British Businessmen and Canadian Confederation: Constitution Making in an Era of Anglo-Globalization

This review was written in Charlottetown, not far from the site of the 1864 political conference that some claim made Prince Edward Island the birthplace or cradle of Confederation. Of course, historians point to a much broader range of influential people and events in the history of Confederation, but scholars have not fully appreciated the role of economic factors in general, and of British investors in colonial enterprise in particular. Andrew Smith's well-researched and smoothly written monograph offers new interpretations from the perspective of several major British investors. Smith filters this most familiar of Canadian stories through the lens of British capital, and he describes a world of transnational connections that will speak broadly to students of globalization and capitalism. He acknowledges the importance of colonial politicking, although the standard actors appear mostly as barriers or opportunities for the British financiers themselves. We know that the success of pro-Confederation governments in British North America was partly a result of support from the Colonial Office, but Smith argues that British interest in Confederation has been underplayed and that British businessmen influenced political opinion in an attempt to revive colonial securities.

British Businessmen explains how some of the main British investors became involved in infrastructure projects like the Grand Trunk Railway in the 1850s, and how the financiers responded when such large enterprises failed. Floundering securities caused investors to favour politically united colonies with close ties to Britain. Not all businessmen mattered to Canadian Confederation, and Smith examines two schools, generally divided by social class. The Liverpool school was made up mainly of industrialists who were classical liberals opposed to state intervention in failing enterprise and to far-flung military adventures. The London school consisted of investors such as Thomas Baring who favoured state investment in colonial infrastructure and the creation of new projects such as the Intercolonial Railway. London's investors embraced the ideology of constitutional political economy, which meant they pointed to political systems as the root of economic prosperity and they sought political rather than business solutions to financial problems.

The political solutions began in the boardrooms of London's service sector, but some manufacturers from outside the City, especially Manchester's Edward Watkin, sympathized with the London school. Gentlemanly capitalists formed lobby groups such as the British North American Association in 1862 to share information on colonial projects and pressure the Colonial Office to encourage political union in the colonies. Smith adds much to the historiography through his analysis of this group, although he focuses mainly on its political influence. It would be useful to know more about the business of associations in this period: who was welcome, who stayed away and why, and what the associations offered that parties could not get through less formal exchanges. The British North American Association quickly helped convince the Colonial Secretary to support Confederation, but their movement met significant obstacles in Canada, including the government of John Sandfield Macdonald and the favourable attitudes toward independence and free enterprise held by the governor general, Lord Monck. Nevertheless, British political and business backing for Confederation endured through changes in the Colonial Office and the colonial governments, and gained momentum with the coalition government in Canada and the meetings in Charlottetown, Quebec, and London. The investors responded favourably to the Quebec proposals and helped carry Confederation through British Parliament, where, as Smith demonstrates, radical backbenchers threatened its passage. Confederation was a victory for capitalists in the City and helped to keep Canadians connected to London capital markets in the nineteenth century.

Smith contributes a Canadian example to the work on gentlemanly capitalists by Peter J. Cain and Anthony G. Hopkins, and in that vein his focus is not on the actual movement of credit, capital, or goods, but the ideological influences and political negotiations of the London capitalists and their transatlantic contacts that created the background for this movement. Still, chapter 2 will leave readers looking for more evidence of the relative weights of material and capital flows and somewhat confused by a string of general and improperly numbered footnotes. Elsewhere we read that the Fathers of Confederation supported strong ties with Britain because 'many of them were involved in projects that were dependent on the continued inflow of British investment' (129). This seems to demand at least a consideration of their involvement in enterprises built on colonial, us, and other foreign capital, as well as a synthesis of the literature that situates these projects in Canadian economic history. These are modest criticisms meant to remind readers that Smith examines political thought and investment activity in the capital, not the larger role of capital in Canadian development. This book is a significant contribution that breathes new life into some of the field's oldest debates, and it is situated in the most recent scholarly literature. Its strongest analysis is in the vibrant area of transnational capital networks, and it should be examined by Canadianists interested in them.