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The evening of the 27th of January was fixed for the Minister's general statement upon the commercial policy of the Government. Sir Robert proposed the reduction of the duty on Russian tallow from 3s. 2d. to 1s. 6d.; the abolition of duty on the coarser fabrics of linen, cotton, and woollen, and the reduction on the finer from 20 to 10 per cent.; on French brandy and Geneva, a reduction from 22s. 10d. to 15s.; on foreign free-grown Muscovada sugar, a reduction from 9s. 4d. to 5s. 10d.; and on clayed 11s. 10d. to 8s.; the admission of Indian corn and buckwheat duty free; on butter, the duty to be reduced from 20s. to 10s.; and on cheese, from 10s. to 5s.; the duty on live animals, and fresh and salted meats, pork, and vegetables to be abolished. As to corn, in lieu of the then sliding scale, he proposed that when the average price of wheat was 48s., the duty should fall by 1s. with every 1s. of rise in price, till on reaching 53s. the duty should be a fixed one of 4s.; that this mitigated scale should last for three years, and, by a positive enactment, then disappear on the 1st of February, 1849, leaving for the future only a nominal rate of duty; and that all British colonial wheat and flour should be forthwith admitted at a nominal rate.

Spain and Portugalstill nominally existing under their native princes, but very much under the influence of Buonaparteadmitted British goods to a great extent. Buonaparte himself had winked at the introduction of them into Portugal, because that country had paid him large sums to permit it. But now he determined to enforce a rigid exclusion, and to make the breach of his dictated orders a plea for seizure of the country. In fact, he had long resolved to seize both Spain and Portugal, but to employ Spain first in reducing her neighbour, and by that very act to introduce his troops into Spain herself. He complained, therefore, that Portugal had refused to enforce the Berlin decree; and he entered into a treaty with Spain at Fontainebleau, which was signed on the 29th of October. By this infamous treaty, Spain agreed to assist France in seizing Portugal, which should be divided into three parts. The province of Entre Minho y Douro, with the town of Oporto, was to be given to the King of Etruria, the grandson of the King of Spain, instead of Etruria itself, which Buonaparte wanted to annex to France, and this was to be called the kingdom of Northern Lusitania. The next part, to consist of Alemtejo and Algarve, was to be given to Godoy, who was to take the title of Prince of Algarve. The third was to remain in the hands of the French till the end of the war, who would thus be at hand to protect the whole. In fact, it never was the intention of Buonaparte that either Godoy or the King of Etruria should ever be more than a temporary puppet; but that the whole of Spain and Portugal should become provinces of France under a nominal French king. Ministers were soon compelled to pursue the policy which Pitt had so successfully inaugurated. With all the determination of Lord Bute and his colleagues to make a speedy peace, they found it impossible. The Family Compact between France and Spain was already signed; and in various quarters of the world Pitt's plans were so far in progress that they must go on. In East and West, his plans for the conquest of Havana, of the Philippine Isles, and for other objects, were not to be abruptly abandoned; and Ministers were compelled to carry out his objects, in many particulars, in spite of themselves. And now the unpleasant truth was forced on the attention of Ministers, that the war which Pitt declared to be inevitable was so, and that he had recommended the only wise measure. The country was now destined to pay the penalty of their folly and stupidity in rejecting Pitt's proposal to declare war against Spain at once, and strip her of the means of offence, her treasure ships. Lord Bristol, our ambassador at Madrid, announced to Lord Bute, in a despatch of the 2nd of November, that these ships had arrived, and that all the wealth which Spain expected from her American colonies for the next year was safe at home. And he had to add that with this, Wall, the Minister, had thrown off the mask, and had assumed the most haughty and insolent language towards Great Britain. This was a confession on the part of Lord Bristol that he had suffered Wall to throw dust in his eyes till his object was accomplished, and it made patent the fact that Pitt had been too sagacious to be deceived; but that the new Ministers, whilst insulting Pitt and forcing him to resign, had been themselves completely duped. Spain now, in the most peremptory terms, demanded redress for all her grievances; and, before the year had closed, the Bute Cabinet was compelled to recall Lord Bristol from Madrid, and to order Fuentes, the Spanish ambassador in London, to quit the kingdom. On the 4th of January, 1762, declaration of war was issued against Spain. Neither king nor Ministers, seeing the wisdom of Pitt's policy and the folly of their own, were prevented from committing another such absurdity. They abandoned Frederick of Prussia at his greatest need. They refused to vote his usual subsidy. By this execrable proceedingfor we not only abandoned Frederick, but made overtures to Austria, with which he was engaged in a mortal strugglewe thus threw him into the arms and close alliance of Russia, and were, by this, the indirect means of that guilty confederation by which Poland was afterwards rent in pieces by these powers. On the 5th of January, 1762, died the Czarina Elizabeth. She was succeeded by her nephew, the Duke of Holstein, under the title of Peter III. Peter was an enthusiastic admirer of the Prussian king; he was extravagant and incessant in his praises of him. He accepted the commission of a colonel in the Prussian service, wore its uniform, and was bent on clothing his own troops in it. It was clear that he was not quite sane, for he immediately recalled the Russian army which was acting against Frederick, hastened to make peace with him, and offered to restore all that had been won from him in the war, even to Prussia proper, which the Russians had possession of. His example was eagerly seized upon by Sweden, which was tired of the war. Both Russia and Sweden signed treaties of peace with Frederick in May, and Peter went farther: he dispatched an army into Silesia, where it had so lately been fighting against him, to fight against Austria. Elated by this extraordinary turn of affairs, the Prussian ambassador renewed his applications for money, urging that, now Russia had joined Frederick, it would be easy to subdue Austria and terminate the war. This was an opportunity for Bute to retrace with credit his steps; but he argued, on the contrary, that, having the aid of Russia, Frederick did not want that of England; and he[173] is even accused of endeavouring to persuade Russia to continue its hostilities against Prussia; and thus he totally alienated a power which might have hereafter rendered us essential service, without gaining a single point. The Duke of Newcastle, man of mediocre merit as he was, saw farther than Bute into the disgraceful nature of thus abandoning a powerful ally at an extremity, as well as the impolicy of converting such a man into a mortal enemy; and, finding all remonstrances vain, resigned. Bute was glad to be rid of him; and Newcastle, finding both his remonstrance and resignation taken very coolly, had the meanness to seek to regain a situation in the Cabinet, but without effect, and threw himself into the Opposition.

