Reciprocity, Annexation, Confederation
Ironically, the reciprocity which Elgin deemed the salvation of British North America eventually threatened to become its nemesis. This inversion of intent was not soon apparent, for the ten years which followed the ratification of the treaty of 1854 were a period of golden contentment. The prosperity of these colonies, like that of other young economies, depended upon their exportation of raw materials. In 1853 the exports from British North America to the United States were valued at $6,527,559. By 1857 they had grown to $22,008,916, and during the remaining life of the treaty, sales of colonial products to the Republic averaged around $25,000,000.1
This phenomenal growth of trade flowed from the confluence of several factors, of which the Reciprocity Treaty of 1854 was only one. The development of a "commerce of convenience" helped to increase Canadian-American trade. For example, Canada West purchased its coal from nearby Pennsylvania, while New England bought its fuel from Nova Scotia. This type of trade was developing prior to 1854; the treaty stimulated it, but did not cause it.
The reexport trade was likewise responsible for much of the increase in commerce. As already noted, the trans-Atlantic freight rates from New York were notably cheaper than those from Montreal, and Canadians naturally used the American entrepôt whenever they could. Like the trade of convenience, this tendency appeared before reciprocity and, under the American drawback system, had steadily gained from 1845 to 1853.