By the end of 1863, the prospects for a union of all the British North American colonies were not looking good. The sudden refusal of the Canadians to co-operate in building the Intercolonial Railway had soured relations with the Lower Provinces, as New Brunswick, Nova Scotia and Prince Edward island were known. The Trent Crisis had shown the need for such a rail link between New Brunswick and Quebec, both for defense and commercial reasons, but the Canadian Government was not prepared to spend the money on the scheme. Even the concession by the Canadians in October 1863 that they would pay to have a potential route for the railway surveyed did not help their tattered reputation.
The Imperial Government were also angry with the Canadians. Aside from the Intercolonial, which London saw as a high defense priority, there was genuine anger that the Canadians had failed to pass a strong Militia Bill in 1862, again for financial reasons, which would have seen the United Province of Canada take on more responsibility for its own defense. Overall, then, prospects for co-operation on any scheme of Confederation looked dim.
At the same time, concerns about defense were not unreasonable. The Civil War, which had been tearing apart the one-time United States since 1861, continued to be an ever-present fact of life for British Americans. Although the natural instincts of British Americans had been to support Lincoln and the Federal States in their conflict with the Southern Confederacy, the Northern Government had been severely critical of Britain’s decision to remain neutral, and events such as the Trent Crisis, and what the Federals saw as British refusal to take a moral stand, had gradually led to threats by both people and politicians in Washington to make British Americans pay for their policy.
For a couple of years, these threats, which grew to include actual invasion and annexation of the Province of Canada, once the Confederacy was defeated, had not been taken too seriously by Canadians. There was a widespread assumption that the South could not be defeated, that some form of resolution would have to be reached when the war became stalemated. But the hostility shown by the Northern authorities (and people) to Canadians led to a distinct pro-Southern attitude north of the border, an attitude that only added to the depth of feeling on both sides of that line.
All of this reached a crescendo in December of 1863 and, like the Trent Crisis of 1861, brought British America perilously close to war. Nova Scotia and New Brunswick had become centres of Confederate activity, as Southern agents and sympathisers used the ports as bases from which to launch runs to break the blockade of Southern ports which the Lincoln Government had imposed to bring the South to its knees. But things went a giant step beyond this on December 7, 1863, when the American steamer Chespeake was boarded and captured by a group of Southern agents and British Americans off the coast of New England. Their plan was to use the Chesapeake as a blockade runner to bring supplies to Southern ports, but the hijackers killed one crew member and wounded others in taking the ship. They then brought it into St. John, New Brunswick to refuel, but had to move to Halifax instead.
On the way, and within British waters, the Chesapeake was stopped boarded by American naval personnel, who arrested the hijackers and brought them and the steamer into Halifax to report to the British authorities. Things got very confusing at that point. Britain objected to the arrest of British subjects in British waters, but agreed to hand over the hijackers to the American authorities, once a local Judge had cleared the paperwork. Instead, local residents and sympathisers helped some of the arrested men escape. Once again, American and British authorities came face to face and the potential for a violent conflict was very real.
Those hijackers who had not escaped were put on trial, but released on a technicality. Things calmed down, because, in the end, no-one was ready to go to war, at least not yet.
British Americans began to feel even less secure than before. Not only was it clear that any spark could ignite a blaze, but their complacent judgement that the North could never defeat the South had received a major blow that same year. Beginning on July 1, soon to be a very symbolic date, a battle had begun in Pennsylvania that would end forever any lingering hopes of a stalemate in the Civil War. General George G. Meade’s Army of the Potomac, fought and defeated the Army of Northern Virginia, commanded by General Robert E. Lee at Gettysburg. The time for British American complacency was over.