As he made these professions, he was, from the very commencement of the year 1812, and nearly six months before the avowal of hostilities, drawing the invading force nearer to the frontiers near Detroit. General Hull had a body of two thousand five hundred men ready for the enterprise, well supplied with artillery and stores; and scarcely was the declaration of war made than he hastened over the frontier line and seized on the British village of Sandwich. There he issued a bragging proclamation, calling on the "oppressed" Canadians to abandon the despotism of kingship and become free citizens of free America. To meet the invasion, the British had in Canada only about four thousand regulars, and the militia might number as many more. To make worse of the matter, the Commander-in-Chief, Sir George Prevost, was a very inefficient officer. But Major-General Brock sent orders to the British officers at Fort St. Joseph to attack the American port of Michilimachimac, which he did on the 17th of July, a month after the American declaration of war. The place was taken, with sixty prisoners and seven pieces of artillery. This raised the courage of the Indians in that quarter, who had long thirsted for revenge of the continual injuries received from the Americans, and they called on their different tribes to arm and support the British. At the news of the capture of Sandwich by Hull, Brock sent Colonel Procter to Fort Amherstberg to operate against him. He also followed quickly himself, and found Procter besieging Hull in Fort Detroit, to which he had retreated across the border. By the 10th of August he compelled Hull to surrender with his two thousand five hundred men and thirty pieces of artillery. Not only Fort Detroit and a fine American vessel in the harbour were taken, but, by the capitulation, the whole of the Michigan territory, which separated the Indian country from Canada, was ceded to us, much improving our frontier.

General Montgomery reached the St. Lawrence, and detached six hundred men to invest Fort Chambly, situated on the river Sorel, about five miles above Fort St. John. The menaced condition of Quebec compelled General Carleton to abandon Montreal to its fate, and to hasten to the capital, and Montgomery immediately took possession of it. So far all succeeded with the American expedition. Carleton, to reach Quebec, had to pass through the American forces on the St. Lawrence. He went in disguise, and dropped down the river by night, with muffled oars, threading the American craft on the river, and so reached Quebec alone, but in safety. Montgomery was determined to fall down the St. Lawrence too, to support Arnold; but his position was anything but enviable. He had been obliged to garrison Forts Chambly and St. John's, and he was now compelled to leave another garrison at Montreal. This done, he had only four hundred and fifty men left, and they were in the most discontented and insubordinate condition. As he proceeded, therefore, he found them fast melting away by desertion; and, had he not soon fallen in with Arnold and his band at Point aux Trembles, he would have found himself alone.