The twelve years of Carleton's first administration naturally fall into three distinct periods of equal length. During the first he was busily employed settling as many difficulties as he could, examining the general state of the country, and gradually growing into the change that was developing in the minds of the home government, the change, that is, from the Americanizing sixties to the French-Canadian seventies. During the second period he was in England, helping to shape the famous Quebec Act. During the third he was defending Canada from American attack and aiding the British counterstroke by every means in his power.

On the 22nd of September 1766 Carleton arrived at Quebec and began his thirty years' experience as a Canadian administrator by taking over the government from Colonel Irving, who had held it since Murray's departure in the spring. Irving had succeeded Murray simply because he happened to be the senior officer present at the time. Carleton himself was technically Murray's lieutenant till 1768. But neither of these facts really affected the course of Canadian history.

The Council, the magistrates, and the traders each presented. the new governor with an address containing the usual professions of loyal devotion. Carleton remarked in his dispatch that these separate addresses, and the marked absence of any united address, showed how much the population was divided. He also noted that a good many of the English-speaking minority had objected to the addresses on account of their own opposition to the Stamp Act, and that there had been some broken heads in consequence. Troubles enough soon engaged his anxious attention—troubles over the Indian trade, the rights and wrongs of the Canadian Jesuits, the wounded dignity of some members of the Council, and the still smouldering and ever mysterious Walker affair.

The strife between Canada and the Thirteen Colonies over the Indian trade of the West remained the same in principle as under the old regime. The Conquest had merely changed the old rivalry between two foreign powers into one between two widely differing British possessions; and this, because of the general unrest among the Americans, made the competition more bitter, if possible, than ever.

The Jesuits pressed their claims for recognition, for their original estates, and for compensation. But their order had fallen on evil days all over the world. It was not popular even in Canada. And the arrangement was that while the existing members were to be treated with every consideration the Society itself was to be allowed to die out.

The offended councillors went so far as to present Carleton with a remonstrance which Irving himself had the misfortune to sign. Carleton had consulted some members on points with which they were specially acquainted. The members who had not been consulted thereupon protested to Irving, who assured them that Carleton must have done so by accident, not design. But when Carleton received a joint letter in which they said, 'As you are pleased to signifye to Us by Coll. Irving that it was accident, & not Intention,' he at once replied: 'As Lieutenant Colonel Irving has signified to you that the Part of my Conduct you think worthy of your Reprehension happened by Accident let him explain his reasons for so doing. He had no authority from me.' Carleton then went on to say that he would consult any 'Men of Good Sense, Truth, Candour, and Impartial Justice' whenever he chose, no matter whether they were councillors or not.

The Walker affair, which now broke out again, was much more serious than the storm in the Council's teacup. It agitated the whole of Canada and threatened to range the population of Montreal and Quebec into two irreconcilable factions, the civil and the military. For the whole of the two years since Murray had been called upon to deal with it cleverly presented versions of Walker's views had been spread all over the colonies and worked into influential Opposition circles in England. The invectives against the redcoats and their friends the seigneurs were of the usual abusive type. But they had an unusually powerful effect at that particular time in the Thirteen Colonies as well as in what their authors hoped to make a Fourteenth Colony after a fashion of their own; and they looked plausible enough to mislead a good many moderate men in the mother country too. Walker's case was that he had an actual witness, as to the identity of his assailants, in the person of McGovoch, a discharged soldier, who laid information against one civilian, three British officers, and the celebrated French-Canadian leader, La Corne de St Luc. All the accused were arrested in their beds in Montreal and thrown into the common gaol. Walker objected to bail on the plea that his life would be in danger if they were allowed at large. He also sought to postpone the trial in order to punish the accused as much as possible, guilty or innocent. But William Hey, the chief justice, an able and upright man, would consent to postponement only on condition that bail should be allowed; so the trial proceeded. When the grand jury threw out the case against one of the prisoners Walker let loose such a flood of virulent abuse that moderate men were turned against him. In the end all the accused were honourably acquitted, while McGovoch, who was proved to have been a false witness from the first, was convicted of perjury. Carleton remained absolutely impartial all through, and even dismissed Colonel Irving and another member of the Council for heading a petition on behalf of the military prisoners.

