commons, however, passed the Esquimalt and Nanaimo bill only to hear of
its rejection in the senate, where some Liberals united with the
Conservative majority to defeat it. When the surveys were all completed,
the government decided to build the railway as a public work; but by the
autumn of 1878, when Mr. Mackenzie was defeated at a general election,
only a few miles of the road had been completed, and the indignation of
British Columbia had become so deep that the legislature passed a
resolution for separation from the Dominion unless the terms of union
were soon fulfilled.

During the existence of the Mackenzie government there was much
depression in trade throughout the Dominion, and the public revenues
showed large deficits in consequence of the falling-off of imports. When
the elections took place in September, 1878, the people were called upon
to give their decision on a most important issue. With that astuteness
which always enabled him to gauge correctly the tendency of public
opinion, Sir John Macdonald recognised the fact that the people were
prepared to accept any new fiscal policy which promised to relieve the
country from the great depression which had too long hampered internal
and external trade. In the session of 1878 he brought forward a
resolution, declaring emphatically that the welfare of Canada required
"the adoption of a national policy which, by a judicious readjustment of
the tariff will benefit the agricultural, the mining, the manufacturing
and other interests of the Dominion ... will retain in Canada thousands
of our fellow-countrymen now obliged to expatriate themselves in search
of the employment denied them at home ... will restore prosperity to our
struggling industries now so sadly depressed ... will prevent Canada
from being made a sacrifice market ... will encourage and develop an
interprovincial trade ... and will procure eventually for this country a
reciprocity of trade with the United States." This ingenious resolution