The financial position of Canada had been hitherto satisfactory. Her entire debt was four million and a half; an expenditure of £600,000 met all her requirements, and her revenue largely exceeded this sum; her securities bore a premium on the Stock Exchanges of England. [Sidenote: 1852 A.D.] But now Canada, in her eagerness for more rapid development, began with liberal hand to offer aid to industrial undertakings. She contributed freely to the making of railways. She encouraged the municipalities to borrow upon her security for the construction of roads and bridges, and for other necessary public works. The municipalities, with responsive alacrity, borrowed and expended; a genial activity pervaded all industries; and the development of Canada advanced with more rapid step than at any previous period. But the country was providing for wants which had not yet arisen, and the premature expenditure brought upon her unwelcome and oppressive burdens of debt and of taxation.[19] CHAPTER XIII. CONFEDERATION. The political system which existed in British America before the union of the two provinces was in a high degree inconvenient. There were, in all, six colonies--Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland, and the two Canadas. They were the subjects of the same Monarch, but they possessed no other bond of union. Their interests were often in conflict; their laws and customs differed widely; each had its own currency; each maintained its own custom-house, to tax or to exclude the products of the others. They were without any bond of union, excepting that which the common sovereignty of England supplied; and they were habitually moved by jealousies and antipathies, which were more powerful to divide than this was to unite. Along their frontiers lay the territory of prosperous States, living under a political system which bound them together by community of interest, while it adequately preserved and guaranteed the free individual action of each. The success of confederation, as seen on the vast arena of the United States, silently educated the British settlements for the adoption of that political system which alone met the necessities of their position.