2. When the Treaty of Versailles was signed (1783), by which Britain acknowledged the independence of the United States, it was widely thought that she was ruined, and that she had fallen for ever from her proud place among the nations. The real greatness of a nation is never so well seen as in her conduct after defeat and disaster. In seven years from the loss of the American Colonies, the Prime Minister was able to say, "The country at this moment is in a situation of prosperity greater than in the most flourishing period before the last war." The world was startled to find that Britain, instead of being ruined by her loss, was fast becoming stronger and greater than ever. 3. This marvellous recovery was due, partly to the enterprising character of our countrymen; partly to the vast resources of our country in its stores of coal and iron; and partly to a number of remarkable inventions that enabled us to make the most of those resources. Indeed, the ten years that followed the Treaty of Versailles saw a display of industrial activity in England such as the world had never witnessed before. 4. Owing to inventions by Arkwright and others of machines for the spinning and weaving of cotton, England began to manufacture calicoes and cotton prints for half the world. About the same time Josiah Wedgwood set his wits to work to make porcelain as good as that from China, and became the father of the potteries of Staffordshire. The iron manufacture now began its prosperous career; for the mode of smelting iron with pit-coal, instead of charcoal, had lately been discovered. 5. But the extraordinary advance in British manufactures was due more than to anything else to the improvements made in the steam-engine by James Watt. Under his clever hands the steam-engine became the most powerful and obedient servant of man; and steam became, in consequence, the great motive-power in most of our factories. It would hardly have been possible, however, to make an extensive use of this steam-power unless there had been some cheap way of conveying coal to the seats of manufacture. There were in those days, we must remember, no railways, for no locomotive engine had yet been invented. The place of railways was supplied, in respect to the carriage of coal and other heavy goods, by a network of canals.