the Irish vote. The arbitration of the Alabama Claims in 1872 provided a satisfactory reconciliation; The British paid the United States $15.5 million for the economic damage caused by Confederate Navy warships purchased from it. Canada could never be defended so the British decided to cut their losses and eliminate the risk of a conflict with the US. The first ministry of William Gladstone withdrew from all its historic military and political responsibilities in North America. It brought home its troops (keeping Halifax as an Atlantic naval base), and turned responsibility over to the locals. That made it wise in 1867 to unify the separate Canadian colonies into a self-governing confederation named the "Dominion of Canada". Free trade Britain persisted in its free trade policy even as its major rivals, the US and Germany, turned to high tariffs (as did Canada). American heavy industry grew faster than Britain, and by the 1890s was crowding British machinery and other products out of the world market. London, however, remained the world's financial center, even as much of its investment was directed toward American railways. The Americans remained far behind the British in international shipping and insurance. The American economic "invasion" of the British home market demanded a response. British conservatives promoted what they called "tariff reform", which consisted of raising the tariff, especially from countries outside the British Empire. Liberals counterattacked by portraying tariff reform as unpatriotic. Tariffs were finally imposed in the 1930s. Without tariffs to protect them, British businessmen were obliged to lose their market or else rethink and modernise their operations. For example, the boot and shoe industry faced increasing imports of American footwear; Americans took over the market for shoe machinery. British companies realised they had to meet the competition so they re-examined their traditional methods of work, labour utilisation, and industrial relations, and to rethink how to market footwear in terms of the demand for fashion. Venezuelan and Alaska border disputes In 1895 a new crisis erupted in South America. A border dispute between British Guiana and Venezuela caused a crisis when Washington spoke out to take Venezuela's side. Propaganda sponsored by Venezuela convinced American public opinion that the British were infringing on Venezuelan territory. Prime Minister Salisbury stood firm. The crisis escalated when President Grover Cleveland, citing the Monroe Doctrine, issued an ultimatum in late 1895. Salisbury's cabinet convinced him he had to go to arbitration.