The Walker affair was an instance of a bad case in which the law at last worked well. But there were many others in which it did not. What with the Coutume de Paris, which is still quoted in the province of Quebec; the other complexities of the old French law; the doubtful meanings drawn from the capitulation, the treaty, the proclamation, and the various ordinances; the instinctive opposition between the French Canadians and the English-speaking civilians; and, finally, what with the portents of subversive change that were already beginning to overshadow all America,—what with all this and more, Carleton found himself faced with a problem which no man could have solved to the satisfaction of every one concerned. Each side in a lawsuit took whatever amalgam of French and English codes was best for its own argument. But, generally speaking, the ingrained feeling of the French Canadians was against any change of their own laws that was not visibly and immediately beneficial to their own particular interests. Moreover, the use of the unknown English language, the worthlessness of the rapacious English-speaking magistrates, and the detested innovation of imprisonment for debt, all combined to make every part of English civil law hated simply because it happened to be English and not French. The home authorities were anxious to find some workable compromise. In 1767 Carleton exchanged several important dispatches with them; and in 1768 they sent out Maurice Morgan to study and report, after consultation with the chief justice and 'other well instructed persons.' Morgan was an indefatigable and clear-sighted man who deserves to be gratefully remembered by both races; for he was a good friend both to the French Canadians before the Quebec Act and to the United Empire Loyalists just before their great migration, when he was Carleton's secretary at New York. In 1769 the official correspondence entered the 'secret and confidential' stage with a dispatch from the home government to Carleton suggesting a House of Representatives to which, practically speaking, the towns would send Protestant members and the country districts Roman Catholics.

In 1770 Carleton sailed for England. He carried a good deal of hard-won experience with him, both on this point and on many others. He went home with a strong opinion not only against an assembly but against any immediate attempts at Anglicization in any form. The royal instructions that had accompanied his commission as 'Captain-General and Governor-in-chief' in 1768 contained directions for establishing the Church of England with a view to converting the whole population to its tenets later on. But no steps had been taken, and, needless to say, the French Canadians remained as Roman Catholic as ever.

An increasingly important question, soon to overshadow all others, was defence. In April 1768 Carleton had proposed the restoration of the seigneurial militia system. 'All the Lands here are held of His Majesty's Castle of St Lewis [the governor's official residence in Quebec]. The Oath which the Vassals [seigneurs] take is very Solemn and Binding. They are obliged to appear in Arms for the King's defence, in case his Province is attacked.' Carleton pointed out that a hundred men of the Canadian seigneurial families were being kept on full pay in France, ready to return and raise the Canadians at the first opportunity. 'On the other hand, there are only about seventy of these officers in Canada who have been in the French service. Not one of them has been given a commission in the King's [George's] Service, nor is there One who, from any motive whatever, is induced to support His Government.' The few French Canadians raised for Pontiac's war had of course been properly paid during the continuance of their active service. But they had been disbanded like mere militia afterwards, without either gratuities or half-pay for the officers. This naturally made the class from which officers were drawn think that no career was open to them under the Union Jack and turned their thoughts towards France, where their fellows were enjoying full pay without a break.

What made this the more serious was the weakness of the regular garrisons, all of which, put together, numbered only 1,627 men. Carleton calculated that about five hundred of 'the King's Old Subjects' were capable of bearing arms; though most of them were better at talking than fighting. He had nothing but contempt for 'the flimsy wall round Montreal,' and relied little more on the very defective works at Quebec. Thus with all his wonderful equanimity, 'grave Carleton' left Canada with no light heart when he took six months' leave of absence in 1770; and he would have been more anxious still if he could have foreseen that his absence was to be prolonged to no less than four years.

He had, however, two great satisfactions. He was represented at Quebec by a most steadfast lieutenant, the quiet, alert, discreet, and determined Cramahe; and he was leaving Canada after having given proof of a disinterestedness which was worthy of the elder Pitt himself. When Pitt became Paymaster-General of England he at once declined to use the two chief perquisites of his office, the interest on the government balance and the half per cent commission on foreign subsidies, though both were regarded as a kind of indirect salary. When Carleton became governor of Canada he at once issued a proclamation abolishing all the fees and perquisites attached to his position and explained his action to the home authorities in the following words: 'There is a certain appearance of dirt, a sort of meanness, in exacting fees on every occasion. I think it necessary for the King's service that his representative should be thought unsullied.' Murray, who had accepted the fees, at first took umbrage. But Carleton soon put matters straight with him. The fact was that fees, and even certain perquisites, were no dishonour to receive, as they nearly always formed a recognized part, and often the whole, of a perfectly legal salary. But fees and perquisites could be abused; and they did lead to misunderstandings, even when they were not abused; while fixed salaries were free from both objections. So Carleton, surrounded by shamelessly rapacious magistrates and the whole vile camp-following gang, as well as by French Canadians who had suffered from the robberies of Bigot and his like, decided to sacrifice everything but his indispensable fixed salary in order that even the most malicious critics could not bring any accusation, however false, against the man who represented Britain and her king.

