In early 1814, at the battle of Leipzig, the European allies, including Britain, defeated Napoleon, who was exiled to the island of Elba. With Napoleon gone, Britain suddenly had more resources available to continue the war against the US. The British plans became more ambitious, involving three separate initiatives: an invasion of New York, an attack against the Middle States, and an attack against New Orleans designed in part to usurp control of the Mississippi.
The US, meanwhile, angered and embarrassed at its myriad failures on land, reorganized its army. The government promoted younger men, who had served with recent distinction, to the rank Major General. These new Major Generals included Andrew Jackson in the South and Jacob Brown in Western New York.
Free to concentrate on the US, Britain began to send veteran reinforcements into Canada. The war in the North no longer represented an American attempt at conquest, but rather a fight for survival.
In early July, American troops under Brown captured Fort Erie. Soon after, in a skirmish near Niagara falls, American troops soundly beat a brigade of British veterans. Three weeks later, Brown's troops met another brigade of British reinforcements in the Battle of Lundy Lane; the battle ended in a bloody standoff, the bloodiest of the war. In August, the British moved against the Fort Erie. The Americans held, inflicting serious losses on the British.
The British attacks were prelude to a larger invasion, with almost 15,000 men primed and waiting in Montreal. Having learned from the calamity of the Battle of Saratoga in the Revolutionary War, however, the British decided to build a water-based supply line. Control of Lake Champlain, a lake on the New York border just south of the Canadian border, was key in maintaining the supply line. The British built a flotilla of ships to wrest the lake from the American ships patrolling it.
A small US squadron of ships held the Lake, none of them as heavily armed as the British ships. To offset British firepower, Thomas Macdonough came up with a trick, installing cables along his anchor that would allow him to quickly spin his boat and present the enemy with a fresh broadside. On September 11, the same day Admiral Cochrane brought his fleet into Chesapeake Bay before bombarding Baltimore, the British entered Lake Champlain from the Plattsburgh River. Macdonough was anchored across from the mouth, and the British attacked. After almost six hours fighting was fierce, though the British seemed to have the advantage. Macdonough sprung his trap and opened fire from his pristine broadside, blasting the British flagship, Confiance and killing the British Captain. The British retreated.
With no supply line in place, the British invasion of New York never materialized.
The reorganization of the American Army paid immediate dividends. The immature, undisciplined American troops of 1812 and 1813 were, by 1814, suddenly transformed into a fighting force capable of holding ground against British veterans. Though the battles of early 1814 provided the US with no further opportunities to renew their attacks against Canada, they stopped the British advance and, on a larger level, forced the British to respect American military power.
Combined with the British failure to capture Baltimore, the American victory on lake Champlain marked the end of two of the three British prongs of attack. Though the US and Britain had been making small efforts to find a means for peace since 1813, after Lake Champlain, the two countries moved to the negotiating table in earnest.