Changing Conditions in the Dominion
The postconfederation annexation movement, surprisingly, was killed rather than strengthened by the Panic of 1873. The condition of the Republic explains this. The two previous movements had occurred when Canada was distressed and the United States prospered, a contrast which suggested that Canadians could improve their lot by becoming Americans. But from 1873 to 1878, Americans might well have preferred to become Canadians.
This disparity was a result of the Civil War and its aftermath. The conflict swelled both the demand for produce and the volume of the currency. Money and credit were easy, prices were rising, and profits were enormous. These factors had bred a frenzy of speculation. The boom did have a solid foundation in the growth of industry, the rapid peopling of public lands, and the westward thrust of the steel of transcontinental railroads. But as virtue exaggerated becomes vice, healthy economic progress was distended into an unhealthy boom. Railroads were overbuilt, production outstripped consumption, and there was rampant speculation. In the wild scramble for easy wealth, scruples were cast aside as stock was watered, markets manipulated, and a gullible public snapped up shares in almost everything except the moon.
In 1873 the United States paid for its orgy. A disastrous crash followed the collapse of Jay Cooke & Company, considered the Gibraltar of American finance. No section or class in the Republic escaped the punishment of the ensuing de-