An interesting personal interlude, which was not without considerable effect on Canadian history, took place in the middle of Carleton's four years' stay in England. He was forty-eight and still a bachelor. Tradition whispers that these long years of single life were the result of a disappointing love affair with Jane Carleton, a pretty cousin, when both he and she were young. However that may be, he now proposed to Lady Anne Howard, whose father, the Earl of Effingham, was one of his greatest friends. But he was doomed to a second, though doubtless very minor, disappointment. Lady Anne, who probably looked on 'grave Carleton' as a sort of amiable, middle-aged uncle, had fallen in love with his nephew, whom she presently married, and with whom she afterwards went out to Canada, where her husband served under the rejected uncle himself. What added spice to this peculiar situation was the fact that Carleton actually married the younger sister of the too-youthful Lady Anne. When Lady Anne rejoined her sister and their bosom friend, Miss Seymour, after the disconcerting interview with Carleton, she explained her tears by saying they were due to her having been 'obliged to refuse the best man on earth.' 'The more fool you!' answered the younger sister, Lady Maria, then just eighteen, 'I only wish he had given me the chance!' There, for the time, the matter ended. Carleton went back to his official duties in furtherance of the Quebec Act. His nephew and the elder sister made mutual love. Lady Maria held her tongue. But Miss Seymour had not forgotten; and one day she mustered up courage to tell Carleton the story of 'the more fool you!' This decided him to act at once. He proposed; was accepted; and lived happily married for the rest of his long life. Lady Maria was small, fair-haired, and blue-eyed, which heightened her girlish appearance when, like Madame de Champlain, she came out to Canada with a husband more than old enough to be her father. But she had been brought up at Versailles. She knew all the aristocratic graces of the old regime. And her slight, upright figure—erect as any soldier's to her dying day—almost matched her husband's stalwart form in dignity of carriage.

The Quebec Act of 1774—the Magna Charta of the French-Canadian race—finally passed the House of Lords on the 18th of June. The general idea of the Act was to reverse the unsuccessful policy of ultimate assimilation with the other American colonies by making Canada a distinctly French-Canadian province. The Maritime Provinces, with a population of some thirty thousand, were to be as English as they chose. But a greatly enlarged Quebec, with a population of ninety thousand, and stretching far into the unsettled West, was to remain equally French-Canadian; though the rights of what it was then thought would be a perpetual English-speaking minority were to be safeguarded in every reasonable way. The whole country between the American colonies and the domains of the Hudson's Bay Company was included in this new Quebec, which comprised the southern half of what is now the Newfoundland Labrador, practically the whole of the modern provinces of Quebec and Ontario, and all the western lands between the Ohio and the Great Lakes as far as the Mississippi, that is, the modern American states of Ohio, Indiana, Illinois, Michigan, and Wisconsin.

The Act gave Canada the English criminal code. It recognized most of the French civil law, including the seigneurial tenure of land. Roman Catholics were given 'the free Exercise' of their religion, 'subject to the King's Supremacy' as defined 'by an Act made in the First Year of Queen Elizabeth,' which Act, with a magnificently prophetic outlook on the future British Empire, was to apply to 'all the Dominions and Countries which then did, or thereafter should, belong to the Imperial Crown.' The Roman Catholic clergy were authorized to collect 'their accustomed Dues and Rights' from members of their own communion. The new oath of allegiance to the Crown was silent about differences of religion, so that Roman Catholics might take it without question. The clergy and seigneurs were thus restored to an acknowledged leadership in church and state. Those who wanted a parliament were distinctly told that 'It is at present inexpedient to call an Assembly,' and that a Council of from seventeen to twenty-three members, all appointed by the Crown, would attend to local government and have power to levy taxes for roads and public buildings only. Lands held 'in free and common socage' were to be dealt with by the laws of England, as was all property which could be freely willed away. A possible establishment of the Church of England was provided for but never put in operation.

