 One mistake that Macdonald believed the Liberals had made was a free-trade agreement with Washington, negotiated in 1874; Macdonald had come to believe that protection was necessary to build Canadian industry.The Panic of 1873 had led to a worldwide depression; the Liberals found it difficult to finance the railroad in such a climate, and were generally opposed to the line anyway—the slow pace of construction led to British Columbia claims that the agreement under which it had entered Confederation was in jeopardy of being broken.By 1876, Macdonald and the Conservatives had adopted protection as party policy.