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The rebellions of 1837- 38 and the subsequent reprisals by forces loyal to the British crown had devastated much of Lower Canada. The British responded by sending Lord Durham to British North AmericaBritish North America originally comprised all British colonies and territories on the North American continent, from Georgia to Labrador and Rupert's Land. It stood in contrast to Russian North America ( Alaska and parts of California) and to Spanish Nor to appraise the situation, and in 1839Events January 9 The French Academy of Sciences announces the Daguerreotype photography process. January 19 British East India Company captures Aden January 20 In the Battle of Yungay, Chile defeats a Peruvian and Bolivian alliance. February 24 William Ot Durham submitted a reportThe Report on the Affairs of British North America commonly known as Lord Durham's Report is an important document in the history of Canada and the British Empire. The notable Whig politician John George Lambton, 1st Earl of Durham, was sent to the Canada calling for the union of the Canadas, responsible governmentResponsible government was a term used to refer to one major plank of the program used by the United Kingdom to grant independence to the so-called "white" dominions (notably Canada, Australia, and New Zealand, and in contrast to its colonial possessions for the British North American colonies, and measures to encourage the assimilation of French-Canadians.

Upper and Lower Canada were united in 18401840 is a leap year starting on Wednesday (link will take you to calendar). Events January 3 One of the predecessor papers to the Herald Sun of Melbourne, Australia, The Port Phillip Herald is founded by George Cavanaugh. January 10 Uniform penny postage and by 18481848 is a leap year starting on Saturday (link will take you to calendar). Events Sri Lanka The Revolution of 1848 (qv. a series of widespread but failed struggles for more liberal governments, from Brazil to Hungary. January 24 California gold rush: Jame, a governor general was in place who would - in theory - ensure a system of responsible government where the governor would yield to the will of the legislature and cabinet.

In 1846 a report was approved in principle that estimated Lower Canada's rebellion losses at £100,000 (in the currency of the day). In February 1849 Louis-Hippolyte Lafontaine, co-leader with Robert Baldwin of Canada's Reform government, introduced a bill in the legislature, then sitting in Montreal, that would compensate those who could prove their losses and had not been convicted of sedition. Lafontaine felt that compensation would help to heal the rift that had been opened in the aftermath of the rebellion, thus containing the influence of more radical French-Canadian nationalists such as Louis-Joseph Papineau.

The Tories' opposition to the bill was fierce. Since some rebels (at least those who had escaped conviction or exile) would be able to claim compensation for losses the Tories claimed the bill was in fact a reward to traitors. The Tories were also upset at the perceived loss of political power to French-Canadians, who in 1849 were still widely viewed as a conquered people undeserving of such favour. The fact that the bill was introduced during a severe economic depression certainly did not help to ease the tensions.

Despite the Tories' opposition, the bill was passed by the Reform-dominated legislature and submitted to Lord Elgin for assent. Responsible government still being a very new concept, outraged English-Canadians demanded that Elgin refuse assent. The governor had his own serious misgivings about the bill and therefore many Tory supporters were confident that the governor would reject the "advice" of the legislature and cabinet.

However, Elgin's commitment to responsible government outweighed his objections to the bill, and the Rebellion Losses Bill was signed into law on April 25, 1849. Montreal's English population was incensed. Elgin's carriage was pelted with stones and rotten eggs, and by the evening a riot had developed which would last for two days and involve thousands of people. By the time the rioting had ended, mobs had caused thousands of dollars in damage and razed the Montreal Parliament building.

The controversy around the bill also contributed to the rise of an American annexationist movement, who published the Montreal Annexation Manifesto on October 11, 1849.

Despite the violent opposition, Lord Elgin's actions were supported by a majority of Canadians and by the Liberal government in London. Responsible government had survived its first major test and would go on to be entrenched into Canada's political infrastructure.