THE loss of the colonies led directly to the foundation of a new colony in Australia, and, by concentrating English interest on the East, it led England to seize the Cape from the bankrupt Dutch East India Company. It also affected Colonial policy profoundly. One school argued that the colonists had rebelled because they had been given parliaments and too much liberty. Another said it would be wiser to treat colonies generously. But events seemed to prove the view that colonies were like fruit and would drop off when they were ripe. During the next fifty years England was driven, by military reasons chiefly, to occupy several more territories, but the theory during this period, and the practice during the fifty subsequent years (1830-80), was that great expense and trouble should not be incurred for colonies; they should be encouraged to shoulder their own responsibilities as soon as possible.

The victorious colonists had promised not to molest those of their fellow citizens who had been " loyal," but the loyalists were subjected to persecution and outrage, and about eighty thousand were compensated by the British Government with land in Upper Canada, in the peninsula between Lakes Erie and Huron. They were at once (1791) given parliamentary government, as was the older province of Lower Canada inhabited by the French settlers. The number of new settlers corresponded with that of the original French, and, as immigrants came in from Scotland, Canada became substantially British.

In the eighteenth century serious crimes (if the criminal was caught) were punished by death, minor crimes by transportation for life or a term of years to an American or West Indian plantation. The American plantations being closed, the government decided to send convicts to the remote new land that had recently been placed on the map by the great Captain Cook. An expedition first landed at Botany Bay in New South Wales in 1788. Many convicts were venial offenders, but imprisonment, the convict-ship voyage, and the conditions in Australia were brutalising. Settlements were made for convict stations round the south-east coast and in Van Diemen's Land; free settlers arrived in 1793, merino sheep were introduced before the end of the century, and inland exploration into the almost empty continent began.

New Zealand, discovered two centuries before, still remained, unexplored and unsettled, inhabited by warlike Maori tribes, but missionaries and rather disreputable traders were now coming to its shores, and in 1825 settlement began. Both in Australia and New Zealand, England anticipated France merely by a narrow margin, but had France arrived first, England's sea power would have led to her dispossession soon afterwards.