000 were paid out of receipts, chiefly
for: canals, $28,543,078; railways,$92,575,599; light-houses
and navigation, $8,433,100; and government buildings, ²
$12,432,825. Moreover, the provinces continued to expend
substantial sums on transportation. Confederation became
in itself a base for expansion of credit, and in relieving the
provinces of debt provided new possibilities for expansion of
debt. In 1885 total debt was $264,703,607; total assets,
$68,295,915; and net debt, $196,407,692.

An increase in interest charges, ³ from $4,860,757 in
1867-68 to $9,806,977 in 1885; in subsidies to the provinces
from $2,753,966 to $3,959,326; in sinking fund from $355,266
in 1868-9 to $1,403,863 in 1885; and in total expenditures
from $13,486,092 in 1867-8 to $34,107,706 in 1884-5 necessi-

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