Under these circumstances the imperial government at once passed through parliament a bill (3 and 4 Vict., c. 78) which re-enacted the Canadian measure with the modifications rendered necessary by the judicial opinion just cited. This act put an end to future reservations, and at the same time recognized the claims of all the Protestant bodies to a share in the funds derived from the sales of the lands. It provided for the division of the reserves into two portions—those sold before the passing of the act and those sold at a later time. Of the previous sales, the Church of England was to receive two-thirds and the Church of Scotland one-third. Of future sales, the Church of England would receive one-third and the Church of Scotland one-sixth, while the residue could be applied by the governor-in-council “for purposes of public worship and religious instruction in Canada,” in other words, that it should be divided among those other religious denominations that might make application at any time for a share in these particular funds.
This act, however, did not prove to be a settlement of this disturbing question. If Bishop Strachan had been content with the compromise made in this act, and had endeavoured to carry out its provisions as soon as it was passed, the Anglican Church would have obtained positive advantages which it failed to receive when the question was again brought into the arena of angry discussion. In 1844 when Henry Sherwood was solicitor-general in the Draper-Viger Conservative government he proposed an address to the Crown for the passing of a new imperial act, authorizing the division of the land itself instead of the income arising from its sales. His object was to place