In some ways the Act did, in other ways it did not, fulfil the objects of its framers. It was undoubtedly a generous concession to the leading French Canadians. It did help to keep Canada both British and Canadian. And it did open the way for what ought to have been a crushing attack on the American revolutionary forces. But it was not, and neither it nor any other Act could possibly have been, at that late hour, completely successful. It conciliated the seigneurs and the parochial clergy. But it did not, and it could not, also conciliate the lesser townsfolk and the habitants. For the last fourteen years the habitants had been gradually drifting away from their former habits of obedience and former obligations towards their leaders in church and state. The leaders had lost their old followers. The followers had found no new leaders of their own.

Naturally enough, there was great satisfaction among the seigneurs and the clergy, with a general feeling among government supporters, both in England and Canada, that the best solution of a very refractory problem had been found at last. On the other hand, the Opposition in England, nearly every one in the American colonies, and the great majority of English-speaking people in Newfoundland, the Maritime Provinces, and Canada itself were dead against the Act; while the habitants, resenting the privileges already reaffirmed in favour of the seigneurs and clergy, and suspicious of further changes in the same unwelcome direction, were neutral at the best and hostile at the worst.

The American colonists would have been angered in any case. But when they saw Canada proper made as unlike a 'fourteenth colony' as could be, and when they also saw the gates of the coveted western lands closed against them by the same detested Act—the last of the 'five intolerable acts' to which they most objected—their fury knew no bounds. They cursed the king, the pope, and the French Canadians with as much violence as any temporal or spiritual rulers had ever cursed heretics and rebels. The 'infamous and tyrannical ministry' in England was accused of 'contemptible subservience' to the 'bloodthirsty, idolatrous, and hypocritical creed' of the French Canadians. To think that people whose religion had spread 'murder, persecution, and revolt throughout the world' were to be entrenched along the St Lawrence was bad enough. But to see Crown protection given to the Indian lands which the Americans considered their own western 'birthright' was infinitely worse. Was the king of England to steal the valley of the Mississippi in the same way as the king of France?

It is easy to be wise after the event and hard to follow any counsel of perfection. But it must always be a subject of keen, if unavailing, regret that the French Canadians were not guaranteed their own way of life, within the limits of the modern province of Quebec, immediately after the capitulation of Montreal in 1760. They would then have entered the British Empire, as a whole people, on terms which they must all have understood to be exceedingly generous from any conquering power, and which they would have soon found out to be far better than anything they had experienced under the government of France. In return for such unexampled generosity they might have become convinced defenders of the only flag in the world under which they could possibly live as French Canadians. Their relations to each other, to the rest of a changing Canada, and to the Empire would have followed the natural course of political evolution, with the burning questions of language, laws, and religion safely removed from general controversy in after years. The rights of the English-speaking minority could, of course, have been still better safeguarded under this system than under the distracting series of half-measures which took its place. There should have been no question of a parliament in the immediate future. Then, with the peopling of Ontario by the United Empire Loyalists and the growth of the Maritime Provinces on the other side, Quebec could have entered Carleton's proposed Confederation in the nineties to her own and every one else's best advantage.

On the other hand, the delay of fourteen years after the Capitulation of 1760 and the unwarrantable extension of the provincial boundaries were cardinal errors of the most disastrous kind. The delay, filled with a futile attempt at mistaken Americanization, bred doubts and dissensions not only between the two races but between the different kinds of French Canadians. When the hour of trial came disintegration had already gone too far. The mistake about the boundaries was equally bad. The western wilds ought to have been administered by a lieutenant-governor under the supervision of a governor-general. Even leasing them for a short term of years to the Hudson's Bay Company would have been better than annexing them to a preposterous province of Quebec. The American colonists would have doubtless objected to either alternative. But both could have been defended on sound principles of administration; while the sudden invasion of a new and inflated Quebec into the colonial hinterlands was little less than a declaration of war. The whole problem bristled with enormous difficulties, and the circumstances under which it had to be faced made an ideal solution impossible. But an earlier Quebec Act, without its outrageous boundary clause, would have been well worth the risk of passing; for the delay led many French Canadians to suppose, however falsely, that the Empire's need might always be their opportunity; and this idea, however repugnant to their best minds and better feelings, has persisted among their extreme particularists until the present day.