But it was not only the political basis of the old colonial system that was rudely shattered. The economic foundations, too, were passing away, and with them the profits of the Montreal merchants, who formed the backbone of the annexation movement. It has been seen that under this system Great Britain had aimed at setting up a self-contained empire, with a monopoly of the markets of the colonies. Now for her own sake she was sweeping away the tariff and shipping monopoly which had been built up through more than two centuries. The logic of Adam Smith, the experiments of Huskisson, the demands of manufacturers for cheap food and raw materials, the passionate campaigns of Cobden and Bright, and the rains that brought the Irish famine, at last had their effect. In 1846 Peel himself undertook the repeal of the Corn Laws. To Lower Canada this was a crushing blow. Until of late the preference given in the British market on colonial goods in return for the control of colonial trade had been of little value; but in 1848 the duties on Canadian wheat and flour had been greatly lowered, resulting in a preference over foreign grain reckoned at eighteen cents a bushel. While in appearance an extension of the old system of preference and protection, in reality this was a step toward its abandonment. For it was understood that American grain, imported into Canada at a low duty, whether shipped direct or ground into flour, would be admitted at the same low rates. The Act, by opening a back door to United States wheat, foreshadowed the triumph of the cheap food agitators in England. But the merchants, the millers, and the forwarders of Montreal could not believe this. The canal system was rushed through; large flour mills were built, and heavy investments of capital were made. Then in 1846 came the announcement that the artificial basis of this brief prosperity had vanished. Lord Elgin summed up the results in a dispatch in 1849: "Property in most of the Canadian towns, and more especially in the capital, has fallen fifty per cent in value within the last three years. Three-fourths of the commercial men are bankrupt, owing to free trade. A large proportion of the exportable produce of Canada is obliged to seek a market in the United States. It pays a duty of twenty per cent on the frontier. How long can such a state of things endure?"