After the ascension of Henry II to the throne and the coronation of Jane of Mann as his co-ruler, the Celtic Empire soon entered a new war, this time an expansionist war to take control of Madagascar. However, the dense jungles of the island prevented the Celtic army from effectively wiping out the armies of the native Imerina Kingdom. As such, the Celts were forced to resign themselves to actual control of the coastlines, and a tenuous control of the jungles and mountains of the inland. The conflict lasted for 4 years and went nowhere, expending a fair bit of manpower and cash from the Celtic coffers, and did a lot to engender unhappiness among the Celtic people with how Henry II ruled the Empire.
A much, much worse problem soon came into the spotlight. Slavery. Since the first Celtic outposts were established in West Africa along the Gold Coast, slaves had been exported for use in the Dominions abroad. This number hadn't been very large until the Celtic colonies in the Caribbean and the Amazon had been established, and once Maryland had been created, this number went ever higher. The Celtic Empire's homeland had only a few tens of thousands of slaves, almost all of whom were in domestic positions such as manservants and cooks. At the time, the main method by which the population of the Dominions had evolved from overseas migration to native population growth. The larger Dominions, such as Borealia and Amazonia, had large areas of land available for settlement by people moving from the cities along the coasts to the inland areas.
However, in many cases, the average Celtic citizen of a Dominion often found himself beat out by the plantation owners, who bought up vast areas of land that could then be worked by slaves, leaving very little for everyone else. A small abolitionist movement had grown up in the Celtic overseas dominions, which grew slowly but steadily. In 1741, Borealia became the first Dominion to abolish slavery, which it was able to do due to its primary industries (logging, fur trapping, and ship building) not requiring many imported slaves to do. Maryland, Carribeia, and Amazonia all refused to abolish slavery, though, and continued the use of slaves. Through the Settlement of 1742, however, the overseas slave trade was abolished in the Empire, and the Dominions would have to use its own supply of existing slaves to acquire new ones.
In 1742, Henry II died. In normal circumstances, the throne would have then gone to his son Connor, but Empress Jane argued that since she had been co-monarch, she was still technically in control of the Empire, and thus Prince Connor would need to wait until she died. The Rìoghail Chòmhdhail agreed, and Empress Jane ruled as the 4th Empress Regnant of the Empire from her husband's death onwards.
Jane's popularity outpaced her husband's considerably, and she soon brought a new level of stability to the Empire by ending an emergent conflict in southern India before it could escalate into war, instead focusing on colonizing the islands of Indonesia, centering around the islands of Makassar. Jane also personally oversaw the implementation of a new series of tax reforms that altered the previous version had been created in the 1680s, finally accounting for demographic shifts and changes, along with changes in inflation. The Celtic Empire's finances were thus finally stabilized, and the growing economic crisis was finally defused, resulting in a much smaller (but still present) economic recession.
Jane ruled until her death in 1767, by which time their son Connor was 23. He was then coronated as Connor I, taking the regnal name that his grandmother's brother had tried to claim so many years ago.